<PAGE>
As filed with the Securities and Exchange Commission on December 22, 2000
File No. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------
<TABLE>
<S> <C>
CONSOLIDATED NATURAL GAS COMPANY CNG CAPITAL TRUST I
<CAPTION>
(Exact name of registrant as specified (Exact name of registrant as specified
in its charter) in its Trust Agreement)
<S> <C>
DELAWARE DELAWARE
<CAPTION>
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
<S> <C>
54-1966737 Applied For
<CAPTION>
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
</TABLE>
120 TREDEGAR STREET
RICHMOND, VIRGINIA 23219
(804) 819-2000
(Address including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------
PATRICIA A. WILKERSON, VICE PRESIDENT AND CORPORATE SECRETARY
JAMES P. CARNEY, ASSISTANT TREASURER
CONSOLIDATED NATURAL GAS COMPANY
120 TREDEGAR STREET, RICHMOND, VIRGINIA 23219
(804) 819-2000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
With a Copy to:
<TABLE>
<S> <C>
JAMES F. STUTTS ROBERT L. BURRUS, JR.
VICE PRESIDENT AND GENERAL COUNSEL MCGUIREWOODS LLP
CONSOLIDATED NATURAL GAS COMPANY ONE JAMES CENTER
120 TREDEGAR STREET 901 EAST CARY STREET
RICHMOND, VIRGINIA 23219 RICHMOND, VIRGINIA 23219
</TABLE>
---------------
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. [_]
CALCULATION OF REGISTRATION FEE(1)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Proposed Proposed
Amount Maximum Maximum Amount of
Title of each Class of to be Offering Price Aggregate Registration
Securities to be Registered Registered Per Share(2) Offering Price Fee
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Senior Debt Securities................
----------------------------------------------------------------------------------------------------
Junior Subordinated Debentures........
----------------------------------------------------------------------------------------------------
Trust Preferred Securities and Related
Guarantee and Agreement as to
Expenses and Liabilities(3)..........
----------------------------------------------------------------------------------------------------
TOTAL................................ $1,500,000,000 $1,500,000,000 $375,000
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
</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 will 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 or the
Agreement as to Expenses and Liabilities by Consolidated Natural Gas
Company.
---------------
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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
Subject to Completion
Dated December 22, 2000
PROSPECTUS
CONSOLIDATED NATURAL GAS COMPANY
120 Tredegar Street
Richmond, Virginia 23219
(804) 819-2000
$1,500,000,000
Senior Debt Securities
Junior Subordinated Debentures
Trust Preferred Securities, Related Guarantee
and Agreement as to Expenses and Liabilities
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 December , 2000.
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using 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.
When we use the terms "we", "our", or the "Company" in this prospectus, we are
referring to Consolidated Natural Gas Company and not CNG Capital Trust I.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements 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
. Current Reports on Form 8-K filed on January 27, 2000 and February 14, 2000
(as amended by a Form 8-K/A filed on April 4, 2000)
. Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000 (as
amended by a Form 10-Q/A filed August 24, 2000), June 30, 2000, and
September 30, 2000
You may request a copy of these filings at no cost, by writing or telephoning
us at the following address:
Corporate Secretary
Consolidated Natural Gas Company
120 Tredegar Street
Richmond, Virginia 23219
(804) 819-2000
You should rely only on the information incorporated by reference or provided
in this prospectus or any prospectus
2
<PAGE>
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.
3
<PAGE>
THE COMPANY
We are a public utility holding company regulated under the Public Utility
Holding Company Act of 1935. Acting through our subsidiaries, we are engaged in
all phases of the natural gas business--distribution, transmission, exploration
and production. Our principal subsidiaries are described below.
Distribution. Our public utility subsidiaries are Dominion East Ohio,
Dominion Peoples, and Dominion Hope. Principal cities served at retail are:
Cleveland, Akron, Youngstown, Canton, Warren, Lima, Ashtabula and Marietta in
Ohio; Pittsburgh (a portion), Altoona and Johnstown in Pennsylvania; and
Clarksburg and Parkersburg in West Virginia. We currently serve at retail
approximately 1.7 million residential, commercial and industrial gas sales and
transportation customers.
Transmission and Storage. Dominion Transmission, Inc. operates a regional
interstate pipeline system and provides gas transportation and storage services
to each of our public utility subsidiaries and to non-affiliated utilities,
end-users and others in the Midwest, the Mid-Atlantic states and the Northeast.
Through its wholly owned subsidiary, Dominion Iroquois, Inc., Dominion
Transmission holds a 16 percent general partnership interest in the Iroquois
Gas Transmission System, L.P., that owns and operates an interstate natural gas
pipeline extending from the Canada-United States border near Iroquois, Ontario,
to Long Island, New York. The Iroquois pipeline transports Canadian gas to
utility and power generation customers in metropolitan New York and New
England. Dominion Transmission, Inc., along with Dominion East Ohio and
Dominion Peoples, operates a combined 26 natural gas storage fields with 885
Bcf of storage capacity. Dominion Transmission, Inc., is subject to regulation
by the Federal Energy Regulatory Commission.
Exploration and Production. Dominion Exploration and Production, Inc. is our
exploration and production subsidiary. It explores for and produces gas and oil
primarily in the onshore and offshore Gulf of Mexico region, the southern and
western United States and the Appalachian region.
Retail Marketing. Dominion Retail Services Corporation was created in 1997 to
market natural gas, electricity and related products and services to
residential, commercial and small industrial customers. Dominion Products and
Services, Inc. also provides energy-related services to customers of our local
distribution subsidiaries and others.
Merger. Effective January 28, 2000, Consolidated Natural Gas Company, our
predecessor corporation, merged into us and became a wholly-owned subsidiary of
Dominion Resources, Inc., a fully integrated gas and electric energy holding
company. Following the merger, we sold our ownership interest in Virginia
Natural Gas, Inc., as required by the terms of the SEC order approving the
transaction. We also have sold our CNG International operations in Latin
America and are actively exploring the sale of our operations
4
<PAGE>
in Australia. Restructuring and merger-related costs incurred during the course
of the past year are more fully described in our most recent Quarterly Report
on Form 10-Q, which is incorporated by reference.
Dominion Resources manages our operations, together with those of its other
subsidiaries, along functional lines in energy, delivery, and exploration and
production segments rather than by corporate entity.
Dominion Resources does not guarantee any of the debt securities offered
hereby.
THE TRUST
CNG Capital Trust I is a statutory business trust newly formed under Delaware
law by us, as sponsor for the Trust, and Bank One Trust Delaware, Inc. as
trustee. 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 Debentures;
. making distributions; and
. engaging in only those other activities necessary, advisable or incidental
to the purposes listed above.
The Junior Subordinated Debentures will be the sole assets of the Trust, and
our payments under the Junior Subordinated Debentures 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 Consolidated Natural
Gas Company, 120 Tredegar Street, Richmond, VA 23219.
USE OF PROCEEDS
The proceeds from the sale of the securities offered by this prospectus will
be added to our treasury funds and subsequently used (either directly or by
repaying short-term indebtedness incurred for such purposes) to finance capital
expenditures, for general corporate purposes, and to retire or redeem debt
securities issued by us as authorized by the SEC under the Public Utility
Holding Company Act. The balance of funds required for these purposes is
expected to be obtained principally from internal cash generation and the
issuance of other debt. Reference is made to the documents incorporated by
reference herein for information relating to estimated capital expenditures.
5
<PAGE>
Ratio of Earnings to Fixed Charges
The ratio of earnings to fixed charges for each of the periods indicated is
as follows:
<TABLE>
<CAPTION>
Twelve Months
Years Ended December 31, Ended
------------------------ September 30,
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- -------------
<S> <C> <C> <C> <C> <C> <C>
1.32 5.04 4.90 4.03 2.33 2.13
==== ==== ==== ==== ==== ====
</TABLE>
DESCRIPTION OF DEBT SECURITIES
The term Debt Securities includes the Senior Debt Securities and the Junior
Subordinated Debentures. We will issue the Senior Debt Securities in one or
more series under a Senior Indenture between us and Bank One Trust Company,
National Association, as Trustee, and the Junior Subordinated Debentures in one
or more series under a Junior Subordinated Indenture between us and Bank One
Trust Company, National Association, as Trustee. The Indenture related to the
Junior Subordinated Debentures is called the Subordinated Indenture in this
prospectus, and together the Senior Indenture and the Subordinated Indenture
are called Indentures. We have summarized selected provisions of the Indentures
below. The forms of the Senior Indenture and the Subordinated Indenture have
been filed as 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 this description
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 Debentures 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 DEBENTURES--SUBORDINATION.
Because we are a holding company that conducts all of our operations through
our subsidiaries, our ability to meet our obligations under the Debt Securities
is dependent on the earnings and cash flows of those subsidiaries and the
ability of those subsidiaries to pay dividends or to advance or repay funds to
us. Holders of Debt Securities will generally have a junior position to claims
of creditors of our subsidiaries, including trade creditors, debtholders,
secured creditors, taxing authorities, guarantee holders and any preferred
stockholders.
Neither of the Indentures limits the amount of Debt Securites 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 the Senior Indenture 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
6
<PAGE>
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;
. 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;
. 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 are to be issued in fully registered
certificated form or in 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 2.1 & 2.3 of the Subordinated 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
7
<PAGE>
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
cannot redeem the Debt Security before 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 more than 60 nor less than 20
days before the date of redemption. (Section 1104 of the Senior Indenture &
Section 3.2 of the Subordinated 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 2.5
of the Subordinated 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 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 before 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 & Section 4.1 of the
Subordinated 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
8
<PAGE>
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 4.4 of the Subordinated 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 12.4 of the Subordinated
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 and related expenses. (Section 305 of the Senior Indenture
& Section 2.5 of the Subordinated 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 2.5 of the
Subordinated 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 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.
9
<PAGE>
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 308 of the Senior Indenture & Section
2.2 of the Subordinated 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 Debentures if the
Junior Subordinated Debentures 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;
10
<PAGE>
. maintain a place of payment;
. 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. (Sections 1001, 1002, 1003
& 1006 of the Senior Indenture & Sections 4.1, 4.2 4.4 & 4.5 of the
Subordinated Indenture.)
Consolidation, Merger or Sale
The Indentures provide that we may consolidate or merge with or into, or
sell all or substantially all our assets to, another Person, 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 and, in the case of a sale
of all or substantially all our assets, we will be relieved of our
obligations. (Sections 801 & 802 of the Senior Indenture & Sections 11.1, &
11.2 of the Subordinated Indenture.)
Events of Default
Event of Default when used in each of the Indentures, will mean any of the
following with respect to Debt Securities of any series:
. failure to pay the principal or any premium on any Debt Security of that
series when due;
. with respect to the Senior Debt Securities, failure to deposit any sinking
fund payment for that series 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 us
under the terms of Junior Subordinated Debentures 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 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 6.1 of the
Subordinated 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
11
<PAGE>
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.
If an Event of Default for any series of Debt Securities occurs and
continues, the Trustee or the holders of at least 33% 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
declaration. (Section 502 of the Senior Indenture & Section 6.1 of the
Subordinated 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. (Sections 512, 601 & 602 of the Senior Indenture & Sections 6.6,
7.1 & 7.2 of the Subordinated 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 14.2 of the Subordinated 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:
. remaining rights 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 12.1 of Subordinated Indenture.)
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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 10.2 of the Subordinated 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 10.1 of the Subordinated
Indenture.)
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 6.6 of the
Subordinated Indenture.)
In addition, under certain circumstances, the holders of a majority of the
outstanding Junior Subordinated Debentures of any series may waive in advance,
for that series, our compliance with certain restrictive provisions of the
Subordinated Indenture under which those Junior Subordinated Debentures were
issued. (Section 4.6 of the Subordinated Indenture.)
Concerning the Trustee
Bank One Trust Company, National Association, an affiliate of Bank One, N.A.,
is the Trustee under the Indentures. We and certain of our affiliates maintain
deposit accounts and banking relationships with Bank One, N.A. Bank One Trust
Company also performs agency functions with respect to other securities issued
by our affiliates. Bank One, N.A. and its affiliates have purchased, and are
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 7.1 of the Subordinated Indenture.)
The Trustee administers its corporate trust business at 153 West 51st Street,
New York, New York 10019, Attention: Corporate Trust Administration.
ADDITIONAL TERMS OF SENIOR DEBT SECURITIES
Limitation on Liens
While any of the Senior Debt Securities are outstanding, we are not permitted
to create liens upon any Principal Property (as
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defined below) or upon any shares of stock of any Material Subsidiary (as
defined below), which we now own or own in the future, to secure any of our
debt, unless at the same time we provide that the Senior Debt Securities will
also be secured by that lien on an equal and ratable basis. However, we are
generally permitted to create the following types of liens:
(1) purchase money liens on future property acquired by us; liens of
any kind existing on property or shares of stock at the time they are
acquired by us; conditional sales agreements and other title retention
agreements on future property acquired by us (as long as none of those
liens cover any of our other properties);
(2) liens on our property or any shares of stock of any Material
Subsidiary that exist as of the date of the Senior Indenture; liens on the
shares of stock of any corporation, which liens existed at the time that
corporation became a Material Subsidiary; certain liens typically incurred
in the ordinary course of business;
(3) liens in favor of the United States (or any State), any foreign
country or any department, agency or instrumentality or political
subdivision of those jurisdictions, to secure payments under any contract
or statute or to secure any debt incurred for the purpose of financing the
purchase price or the cost of constructing or improving the property
subjet to those liens, including, for example, liens to secure debt of the
pollution control or industrial revenue bond type;
(4) debt that we may issue in connection with a consolidation or
merger of the Company or any Material Subsidiary with or into any other
Person (including any of our affiliates or Material Subsidiaries) in
exchange for secured debt of that Person (Third Party Debt) as long as
that debt (i) is secured by a mortgage on all or a portion of the property
of that Person, (ii) prohibits secured debt from being incurred by that
Person, unless the Third Party Debt is secured on an equal and ratable
basis or (iii) prohibits secured debt from being incurred by that Person;
(5) debt of another Person that we must assume in connection with a
consolidation or merger of that Person, with respect to which any of our
property is subjected to a lien;
(6) liens on any property that we acquire, construct, develop or
improve after the date the Senior Debt Securities are first issued that
are created before or within 18 months after the acquisition,
construction, development or improvement of the property and secrue the
payment of the purchase price or related costs;
(7) liens in our favor or in favor of our Material Subsidiaries or
wholly-owned subsidiaries:
(8) liens securing production payments on oil, gas, coal or other
mineral properties;
(9) the placement, extension or renewal of any lien referred to in (1)
through (8) as long as the amount secrued by the liens or the property
subject to the liens is not increased; and
(10) any other lien not covered by (1) through (9) above as
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long as immediately after the creation of the lien the aggregate principal
amount of debt secured by these liens does not exceed 10% of our common
shareholders' equity.
When we use the term "lien" in this section, we mean any mortgage, lien,
pledge, security interest or other encumbrance of any kind; "Material
Subsidiary" means each of our subsidiaries whose total assets (as
determined in accordance with GAAP) represent at least 20% of our total
assets on a consolidated basis; and "Principal Property" means any of our
plants and facilities (including pipelines) located in the United States
that in the opinion of our Board of Directors or management is of material
importance to the business conducted by us and our consolidated
subsidiaries taken as a whole. (Section 1008 of the Senior Indenture.)
Repayment at the Option of the Holder; Repurchases by the Company
We must repay the Senior Debt Securities at the option of the Holders before
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.
(Section 1302 of the Senior Indenture.)
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 before 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. (Section 1303 of the Senior Indenture.)
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 Securites 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.
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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.
(Section 402 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 THE JUNIOR SUBORDINATED DEBENTURES
Additional Covenants Applicable to Junior Subordinated Debentures
Under the Subordinated Indenture, we will:
. maintain 100% ownership of any Trust to which the Junior Subordinated
Debentures have been issued while the Junior Subordinated Debentures remain
outstanding; and
. pay to any Trust to which the Junior Subordinated Debentures have been
issued 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 that Trust, so that the net amounts received and
retained by that 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 4.7 & 4.8 of the Subordinated Indenture.)
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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 Debentures. 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 Debentures, to the extent
permitted by applicable law. (Section 2.10 of the Subordinated Indenture.)
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 Debentures 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 Debentures will be subordinate and junior
in right of payment, to the extent set forth in the Subordinated 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 Debentures have the right to receive any payments of principal or
interest on their Junior Subordinated Debentures. (Sections 14.1 and 14.9 of
the Subordinated Indenture.)
Senior Indebtedness means, with respect to any series of Junior Subordinated
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Debentures, 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;
. capitalized lease obligations;
. 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 to our subsidiaries. (Section 1.1 of the Subordinated Indenture.)
Senior Indebtedness will be entitled to the benefits of the subordination
provisions in the Subordinated Indenture irrespective of the amendment,
modification or waiver of any term of the Senior Indebtedness. We may not amend
the Subordinated Indenture to change the subordination of any outstanding
Junior Subordinated Debentures without the consent of each holder of Senior
Indebtedness that the amendment would adversely affect. (Sections 10.2 & 14.7
of the Subordinated Indenture.)
The Subordinated 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.)
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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 applicable Trust to purchase our Junior Subordinated Debentures. These
Junior Subordinated Debentures 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 Debentures held by the Trust. If we fail to make a payment on the
Junior Subordinated Debentures, the Trust will not have sufficient funds to
make related payments, including distributions, on its Trust Preferred
Securities.
The Guarantee, when taken together with our obligations under the Junior
Subordinated Debentures, the Subordinated Indenture and the amended trust
agreement, will provide a full and unconditional guarantee of amounts due on
the Trust Preferred Securities issued by the Trust.
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 Debentures 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 Debentures. Holders of Trust Preferred
Securities have no preemptive or similar rights. (Section 7.1 of the Amended
Trust Agreement.)
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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
Debentures 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 Junior
Subordinated Debentures 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 that Trust.
Extensions
We have the right under the Subordinated Indenture to defer payments of
interest on the Junior Subordinated Debentures by extending the interest
payment period from time to time on the Junior Subordinated Debentures. The
Administrative Trustees will give the holders of the Trust Preferred
Securities notice of any Extension Period 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 DEBENTURES--OPTION TO EXTEND INTEREST PAYMENT PERIOD.
Distributions
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 Subordinated Debentures. We have
guaranteed the payment of distributions out
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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 register 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 before the relevant
payment dates. Distributions will be paid through the Property Trustee who will
hold amounts received in respect of the Junior Subordinated Debentures in the
Property Account for the benefit of the holders of the trust securities. If 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 before the relevant
payment dates. If 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 Debentures or to the
extent the Junior Subordinated Debentures are redeemed before maturity. The
Junior Subordinated Debentures 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 under SPECIAL EVENT REDEMPTION.
Upon the maturity of the Junior Subordinated Debentures, 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 Debentures, 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
Debentures so redeemed at the redemption price; provided, that holders of trust
securities will be given not less than 20 nor more than 60 days' notice of the
redemption. If 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.)
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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
Debentures,
. interest payable to the Trust on the Junior Subordinated Debentures 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, there is more than an insubstantial risk that the Trust is or
will be considered an investment company and be 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. If 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), 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 Debentures, then, by 12:00 noon New York
City time on the redemption date, 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
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before 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. If 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. If 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.)
Distribution of the Junior Subordinated Debentures
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 Debentures 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. Before any such dissolution, we will obtain any
required regulatory approvals. The right to dissolve the trust and distribute
the Junior Subordinated Debentures 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 Debentures directly
to the holders of the trust securities;
. upon the redemption of all of the trust securities; or
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. upon entry of a court order for the dissolution of us or the Trust.
(Section 8.1 of the Amended Trust Agreement.)
Upon 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 the Trust Preferred Security
specified in an accompanying prospectus supplement, plus accumulated and
unpaid distributions to the date of payment, or
. Junior Subordinated Debentures 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 Debentures 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 Indenture relating to the Junior
Subordinated Debentures will be an event of default under the amended trust
agreement (a Trust Enforcement Event). See DESCRIPTION OF DEBT SECURITIES--
EVENTS OF DEFAULT.
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 Debentures to holders of the
trust securities of the Trust,
. the redemption of all of the trust securities of the Trust, or
. 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
Indenture. If 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
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<PAGE>
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 the Property Trustee, as the
sole holder of the Junior Subordinated Debentures, will have the right under
the Subordinated Indenture to declare the principal of, interest and premium,
if any, on the Junior Subordinated Debentures to be immediately due and
payable.
If the Property Trustee fails to enforce its rights under the amended trust
agreement or the Subordinated Indenture to the fullest extent permitted by law
and subject to the terms of the amended trust agreement and the Subordinated
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 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
Debentures 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 DEBENTURES 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 Debentures 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.)
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 following conditions are met:
. 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
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<PAGE>
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 the Junior
Subordinated Debentures;
. 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;
. before 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 MERGERS, CONSOLIDATIONS OR AMALGAMATIONS OF THE TRUST AND
DESCRIPTION OF THE GUARANTEE--AMENDMENTS, and as otherwise required by law and
the amended trust agreement.
The amended trust agreement may be amended if approved by a majority of the
Administrative Trustees of the Trust. However, if any proposed amendment
provides for, or the Administrative Trustees otherwise propose to effect,
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. 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
. 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 the 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 the Junior Subordinated Debentures, to
. exercise the remedies available under the Subordinated Indenture with
respect to the Junior Subordinated Debentures,
. waive any event of default under the Subordinated Indenture that is
waivable, or
. cancel an acceleration of the principal of the Junior Subordinated
Debentures.
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
. any Trust Preferred Securities owned by us or any of our affiliates will not
be counted in determining whether the
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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. However, the holders of the Trust
Preferred Securities will not be required to offer such an indemnity where the
holders, by exercising their voting rights, direct the Property Trustee to take
any action following a Trust Enforcement Event. (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 Debentures 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.
Bank One Trust Company, National Association 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.
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, to the extent specified in the Guarantee, to the holders of
the Trust Preferred Securities, but only to the extent that the Guarantee
Payments are not paid by or on behalf of the related Trust. We are
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<PAGE>
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.)
The following payments and distributions on the Trust Preferred Securities
are Guarantee Payments:
. any accrued and unpaid distributions required to be paid on the Trust
Preferred Securities of the Trust, 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 Debentures to the
holders of Trust Securities of the Trust or the redemption of all the Trust
Preferred Securities of the Trust, the lesser of:
. the sum of the liquidation amount and all accrued and unpaid
distributions on the Trust Preferred Securities of the Trust 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 of the Trust 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
Debentures that the Property Trustee holds under a Trust, that 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 Debentures that we may issue
and similar guarantees; and
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. senior to our common stock. (Section 6.2 of 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.
Amendments
We may amend the Guarantee without the consent of any holder of the Trust
Preferred Securities 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 50% of the outstanding Trust Preferred
Securities to which that Guarantee relates. (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 Debentures to the holders of
those Trust Preferred Securities; or
. the amounts payable upon liquidation of the related 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 Debentures, 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.)
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Because we are a holding company that conducts all of our operations through
our subsidiaries, our ability to meet our obligations under the Guarantee is
dependent on the earnings and cash flows of those subsidiaries and the ability
of those subsidiaries to pay dividends or to advance or repay funds to us. The
Trust, as holder of the Guarantee and the Junior Subordinated Debentures will
generally have a junior position to claims of creditors of our subsidiaries,
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 related Guarantee. (Section 3.1 of the Guarantee.)
The holders of a majority of the Trust Preferred Securities to which the
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 that Guarantee or to direct the exercise of any trust or power
that the Guarantee Trustee holds under that 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
Bank One Trust Company is the Guarantee Trustee. It is also the Property
Trustee, the Subordinated Indenture Trustee and the Senior Indenture Trustee.
Bank One Delaware, Inc. is the Delaware trustee for the Trust. We and certain
of our affiliates maintain deposit accounts and banking relationships with Bank
One, N.A. Bank One Trust Company also performs agency functions with respect to
other securities listed by our affiliates. Bank One, N.A. and its affiliates
have purchased, and are likely to purchase in the future, our securities and
securities of our affiliates.
The Guarantee Trustee will perform only those duties that are specifically
set forth in the 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 the 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.)
AGREEMENT AS TO EXPENSES AND LIABILITIES
We will enter into an Agreement as to Expenses and Liabilities under the
Trust
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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 that 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 that 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 DEBENTURES 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 Indenture that has the effect of
providing a full, irrevocable and unconditional guarantee of the Trust's
obligations under the Trust Preferred Securities.
As long as we make payments of interest and other payments when due on the
Junior Subordinated Debentures 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 Debentures 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 Debentures will match the distribution rate and distribution
and other payment dates for the Trust Preferred Securities;
. we will pay for any and all costs, expenses and liabilities of the Trust
except its obligations under its Trust Preferred Securities; and
. the 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
Debentures, 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.
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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 Debentures 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.
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, 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
McGuireWoods LLP, counsel to the Company, will issue an opinion about the
legality of the offered securities for us. As of December 20, 2000, partners of
McGuireWoods LLP own less than one half of one percent of the common stock of
Dominion Resources, Inc. Certain matters
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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 audited historical financial statements of Consolidated Natural Gas
Company and its subsidiaries incorporated in this prospectus by reference to
the Company's Current Report on Form 8-K dated January 27, 2000, have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The estimates of gas and oil reserves included in such 1999 Annual Report are
incorporated in this prospectus by reference thereto in reliance upon the
report of Ralph E. Davis Associates, Inc., independent geologists, as experts.
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Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
About This Prospectus..................................................... 2
Where You Can Find More Information....................................... 2
The Company............................................................... 4
The Trusts................................................................ 5
Use of Proceeds........................................................... 5
Ratio of Earnings to Fixed Charges........................................ 6
Description of Debt Securities............................................ 6
Additional Terms of Senior Debt Securities................................ 13
Additional Terms of Junior Subordinated Debentures........................ 16
Description of the Trust Preferred Securities............................. 18
Description of the Guarantees............................................. 28
Agreements as to Expenses and Liabilities................................. 31
Relationship Among the Trust Preferred Securities, the Guarantee and the
Junior Subordinated Debentures Held by the Trust......................... 32
Accounting Treatment...................................................... 32
Plan of Distribution...................................................... 33
Legal Opinions............................................................ 33
Experts................................................................... 34
</TABLE>
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CONSOLIDATED NATURAL GAS COMPANY
$1,500,000,000
Senior Debt Securities
Junior Subordinated Debentures
Trust Preferred Securities, Related Guarantee
and Agreement as to Expenses and Liabilities
---------------
PROSPECTUS
---------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
<TABLE>
<CAPTION>
Estimated
---------
<S> <C>
Securities and Exchange Commission fee (actual)...................... $ 375,000
Trustee Fees and Expenses............................................ 45,000
Rating Agency Fees................................................... 250,000
Printing Expenses.................................................... 350,000
Accountants' Fees.................................................... 120,000
Counsel Fees......................................................... 500,000
Miscellaneous........................................................ 100,000
---------
Total.............................................................. 1,740,000
</TABLE>
Item 15. Indemnification of Directors and Officers.
Consolidated Natural Gas Company is a Delaware corporation and subsidiary of
Dominion Resources, Inc. Article VI of Dominion Resources' Articles of
Incorporation mandates indemnification of its directors and officers to the
full extent permitted by the Virginia Stock Corporation Act (the Virginia Act)
and any other applicable law. The Virginia Act permits a corporation to
indemnify its directors and officers against liability incurred in all
proceedings, including derivative proceedings, arising out of their service to
the corporation or to other corporations or enterprises that the officer or
director was serving at the request of the corporation, except in the case of
willful misconduct or a knowing violation of a criminal law. Dominion Resources
is required to indemnify its directors and officers in all such proceedings if
they have not violated this standard.
Dominion Resources has purchased directors' and officers' liability insurance
policies. Within the limits of their coverage, the policies insure (1) the
directors and officers of Dominion Resources against certain losses resulting
from claims against them in their capacities as directors and officers to the
extent that such losses are not indemnified by Dominion Resources and (2)
Dominion Resources to the extent that it indemnifies such directors and
officers for losses as permitted under the laws of Virginia. Both Article VI of
Dominion Resources' Articles of Incorporation and the liability insurance
policies cover individuals serving as officers, directors, or trustees of the
registrants at Dominion Resources' request.
Article Eighth of the Consolidated Natural Gas Company's certificate of
incorporation limits the personal liability of directors to Consolidated
Natural Gas Company for monetary damages for certain breaches of fiduciary
duty.
Section 145 of the General Corporation Law of the State of Delaware empowers
a corporation to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding by reason of the fact that he is or was a director, officer,
employee or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
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<PAGE>
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful, except that, in the case
of an action or suit by or in the right of the corporation, no indemnification
may be made in respect of any claim, issue or matter as to which such person is
adjudged to be liable to the corporation unless the Court of Chancery or the
court in which such action or suit was brought determines that such person is
fairly and reasonably entitled to indemnity for proper expenses. The by-laws of
Consolidated Natural Gas Company provide mandatory indemnification to the full
extent permitted by Section 145.
Item 16. Exhibits.
<TABLE>
<CAPTION>
Exhibit
No. Description of Document
------- -----------------------
<C> <S>
1.1 Form of Underwriting Agreement (filed herewith) (Note: The form filed
herewith is for Senior Debt Securities. A similar form will be used
for junior subordinated debentures or Trust Preferred Securities with
appropriate conforming changes.)
4.1 Form of Indenture relating to senior debt securities between
Consolidated Natural Gas Company and Bank One Trust Company, National
Association (filed herewith)
4.2 Form of Indenture relating to junior subordinated debentures between
Consolidated Natural Gas Company and Bank One Trust Company, National
Association (filed herewith)
4.3 Form of supplemental indenture to the Senior Indenture (filed
herewith)
4.4 Form of Guarantee Agreement to be delivered by Consolidated Natural
Gas Company (filed herewith)
4.5 Certificate of Trust of CNG Capital Trust I (filed herewith)
4.6 Trust Agreement of CNG Capital Trust I, dated December 21, 2000 (filed
herewith)
4.7 Form of Amended and Restated Trust Agreement (filed herewith)
4.8 Form of Agreement as to Expenses and Liabilities (filed herewith)
5.1 Opinion of McGuireWoods LLP, counsel to Consolidated Natural Gas
Company with respect to legality of securities (filed herewith)
5.2 Opinion of Richards, Layton & Finger, special Delaware counsel to
Consolidated Natural Gas Company with respect to the formation of the
Trust and the issuance of Trust Preferred Securities (filed herewith)
12.1 Computation of Ratio of Earnings to Fixed Charges for the years ended
December 31, 1995 through 1999 and the twelve months ended September
30, 2000 (filed herewith)
23.1 Consent of McGuireWoods LLP (contained in Exhibit 5.1)
23.2 Consent of Richards, Layton & Finger (contained in Exhibit 5.2)
23.3 Consent of PricewaterhouseCoopers LLP (filed herewith)
23.4 Consent of Independent Geologist (filed herewith)
24 Powers of Attorney (contained on the signature pages hereto)
25.1 Statements of Eligibility of Bank One Trust Company, National
Association (filed herewith)
25.2 Statements of Eligibility of Bank One Trust Company, National
Association (filed herewith)
</TABLE>
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<PAGE>
Item 17. Undertakings.
Each of the undersigned registrants 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 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.
(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 registrant 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 registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
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.
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<PAGE>
(5) 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 foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by 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, such 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 registrant hereby further undertakes:
(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.
(7) If any securities registered hereunder are offered at competitive
bidding, the undersigned registrant hereby undertakes (1) to use its best
efforts to distribute prior to the opening of bids, to prospective
bidders, underwriters and dealers, a reasonable number of copies of a
prospectus which at that time meets the requirements of section 10(a) of
the Act, and relating to the securities offered at competitive bidding, as
contained in the registration statement, together with any supplements
thereto, and (2) to file an amendment to the registration statement
reflecting the results of bidding, the terms of the reoffering and related
matters to the extent required by the applicable form, not later than the
first use, authorized by the issuer after the opening of bids, of a
prospectus relating to the securities offered at competitive bidding,
unless no further public offering of such securities by the issuer and no
reoffering of such securities by the purchasers is proposed to be made.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Consolidated
Natural Gas Company 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
22nd day of December, 2000.
Consolidated Natural Gas Company
/s/ Thos. E. Capps
By___________________________________
Thos. E. Capps
Chairman of the Board of Directors
President and Chief Executive
Officer
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 22nd of December, 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, any 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 Consolidated Natural Gas Company deems appropriate
and file any registration statement requesting additional securities under Rule
462(b)(3) of the Securities Act of 1933, and generally to do all things in
their name in their capacities as officers and directors to enable Consolidated
Natural Gas Company to comply with the provisions of the Securities Act of 1933
and all requirements of the Securities and Exchange Commission.
<TABLE>
<CAPTION>
Signature Capacity
--------- --------
<S> <C>
/s/ Thos. E. Capps
_____________________________________ Chairman of the Board of Directors,
Thos. E. Capps President and Chief Executive Officer
/s/ Thomas F. Farrell, II
_____________________________________
Thomas F. Farrell, II Director
/s/ Edgar M. Roach Jr.
_____________________________________
Edgar M. Roach, Jr. Director
/s/ Thomas N. Chewning
_____________________________________ Executive Vice President (Chief
Thomas N. Chewning Financial Officer)
/s/ Steven A. Rogers
_____________________________________
Steven A. Rogers Controller
</TABLE>
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<PAGE>
Pursuant to the requirements of the Securities Act of 1933, CNG Capital Trust
I 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 22nd day of December, 2000.
CNG Capital Trust I
By Consolidated Natural Gas Company,
As Sponsor
/s/ G. Scott Hetzer
By___________________________________
Authorized Officer
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