As Filed with the Securities and Exchange Commission on October 13, 2000
Registration No. 333-43768
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 1 to
FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
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KEYSPAN CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK
(State of incorporation)
11-3431358
(I.R.S. employer identification number)
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STEVEN L. ZELKOWITZ, ESQ.
ONE METROTECH CENTER, BROOKLYN, NEW YORK 11201
175 EAST OLD COUNTRY ROAD, HICKSVILLE, NEW YORK 11801
(718) 403-1000 (BROOKLYN)
(516) 755-6650 (HICKSVILLE)
(Address, including zip code,
and telephone number,
including area code, of
registrant's principal
executive offices and agent
for service)
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COPY TO:
RAYMOND W. WAGNER, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017-3954
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time
to time after this Registration Statement becomes effective as determined by
market conditions.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. |X|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
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 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE AGGREGATE PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT (2) OFFERING PRICE (2) REGISTRATION FEE
Debt Securities $1,650,000,000 (1) 100% $1,650,000,000 $435,600 (3)
====================================================================================================================================
</TABLE>
(1) Or an equivalent amount, based upon the exchange rate on the applicable
trade date, in a foreign currency or currency unit identified by
the Issuer on the issue date.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Previously paid.
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SUBJECT TO COMPLETION, DATED OCTOBER 13, 2000
PROSPECTUS
[GRAPHIC OMITTED]
KEYSPAN CORPORATION
$1,650,000,000
DEBT SECURITIES
- We plan to issue up to $1,650,000,000 of debt securities.
- The debt securities may be offered as separate series, in amounts,
prices and on terms to be determined at the time of the sale. When we
offer debt securities, we will provide you with a prospectus supplement
or a term sheet describing the terms of the specific issue of debt
securities including the offering price of the securities.
- We may sell the debt securities to agents, underwriters or dealers, or
may sell them directly to other purchasers.
- You should read this prospectus and the prospectus supplement or the
term sheet relating to the specific issue of debt securities carefully
before you invest.
------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
The date of this prospectus is October , 2000.
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<TABLE>
TABLE OF CONTENTS
Page
<CAPTION>
<S> <C>
About this Prospectus......................................................................................................1
Risk Factors...............................................................................................................1
Where You Can Find More Information........................................................................................1
Forward-Looking Statements.................................................................................................2
KeySpan ...................................................................................................................3
Use of Proceeds............................................................................................................4
Ratio of Earnings to Fixed Charges.........................................................................................4
Description of Securities..................................................................................................5
Certain U.S. Federal Income Tax Consequences to Non-U.S. Persons .........................................................18
Plan of Distribution......................................................................................................20
Legal Opinions............................................................................................................22
Experts ..................................................................................................................22
</TABLE>
<PAGE>
ABOUT THIS PROSPECTUS
As used in this prospectus and any prospectus supplement or term sheet,
except as the context otherwise requires, "we," "us," "our," "our Company," and
"KeySpan" mean KeySpan Corporation, together with its consolidated subsidiaries.
RISK FACTORS
For each series of debt securities, we will include risk factors, if
appropriate, in the prospectus supplement relating to that series.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any of these documents 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. Our SEC filings are also available to the public
on the SEC's web site at http://www.sec.gov.
We filed a registration statement on Form S-3 with the SEC covering the
debt securities. For further information on us and the debt securities, you
should refer to the registration statement and its exhibits. This prospectus
summarizes material provisions of the indenture. Because the prospectus may not
contain all the information that you may find important, you should review the
full text of these documents. We have included copies of these documents in an
exhibit to our registration statement of which this prospectus is a part.
The SEC allows us to "incorporate by reference" the information that we
file with the SEC, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is considered to be part of this prospectus, and later information that the we
file 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 all of the securities are sold.
- Our Annual Report on Form 10-K for the fiscal year ended December 31,
1999;
- Our Quarterly Report on Form 10-Q for the quarterly periods ended March
31, 2000 and June 30, 2000;
- Our Current Reports on Form 8-K January 19, 2000, January 27, 2000,
February 1, 2000, March 27, 2000, July 12, 2000, July 26, 2000 and October 6,
2000.
You may request a copy of these filings, or any of our SEC filings, at
no cost, over the Internet at our web site at http://www.keyspanenergy.com or by
writing or telephoning us at the following address:
Investor Relations
KeySpan Corporation
One MetroTech Center
Brooklyn, New York, 11201
(718) 403-3385
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You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement or term sheet. We have not
authorized anyone else to provide you with different information. We are not
making an offer of these debt securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus or any
supplement is accurate as of any date other than the date on the front of these
documents.
FORWARD-LOOKING STATEMENTS
Some of the information included in this prospectus, any prospectus
supplement or term sheet and the documents we have incorporated by reference
contain forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, as amended. Such statements relate to future
events or our future financial performance. We use words such as "anticipate,"
"believe," "expect," "may," "project," "will" or other similar words to identify
forward-looking statements.
Without limiting the foregoing, all statements relating to our
- anticipated capital expenditures,
- future cash flows and borrowings,
- pursuit of potential future acquisition opportunities, and
- sources of funding
are forward-looking statements. These forward-looking statements are based on
numerous assumptions that we believe are reasonable, but they are open to a wide
range of uncertainties and business risks and actual results may differ
materially from those discussed in these statements.
Among the factors that could cause actual results to differ materially
are:
- available sources and costs of fuel;
- volatility of energy prices in a deregulated market environment;
- federal and state regulatory initiatives that increase
competition, threaten cost and investment recovery and impact
rate structure;
- our ability to successfully reduce our cost structures;
- the successful integration of Eastern and EnergyNorth;
- the degree to which we develop unregulated business ventures;
- our ability to identify and make complementary acquisitions, as
well as the successful integration of those acquisitions; and
- inflationary trends and interest rates.
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When considering these forward-looking statements, you should keep in
mind the cautionary statements in this document, any prospectus supplement or
term sheet and the documents incorporated by reference. We will not update these
statements unless the securities laws require us to do so.
KEYSPAN
KeySpan was formed in connection with a business combination in May 1998
of KeySpan Energy Corporation, the parent of The Brooklyn Union Gas Company, and
certain businesses of the Long Island Lighting Company. Our core business is gas
distribution, conducted by our two regulated gas subsidiaries, The Brooklyn
Union Gas Company d/b/a KeySpan Energy Delivery New York and KeySpan Gas East
Corporation d/b/a KeySpan Energy Delivery Long Island. Together, they distribute
gas to approximately 1.6 million customers.
We are also a major, and growing, generator of electricity. We own and
operate five large generating plants and 42 smaller facilities in Nassau and
Suffolk Counties on Long Island and lease and operate a major facility in Queens
County in New York City. Under contractual arrangements, we provide power,
electric transmission-and- distribution services, billing and other customer
services for approximately one million electric customers of the Long Island
Power Authority. Our other subsidiaries are involved in oil and gas exploration
and production; gas storage; wholesale and retail gas and electric marketing;
appliance service; heating, ventilation and air conditioning installation and
services; large energy-system ownership, installation and management;
telecommunications; energy-related internet activities; and fuel cells. We also
invest in, and participate in the development of, pipelines and other
energy-related projects, domestically and internationally.
In November 1999, KeySpan and Eastern Enterprises announced that they had
signed a definitive merger agreement under which we will acquire all of the
common stock of Eastern for $64.00 per share in cash, subject to adjustment. The
transaction has a total value of approximately $2.5 billion ($1.7 billion in
equity and $0.8 billion in assumed debt and preferred stock). The transaction
will be accounted for as a purchase.
Eastern owns and operates Boston Gas Company, Colonial Gas Company, Essex
Gas Company, Midland Enterprises Inc., Transgas Inc. and ServicEdge Partners,
Inc. In July 1999, Eastern announced it had entered into an agreement to acquire
EnergyNorth, Inc. owner of New Hampshire's largest natural gas distributor,
EnergyNorth Natural Gas, Inc. EnergyNorth is located across the Massachusetts
border from, but contiguous to, areas served by Eastern's gas distribution
subsidiaries. In connection with our acquisition of Eastern, Eastern has amended
its agreement with EnergyNorth to provide for an all cash acquisition of
EnergyNorth shares at a price per share of $61.13, subject to adjustment. The
restructured EnergyNorth acquisition is expected to close contemporaneously with
the KeySpan/Eastern transaction.
The increased size and scope of our combined organization should enable
KeySpan, Eastern and EnergyNorth to provide enhanced, cost-effective customer
service and to capitalize on the above-average growth opportunities for natural
gas in the Northeast and provide additional resources to our unregulated
businesses. The combined company will serve approximately 2.4 million gas
customers.
The transactions among KeySpan, Eastern and EnergyNorth have already
received all required shareholder approvals, as well as the approval of the New
Hampshire Public Utility Commission. However, it is conditioned upon the
approval of the SEC, which is currently reviewing applications filed by us,
Eastern and EnergyNorth under the Public Utility Holding Company Act. We
anticipate that the transactions can be completed before the end of 2000, but we
are unable to determine when or if the required SEC approvals will be obtained.
We are a holding company with no independent operations or source of
income of our own. We conduct substantially all of our operations through our
subsidiaries and, as a result, we depend on the earnings and cash
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flow of, and dividends or distributions from, our subsidiaries to provide the
funds necessary to meet our debt and contractual obligations. Furthermore, a
substantial portion of our consolidated assets, earnings and cash flow is
derived from the operations of our regulated utility subsidiaries, whose legal
authority to pay dividends or make other distributions to us is subject to
regulation by the New York Public Service Commission.
USE OF PROCEEDS
We are issuing the debt securities in order to finance our acquisition of
Eastern and EnergyNorth, by either using the proceeds to finance the acquisition
of Eastern's and EnergyNorth's common stock or for any other proper Company
purpose, including to redeem or replace short term financing instruments, such
as bank loans or commercial paper issued to finance those acquisitions.
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows our consolidated ratio of earnings to fixed
charges for the periods indicated.
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<S> <C> <C> <C> <C> <C>
Twelve Months Twelve Months Twelve Months Nine Months Year Six Months
Ended Ended Ended Ended Ended Ended
December 31, March 31 March 31 December 31 December 31 June 30,
1996 (a) 1997 (a) 1998(a) 1998 1999 2000
-------------------- --------------------- --------------- --------------------- ------------------ -------------
2.15 2.21 2.44 (b) 3.23 4.14
</TABLE>
(a) Represents ratio of earnings to fixed charges for our predecessor, Long
Island Lighting Company.
(b) For the nine months ended December 31, 1998, earnings were insufficient to
cover fixed charges by $365.0 million. During the nine months ended
December 31, 1998, we incurred the following special charges (after tax):
charges associated with the transaction with the Long Island Power
Authority of $107.9 million; charges associated with the combination of
Long Island Lighting Company's gas and electric services businesses with
KeySpan Corporation of $83.5 million; an impairment charge of $54.1
million to write-down the value of proved gas reserves; and a charge of
$13.0 million to establish a not-for-profit philanthropic foundation.
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DESCRIPTION OF SECURITIES
IN THIS DESCRIPTION, "WE," "US," "OUR," "OUR COMPANY," AND "KEYSPAN"
MEAN KEYSPAN CORPORATION AND NOT ANY OF OUR SUBSIDIARIES. CAPITALIZED TERMS USED
BELOW ARE DEFINED UNDER "MATERIAL COVENANTS - DEFINED TERMS."
The debt securities will be issued under an indenture, dated as of
November 1, 2000, between us and The Chase Manhattan Bank, as trustee. The
indenture provides for the issuance from time to time of debt securities in an
unlimited dollar amount and an unlimited number of series.
The following description of the terms of the debt securities summarizes
the material terms that will apply to the debt securities. The description is
not complete, and we refer you to the indenture, a copy of which is an exhibit
to the registration statement of which this prospectus is a part. For your
reference, in several cases below we have noted the section in the indenture
that the paragraph summarizes. Capitalized terms have the meanings assigned to
them in the indenture. The referenced sections of the indenture and the
definitions of capitalized terms are incorporated by reference in the following
summary.
Prospective purchasers of debt securities should be aware that special
U.S. Federal income tax, accounting and other considerations may be applicable
to instruments such as the debt securities. The prospectus supplement or term
sheet relating to an issue of debt securities will describe these
considerations, if they apply.
SPECIFIC TERMS OF EACH SERIES
Each time that we issue a new series of debt securities, the prospectus
supplement or term sheet relating to that new series will specify the particular
amount, price and other terms of those debt securities. These terms may include:
- the title of the debt securities;
- any limit on the total principal amount of the debt securities;
- the date or dates on which the principal of the debt securities will
be payable or their manner of determination;
- the interest rate or rates of the debt securities; the date or dates
from which interest will accrue on the debt securities; and the
interest payment dates and the regular record dates for the debt
securities; or, in each case, their manner of determination;
- the place or places where the principal of and premium and interest on
the debt securities will be paid;
- the period or periods within which, the price or prices at which and
the terms on which any of the debt securities may be redeemed, in
whole or in part at our option, and any remarketing arrangements;
- the terms on which we would be required to redeem, repay or purchase
debt securities required by any sinking fund, mandatory redemption or
similar provision; and the period or periods within which, the price
or prices at which and the terms and conditions on which the debt
securities will be so redeemed, repaid or purchased in whole or in
part;
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- the denomination in which the debt securities will be issued, if other
than denominations of $1,000 and any whole multiple thereof;
- the portion of the principal amount of the debt securities that is
payable on the declaration of acceleration of the maturity, if other
than their principal amount; these debt securities could include
original issue discount, or OID, debt securities or indexed debt
securities, which are each described below;
- whether and under what circumstances we will pay additional amounts
under any debt securities held by a person who is not a U.S. person
for tax payments, assessments or other governmental charges and
whether we have the option to redeem the debt securities which are
affected by the additional amounts instead of paying the additional
amounts;
- the form in which we will issue the debt securities, whether
registered, bearer or both, and any restrictions on the exchange of
one form of debt securities for another and on the offer, sale and
delivery of the debt securities in either form;
- whether the debt securities will be issuable as global securities;
- whether the amounts of payments of principal of, premium, if any, and
interest, if any, on the debt securities are to be determined with
reference to an index, formula or other method, and if so, the manner
in which such amounts will be determined;
- if the debt securities are issuable in definitive form upon the
satisfaction of certain conditions, the form and terms of such
conditions;
- any trustees, paying agents, transfer agents, registrars, depositories
or similar agents with respect to the debt securities;
- any additions or deletions to the terms of the debt securities with
respect to the events of default or covenants governing the debt
securities;
- the foreign currency or units of two or more foreign currencies in
which payment of the principal of and premium and interest on any debt
securities will be made, if other than U.S. dollars, and the holders'
right, if any, to elect payment in a foreign currency or foreign
currency unit other than that in which the debt securities are
payable;
- whether and to what extent the debt securities are subject to
defeasance on terms different from those described under "Defeasance
of indenture;" and
- any other terms of the debt securities that are not inconsistent with
the indenture.
(section 301)
We may issue debt securities as OID debt securities. OID debt securities
bear no interest or bear interest at below-market rates and are sold at a
discount below their stated principal amount. If we issue OID debt securities,
the prospectus supplement or term sheet will contain the issue price, the rate
at which interest will accrete, and the date from which such interest will
accrete on the OID debt securities.
We may also issue indexed debt securities. Payments of principal of, and
premium and interest on, indexed debt securities are determined with reference
to the rate of exchange between the currency or currency unit in
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which the debt security is denominated and any other currency or currency unit
specified by us, to the relationship between two or more currencies or currency
units or by other similar methods or formulas specified in the prospectus
supplement or term sheet.
RANKING
The debt securities will be our unsecured and unsubordinated obligations
and will rank equally with all our other unsecured and unsubordinated debt.
FORM AND DENOMINATION
The prospectus supplement or term sheet will describe the form which the
debt securities will have, including insertions, omissions, substitutions and
other variations permitted by the indenture and any legends required by any
laws, rules or regulations. (section 201)
We will issue debt securities in denominations of $1,000 and whole
multiples thereof, unless the prospectus supplement or term sheet states
otherwise. (section 302)
PAYMENT
We will pay principal of and premium and interest on its registered debt
securities at the place and time described in the debt securities. We will pay
installments of interest on any registered debt security to the person in whose
name the registered debt security is registered at the close of business on the
regular record date for these payments. We will pay principal and premium on
registered debt securities only against surrender of these debt securities.
(section 1001) If we issue debt securities in bearer form, the prospectus
supplement or term sheet will describe where and how payment will be made.
MATERIAL COVENANTS
The indenture includes the following material covenants:
LIEN ON ASSETS
If we or any of our Gas Utility Subsidiaries mortgage, pledge or otherwise
subject to any lien the whole or any part of any Property which we now own or
acquire in the future, then we will secure the debt securities to the same
extent and in the same proportion as the debt or other obligation that is
secured by each of those mortgages, pledges or other liens. The debt securities
will remain secured for the same period as the other debt remains secured. This
restriction does not apply, however, to any of the following:
- purchase-money mortgages or liens;
- liens on any property or asset that existed at the time when we
acquired that property or asset;
- any deposit or pledge to secure public or statutory obligations or
contractual obligations to Long Island Power Authority;
- any deposit or pledge with any governmental agency required in order
to qualify us to conduct our business, or any part of our business, or
to entitle us to maintain self-insurance or to obtain the benefits of
any law relating to workmen's compensation, unemployment insurance,
old age pensions or other social security;
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- any deposit or pledge with any court, board, commission or
governmental agency as security related to the proper conduct of any
proceeding before it;
- any mortgage, pledge or lien on any property or asset of any of our
affiliates other than Gas Utility Subsidiaries, even if the affiliate
may have acquired that property or asset from us or a Gas Utility
Subsidiary;
- any lien granted over receivables or other monetary or regulatory
assets granted in connection with a securitization arrangement for
those assets to secure our or one of our Gas Utility Subsidiaries'
monetary or regulatory obligations incurred in relation to such
securitization arrangements, so long as the principal amount of those
obligations does not exceed the aggregate face amount of such
receivables or monetary assets;
- liens for taxes, assessments or governmental charges or levies not yet
delinquent or being contested in good faith by us, if we have made
appropriate reserves;
- liens of landlords and liens of mechanics and materialmen incurred in
the ordinary course of business for sums not yet due or being
contested in good faith by us, if we have made appropriate reserves;
- leases or subleases which we have granted to others in the ordinary
course of business;
- easements, rights-of-way, restrictions and other similar encumbrances
which we have incurred in the ordinary course of business and which do
not interfere with the ordinary conduct of our business;
- liens incurred in connection with the issuance by a state or a
political subdivision of a state of any securities the interest on
which is exempt from federal income taxes under Section 103 of the
Internal Revenue Code or any other laws or regulations in effect at
the time of the issuance; or
- liens for the sole purpose of extending, renewing or replacing all or
a part of the indebtedness secured by any lien referred to in the
foregoing clauses or in this clause.
Notwithstanding the foregoing, we and our Gas Utility Subsidiaries may
create, incur or permit to exist any lien to secure Indebtedness in addition to
those permitted by the preceding sentence, and renew, extend or replace such
liens, PROVIDED that at the time of such creation, incurrence, renewal,
extension or replacement, after giving effect thereto, the aggregate amount of
all such Indebtedness of our company and our Gas Utility Subsidiaries and the
aggregate Attributable Value of all Sales and Leaseback Transactions of our
company and our Gas Utility Subsidiaries at any one time outstanding together
shall not exceed 10% of Consolidated Tangible Assets. As of June 30, 2000,
Consolidated Tangible Assets were $7.1 billion. (section 1007).
SALE AND LEASEBACK TRANSACTIONS
Neither we nor any of our Gas Utility Subsidiaries may enter into any Sale
and Leaseback unless either:
(1) we and our Gas Utility Subsidiaries would be entitled pursuant
to the "--Liens on assets" covenant to create Indebtedness
secured by a lien on the Principal Property to be leased back
in an amount equal to the Attributable Value of such Sale and
Leaseback Transaction without the debt securities being
equally and ratably secured with (or, at our option, prior to)
that Indebtedness; or
(2) we or the relevant subsidiary, within 270 days after the sale
or transfer of the relevant assets shall have been made,
applies, in the case of a sale or transfer for cash, an amount
equal to the net
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proceeds from the sale or, in the case of a sale or transfer
otherwise than for cash, an amount equal to the fair market
value of the Principal Property so leased (as determined by
any two directors of our company or the relevant Gas Utility
Subsidiary) to:
- the retirement of Indebtedness of our company
ranking prior to or on a parity with the debt
securities, incurred or assumed by us or that Gas
Utility Subsidiary which by its terms matures at,
or is extendible or renewable at the option of the
obligor to, a date more than twelve months after
the date of incurring, assuming or guaranteeing
such Indebtedness or
- the investment in any Principal Property used in
the ordinary course of business.
(section 1008)
LIMITATION ON MERGER, CONSOLIDATION AND SALES OF ASSETS
We may not consolidate with or merge into any other entity or transfer or
lease substantially all of our properties and assets to any person unless:
- the successor is organized under the laws of the United States or a state
thereof;
- the successor assumes by supplemental indenture the obligations of its
predecessor (that is, all our obligations under the debt securities and the
indenture); and
- after giving effect to the transaction, there is no default under the
indenture.
The surviving transferee or lessee corporation will be our successor, and
we will be relieved of all obligations under the debt securities and the
indenture. (sections 801 and 802)
DEFINED TERMS
"Attributable Value" means, as to any particular lease under which we or
any of our Gas Utility Subsidiaries is at any time liable as lessee and at any
date as of which the amount thereof is to be determined, the total net
obligations of the lessee for rental payments during the remaining term of the
lease (including any period for which such lease has been extended or may, at
the option of the lessor, be extended) discounted from the respective due dates
thereof to such date at a rate per annum equivalent to the interest rate
inherent in such lease (as determined in good faith by us in accordance with
generally accepted financial practice) compounded semi- annually.
"Capital Stock" of any Person means shares, interests, rights to purchase,
warrants, options, participation or other equivalents of or interests in
(however designed) equity of such Person, including any preferred stock, but
excluding any debt securities convertible into such equity.
"Consolidated Tangible Assets" means, as of the date of any determination
thererof, the total of all assets which would appear on a consolidated balance
sheet of our company and our subsidiaries, prepared in accordance with U.S.
generally accepted accounting principles or U.S. GAAP, at their net book values
(after deducting related depreciation, depletion and amortization which, in
accordance with U.S. GAAP, should be set aside in connection with the business
conducted), but excluding goodwill, trade names, trademarks, patents,
unamortized debt discount and all other intangible assets all as determined in
accordance with U.S. GAAP.
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"Gas Utility Subsidiaries" means the following subsidiaries of our Company
engaged in the distribution and sale at retail of natural gas: The Brooklyn
Union Gas Company d/b/a KeySpan Energy Delivery New York, KeySpan Gas East
Corporation d/b/a KeySpan Energy Delivery Long Island, Boston Gas Company,
Colonial Gas Company, Essex Gas Company, and EnergyNorth Natural Gas, Inc.; and
any other subsidiary of our Company engaged in such activity, provided such
subsidiary would be, at any particular time, a "significant subsidiary" of the
Company within the meaning of Rule 1-02 of Regulation S-X promulgated by the
Commission.
"Indebtedness" means, with respect to any Person (without duplication):
(1) any liability of that Person:
- for borrowed money or under any reimbursement
obligation relating to a letter of credit or similar
instrument;
- evidenced by a bond, note, debenture or similar
instrument;
- to pay the deferred purchase price of property or
services, except trade accounts payable arising in the
ordinary course of business; or
- for the payment of money relating to any obligations
under any capital lease of real or personal property
which has been recorded as a capitalized lease
obligation.
(2) any liability of others described in the preceding clause
(1) that the Person has guaranteed or that is otherwise its legal
liability or which is secured by a lien on that Person's Property;
(3) any amendment, supplement, modification, deferral,
renewal, extension or refunding of any liability of the types referred
to in clauses (1) or (2) above; and
(4) in the case of any of our subsidiaries, the aggregate
preference in respect of amounts payable on the issued and outstanding
shares of preferred stock of any such subsidiary in the event of any
voluntary or involuntary liquidation, dissolution or winding up (excluding
any such preference attributable to such shares of preferred stock that
are owned by such Person or any of its subsidiaries).
"Person" means any individual, firm, corporation, partnership,
association, joint venture, tribunal, limited liability company, trust,
government or political subdivision or agency or instrumentality thereof, or any
other entity or organization.
"Principal Property" means the real estate, fixtures, pipelines, mains,
meters, pipes, valves, compressors and other related personal property primarily
used in connection with the transportation, distribution or retail sale of gas
by the Gas Utility Subsidiaries.
"Property" means any asset, revenue or any other property, including
capital stock, whether tangible or intangible, real or personal, including,
without limitation, any right to receive income.
"Sale and Leaseback Transaction" means any transaction or series of
related transactions relating to Principal Property now owned or hereafter
acquired whereby we or one of our Gas Utility Subsidiaries transfers the
Principal Property to a Person and we or one of our Gas Utility Subsidiaries
leases it from that Person for a period, including renewals, in excess of three
years.
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"Significant Subsidiary" has the meaning specified , as of the date of the
indenture, in Rule 1-02 of Regulation S-X promulgated under the Securities Act.
REGISTRATION OF TRANSFER AND EXCHANGE
All debt securities issued upon any registration of transfer or exchange
of debt securities will be valid obligations of ours, evidencing the same debt
and entitled to the same rights under the indenture as the debt securities
surrendered in the registration of transfer or exchange.
REGISTRATION OF TRANSFER
Holders of registered debt securities may present their securities for
registration of transfer at the office of one or more security registrars
designated and maintained by us. (section 305)
We will not be required to register the transfer of or exchange debt
securities under the following conditions:
- We will not be required to register the transfer of or exchange any debt
securities during a period of 15 days before any selection of those debt
securities to be redeemed.
- We will not be required to register the transfer of or exchange any debt
securities selected for redemption, in whole or in part, except the
unredeemed portion of any debt securities being redeemed in part.
- We will not be required to register the transfer of or exchange debt
securities of any holder who has exercised an option to require the
repurchase of those debt securities prior to their stated maturity date,
except the portion not being repurchased.
(section 305)
EXCHANGE
At your option, you may exchange your registered debt securities of any
series (except a global security, as set forth below) for an equal principal
amount of other registered debt securities of the same series having authorized
denominations upon surrender to our designated agent.
We may at any time exchange debt securities issued as one or more global
securities for an equal principal amount of debt securities of the same series
in definitive registered form. In this case we will deliver to the holders new
debt securities in definitive registered form in the same aggregate principal
amount as the global securities being exchanged.
The depositary of the global securities may also decide at any time to
surrender one or more global securities in exchange for debt securities of the
same series in definitive registered form, in which case we will deliver the new
debt securities in definitive form to the persons specified by the depositary,
in an aggregate principal amount equal to, and in exchange for, each person's
beneficial interest in the global securities. (section 305)
Notwithstanding the above, we will not be required to exchange any debt
securities if, as a result of the exchange, we would suffer adverse consequences
under any United States law or regulation. (section 305)
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GLOBAL SECURITIES
If we decide to issue debt securities in the form of one or more global
securities, then we will register the global securities in the name of the
depositary for the global securities or the nominee of the depositary and the
global securities will be delivered by the trustee to the depositary for credit
to the accounts of the holders of beneficial interests in the debt securities.
The prospectus supplement or term sheet will describe the specific terms
of the depositary arrangement for debt securities of a series that are issued in
global form. None of our company, the trustee, any paying agent or the security
registrar 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 global debt security or for maintaining, supervising or reviewing
any records relating to these beneficial ownership interests.
DEFEASANCE OF INDENTURE
We can terminate all of our obligations under the indenture with respect
to the debt securities, other than the obligation to pay interest on and the
principal of the debt securities and certain other obligations, at any time by:
- depositing money or U.S. government obligations with the trustee in an
amount sufficient to pay the principal of and interest on the debt
securities to their maturity; and
- complying with certain other conditions, including delivery to the trustee
of an opinion of counsel to the effect that holders of debt securities
will not recognize income, gain or loss for federal income tax purposes as
a result of our defeasance.
In addition, we can terminate all of our obligations under the indenture
with respect to the debt securities, including the obligation to pay interest on
and the principal of the debt securities, at any time by:
- depositing money or U.S. government obligations with the trustee in an
amount sufficient to pay the principal of and interest on the debt
securities to their maturity, and
- complying with certain other conditions, including delivery to the trustee
of an opinion of counsel stating that there has been a ruling by the
Internal Revenue Service, or a change in the federal tax law since the
date of the indenture, to the effect that holders of debt securities will
not recognize income, gain or loss for federal income tax purposes as a
result of our defeasance.
(sections 402-404)
PAYMENTS OF UNCLAIMED MONEYS
Moneys deposited with the trustee or any paying agent for the payment of
principal of or premium and interest on any debenture that remains unclaimed for
two years will be repaid to us at our request, unless the law requires
otherwise. If this happens and you want to claim these moneys, you must look to
us and not to the trustee or paying agent. (section 409)
EVENTS OF DEFAULT, NOTICES, AND WAIVER
EVENTS OF DEFAULT
An "event of default" regarding any series of debt securities is any one
of the following events:
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- default for 30 days in the payment of any interest installment when due and
payable;
- default in the payment of principal or premium when due at its stated
maturity, by declaration, when called for redemption or otherwise;
- default in the performance of any covenant in the debt securities or in
the indenture by us for 60 days after notice to us by the trustee or by
holders of 25% in principal amount of the outstanding debt securities of
that series;
- acceleration of debt securities of another series or any other
indebtedness of ours or one of our Significant Subsidiaries for borrowed
money, in an aggregate principal amount exceeding $25 million under the
terms of the instrument or instruments under which the indebtedness is
issued or secured, if the acceleration is not annulled within 30 days
after written notice as provided in the indenture;
- a final, non-appealable judgment or order for the payment of money in
excess of $25 million rendered against us or one of our Significant
Subsidiaries that is not paid or discharged within 60 days following entry
of such judgment or order;
- certain events of bankruptcy, insolvency and reorganization involving us;
and
- any other event of default of that series that is specified in the
prospectus supplement or term sheet.
(section 501)
A default regarding a single series of debt securities will not
necessarily constitute a default regarding any other series.
If an event of default for any series of debt securities occurs and is
continuing (other than an event of default involving the bankruptcy, insolvency
or reorganization of our company), either the trustee or the holders of 25% in
principal amount of the outstanding debt securities of that series may declare
the principal (or, in the case of (a) OID debt securities, a lesser amount as
provided in those OID debt securities or (b) indexed debt securities, an amount
determined by the terms of those indexed debt securities), of all the debt
securities of that series, together with any accrued interest on the debt
securities, to be immediately due and payable by notice in writing to us. If it
is the holders of debt securities who give notice of that declaration of
acceleration to us, then they must also give notice to the trustee. (section
502)
If an event of default occurs which involves the bankruptcy, insolvency or
reorganization of our company, as set forth above, then all unpaid principal
amounts (or, if the debt securities are (a) OID debt securities, then the
portion of the principal amount that is specified in those OID debt securities
or (b) indexed debt securities, an amount determined by the terms of those
indexed debt securities) and accrued interest on all debt securities of each
series will immediately become due and payable, without any action by the
trustee or any holder of debt securities. (section 502)
In order for holders of debt securities to initiate proceedings for a
remedy under the indenture, 25% in principal amount must first give notice to us
as provided above, must request that the trustee initiate a proceeding in its
own name and must offer the trustee a reasonable indemnity against costs and
liabilities. If the trustee still refuses for 60 days to initiate the
proceeding, and no inconsistent direction has been given to the trustee by
holders of a majority of the debt securities of the same series, the holders may
initiate a proceeding as long as they do not adversely affect the rights of any
other holders of that series. (section 507)
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The holders of a majority in principal amount of the outstanding debt
securities of a series may rescind a declaration of acceleration if all events
of default, besides the failure to pay principal or interest due solely because
of the declaration of acceleration, have been cured or waived. (section 502)
If we default on the payment of any installment of interest and fail to
cure the default within 30 days, or if we default on the payment of principal
when it becomes due, then the trustee may require us to pay all amounts due to
the trustee, with interest on the overdue principal or interest payments, in
addition to the expenses of collection. (section 503)
A judgment for money damages by courts in the United States, including a
money judgment based on an obligation expressed in a foreign currency, will
ordinarily be rendered only in U.S. dollars. New York statutory law provides
that a court shall render a judgment or decree in the foreign currency of the
underlying obligation and that the judgment or decree shall be converted into
U.S. dollars at the exchange rate prevailing on the date of entry of the
judgment or decree. The indenture requires us to pay additional amounts
necessary to protect holders if a court requires a conversion to be made on a
date other than a judgment date.
NOTICES
The trustee is required to give notice to holders of a series of debt
securities of a default, which remains uncured or has not been waived, that is
known to the trustee within 90 days after the default has occurred. In the event
of a default in the performance of any covenant in the debt securities or the
indenture which results under the indenture in notice to us by the trustee after
90 days, the trustee shall not give notice to the holders of debt securities
until 60 days after the giving of notice to us. The trustee may not withhold the
notice in the case of a default in the payment of principal of and premium or
interest on any of the debt securities. (section 602)
WAIVER
The holders of a majority in principal amount of the outstanding debt
securities of a series may waive any past default or event of default except a
default in the payment of principal of or premium or interest on the debt
securities of that series or a default relating to a provision that cannot be
amended without the consent of each affected holder. (section 513)
REPORTS
We are required to file an officer's certificate with the trustee every
year confirming that we are complying with all conditions and covenants in the
indenture. (section 1005)
We must also file with the trustee copies of our annual reports and the
information and other documents which we may be required to file with the SEC
under Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as
amended. These documents must be filed with the trustee within 15 days after
they are required to be filed with the SEC. If we are not required to file the
information, documents or reports under either of these Sections, then we must
file with the trustee and the SEC, in accordance with the rules and regulations
of the SEC, the supplementary and periodic information, documents and reports
which may be required by Section 13 of the Exchange Act, in respect of a debt
security listed and registered on a national securities exchange, as may be
required by the rules and regulations of the SEC.
Within 30 days of filing the information, documents or reports referred to
above with the trustee, we must mail to the holders of the debt securities any
summaries of the information, documents or reports which are required to be sent
to the holders by the rules and regulations of the SEC. (section 704)
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RIGHTS AND DUTIES OF THE TRUSTEE
The holders of a majority in principal amount of outstanding debt
securities of any series may direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or exercising any trust or
other power conferred on the trustee. The trustee may decline to follow that
direction if it would involve the trustee in personal liability or would be
illegal. (section 512) During a default, the trustee is required to exercise the
standard of care and skill that a prudent man would exercise under the
circumstances in the conduct of his own affairs. (section 601) The trustee is
not obligated to exercise any of its rights or powers under the indenture at the
request or direction of any of the holders of debt securities unless those
holders have offered to the trustee reasonable security or indemnity. (section
603)
The trustee is entitled, in the absence of bad faith on its part, to rely
on an officer's certificate before taking action under the indenture. (section
603)
SUPPLEMENTAL INDENTURES
SUPPLEMENTAL INDENTURES NOT REQUIRING CONSENT OF HOLDERS
Without the consent of any holders of debt securities, we and the trustee
may supplement the indenture, among other things, to:
- pledge property to the trustee as security for the debt securities;
- reflect that another entity has succeeded us and assumed the covenants and
obligations of us under the debt securities and the indenture;
- cure any ambiguity or inconsistency in the indenture or in the debt
securities or make any other provisions necessary or desirable, as long as
the interests of the holders of the debt securities are not adversely
affected in any material respect;
- issue and establish the form and terms of any series of debt securities as
provided in the indenture;
- add to our covenants further covenants for the benefit of the holders of
debt securities (and if the covenants are for the benefit of less than all
series of debt securities, stating which series are entitled to benefit);
- add any additional event of default (and if the new event of default
applies to fewer than all series of debt securities, stating to which
series it applies);
- change the trustee or provide for an additional trustee;
- provide additional provisions for bearer debt securities so long as the
action does not adversely affect the interests of holders of any debt
securities in any material respect; or
- modify the indenture in order to continue its qualification under the Trust
Indenture Act of 1939 or as may be necessary or desirable in accordance
with amendments to that Act.
(section 901)
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SUPPLEMENTAL INDENTURES REQUIRING CONSENT OF HOLDERS
With the consent of the holders of at least a majority in principal amount
of the series of the debt securities that would be affected by a modification of
the indenture, the indenture permits us and the trustee to supplement the
indenture or modify in any way the terms of the indenture or the rights of the
holders of the debt securities. However, without the consent of each holder of
all of the debt securities affected by that modification, we and the trustee may
not:
- reduce the principal of or premium on or change the stated final maturity
of any debt security;
- reduce the rate of or change the time for payment of interest on any debt
security (or, in the case of OID debt securities, reduce the rate of
accretion of the OID);
- change any of our obligations to pay additional amounts under the
indenture;
- reduce or alter the method of computation of any amount payable upon
redemption, repayment or purchase of any debt security by us (or the time
when the redemption, repayment or purchase may be made);
- make the principal or interest on any debt security payable in a currency
other than that stated in the debt security or change the place of payment;
- reduce the amount of principal due on an OID debt security upon
acceleration of maturity or provable in bankruptcy or reduce the amount
payable under the terms of an indexed debt security upon acceleration of
maturity or provable in bankruptcy;
- impair any right of repayment or purchase at the option of any holder of
debt securities;
- modify the right of any holder of debt securities to receive or sue for
payment of the principal or interest on a debt security that would be due
and payable at the maturity thereof or upon redemption; or
- reduce the principal amount of the outstanding debt securities of any
series required to supplement the indenture or to waive any of its
provisions.
(section 902)
A supplemental indenture which modifies or eliminates a provision intended
to benefit the holders of one series of debt securities will not affect the
rights under the indenture of holders of other series of debt securities.
REDEMPTION
The specific terms of any redemption of a series of debt securities will
be contained in the prospectus supplement or term sheet for that series.
Generally, we must send notice of redemption to the holders at least 30 days but
not more than 60 days prior to the redemption date. The notice will specify:
- the principal amount being redeemed;
- the redemption date;
- the redemption price;
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- the place or places of payment;
- the CUSIP number of the debt securities being redeemed;
- whether the redemption is pursuant to a sinking fund;
- that on the redemption date, interest (or, in the case of OID debt
securities, original issue discount) will cease to accrue; and
- if bearer debt securities are being redeemed, that those bearer debt
securities must be accompanied by all coupons maturing after the
redemption date or the amount of the missing coupons will be deducted from
the redemption price, or indemnity must be furnished, and whether those
bearer debt securities may be exchanged for registered debt securities not
being redeemed.
(section 1104)
On or before any redemption date, we will deposit an amount of money with
the trustee or with a paying agent sufficient to pay the redemption price.
(section 1103)
If less than all the debt securities are being redeemed, the trustee shall
select the debt securities to be redeemed using a method it considers fair.
(section 1103) After the redemption date, holders of debt securities which were
redeemed will have no rights with respect to the debt securities except the
right to receive the redemption price and any unpaid interest to the redemption
date. (section 1106)
CONCERNING THE TRUSTEE
We have customary banking relationships with the trustee, The Chase
Manhattan Bank. Among other services, The Chase Manhattan Bank provides us with
cash management and credit services, including payroll account, lockbox, foreign
exchange and investment custody account services. The Chase Manhattan Bank also
serves or has served as administrative agent and trustee with respect to other
issuances of debt by us and our subsidiaries and is a member of a syndicate of
banks which is party to several credit facilities with us in a total amount of
$2 billion. In addition, Chase Securities Inc., an affiliate of The Chase
Manhattan Bank, acts as a placement agent for our commercial paper program.
GOVERNING LAW
The laws of the State of New York govern the indenture and will govern the
debt securities. (section 112)
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. PERSONS
The following is a summary of certain U.S. federal income tax
considerations for beneficial owners of the debt securities that are "non-U.S.
persons" under the Internal Revenue Code of 1986, as amended. Under the Internal
Revenue Code, a "non-U.S. person" means a person that is not any of the
following:
- a citizen or resident of the United States;
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- a corporation or partnership created or organized in or under the laws of
the United States or any political subdivision thereof;
- an estate the income of which is subject to U.S. federal income taxation
regardless of its source; or
- a trust which is either subject to the supervision of a court within the
United States and the control of one or more U.S. persons or has a valid
election in effect under applicable U.S. Treasury regulations to be treated
as a U.S. person.
This summary is based on current law which is subject to change (perhaps
retroactively), is for general purposes only and should not be considered tax
advice. This summary does not represent a detailed description of the federal
income tax consequences to you in light of your particular circumstances. In
addition, it does not represent a detailed description of the U.S. federal
income tax consequences applicable to you if you are subject to special
treatment under the U.S. federal income tax laws (including if you are a
"controlled foreign corporation," "passive foreign investment company" or
"foreign personal holding company"). We cannot assure you that a change in law
will not alter significantly the tax considerations that we describe in this
summary.
YOU SHOULD CONSULT YOUR OWN TAX ADVISOR CONCERNING THE PARTICULAR U.S.
FEDERAL INCOME TAX CONSEQUENCES TO YOU OF THE OWNERSHIP OF THE DEBT SECURITIES,
AS WELL AS THE CONSEQUENCES TO YOU ARISING UNDER THE LAWS OF ANY OTHER TAXING
JURISDICTION.
U.S. FEDERAL WITHHOLDING TAX
The 30% U.S. federal withholding tax will not apply to any payment of
principal or interest (including original issue discount) on a particular series
of debt securities provided that:
- you do not actually (or constructively) own 10% or more of the total
combined voting power of all classes of our voting stock within the meaning
of the Internal Revenue Code and the U.S. Treasury Regulations;
- you are not a controlled foreign corporation that is related to us through
stock ownership;
- you are not a bank whose receipt of interest on the debt securities is
described in the Internal Revenue Code; and
- (a) you provide your name and address on an IRS Form W-8, and certify,
under penalty of perjury, that you are not a U.S. person or (b) a financial
institution holding the debt securities on your behalf certifies, under
penalty of perjury, that it has received an IRS Form W-8 from the
beneficial owner and provides us with a copy.
If you cannot satisfy the requirements described above, payments of
premium, and interest (including original issue discount) made to you will be
subject to the 30% U.S. federal withholding tax, unless you provide us with a
properly executed:
- IRS Form 1001 or successor form claiming an exemption from withholding
under the benefit of a tax treaty or
- IRS Form 4224 or successor form stating that interest paid on the debt
security is not subject to withholding tax because it is effectively
connected with your conduct of a trade or business in the United States.
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Under new Treasury regulations applicable to payment made after December
31, 2000, revised Form W-8s will generally replace IRS Form 1001 and IRS Form
4224. The 30% U.S. federal withholding tax will not apply to any gain or income
that you realize on the sale, exchange, retirement or other disposition of the
debt security.
U.S. FEDERAL ESTATE TAX
Your estate will not be subject to U.S. federal estate tax on debt
securities of a series beneficially owned by you at the time of your death,
provided that:
- you do not own 10% or more of the total combined voting power of all
classes of our voting stock (within the meaning of the Internal Revenue
Code and the U.S. Treasury Regulations) and
- interest on that debt security would not have been, if received at the time
of your death, effectively connected with the conduct by you of a trade or
business in the United States.
U.S. FEDERAL INCOME TAX
If you are engaged in a trade or business in the United States and
interest on the debt securities is effectively connected with the conduct of
that trade or business (although exempt from the 30% withholding tax), you will
be subject to U.S. federal income tax on that interest on a net income basis in
the same manner as if you were a U.S. person as defined under the Internal
Revenue Code. In addition, if you are a foreign corporation, you may be subject
to a branch profits tax equal to 30% (or lower applicable treaty rate) of your
earnings and profits for the taxable year, subject to adjustments that are
effectively connected with the conduct by you of a trade or business in the
United States. For this purpose, interest on debt securities will be included in
earnings and profits.
Any gain or income realized on the disposition of a debt security
generally will not be subject to U.S. federal income tax unless:
- that gain or income is effectively connected with the conduct of a trade or
business in the United States by you, or
- you are an individual who is present in the United States for 183 days or
more in the taxable year of that disposition, and certain other conditions
are met.
INFORMATION REPORTING AND BACKUP WITHHOLDING
In general, you will not be required to provide information reporting and
backup withholding regarding payments that we make to you provided that we do
not have actual knowledge that you are a U.S. person and we have received from
you the statement described above under "U.S. Federal Withholding Tax."
In addition, you will not be required to pay backup withholding and
provide information reporting regarding the proceeds of the sale of a debt
security within the United States or conducted through certain U.S.-related
financial intermediaries, if the payor receives the statement described above
and does not have actual knowledge that you are a U.S. person, as defined under
the Internal Revenue Code, or you otherwise establish an exemption.
U.S. Treasury Regulations were recently issued that generally modify the
information reporting and backup withholding rules applicable to certain
payments made after December 31, 2000. In general, the new U.S. Treasury
Regulations would not significantly alter the present rules discussed above,
except in certain special situations.
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Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against your U.S. federal income tax liability provided the
required information is furnished to the IRS.
PLAN OF DISTRIBUTION
We may sell the debt securities as follows:
- through underwriters or dealers; or
- through agents; or
- directly to purchasers.
The prospectus supplement or term sheet for each series of debt securities
will describe that offering, including:
- the name or names of any underwriters, dealers or agents;
- the purchase price and the proceeds to us from that sale;
- any underwriting discounts and other items constituting underwriters'
compensation;
- any initial public offering price and any discounts or concessions allowed
or reallowed or paid to dealers; and
- any securities exchanges on which the debt securities of that series may be
listed.
UNDERWRITERS
Unless otherwise set forth in the prospectus supplement or term sheet, the
obligations of the underwriters to purchase debt securities will be subject to
certain conditions. The underwriters will be obligated to purchase all the debt
securities of a series if any are purchased.
The debt securities will be acquired by the underwriters for their own
account and may be resold by them from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. Underwriters may be deemed to
have received compensation from us in the form of underwriting discounts or
commissions and may also receive commissions from the purchasers of debt
securities for whom they may act as agent. Underwriters may also sell debt
securities to or through dealers. These dealers may receive compensation in the
form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agent. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
We may authorize underwriters to solicit offers by certain types of
institutions to purchase debt securities from us at the public offering price
stated in the prospectus supplement or term sheet required by delayed delivery
contracts providing for payment and delivery on a specified date in the future.
If we sell debt securities under these delayed delivery contracts, the
prospectus supplement or term sheet will state that as well as the conditions to
which these delayed delivery contracts will be subject and the commissions
payable for that solicitation.
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AGENTS
We may also sell debt securities through agents designated by us from time
to time. We will name any agents involved in the offer or sale of the debt
securities and will list commissions payable by us to these agents in the
prospectus supplement or term sheet. These agents will be acting on a best
efforts basis to solicit purchases for the period of their appointment, unless
we state otherwise in the prospectus supplement or term sheet.
DIRECT SALES
We may sell debt securities directly to purchasers. In this case, we will
not engage underwriters or agents in the offer and sale of debt securities.
REMARKETING TRANSACTIONS
We may also sell debt securities that we have purchased, redeemed or
repaid through one or more remarketing firms acting as principals for their own
accounts or as our agents. The applicable prospectus supplement or term sheet
will identify any remarketing firms and describe the terms of our agreement with
them and their compensation. Remarketing firms may be deemed to be underwriters
of the debt securities under the Securities Act of 1933, as amended.
INDEMNIFICATION
We may indemnify underwriters, dealers or agents who participate in the
distribution of debt securities against certain liabilities, including
liabilities under the Securities Act, and agree to contribute to payments which
these underwriters, dealers or agents may be required to make.
NO ASSURANCE OF LIQUIDITY
Each series of debt securities will be a new issue of securities with no
established trading market. Any underwriters that purchase debt securities from
us may make a market in these debt securities. The underwriters will not be
obligated, however, to make a market in the debt securities and may discontinue
market-making at any time without notice to holders of debt securities. We
cannot assure you that there will be liquidity in the trading market for any
debt securities of any series.
LEGAL OPINIONS
The validity of the debt securities offered by us in this prospectus will
be passed upon for us by Steven L. Zelkowitz, Senior Vice President and General
Counsel of KeySpan. Mr. Zelkowitz is the beneficial owner of or has the option
to acquire approximately 277,400 shares of our common stock. Certain legal
matters will be passed upon for any agents or underwriters by Simpson Thacher &
Bartlett, New York, New York, or other counsel identified in the prospectus
supplement or term sheet. Simpson Thacher & Bartlett also acts as counsel for us
from time to time.
EXPERTS
Arthur Andersen LLP, independent accountants, audited the financial
statements for the nine months ended December 31, 1998 and the twelve months
ended December 31, 1999, and related schedules incorporated by reference in this
prospectus. Arthur Andersen LLP, also audited the financial statements for
Eastern Enterprises for the twelve months ended December 31, 1998 and December
31, 1999, and related schedules incorporated by reference in this
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prospectus. These financial statements and schedules are incorporated by
reference herein in reliance upon the authority of Arthur Andersen LLP, as
experts in accounting and auditing in giving the reports.
Ernst & Young LLP, independent auditors, have audited the income statement
and statement of cash flows, and the related financial statement schedule of
Long Island Lighting Company for the twelve months ended March 31, 1998 included
in our Annual Report on Form 10-K, as amended, for the twelve months ended
December 31, 1999, as set forth in their report, which is incorporated herein by
reference. These financial statements and schedule are incorporated herein by
reference in reliance upon Ernst & Young LLP's report, given on their authority
as experts in accounting and auditing.
22
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the debt
securities being registered, other than the underwriting discounts and
commissions, are as follows:
Securities and Exchange Commission Registration Fee $435,600
Legal Fees and Expenses $100,000
Accountants Fees and Expenses $50,000
Trustee Fees and Expenses $15,000
Rating Agency Fees $250,000
Printing and Delivery Expenses $75,000
Miscellaneous Expenses $5,000
------------------
Total* $930,600
==================
--------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The New York Business Corporation Law ("BCL"), Article 7, Sections 721-726
provide for the indemnification and advancement of expenses to officers and
directors. Section 721 provides that indemnification and advancement pursuant to
the BCL are not exclusive of any other rights an officer or director may be
entitled to, provided that no indemnification may be made to or on behalf of any
director or officer if a judgment or other final adjudication adverse to the
director or officer establishes that his acts were committed in bad faith or
were the result of active and deliberate dishonesty and were material to the
cause of action so adjudicated, or that the director personally gained a
financial profit or other advantage to which he or she was not legally entitled.
Section 722 of the BCL provides that a corporation may indemnify an
officer or director, in the case of third party actions, against judgments,
fines, amounts paid in settlement and reasonable expenses and, in the case of
derivative actions, against amounts paid in settlement and reasonable expenses,
provided that the director or officer acted in good faith, for a purpose which
he or she reasonably believed to be in the best interests of the corporation
and, in the case of criminal actions, had no reasonable cause to believe his
conduct was unlawful. In addition, statutory indemnification may not be provided
in derivative actions (i) which are settled or otherwise disposed of or (ii) in
which the director or officer is adjudged liable to the corporation, unless and
only to the extent a court determines that the person is fairly and reasonably
entitled to indemnity.
Section 723 of the BCL provides that statutory indemnification is
mandatory where the director or officer has been successful, on the merits or
otherwise, in the defense of a civil or criminal action or proceeding. Section
723 also provides that expenses of defending a civil or criminal action or
proceeding may be advanced by the corporation upon receipt of an undertaking to
repay them if and to the extent the recipient is ultimately found not to be
entitled to indemnification. Section 725 provides for repayment of such expenses
when the recipient is ultimately found not to be entitled to indemnification.
Section 726 provides that a corporation may obtain indemnification insurance
indemnifying itself and its directors and officers. The registrant has in effect
insurance policies providing both directors and officers liability coverage and
corporate reimbursement coverage.
Section 402(b) of the BCL provides that a corporation may include in its
certificate of incorporation a
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provision limiting or eliminating, with certain exceptions, the personal
liability of directors to a corporation or its shareholders for damages for any
breach of duty in such capacity. The certificate of incorporation of the
registrant contains provisions eliminating the personal liability of directors
to the extent permitted by New York law.
The registrant's certificate of incorporation provides generally that it
shall, except to the extent expressly prohibited by the BCL, indemnify each of
its officers and directors made or threatened to be made a party to any action,
suit or proceeding, or appeal thereof, whether civil or criminal by reason of
the fact that such person is or was an officer or director against all expense,
liability and loss (including, but not limited to all attorneys' fees,
judgments, fines, pension plan taxes or penalties and amounts paid or to be paid
in settlement) reasonably incurred or suffered by such person in connection
therewith. The certificate of incorporation further provides for advancement and
reimbursement of such expenses incurred by an officer or director in defending
any action or proceeding in advance of the final disposition thereof upon
receipt of an undertaking by such person to repay such amount if, and to the
extent that, such person is ultimately found not to be entitled to
indemnification.
ITEM 16. LIST OF EXHIBITS.
See Exhibit Index
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3, Form S-8, or Form F-3 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Securities and
Exchange Commission by the Issuer pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post- effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
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<PAGE>
(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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Issuer's annual report pursuant to Section 13(a) or Section 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.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of such
registrant pursuant to the provisions referred to in Item 15 of this
registration statement, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in such Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by such registrants of expenses incurred or paid by a director,
officer or controlling person of such registrants in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, KeySpan Corporation
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 amendment to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Brooklyn, State of New York, on the 13th day of
October, 2000.
KEYSPAN CORPORATION
Issuer of Securities
(Registrant)
By: /s/ Gerald Luterman
---------------------------------------------
Gerald Luterman
Chief Financial Officer and Senior Vice-President
(Principal Financial Officer)
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated.
Signatures and Titles: Date:
* October 13, 2000
-------------------------------------------------
Robert B. Catell
Chief Executive Officer and Director
(Principal Executive Officer)
/s/ Gerald Luterman October 13, 2000
-------------------------------------------------
Gerald Luterman
Chief Financial Officer and Senior Vice-
President
(Principal Financial Officer)
/s/ Ronald Jendras October 13, 2000
-------------------------------------------------
Ronald Jendras
Vice President, Controller and Chief
Accounting Officer
(Principal Accounting Officer)
* October 13, 2000
-------------------------------------------------
Lilyan H. Affinito
Director
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<PAGE>
* October 13, 2000
----------------------------------------------------------
George Bugliarello
Director
* October 13, 2000
----------------------------------------------------------
Howard R. Curd
Director
* October 13, 2000
----------------------------------------------------------
Richard N. Daniel
Director
* October 13, 2000
----------------------------------------------------------
Donald H. Elliott
Director
* October 13, 2000
----------------------------------------------------------
Alan H. Fishman
Director
* October 13, 2000
----------------------------------------------------------
James R. Jones
Director
* October 13, 2000
----------------------------------------------------------
Stephen W. McKessy
Director
* October 13, 2000
----------------------------------------------------------
Edward D. Miller
Director
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<PAGE>
* October 13, 2000
------------------------------------------------------------
Basil A. Paterson
Director
* October 13, 2000
------------------------------------------------------------
James Q. Riordan
Director
* October 13, 2000
------------------------------------------------------------
Vincent Tese
Director
/s/ Ronald Jendras October 13, 2000
------------------------------------------------------------
Ronald Jendras, as Attorney-in-Fact
Vice President, Controller and Chief
Accounting Officer
---------------
* Such signature has been affixed pursuant to a power of attorney filed as an
exhibit hereto.
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<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibits
-------- -----------------------
1* Form of Underwriting Agreement
2** Agreement and Plan of Merger, dated as of November 4,
1999, by and among KeySpan Corporation, Eastern
Enterprises and ACJ Acquisition LLC
4-a* Form of Indenture, dated as of November 1, 2000,
between the Registrant and The Chase Manhattan Bank,
as trustee. The form or forms of debt securities with
respect to each particular series of debt securities
registered hereunder will be filed as an exhibit to a
Current Report on Form 8-K and shall be deemed to be
incorporated herein by reference.
5* Opinion of Steven L. Zelkowitz as to the legality of
the debt securities to be issued
12** Computation of ratio of earnings to fixed charges
23-a* Consent of Arthur Andersen, LLP, Independent Accountants
23-b* Consent of Ernst & Young, LLP, Independent Auditors
23-c* Consent of Steven L. Zelkowitz (contained in his
Opinion filed as Exhibit 5 hereto)
24-a** Powers of Attorney
24-b* Certified resolution of the Board of Directors of
KeySpan authorizing signatures pursuant to power of
attorney
25* Statement of Eligibility of The Chase Manhattan Bank on
Form T-1
------------------
* Filed herewith.
** Previously filed.
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