<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 2, 1997.
SUBJECT TO AMENDMENT. REGISTRATION NOS. 333-40629
333-40629-01
333-40629-02
333-40629-03
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
<TABLE>
<C> <C> <C>
ALABAMA POWER COMPANY ALABAMA 63-0004250
ALABAMA POWER CAPITAL TRUST III DELAWARE 51-6507053
ALABAMA POWER CAPITAL TRUST IV DELAWARE 51-6507054
ALABAMA POWER CAPITAL TRUST V DELAWARE APPLIED FOR
(Exact name of registrant as specified in its (State or other jurisdiction of (I.R.S. Employer Identification
charter) incorporation or organization) No.)
</TABLE>
600 NORTH 18TH STREET
BIRMINGHAM, ALABAMA 35291
(205) 257-1000
(Address, including zip code, and telephone number, including area code, of each
registrant's principal executive offices)
---------------------
ART P. BEATTIE
VICE PRESIDENT, SECRETARY AND TREASURER
ALABAMA POWER COMPANY
600 NORTH 18TH STREET
BIRMINGHAM, ALABAMA 35291
(205) 257-2505
(Name, address, including zip code, and telephone number, including area code,
of agent for service of each registrant)
---------------------
THE COMMISSION IS REQUESTED TO MAIL SIGNED COPIES OF ALL ORDERS, NOTICES AND
COMMUNICATIONS TO:
W . L . WESTBROOK WALTER M. BEALE, JR., ESQ.
FINANCIAL VICE PRESIDENT BALCH & BINGHAM LLP
THE SOUTHERN COMPANY 1901 SIXTH AVENUE NORTH
270 PEACHTREE STREET, N.W. SUITE 2600
ATLANTA, GEORGIA 30303 BIRMINGHAM, ALABAMA 35203
JOHN D. MCLANAHAN, ESQ.
TROUTMAN SANDERS LLP
600 PEACHTREE STREET, N.E.
SUITE 5200
ATLANTA, GEORGIA 30308-2216
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] __________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
TITLE OF AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
EACH CLASS OF SECURITIES TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) PER UNIT(1)(2)(3) PRICE(1)(2)(3) FEE(1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alabama Power Capital Trust III Preferred
Securities............................................
- ---------------------------------------------------------------------------------------------------------------------------------
Alabama Power Capital Trust IV Preferred Securities...
- ---------------------------------------------------------------------------------------------------------------------------------
Alabama Power Capital Trust V Preferred Securities....
- ---------------------------------------------------------------------------------------------------------------------------------
Alabama Power Company Senior Notes....................
- ---------------------------------------------------------------------------------------------------------------------------------
Alabama Power Company Junior Subordinated Notes.......
- ---------------------------------------------------------------------------------------------------------------------------------
Alabama Power Company Guarantees with respect to
Preferred Securities of Alabama Power Capital Trust
III, Alabama Power Capital Trust IV and Alabama Power
Capital Trust V(4)(5).................................
- ---------------------------------------------------------------------------------------------------------------------------------
Total................................................. $750,000,000(6) 100% $750,000,000 $227,273(7)
=================================================================================================================================
</TABLE>
(1) There are being registered hereunder such presently indeterminate number of
Preferred Securities of Alabama Power Capital Trust III, Alabama Power
Capital Trust IV and Alabama Power Capital Trust V and such presently
indeterminate principal amount of Senior Notes and Junior Subordinated Notes
of Alabama Power Company with an aggregate initial offering price not to
exceed $750,000,000. Junior Subordinated Notes also may be issued to Alabama
Power Capital Trust III, Alabama Power Capital Trust IV or Alabama Power
Capital Trust V and later distributed upon dissolution and distribution of
the assets thereof, which would include such Junior Subordinated Notes for
which no separate consideration will be received. Pursuant to Rule 457(o)
under the Securities Act of 1933, which permits the registration fee to be
calculated on the basis of the maximum offering price of all the securities
listed, the table does not specify by each class information as to the
amount to be registered, proposed maximum offering price per unit or
proposed maximum aggregate offering price.
(2) Estimated solely for the purpose of determining the registration fee.
(3) Exclusive of accrued interest and distributions, if any.
(4) No separate consideration will be received for the Alabama Power Company
Guarantees. Pursuant to Rule 457(n) no separate fee is payable in respect of
the Alabama Power Company Guarantees.
(5) Includes the obligations of Alabama Power Company under the respective Trust
Agreements, the Subordinated Note Indenture, the related series of Junior
Subordinated Notes, the respective Guarantees and the respective Agreements
as to Expenses and Liabilities, which include the Company's covenant to pay
any indebtedness, expenses or liabilities of the Trusts (other than
obligations pursuant to the terms of the Preferred Securities or other
similar interests), all as described in this registration statement.
(6) Includes $200,000,000 of unsold Preferred Securities, Junior Subordinated
Notes and Alabama Power Company Guarantees previously registered under
Registration Statement No. 333-17333.
(7) Previously paid.
---------------------
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
THE WITHIN PROSPECTUS CONTAINS THE INFORMATION REQUIRED BY RULE 429 OF THE
COMMISSION UNDER THE SECURITIES ACT OF 1933 WITH RESPECT TO THE $200,000,000 OF
PREFERRED SECURITIES, JUNIOR SUBORDINATED NOTES AND ALABAMA POWER COMPANY
GUARANTEES REMAINING UNSOLD UNDER REGISTRATION STATEMENT NO. 333-17333.
================================================================================
<PAGE>
EXPLANATORY NOTE
This Amendment No.1 to the Registration Statement includes two
prospectus supplements. The first relates to the proposed offering of Series
A Senior Notes as described therein currently planned to commence as soon as
practicable after the effective date of the Registration Statement. The second
is a form that may be used in connection with issuances from time to time of
Preferred Securities.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED WITHOUT THE DELIVERY OF A FINAL PROSPECTUS
SUPPLEMENT AND ACCOMPANYING PROSPECTUS. THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF
THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE
WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED DECEMBER 2, 1997
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED DECEMBER , 1997
$193,800,000
ALABAMA POWER COMPANY
A SUBSIDIARY OF THE SOUTHERN COMPANY
SERIES A % SENIOR NOTES
DUE DECEMBER 1, 2047
------------------
Interest on the Series A % Senior Notes due December 1, 2047 (the
"Series A Senior Notes") at the rate of % per annum (the "Securities Rate")
will be payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year (each, an "Interest Payment Date"), commencing December
31, 1997. The Series A Senior Notes will be redeemable at 100% of the principal
amount redeemed plus accrued interest to the redemption date at the option of
Alabama Power Company (the "Company") in whole or in part on or after December
1, 2002. The Series A Senior Notes will be available for purchase in
denominations of $25 and any integral multiple thereof.
The Series A Senior Notes will be direct, unsecured and unsubordinated
obligations of the Company ranking pari passu with all other unsecured and
unsubordinated obligations of the Company. The Series A Senior Notes will be
effectively subordinated to all secured debt of the Company, including its first
mortgage bonds, aggregating approximately $2,300,000,000 outstanding at
September 30, 1997. The Senior Note Indenture contains no restrictions on the
amount of additional indebtedness that may be incurred by the Company.
The Series A Senior Notes initially will be represented by a global
certificate or certificates registered in the name of The Depository Trust
Company ("DTC") or its nominee. Beneficial interests in the Series A Senior
Notes will be shown on, and transfers thereof will be effected only through,
records maintained by Participants (as defined herein) in DTC. Except as
described herein, Series A Senior Notes in certificated form will not be issued
in exchange for the global certificates. See "Description of the Series A Senior
Notes -- Book-Entry Only Issuance -- The Depository Trust Company."
The Series A Senior Notes are expected to be approved for listing on the
New York Stock Exchange, subject to official notice of issuance. Trading of the
Series A Senior Notes on the New York Stock Exchange is expected to commence
within a 30-day period after the initial delivery of the Series A Senior Notes.
See "Underwriting" herein.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
=======================================================================================================================
PRICE TO UNDERWRITING DISCOUNTS PROCEEDS TO
PUBLIC(1) AND COMMISSIONS(2)(4) COMPANY(3)(4)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Series A Senior Note % % %
- -----------------------------------------------------------------------------------------------------------------------
Total $ $ $
=======================================================================================================================
</TABLE>
(1) Plus accrued interest, if any, from the date of original issuance.
(2) See "Underwriting" for a description of the indemnification arrangements
with the Underwriters.
(3) Before deducting expenses of the offering payable by the Company
estimated to be $ .
(4) The Underwriting Discount will be % of the principal amount of the
Series A Senior Notes sold to certain institutions. Therefore, to the
extent any such sales are made to such institutions, the actual total
Underwriting Discount will be less than, and the actual total Proceeds to
Company will be greater than, the amounts shown in the table above.
------------------
The Series A Senior Notes offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part. It is expected
that delivery of the Series A Senior Notes will be made only in book-entry form
through the facilities of DTC on or about December , 1997 against payment
therefor in immediately available funds.
------------------
SALOMON SMITH BARNEY
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
THE ROBINSON-HUMPHREY COMPANY, INC.
The date of this Prospectus Supplement is December , 1997.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SERIES A SENIOR
NOTES OFFERED HEREBY, INCLUDING BY ENTERING STABILIZING BIDS, PURCHASING SERIES
A SENIOR NOTES TO COVER SYNDICATE SHORT POSITIONS AND IMPOSING PENALTY BIDS. FOR
A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING" HEREIN.
SUMMARY OF OFFERING
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus Supplement and in
the accompanying Prospectus. Capitalized terms not otherwise defined shall have
the meanings assigned in the Glossary.
The Company................ The Company is a corporation organized under the
laws of the State of Alabama on November 10,
1927, by the consolidation of a predecessor
Alabama Power Company, Gulf Electric Company and
Houston Power Company. The Company has its
principal office at 600 North 18th Street,
Birmingham, Alabama 35291, telephone (205)
257-1000. The Company is a wholly owned
subsidiary of The Southern Company.
The Company is a regulated public utility engaged
in the generation, transmission, distribution and
sale of electric energy within an approximately
44,500 square mile service area comprising most
of the State of Alabama.
Series A Senior Notes
Offered.................... The Company is offering $193,800,000 aggregate
principal amount of its Series A Senior Notes.
Interest on the Series A Senior Notes will be
payable quarterly in arrears on March 31, June
30, September 30 and December 31 of each year,
commencing on December 31, 1997.
Record Date................ The regular record date for each Interest Payment
Date will be the close of business on the 15th
calendar day prior to such Interest Payment Date.
Ranking.................... The Series A Senior Notes will be direct, unsecured
and unsubordinated obligations of the Company
ranking pari passu with all other unsecured and
unsubordinated obligations of the Company. The
Series A Senior Notes will be effectively
subordinated to all secured debt of the Company,
including its first mortgage bonds, aggregating
approximately $2,300,000,000 outstanding at
September 30, 1997. The Senior Note Indenture
contains no restrictions on the amount of
additional indebtedness that may be incurred by
the Company.
Redemption................. The Series A Senior Notes will be redeemable by the
Company (in whole or in part), from time to time
on or after December 1, 2002, at 100% of the
principal amount to be redeemed plus accrued
interest to the redemption date. See "Description
of the Series A Senior Notes -- Redemption"
herein.
Proposed Listing........... New York Stock Exchange.
S-2
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
September 30, 1997, and as adjusted to reflect the issuances described in
note(1) below. The following data is qualified in its entirety by reference to
and, therefore, should be read together with the detailed information and
financial statements appearing in the documents incorporated herein by
reference. See also "Selected Information" in the accompanying Prospectus.
<TABLE>
<CAPTION>
CAPITALIZATION (UNAUDITED) AS OF
SEPTEMBER 30, 1997
--------------------------------
ACTUAL AS ADJUSTED(1)
---------- -------------------
(THOUSANDS, EXCEPT PERCENTAGES)
<S> <C> <C> <C>
Common Stock Equity......................................... $2,775,321 $2,775,321 47.6%
Cumulative Preferred Stock.................................. 278,400 278,400 4.8
Company Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trusts Holding Company Junior
Subordinated Notes (2).................................... 297,000 297,000 5.1
Senior Notes................................................ -- 193,800 3.3
Other Long-Term Debt........................................ 2,219,594 2,284,594 39.2
---------- ---------- -----
Total, excluding amounts due within one year...... $5,570,315 $5,829,115 100.0%
========== ========== =====
</TABLE>
- ---------------
(1) Reflects (i) the issuance of the Series A Senior Notes and (ii) the issuance
in November 1997 by The Industrial Development Board of the Town of Columbia
of $65,000,000 aggregate principal amount of its Variable Rate Demand
Revenue Bonds (Alabama Power Company Project) Series 1997 (Taxable) for the
benefit of the Company.
(2) As described in the accompanying Prospectus, substantially all of the assets
of the respective Trusts are Junior Subordinated Notes of the Company, and
upon redemption of such debt, the related Preferred Securities will be
mandatorily redeemable.
USE OF PROCEEDS
The proceeds from the sale of the Series A Senior Notes will be used
by the Company to repay a portion of its outstanding short-term indebtedness,
which aggregated approximately $305,000,000 as of December 1, 1997.
S-3
<PAGE>
DESCRIPTION OF THE SERIES A SENIOR NOTES
Set forth below is a description of the specific terms of the Series A
Senior Notes. This description supplements, and should be read together with,
the description of the general terms and provisions of the Senior Notes set
forth in the accompanying Prospectus under the caption "Description of the
Senior Notes." The following description does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, the description in
the accompanying Prospectus and the Senior Note Indenture (as defined therein).
GENERAL
The Series A Senior Notes will be issued as a series of Senior Notes under
the Senior Note Indenture. The Series A Senior Notes will be limited in
aggregate principal amount to $193,800,000.
The entire principal amount of the Series A Senior Notes will mature and
become due and payable, together with any accrued and unpaid interest thereon,
on December 1, 2047. The Series A Senior Notes are not subject to any sinking
fund provision.
INTEREST
Each Series A Senior Note shall bear interest at the Securities Rate from
the date of original issuance, payable quarterly in arrears on March 31, June
30, September 30 and December 31 of each year to the person in whose name such
Series A Senior Note is registered at the close of business on the fifteenth
calendar day prior to such payment date. The initial Interest Payment Date is
December 31, 1997. The amount of interest payable will be computed on the basis
of a 360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Series A Senior Notes is not a Business Day, then
payment of the interest payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
OPTIONAL REDEMPTION
The Company shall have the right to redeem the Series A Senior Notes, in
whole or in part, without premium, from time to time, on or after December 1,
2002, upon not less than 30 nor more than 60 days' notice, at a Redemption Price
equal to 100% of the principal amount to be redeemed plus any accrued and unpaid
interest to the Redemption Date.
REDEMPTION PROCEDURES
If the Senior Note Indenture Trustee gives a notice of redemption in
respect of Series A Senior Notes (which notice will be irrevocable), then, by
2:00 P.M., New York City time, on the redemption date, the Senior Note Indenture
Trustee will irrevocably deposit with the securities depositary, so long as the
Series A Senior Notes are in book-entry only form, sufficient funds to pay the
Redemption Price. See "-- Book-Entry Only Issuance -- The Depository Trust
Company" below. If the Series A Senior Notes are no longer in book-entry only
form, the Senior Note Indenture Trustee shall irrevocably deposit with the
Paying Agent funds sufficient to pay the applicable Redemption Price and will
give the Paying Agent irrevocable instructions to pay the Redemption Price to
the holders thereof upon surrender of their Series A Senior Notes certificates.
If notice of redemption shall have been given and funds deposited as required,
then immediately prior to the close of business on the date of such deposit,
interest will cease to accrue and all rights of holders of such Series A Senior
Notes so called for redemption will cease, except the right of the holders of
such Series A Senior Notes to receive the Redemption Price, but without interest
on such Redemption Price. In the event that any date fixed for redemption of
Series A Senior Notes is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day
S-4
<PAGE>
falls in the next calendar year, such payment will be made on the immediately
preceding Business Day. In the event that payment of the Redemption Price in
respect of Series A Senior Notes is improperly withheld or refused and not paid
by the Company, interest on such Series A Senior Notes will continue to accrue
at the Securities Rate, from such redemption date originally established by the
Company for such Series A Senior Notes to the date such Redemption Price is
actually paid. See "Description of the Senior Notes -- Events of Default" in the
accompanying Prospectus.
Subject to the foregoing and to applicable law (including, without
limitation, United States federal securities laws), the Company or its
affiliates may, at any time and from time to time, purchase outstanding Series A
Senior Notes by tender, in the open market or by private agreement.
LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS
The Senior Note Indenture provides that, so long as any of the Series A
Senior Notes remain outstanding, the Company shall not enter into any
arrangement with any person providing for the leasing by the Company of any
assets which have been or are to be sold or transferred by the Company to such
person (a "Sale and Lease-Back Transaction") unless: (i) such transaction
involves a lease for a temporary period not to exceed three years; (ii) such
transaction is between the Company and an affiliate of the Company; (iii) such
transaction is entered into within 60 days after the initial acquisition by the
Company of the assets or property subject to such transaction; (iv) after giving
effect thereto, the aggregate amount of all attributable debt with respect to
all such Sale and Lease-Back Transactions does not exceed 10% of consolidated
net tangible assets of the Company and its subsidiaries on a consolidated basis;
or (v) within the 12 months preceding the sale or transfer or the 12 months
following the sale or transfer, the Company applies, in the case of a sale or
transfer for cash, an amount equal to the net proceeds thereof and, in the case
of a sale or transfer otherwise than for cash, an amount equal to the fair value
of the assets so leased at the time of entering into such arrangement (as
determined by the Board of Directors of the Company), (a) to the retirement of
indebtedness for money borrowed, incurred or assumed by the Company which by its
terms matures at, or is extendible or renewable at the option of the obligor to,
a date more than 12 months after the date of incurring, assuming or guaranteeing
such debt or (b) to investment in any assets of the Company.
BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as the initial securities
depositary for the Series A Senior Notes. The Series A Senior Notes will be
issued only as fully registered securities registered in the name of Cede & Co.,
DTC's nominee. One or more fully registered global Series A Senior Notes
certificates will be issued, representing in the aggregate the total principal
amount of Series A Senior Notes, and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the 1934 Act. DTC holds
securities that its participants ("Participants") deposit with DTC. DTC also
facilitates the settlement among Participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the NYSE, the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Commission.
Purchases of Series A Senior Notes within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Series A Senior
Notes on DTC's records. The ownership
S-5
<PAGE>
interest of each actual purchaser of Series A Senior Notes ("Beneficial Owner")
is in turn to be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from DTC of their
purchases, but Beneficial Owners are expected to receive written confirmations
providing details of the transactions, as well as periodic statements of their
holdings, from the Direct or Indirect Participants through which the Beneficial
Owners purchased Series A Senior Notes. Transfers of ownership interests in the
Series A Senior Notes are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interests in Series A Senior
Notes, except in the event that use of the book-entry system for the Series A
Senior Notes is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Series A Senior
Notes. DTC's records reflect only the identity of the Direct Participants to
whose accounts such Series A Senior Notes are credited, which may or may not be
the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to DTC. If less than all of the Series A
Senior Notes are being redeemed, DTC will reduce the amount of the interest of
each Direct Participant in the Series A Senior Notes in accordance with its
procedures.
Although voting with respect to the Series A Senior Notes is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Series A Senior Notes. Under its usual
procedures, DTC would mail an Omnibus Proxy to the Company as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts the Series A Senior
Notes are credited on the record date (identified in a listing attached to the
Omnibus Proxy).
Payments on the Series A Senior Notes will be made to DTC. DTC's practice
is to credit Direct Participants' accounts on the relevant payment date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payments on such payment date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the account of customers registered in "street name," and will be the
responsibility of such Participant and not of DTC or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment to DTC is the responsibility of the Company, disbursement of such
payments to Direct Participants is the responsibility of DTC, and disbursement
of such payments to the Beneficial Owners is the responsibility of Direct and
Indirect Participants.
Except as provided herein, a Beneficial Owner in a global Series A Senior
Note will not be entitled to receive physical delivery of Series A Senior Notes.
Accordingly, each Beneficial Owner must rely on the procedures of DTC to
exercise any rights under the Series A Senior Notes. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of securities in definitive form. Such laws may impair the ability to
transfer beneficial interests in a global Series A Senior Note.
DTC may discontinue providing its services as securities depositary with
respect to the Series A Senior Notes at any time by giving reasonable notice to
the Company. Under such circumstances, in the event that a successor securities
depositary is not obtained, Series A Senior Notes certificates will be printed
and delivered to the holders of record. Additionally, the Company may decide to
discontinue use of the system of book-entry transfers through DTC (or a
successor depositary) with respect to the Series A Senior Notes. In that event,
certificates for the Series A Senior Notes will be printed and delivered to the
holders of record.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof. The Company has no
responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
S-6
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Company has agreed to sell to each of the Underwriters named below (for whom
Salomon Brothers Inc, Goldman, Sachs & Co., Lehman Brothers Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated,
PaineWebber Incorporated, Prudential Securities Incorporated and The
Robinson-Humphrey Company, Inc. are acting as Representatives) and each of the
Underwriters has severally agreed to purchase from the Company the respective
principal amount of Series A Senior Notes set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
SERIES A
NAME SENIOR NOTES
---- -------------------
<S> <C>
Salomon Brothers Inc........................................
Goldman, Sachs & Co.........................................
Lehman Brothers Inc.........................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated..........
Morgan Stanley & Co. Incorporated...........................
PaineWebber Incorporated....................................
Prudential Securities Incorporated..........................
The Robinson-Humphrey Company, Inc..........................
-----------
Total............................................. $
===========
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all of the Series A Senior
Notes offered hereby if any of the Series A Senior Notes are purchased.
The Underwriters propose to offer the Series A Senior Notes in part
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus Supplement, and in part to certain securities
dealers at such price less a concession not in excess of $ per Series A
Senior Note. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of $ per Series A Senior Note to certain brokers
and dealers. After the Series A Senior Notes are released for sale to the
public, the offering price and other selling terms may from time to time be
varied by the Representatives.
The Company has agreed, during the period of 15 days from the date of the
Underwriting Agreement, not to sell, offer to sell, grant any option for the
sale of, or otherwise dispose of any Series A Senior Notes, any security
convertible into or exchangeable into or exercisable for Series A Senior Notes
or any debt securities substantially similar to the Series A Senior Notes
(except for the Series A Senior Notes issued pursuant to the Underwriting
Agreement), without the prior written consent of the Representatives.
Prior to this offering, there has been no public market for the Series A
Senior Notes. The Series A Senior Notes are expected to be approved for listing
on the NYSE, subject to official notice of issuance. Trading of the Series A
Senior Notes on the NYSE is expected to commence within a 30-day period after
the initial delivery of the Series A Senior Notes. The Representatives have
advised the Company that they intend to make a market in the Series A Senior
Notes prior to the commencement of trading on the NYSE. The Representatives will
have no obligation to make a market in the Series A Senior Notes, however, and
may cease market making activities, if commenced, at any time.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the 1933 Act.
In connection with this offering and in compliance with applicable law and
industry practice, the Underwriters may overallot or effect transactions which
stabilize, maintain or otherwise affect the market price of the Series A Senior
Notes at levels above those which might otherwise prevail in the open market,
including by entering stabilizing bids, purchasing Series A Senior Notes to
cover syndicate short positions and imposing penalty bids. A stabilizing bid
means the placing of any bid, or the effecting of any purchase, for the purpose
of pegging, fixing or maintaining the price of a security. Covering a syndicate
short position means placing a bid or effecting a purchase of a security on
behalf of the underwriting syndicate to reduce a short position created in
connection with the offering. Imposing a penalty bid means purchasing a security
in the
S-7
<PAGE>
open market to reduce the underwriting syndicate's short position or to
stabilize the price of the security and in connection therewith reclaiming the
amount of the selling concession from the underwriters and selling group members
who sold such securities as part of the offering.
In general, purchases of a security for the purpose of stabilization or to
reduce a syndicate short position could cause the price of the security to be
higher than it might be in the absence of such purchases. The imposition of a
penalty bid might also have an effect on the price of a security to the extent
that it were to discourage resales of the security.
Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Series A Senior Notes. In addition,
neither the Company nor any of the Underwriters makes any representation that
the Underwriters will engage in such transactions or that such transactions once
commenced will not be discontinued without notice.
Certain of the Underwriters engage in transactions with, and, from time to
time, have performed services for, the Company and its affiliates in the
ordinary course of business.
S-8
<PAGE>
GLOSSARY
1933 Act................... The Securities Act of 1933, as amended.
1934 Act................... The Securities Exchange Act of 1934, as amended.
Company.................... Alabama Power Company.
DTC........................ The Depository Trust Company, a "clearing
corporation" that initially will hold (through its
agents) a global certificate evidencing the Series
A Senior Notes.
Interest Payment Dates..... March 31, June 30, September 30 and December 31 of
each year.
NYSE....................... New York Stock Exchange.
Record Date................ The close of business on the 15th calendar day
prior to an Interest Payment Date.
Redemption Price........... 100% of the principal amount of the Series A Senior
Notes being redeemed, plus accrued and unpaid
interest thereon to the date of payment.
Securities Rate............ The per annum interest rate on the Series A Senior
Notes, and set forth on the cover page of this
Prospectus Supplement.
Senior Note Indenture...... The indenture pursuant to which the Company's
Series A Senior Notes will be issued.
Senior Note Indenture
Trustee................... The trustee under the Senior Note Indenture;
initially, The Chase Manhattan Bank.
Series A Senior Notes...... The Series A % Senior Notes due December 1,
2047 of the Company.
S-9
<PAGE>
======================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Summary of Offering.................. S-2
Capitalization....................... S-3
Description of the Series A Senior
Notes.............................. S-4
Underwriting......................... S-7
Glossary............................. S-9
PROSPECTUS
Available Information................ 2
Incorporation of Certain Documents by
Reference.......................... 2
Selected Information................. 3
Alabama Power Company................ 4
The Trusts........................... 5
Accounting Treatment................. 5
Use of Proceeds...................... 5
Recent Results of Operations......... 5
Description of the Senior Notes...... 6
Description of the Junior
Subordinated Notes................. 9
Description of the Preferred
Securities......................... 14
Description of the Guarantees........ 15
Relationship Among the Preferred
Securities, the Junior Subordinated
Notes and the Guarantees........... 17
Plan of Distribution................. 19
Legal Matters........................ 19
Experts.............................. 19
</TABLE>
======================================================
======================================================
$193,800,000
ALABAMA POWER
COMPANY
A SUBSIDIARY OF THE SOUTHERN COMPANY
SERIES A %
SENIOR NOTES
DUE DECEMBER 1, 2047
------------
PROSPECTUS
SUPPLEMENT
DECEMBER , 1997
------------
SALOMON SMITH BARNEY
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES
INCORPORATED
THE ROBINSON-HUMPHREY
COMPANY, INC.
======================================================
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED DECEMBER 2, 1997
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED DECEMBER , 1997
[ ] PREFERRED SECURITIES
ALABAMA POWER CAPITAL TRUST [ ]
% TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS SET FORTH HEREIN, BY
ALABAMA POWER COMPANY
A SUBSIDIARY OF THE SOUTHERN COMPANY
---------------------------
The % Trust Preferred Securities (the "Preferred Securities") offered
hereby evidence preferred undivided beneficial interests, representing 97%
undivided beneficial interests in the assets of Alabama Power Capital Trust
[ ], a statutory business trust created under the laws of the State of Delaware
(the "Trust"). Alabama Power Company, an Alabama corporation (the "Company"),
will own all the common securities (the "Common Securities" and, together with
the Preferred Securities, the "Trust Securities") representing the remaining 3%
undivided beneficial interests in the assets of the Trust. The Trust exists for
the sole purpose of issuing the Preferred Securities and Common Securities and
investing the proceeds thereof in an equivalent amount of the Company's Series
% junior subordinated deferrable interest notes due ,
(the "Series Junior Subordinated Notes").
The Series Junior Subordinated Notes will be unsecured obligations of the
Company and will be subordinate and junior in right of payment to Senior
Indebtedness of the Company, as described herein. See "Description of the Junior
Subordinated Notes -- Subordination" in the accompanying Prospectus. Holders of
the Preferred Securities are entitled to receive cumulative cash distributions
at the rate of % per annum (the "Securities Rate"), accruing from the date
of original issuance and payable, unless deferred, quarterly in arrears on March
31, June 30, September 30 and December 31 of each year (each, a "Distribution
Date").
--------------------------- (continued on page S-2)
See "Risk Factors" beginning on page S-7 for certain information relevant
to an investment in the Preferred Securities, including the period and
circumstances during and under which payments of distributions on the Preferred
Securities may be deferred and the related United States federal income tax
consequences of such deferral.
---------------------------
Application has been made to list the Preferred Securities on the New York
Stock Exchange, Inc. (the "NYSE"). If approved, trading of the Preferred
Securities on the NYSE is expected to commence within a 30-day period after the
initial delivery of the Preferred Securities. See "Underwriting."
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
=======================================================================================================================
Price to Underwriting Proceeds to
Public(1) Discount(2)(3) Trust(2)(3)(4)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Preferred Security...................... $ $ $
- -----------------------------------------------------------------------------------------------------------------------
Total....................................... $ $ $
=======================================================================================================================
</TABLE>
(1) Plus accrued distributions, if any, from the Issue Date.
(2) The Company and the Trust have agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act of
1933, as amended. See "Underwriting."
(3) Because the proceeds of the sale of the Preferred Securities will be
invested in Series Junior Subordinated Notes, the Company has agreed to
pay to the Underwriters, as compensation (the "Underwriters' Compensation")
for arranging the investment therein of such proceeds, $ per Preferred
Security, except for Preferred Securities sold to certain institutions, for
which the Underwriters' Compensation will be $ per Preferred Security.
Therefore, to the extent that Preferred Securities are sold to such
institutions, the actual amount of Underwriters' Compensation will be less
than and the Proceeds to Trust will be greater than the aggregate amounts
specified above. See "Underwriting."
(4) Expenses of the offering to be paid by the Company are estimated to be
approximately $ .
---------------------------
The Preferred Securities are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that delivery of
the Preferred Securities will be made in book-entry only form through the
facilities of The Depository Trust Company on or about , (the
"Issue Date").
, 199
<PAGE>
(CONTINUED FROM PAGE S-1)
The Securities Rate and the Distribution Dates for the Preferred Securities
will correspond to the interest rate and interest and other payment dates on the
Series Junior Subordinated Notes, which will constitute substantially all the
assets of the Trust. As a result, if principal or interest is not paid on the
Series Junior Subordinated Notes, no amounts will be paid on the Preferred
Securities. THE COMPANY HAS THE RIGHT TO DEFER PAYMENTS OF INTEREST ON THE
SERIES JUNIOR SUBORDINATED NOTES BY EXTENDING THE INTEREST PAYMENT PERIOD ON
THE SERIES JUNIOR SUBORDINATED NOTES, AT ANY TIME AND FROM TIME TO TIME, FOR
UP TO 20 CONSECUTIVE QUARTERS (EACH, AN "EXTENSION PERIOD"). If interest
payments are so deferred, distributions on the Preferred Securities also will be
deferred and the Company will not be permitted to declare or pay any dividend or
distribution on any of its capital stock or make any guarantee payments with
respect to the foregoing, or make any payment on any debt securities issued by
the Company which rank pari passu (equal in priority) with or junior to the
Series Junior Subordinated Notes. During any Extension Period, holders of
Preferred Securities will be required to include income in the form of original
issue discount ("OID") in their gross income for United States federal income
tax purposes in advance of the receipt of the cash payments attributable to such
deferred interest. See "Description of the Series Junior Subordinated
Notes -- Option to Extend Interest Payment Period," "Risk Factors -- Option to
Extend Interest Payment Period" and "Certain Federal Income Tax
Considerations -- Original Issue Discount" and "-- Market Discount." Deferred
installments of interest on the Series Junior Subordinated Notes will bear
interest, compounded quarterly, at a rate per annum equal to the Securities
Rate. The payment of such deferred interest, together with interest thereon,
will be distributed to the holders of the Preferred Securities as received at
the end of any Extension Period.
The Trust Securities are subject to mandatory redemption upon repayment of
the Series Junior Subordinated Notes at maturity or their earlier redemption.
The Series Junior Subordinated Notes are redeemable at the option of the
Company (in whole or in part), from time to time, on or after ,
, or at any time in whole upon the occurrence of a Tax Event or Investment
Company Act Event (either, a "Special Event"). The Company will have the right
at any time to terminate the Trust and cause the Series Junior Subordinated
Notes to be distributed to the holders of the Preferred Securities in
liquidation of the Trust. See "Description of the Preferred
Securities -- Special Event Redemption; Distribution of Series Junior
Subordinated Notes." The Series Junior Subordinated Notes are subordinated and
junior in right of payment to all Senior Indebtedness (as defined herein) of the
Company. See "Description of the Junior Subordinated Notes -- Subordination" in
the accompanying Prospectus. As of , 199 , Senior Indebtedness of the
Company aggregated approximately $ . If the Series Junior Subordinated
Notes are distributed to the holders of the Preferred Securities, the Company
will use its best efforts to have the Series Junior Subordinated Notes listed
on the NYSE or on such other exchange as the Preferred Securities are then
listed. See "Description of the Preferred Securities -- Special Event
Redemption; Distribution of Series Junior Subordinated Notes" and "Description
of the Series Junior Subordinated Notes."
The payment of distributions on the Preferred Securities is guaranteed by
the Company under the Guarantee Agreement, but only to the extent that the Trust
has funds legally and immediately available therefor (the "Guarantee"). If the
Company fails to make required payments on the Series Junior Subordinated
Notes, the Trust will not have sufficient funds to pay such distributions, and
the Guarantee does not cover the payment of distributions when the Trust does
not have sufficient funds legally available therefor. In such event, the remedy
of a holder of Preferred Securities is to enforce the Series Junior
Subordinated Notes. See "Description of the Series Junior Subordinated Notes"
herein and "Description of the Junior Subordinated Notes" in the accompanying
Prospectus. The Company's obligations under the Guarantee are subordinate and
junior in right of payment to all of its other liabilities and will rank pari
passu with the most senior preferred stock of the Company. See "Description of
the Guarantees" in the accompanying Prospectus. The Company has, through the
Guarantee, the Subordinated Note Indenture, the Series Junior Subordinated
Notes, the Trust Agreement and the Agreement as to Expenses and Liabilities,
fully and unconditionally guaranteed, subject to certain subordination
provisions, all the Trust's obligations with respect to the Preferred
Securities.
In the event of the redemption of the Series Junior Subordinated Notes or
the voluntary or involuntary dissolution, winding-up or termination of the
Trust, the holders of the Preferred Securities will be entitled to receive, for
each Preferred Security, a liquidation amount of $25 plus accrued and unpaid
distributions thereon (including interest thereon) to the date of payment (the
"Redemption Price"), unless in connection with such dissolution, winding-up or
termination, the Series Junior Subordinated Notes are distributed to the
holders of the Preferred Securities. See "Description of the Preferred
Securities -- Liquidation Distribution Upon Dissolution."
The Preferred Securities initially will be represented by a global
certificate or certificates registered in the name of The Depository Trust
Company ("DTC") or its nominee. Beneficial interests in the Preferred Securities
will be shown on, and transfers thereof will be effected only through, records
maintained by Participants (as defined herein) in DTC. Except as described
herein, Preferred Securities in certificated form will not be issued in exchange
for the global certificates. See "Description of the Preferred
Securities -- Book-Entry Only Issuance -- The Depository Trust Company."
---------------------
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE PREFERRED
SECURITIES, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING
TRANSACTIONS IN SUCH SECURITIES, AND THE IMPOSITION OF A PENALTY BID, IN
CONNECTION WITH THE OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."
S-2
<PAGE>
SUMMARY OF OFFERING
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus Supplement and in
the accompanying Prospectus. Capitalized terms not otherwise defined shall have
the meanings assigned in the Glossary.
The Company................ The Company is a corporation organized under the
laws of the State of Alabama on November 10,
1927, by the consolidation of a predecessor
Alabama Power Company, Gulf Electric Company and
Houston Power Company. The Company has its
principal office at 600 North 18th Street,
Birmingham, Alabama 35291, telephone (205)
257-1000. The Company is a wholly owned
subsidiary of The Southern Company.
The Company is a regulated public utility engaged
in the generation, transmission, distribution and
sale of electric energy within an approximately
44,500 square mile service area comprising most
of the State of Alabama.
The Trust.................. Alabama Power Capital Trust is a statutory
business trust created under Delaware law solely
for the purpose of holding the Company's Series
Junior Subordinated Notes and issuing Preferred
Securities and Common Securities evidencing the
entire beneficial interest therein (and engaging
in activities necessary, appropriate, convenient
or incidental thereto).
The Trustees............... The Chase Manhattan Bank will act as property
trustee (the "Property Trustee") of the Trust.
Two employees of the Company also will act as
trustees (the "Administrative Trustees") of the
Trust. Chase Manhattan Bank Delaware will be an
additional trustee (the "Delaware Trustee") of
the Trust. The Chase Manhattan Bank also will act
as trustee (the "Indenture Trustee") under the
Subordinated Note Indenture pursuant to which the
Series Junior Subordinated Notes will be issued
and will act as trustee under the Guarantee (the
"Guarantee Trustee").
The Property Trustee, Delaware Trustee and
Administrative Trustees are sometimes referred to
as the "Securities Trustees."
Preferred Securities
Offered.................... The Trust will offer Preferred Securities
evidencing preferred undivided beneficial
interests in the assets of the Trust. Holders of
the Preferred Securities are entitled to receive
cumulative cash distributions at the Securities
Rate, accruing from the date of original issuance
and payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each
year, commencing on , (each, a
"Distribution Date"). The Securities Rate and the
Distribution Dates for the Preferred Securities
will correspond to the interest rate and payment
dates on the Series Junior Subordinated Notes,
which will constitute substantially all the
assets of the Trust. As a result, if principal or
interest is not paid on the Series Junior
Subordinated Notes, no amounts will be paid on
the Preferred Securities. See "Description of the
Preferred Securities" herein.
Record Date................ The record date for each Distribution Date will be
the close of business on the 15th calendar day
prior to such Distribution Date.
S-3
<PAGE>
Series Junior
Subordinated Notes....... The Trust will invest the proceeds from the
issuance of the Preferred Securities and Common
Securities in an equivalent amount of Series
% junior subordinated deferrable interest
notes due . The Series Junior
Subordinated Notes will be subordinate and junior
in right of payment to all indebtedness for
borrowed money and other obligations of the
Company included in the definition of Senior
Indebtedness. See "Description of the Junior
Subordinated Notes -- Subordination" in the
accompanying Prospectus.
Guarantee.................. The payment of distributions on the Preferred
Securities is guaranteed by the Company under the
Guarantee, but only to the extent the Trust has
funds legally and immediately available to make
such distributions. If the Company does not make
principal or interest payments on the Series
Junior Subordinated Notes, the Trust will not
have sufficient funds to make distributions on
the Preferred Securities, in which event the
Guarantee will not apply to such distributions
until the Trust has sufficient funds legally
available therefor. The obligations of the
Company under the Guarantee will be subordinate
and junior in right of payment to all other
liabilities of the Company and will rank pari
passu with the most senior preferred stock issued
by the Company. See "Risk Factors -- Ranking of
and Rights Under the Guarantee" herein and
"Description of the Guarantees" in the
accompanying Prospectus. The Company has, through
the Guarantee, the Subordinated Note Indenture,
the Series Junior Subordinated Notes, the Trust
Agreement and the Agreement as to Expenses and
Liabilities, fully and unconditionally
guaranteed, subject to certain subordination
provisions, all the Trust's obligations with
respect to the Preferred Securities.
Interest Deferral.......... The Company has the right to defer payments of
interest on the Series Junior Subordinated
Notes by extending the interest payment period on
the Series Junior Subordinated Notes, at any
time and from time to time, for up to 20
consecutive quarters (each, an "Extension
Period"). The only restrictions on the Company's
ability to defer payments of interest are that
during the Extension Period the Company may not
(i) pay dividends on or redeem any of its capital
stock or (ii) pay principal or interest on any
debt securities ranking pari passu with or
subordinate to the Series Junior Subordinated
Notes. There could be multiple Extension Periods
of varying lengths throughout the term of the
Series Junior Subordinated Notes.
If interest payments on the Series Junior
Subordinated Notes are deferred, distributions on
the Preferred Securities will also be deferred.
During an Extension Period, holders of Preferred
Securities will be required to include income in
the form of OID in their gross income for federal
income tax purposes in advance of the receipt of
the cash payments attributable to such deferred
interest. See "Description of the Series Junior
Subordinated Notes -- Option to Extend Interest
Payment Period" and "Certain Federal Income Tax
Considerations -- Original Issue Discount" and
"-- Market Discount." Deferred interest will bear
interest, compounded quarterly, at a rate per
annum equal to the Securities Rate from the date
of deferral to the date of payment.
S-4
<PAGE>
Redemption; Distribution... The Preferred Securities are subject to mandatory
redemption upon repayment of the Series Junior
Subordinated Notes at maturity or their earlier
redemption. The Series Junior Subordinated
Notes are redeemable by the Company (in whole or
in part), from time to time on or after ,
or at any time in whole upon the occurrence of a
Special Event. If a partial redemption of the
Series Junior Subordinated Notes would result
in the delisting of the Preferred Securities, the
Company may only redeem the Series Junior
Subordinated Notes in whole. Any partial
redemption of the Series Junior Subordinated
Notes will be effected by the redemption of an
equivalent amount of Trust Securities, to be
allocated approximately 97% to the Preferred
Securities and 3% to the Common Securities. See
"Description of the Preferred
Securities -- Redemption" and "-- Special Event
Redemption; Distribution of Series Junior
Subordinated Notes."
The Company will have the right at any time to
terminate the Trust and cause the Series Junior
Subordinated Notes to be distributed to the
holders of the Preferred Securities in
liquidation of the Trust. This right is optional
and wholly within the discretion of the Company.
Circumstances under which the Company may
determine to exercise such right could include
the occurrence of an Investment Company Act Event
or a Tax Event, adverse tax consequences to the
Company or the Trust that are not within the
definition of a Tax Event because they do not
result from an amendment or change described in
such definition, and changes in the accounting
requirements applicable to the Preferred
Securities as described under "Accounting
Treatment." See "Description of the Preferred
Securities -- Special Event Redemption;
Distribution of Series Junior Subordinated
Notes."
Special Event.............. A Special Event means a Tax Event or an Investment
Company Act Event. A "Tax Event" means that the
Administrative Trustees and the Company shall
have received an opinion from independent tax
counsel experienced in such matters (which may be
counsel to the Company) to the effect that, as a
result of (a) any amendment to, or change
(including any announced prospective change) in,
the laws (or any regulations thereunder) of the
United States or any political subdivision or
taxing authority thereof or therein or (b) any
amendment to, or change in, an interpretation or
application of such laws or regulations, there is
more than an insubstantial risk that (i) the
Trust would be subject to United States federal
income tax with respect to income accrued or
received on the Series Junior Subordinated
Notes, (ii) interest payable to the Trust on the
Series Junior Subordinated Notes would not be
deductible by the Company for United States
federal income tax purposes, or (iii) the Trust
would be subject to more than a de minimis amount
of other taxes, duties or other governmental
charges, which change or amendment becomes
effective on or after the Issue Date. An
"Investment Company Act Event" means that the
Administrative Trustees and the Company shall
have received an opinion of independent counsel
(which may be counsel to the Company) to the
effect that, as a result of a change in law or
regulation or a written change in interpretation
or application of law or regulation by any
legislative body, court, governmental agency or
regulatory authority after the Issue Date, there
is more than an
S-5
<PAGE>
insubstantial risk that the Trust is or will be
considered an investment company under the
Investment Company Act of 1940, as amended (the
"1940 Act").
Redemption Price........... In the event of the redemption of the Trust
Securities or other termination of the Trust
without distribution of the Series Junior
Subordinated Notes, each Preferred Security shall
be entitled to receive a liquidation amount of
$25 plus accrued and unpaid distributions thereon
(including interest thereon) to the date of
payment.
S-6
<PAGE>
RISK FACTORS
Prospective purchasers of Preferred Securities should carefully review the
information contained elsewhere in this Prospectus Supplement and in the
accompanying Prospectus and should consider particularly the following matters:
RANKING OF AND RIGHTS UNDER THE SERIES JUNIOR SUBORDINATED NOTES
No amounts will be available to make payments on the Preferred Securities
except from payments made on the Series Junior Subordinated Notes. The
obligations of the Company under the Series Junior Subordinated Notes are
subordinate and junior in right of payment to all present and future Senior
Indebtedness of the Company. At , 199 , Senior Indebtedness of
the Company aggregated approximately $ . There are no terms in the
Preferred Securities, the Series Junior Subordinated Notes or the Guarantee
that limit the Company's ability to incur additional indebtedness, including
indebtedness that ranks senior to the Series Junior Subordinated Notes. See
"Description of the Guarantees" and "Description of the Junior Subordinated
Notes -- Subordination" in the accompanying Prospectus.
RANKING OF AND RIGHTS UNDER THE GUARANTEE
The Company's obligations under the Guarantee are subordinate and junior in
right of payment to all liabilities of the Company and will be pari passu with
the most senior preferred stock issued by the Company. If the Company were to
default in its obligation to pay amounts payable on the Series Junior
Subordinated Notes, the Trust would lack available funds for the payment of
distributions or amounts payable on redemption of the Preferred Securities or
otherwise, and in such event holders of the Preferred Securities would not be
able to rely upon the Guarantee for payment of such amounts.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
The Company has the right under the Subordinated Note Indenture, and at any
time, and from time to time, to defer payments of interest on the Series
Junior Subordinated Notes for a period of up to 20 consecutive quarters (each,
an "Extension Period"), but not beyond the stated maturity of the Series
Junior Subordinated Notes. Prior to the termination of any Extension Period, the
Company may further defer payments of interest, provided that such Extension
Period, together with all such previous and further extensions thereof, may not
exceed 20 consecutive quarters. Upon the termination of any Extension Period and
the payment of all amounts then due, the Company may select a new Extension
Period, subject to the above requirements. There could be multiple Extension
Periods of varying lengths throughout the term of the Series Junior
Subordinated Notes. Deferred installments of interest on the Series Junior
Subordinated Notes will bear interest, compounded quarterly, at a rate per annum
equal to the Securities Rate. The payment of such deferred interest, together
with interest thereon, will be passed through to the holders of the Preferred
Securities as received at the end of any Extension Period.
The only restrictions on the Company's ability to defer payments of
interest are that during any Extension Period the Company may not (i) pay
dividends on or redeem any of its capital stock or (ii) pay principal or
interest on any debt securities ranking pari passu with or subordinate to the
Series Junior Subordinated Notes. See "Description of the Preferred
Securities -- Distributions" and "Description of the Series Junior
Subordinated Notes -- Option to Extend Interest Payment Period."
Should the Company exercise its rights to defer payments of interest, each
holder of Preferred Securities will be required to include income in the form of
OID in their gross income for United States federal income tax purposes in
respect of the deferred interest allocable to its Preferred Securities. As a
result, holders of Preferred Securities will recognize income for United States
federal income tax purposes in advance of the receipt of cash and will not
receive the cash from the Trust related to such income if such holders dispose
of their Preferred Securities prior to the record date for the date on which
distributions of such amounts are made. See "Certain Federal Income Tax
Considerations -- Original Issue Discount" and "-- Sale of
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<PAGE>
Preferred Securities." INVESTORS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS WITH
RESPECT TO THE TAX CONSEQUENCES OF AN INVESTMENT IN THE PREFERRED SECURITIES.
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Series
Junior Subordinated Notes. However, should the Company determine to exercise
such right in the future, the market price of the Preferred Securities is likely
to be affected. A holder that disposes of its Preferred Securities during an
Extension Period, therefore, might not receive the same return on its investment
as a holder that continues to hold its Preferred Securities. In addition, as a
result of the existence of the Company's right to defer interest payments, the
market price of the Preferred Securities (which represent an undivided
beneficial interest in the Series Junior Subordinated Notes) may be more
volatile than other similar securities that do not have such rights.
SPECIAL EVENT REDEMPTION; DISTRIBUTION OF SERIES JUNIOR SUBORDINATED NOTES
If a Special Event shall occur and be continuing, the Company will have the
option to redeem the Series Junior Subordinated Notes in cash (with the result
that the Preferred Securities shall be redeemed). In addition, the Company will
have the right at any time to terminate the Trust and cause the Series Junior
Subordinated Notes to be distributed to the holders of the Preferred Securities
in liquidation of the Trust. See "Description of the Preferred
Securities -- Special Event Redemption; Distribution of Series Junior
Subordinated Notes."
There can be no assurance as to the market price for the Series Junior
Subordinated Notes that may be distributed in exchange for Preferred Securities
if a termination or liquidation of the Trust were to occur. Accordingly, the
Series Junior Subordinated Notes that the investor may receive on termination
and liquidation of the Trust may trade at a discount to the price that the
investor paid to purchase the Preferred Securities offered hereby. See
"Description of the Series Junior Subordinated Notes."
LIMITED VOTING RIGHTS
Holders of Preferred Securities will have limited voting rights and, except
for the rights of holders of Preferred Securities to appoint a Substitute
Property Trustee upon the occurrence of certain events described herein, will
not be entitled to vote to appoint, remove or replace the Securities Trustees,
which voting rights are vested exclusively in the holder of the Common
Securities.
TRADING CHARACTERISTICS OF PREFERRED SECURITIES
The Preferred Securities are expected to be listed on the NYSE, subject to
official notice of issuance. Accordingly, the Preferred Securities are expected
to trade at a price that takes into account the value, if any, of accrued but
unpaid distributions; thus, purchasers will not pay and sellers will not receive
accrued and unpaid interest with respect to the Preferred Securities that is not
included in the trading price thereof. Nonetheless, if an Extension Period
occurs, interest on the Series Junior Subordinated Notes will be included in
the gross income of U.S. holders of Preferred Securities as it accrues rather
than when it is paid. Should an Extension Period occur, a holder who disposes of
his Preferred Securities between record dates for payments of distributions
thereon would be required to include accrued but unpaid interest on the Series
Junior Subordinated Notes through the date of disposition in income as OID,
and to add such amount to his adjusted tax basis in his pro rata share of the
related Series Junior Subordinated Notes deemed disposed of. To the extent the
selling price is less than the holder's adjusted tax basis (which will include,
in the form of OID, all accrued but unpaid interest), a holder generally will
recognize a capital loss. Subject to certain limited exceptions, capital losses
cannot be applied to offset ordinary income for United States federal income tax
purposes. See "Certain Federal Income Tax Considerations -- Original Issue
Discount" and "-- Sale of Preferred Securities."
The trading price of the Preferred Securities is likely to be sensitive to
the level of interest rates generally. If interest rates rise in general, the
trading price of the Preferred Securities may decline to reflect the additional
yield requirements of the purchasers. Conversely, a decline in interest rates
may increase the trading price of the Preferred Securities, although any
increase will be moderated by the Company's ability to
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call the Series Junior Subordinated Notes at any time on or after at
a redemption price equal to 100% of the principal amount to be redeemed plus
accrued but unpaid interest. In addition, because holders of Preferred
Securities will be paid only from payments on the Series Junior Subordinated
Notes and may receive Series Junior Subordinated Notes upon the termination of
the Trust, prospective purchasers of Preferred Securities are making an
investment decision with regard to the Series Junior Subordinated Notes and
should carefully review all the information regarding the Series Junior
Subordinated Notes contained herein. See "Description of the Preferred
Securities -- Special Event Redemption; Distribution of Series Junior
Subordinated Notes" and "Description of the Series Junior Subordinated Notes."
ALABAMA POWER CAPITAL TRUST [ ]
The Trust is a statutory business trust created under Delaware law pursuant
to the filing of a certificate of trust with the Delaware Secretary of State on
November , 199 . The Trust's business is defined in a trust agreement,
executed by the Company, as Depositor, and the Delaware Trustee thereunder. This
trust agreement will be amended and restated in its entirety on the Issue Date
substantially in the form filed as an exhibit to the Registration Statement of
which this Prospectus Supplement and the accompanying Prospectus form a part
(the "Trust Agreement"). The Trust Agreement will be qualified as an indenture
under the Trust Indenture Act of 1939, as amended (the "1939 Act"). The Trust
exists for the exclusive purposes of (i) issuing the Trust Securities
representing undivided beneficial interests in the assets of the Trust, (ii)
investing the gross proceeds of the Trust Securities in the Series Junior
Subordinated Notes, and (iii) engaging in only those other activities necessary,
appropriate, convenient or incidental thereto. The Trust has a term of
approximately years, but may terminate earlier as provided in the Trust
Agreement.
Upon issuance of the Preferred Securities, the purchasers thereof will own
all of the Preferred Securities. The Company will acquire all of the Common
Securities, which will have an aggregate liquidation amount equal to
approximately 3% of the total capital of the Trust. The Common Securities will
rank pari passu, and payments will be made thereon pro rata, with the Preferred
Securities, except that upon the occurrence and continuance of a Subordinated
Note Indenture Event of Default, the rights of the holders of Common Securities
to payment in respect of distributions and payments upon liquidation, redemption
and otherwise will be subordinated to the rights of the holders of the Preferred
Securities.
The Trust's business and affairs will be conducted by the Securities
Trustees, which shall be appointed by the Company as the holder of the Common
Securities. Two employees of the Company initially will serve as Administrative
Trustees. The Chase Manhattan Bank will serve as Property Trustee and will hold
legal title to the Series Junior Subordinated Notes issued by the Company on
behalf of the Trust and the holders of the Trust Securities. Chase Manhattan
Bank Delaware will serve as Delaware Trustee. In certain circumstances, the
holders of a majority in liquidation amount of the Preferred Securities will be
entitled to appoint a Substitute Property Trustee. See "Description of the
Preferred Securities -- Voting Rights."
The Property Trustee will hold legal title to the Series Junior
Subordinated Notes for the benefit of the Trust and the holders of the Trust
Securities and will have the power to exercise all rights, powers and privileges
under the Subordinated Note Indenture as the holder of the Series Junior
Subordinated Notes. The Property Trustee will make payments of distributions and
payments on liquidation, redemption and otherwise to the holders of the Trust
Securities. Subject to the right of the holders of the Preferred Securities to
appoint a Substitute Property Trustee in certain instances, the Company, as the
holder of all the Common Securities, will have the right to appoint, remove or
replace all the Securities Trustees.
The Series Junior Subordinated Notes will constitute substantially all of
the assets of the Trust. Other assets that may constitute "Trust Property" (as
that term is defined in the Trust Agreement) include any cash on deposit in, or
owing to, the payment account as established under the Trust Agreement, as well
as any other property or assets held by the Property Trustee pursuant to the
Trust Agreement. In addition, the Trust may, from time to time, receive cash
pursuant to the Agreement as to Expenses and Liabilities.
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The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are as set forth in the Trust
Agreement, the Delaware Business Trust Act, and the 1939 Act. See "Description
of the Preferred Securities."
The Trust's registered office in the State of Delaware is c/o Chase
Manhattan Bank Delaware, 1201 Market Street, Wilmington, Delaware 19801. The
principal place of business of the Trust shall be c/o the Company, 600 North
18th Street, Birmingham, Alabama 35291, telephone (205) 257-2505, Attn:
Treasurer.
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
September 30, 1997, and as adjusted to reflect the issuances described in note
(2) below. The following data is qualified in its entirety by reference to and,
therefore, should be read together with the detailed information and financial
statements appearing in the documents incorporated herein by reference. See also
"Selected Information" in the accompanying Prospectus.
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1997
-------------------------------
ACTUAL AS ADJUSTED(2)
---------- ------------------
(THOUSANDS, EXCEPT PERCENTAGES)
<S> <C> <C> <C>
Common Stock Equity......................................... $2,775,321 $2,775,321 43.5%
Cumulative Preferred Stock.................................. 278,400 278,400 4.4
Company Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trusts Holding Company Junior
Subordinated Notes(1)..................................... 297,000 547,000 8.6
Senior Notes................................................ -- 250,000 3.9
Junior Subordinated Notes................................... -- 250,000 3.9
Other Long-Term Debt........................................ 2,219,594 2,284,594 35.7
---------- ---------- -----
Total, excluding amounts due within one year........... $5,570,315 $6,385,315 100.0%
========== ========== =====
</TABLE>
- ---------------
(1) As described herein and in the accompanying Prospectus, substantially all of
the assets of the respective Trusts will be Junior Subordinated Notes of
the Company, and upon redemption of such debt, the related Preferred
Securities will be mandatorily redeemable.
(2) Reflects (i) the issuance of $250,000,000 of new Preferred Securities,
$250,000,000 of new Senior Notes and $250,000,000 of new Junior
Subordinated Notes and (ii) the proposed issuance in November 1997 by The
Industrial Development Board of the Town of Columbia of $65,000,000
aggregate principal amount of its Variable Rate Demand Revenue Bonds
(Alabama Power Company Project) Series 1997 (Taxable) for the benefit of
the Company. Does not reflect the potential redemption of outstanding
securities with proceeds from new security issuances. The pro forma amounts
used in connection with this capitalization table are assumed solely for
the purpose of this calculation and the amounts and types of securities
that will be ultimately issued will depend upon market conditions and other
factors prevailing at the time of issuance.
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust will be treated as a subsidiary
of the Company and, accordingly, the accounts of the Trust will be included in
the consolidated financial statements of the Company. The Preferred Securities
will be presented as a separate line item in the consolidated balance sheet of
the Company, and appropriate disclosures concerning the Preferred Securities,
the Guarantee and the Series Junior Subordinated Notes will be included in the
notes to the consolidated financial statements. For financial reporting
purposes, the Company will record distributions payable on the Preferred
Securities as an expense.
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DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the Trust
Agreement. The Trust Agreement will be qualified as an indenture under the 1939
Act. The Property Trustee will act as the indenture trustee with respect to the
Trust, as well as the Guarantee, for purposes of compliance with the provisions
of the 1939 Act. The terms of the Preferred Securities will include those stated
in the Trust Agreement, the Delaware Business Trust Act, and those made part of
the Trust Agreement by the 1939 Act. The following summary of the principal
terms and provisions of the Preferred Securities does not purport to be complete
and is subject to, and qualified in its entirety by reference to, the Trust
Agreement, the form of which is filed as an exhibit to the Registration
Statement of which this Prospectus Supplement and the accompanying Prospectus
are a part, as well as the 1939 Act.
GENERAL
The Trust Agreement authorizes the Administrative Trustees, on behalf of
the Trust, to issue the Preferred Securities, which represent preferred
undivided beneficial interests in the assets of the Trust, and the Common
Securities, which represent common undivided beneficial interests in the assets
of the Trust. All of the Common Securities will be owned by the Company. The
Common Securities rank pari passu, and payments will be made thereon on a pro
rata basis, with the Preferred Securities, except that upon the occurrence of a
Subordinated Note Indenture Event of Default, the rights of the holders of the
Common Securities to receive payment of periodic distributions and payments upon
liquidation, redemption and otherwise will be subordinated to the rights of the
holders of the Preferred Securities. The Trust Agreement does not permit the
issuance by the Trust of any securities other than the Trust Securities or the
incurrence of any indebtedness by the Trust. Pursuant to the Trust Agreement,
the Property Trustee will own and hold the Series Junior Subordinated Notes for
the benefit of the Trust and the holders of the Trust Securities. The payment of
distributions out of money held by the Trust, and payments upon redemption of
the Preferred Securities or liquidation of the Trust, are guaranteed by the
Company on a subordinated basis as and to the extent described under
"Description of the Guarantees" in the accompanying Prospectus. The Guarantee
does not cover payment of distributions on the Preferred Securities when the
Trust does not have legally and immediately available funds sufficient to make
such distributions. In such event, the remedy of a holder of Preferred
Securities is to direct the Property Trustee to enforce its rights under the
Series Junior Subordinated Notes. In addition, a holder of Preferred Securities
may institute a legal proceeding directly against the Company, without first
instituting a legal proceeding against the Property Trustee or any other person
or entity, for enforcement of payment to such holder of principal of or interest
on the Series Junior Subordinated Notes having a principal amount equal to the
aggregate stated liquidation amount of the Preferred Securities of such holder
on or after the due dates specified in the Series Junior Subordinated Notes. The
above mechanisms and obligations, together with the Company's obligations under
the Agreement as to Expenses and Liabilities, constitute a full and
unconditional guarantee by the Company of payments due on the Preferred
Securities. See "-- Voting Rights" below.
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at the Securities
Rate and will accrue from the Issue Date and, except in the event of an
Extension Period, will be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year. In the event that any date on which
distributions are to be made on the Preferred Securities is not a Business Day,
then payment of the distributions payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. A "Business Day" shall mean any day other than a Saturday or
Sunday, a day on which banks in New York City are authorized or obligated by law
or executive order to remain closed or a day on which the principal corporate
trust office of the Property Trustee or the Indenture Trustee is closed for
business.
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Distributions payable on any Distribution Date will be payable to the
holders of record on the Record Date for such Distribution Date, which is the
close of business on the fifteenth calendar day preceding such Distribution
Date. Subject to any applicable laws and regulations and the provisions of the
Trust Agreement, each such payment will be made as described under
"-- Book-Entry Only Issuance -- The Depository Trust Company" below. The amount
of distributions payable for any period will be computed on the basis of a
360-day year of twelve 30-day months.
The Company has the right under the Subordinated Note Indenture to defer
payments of interest on the Series Junior Subordinated Notes by extending the
interest payment period from time to time on the Series Junior Subordinated
Notes (each, an "Extension Period") which, if exercised, would defer quarterly
distributions on the Preferred Securities during any such extended interest
payment period. Deferred installments of interest on the Series Junior
Subordinated Notes will bear interest, compounded quarterly, at a rate per annum
equal to the Securities Rate. If distributions are deferred, the deferred
distributions and accrued interest thereon shall be paid, if funds are legally
available therefor, to holders of record of the Preferred Securities as they
appear on the books and records of the Trust on the Record Date next following
the termination of such Extension Period. See "Description of the Series Junior
Subordinated Notes -- Interest" and "-- Option to Extend Interest Payment
Period."
Distributions on the Preferred Securities must be paid on the Distribution
Dates to the extent that the Trust has funds legally and immediately available
for the payment of such distributions. The Trust's funds available for
distribution to the holders of the Preferred Securities will be limited to
payments received under the Series Junior Subordinated Notes. See "Description
of the Series Junior Subordinated Notes."
REDEMPTION
The Preferred Securities are subject to mandatory redemption upon repayment
of the Series Junior Subordinated Notes at maturity or their earlier redemption.
The Series Junior Subordinated Notes will mature on , and may
be redeemed, in whole or in part, at the option of the Company, at any time on
or after , or at any time in whole upon the occurrence of a
Special Event. Upon the repayment of the Series Junior Subordinated Notes,
whether at maturity or upon redemption, the proceeds from such repayment or
payment shall simultaneously be applied to redeem a like amount of Trust
Securities upon not less than 30 nor more than 60 days' notice, at the
Redemption Price (as defined below). See "Description of the Series Junior
Subordinated Notes -- Optional Redemption." If a partial redemption of the
Series Junior Subordinated Notes would result in the delisting of the Preferred
Securities, the Company may only redeem the Series Junior Subordinated Notes in
whole. In the event that fewer than all of the outstanding Trust Securities are
to be redeemed, the Preferred Securities to be redeemed will be selected as
described under "-- Book-Entry Only Issuance -- The Depository Trust Company"
below. If the Preferred Securities are no longer in book-entry only form, the
Preferred Securities to be redeemed will be selected by such method as the
Property Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to $25 or integral multiples
thereof) of the aggregate liquidation amount of Preferred Securities of a
denomination larger than $25; provided, however, that before undertaking the
redemption of the Preferred Securities on other than a pro rata basis, the
Property Trustee shall have received an opinion of counsel that the status of
the Trust as a grantor trust for federal income tax purposes would not be
adversely affected.
The Redemption Price for each Preferred Security shall equal the stated
liquidation amount of $25 plus accrued and unpaid distributions thereon to the
date of payment.
SPECIAL EVENT REDEMPTION; DISTRIBUTION OF SERIES JUNIOR SUBORDINATED NOTES
Upon the occurrence of a Special Event at any time, the Company will have
the option to redeem the Series Junior Subordinated Notes in whole (and thus
cause the redemption of the Preferred Securities in whole). A Special Event is
either an Investment Company Act Event or a Tax Event.
An "Investment Company Act Event" means that the Administrative Trustees
and the Company shall have received an opinion of independent counsel (which may
be counsel to the Company) to the effect that,
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as a result of a change in law or regulation or a written change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority after the Issue Date, there
is more than an insubstantial risk that the Trust is or will be considered an
investment company under the 1940 Act.
"Tax Event" means that the Administrative Trustees and the Company shall
have received an opinion from independent tax counsel experienced in such
matters (which may be counsel to the Company) to the effect that, as a result of
(a) any amendment to, or change (including any announced prospective change) in,
the laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to, or
change in, an interpretation or application of such laws or regulations, there
is more than an insubstantial risk that (i) the Trust would be subject to United
States federal income tax with respect to income accrued or received on the
Series Junior Subordinated Notes, (ii) interest payable to the Trust on the
Series Junior Subordinated Notes would not be deductible by the Company for
United States federal income tax purposes or (iii) the Trust would be subject to
more than a de minimis amount of other taxes, duties or other governmental
charges, which change or amendment becomes effective on or after the Issue Date.
The Company will have the right at any time to terminate the Trust and,
after satisfaction of liabilities to creditors of the Trust, if any, cause the
Series Junior Subordinated Notes to be distributed to the holders of the
Preferred Securities in liquidation of the Trust. See "-- Liquidation
Distribution Upon Dissolution" below. This right is optional and wholly within
the discretion of the Company. Circumstances under which the Company may
determine to exercise such right could include the occurrence of an Investment
Company Act Event or a Tax Event, adverse tax consequences to the Company or the
Trust that are not within the definition of a Tax Event because they do not
result from an amendment or change described in such definition, and changes in
the accounting requirements applicable to the Preferred Securities as described
under "Accounting Treatment."
If Series Junior Subordinated Notes are distributed to the holders of the
Preferred Securities, the Company will use its best efforts to have the Series
Junior Subordinated Notes listed on the NYSE or on such other exchange as the
Preferred Securities are then listed. After the date for any distribution of
Series Junior Subordinated Notes upon termination of the Trust, (i) the
Preferred Securities and the Guarantee will no longer be deemed to be
outstanding, (ii) the depositary or its nominee, as the record holder of the
Preferred Securities, will receive a registered global certificate or
certificates representing the Series Junior Subordinated Notes to be delivered
upon such distribution and (iii) any certificates representing Preferred
Securities and the Guarantee not held by the depositary or its nominee will be
deemed to represent Series Junior Subordinated Notes having an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the Securities Rate of, and accrued and unpaid
interest equal to accrued and unpaid distributions on, such Preferred
Securities, until such certificates are presented to the Company or its agent
for transfer or reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Series Junior Subordinated Notes that may be distributed in
exchange for the Preferred Securities if a termination and liquidation of the
Trust were to occur. Accordingly, the Preferred Securities that an investor may
purchase, or the Series Junior Subordinated Notes that the investor may
receive on termination and liquidation of the Trust, may trade at a discount to
the price that the investor paid to purchase the Preferred Securities offered
hereby.
REDEMPTION PROCEDURES
In the event that fewer than all of the Trust Securities are to be
redeemed, then the aggregate liquidation amount of the Trust Securities to be
redeemed shall be allocated 97% to the Preferred Securities and 3% to the Common
Securities.
The Preferred Securities redeemed on each redemption date shall be redeemed
at the Redemption Price with the proceeds from the contemporaneous redemption of
the Series Junior Subordinated Notes. The
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<PAGE>
Redemption Price of Preferred Securities shall be deemed payable on each
redemption date only to the extent that the Trust has funds legally and
immediately available for payment of such Redemption Price.
If the Property Trustee gives a notice of redemption in respect of
Preferred Securities (which notice will be irrevocable), then, by 2:00 P.M., New
York City time, on the redemption date, subject to the immediately preceding
paragraph, the Property Trustee will irrevocably deposit with the securities
depositary, so long as the Preferred Securities are in book-entry only form,
sufficient funds to pay the applicable Redemption Price. See "-- Book-Entry Only
Issuance -- The Depository Trust Company" below. If the Preferred Securities are
no longer in book-entry only form, the Property Trustee, subject to the
immediately preceding paragraph, shall irrevocably deposit with the Paying Agent
funds sufficient to pay the applicable Redemption Price and will give the Paying
Agent irrevocable instructions to pay the Redemption Price to the holders
thereof upon surrender of their Preferred Securities certificates. If notice of
redemption shall have been given and funds deposited as required, then
immediately prior to the close of business on the date of such deposit,
distributions will cease to accrue and all rights of holders of such Preferred
Securities so called for redemption will cease, except the right of the holders
of such Preferred Securities to receive the Redemption Price, but without
interest on such Redemption Price. In the event that any date fixed for
redemption of Preferred Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day. In
the event that payment of the Redemption Price in respect of Preferred
Securities is improperly withheld or refused and not paid either by the Trust or
by the Company pursuant to the Guarantee, distributions on such Preferred
Securities will continue to accrue at the then applicable rate, from such
redemption date originally established by the Trust for such Preferred
Securities to the date such Redemption Price is actually paid. See "-- Events of
Default" below, "Relationship Among the Preferred Securities, the Series
Junior Subordinated Notes and the Guarantee" and "Description of the
Guarantees -- Events of Default" in the accompanying Prospectus.
Subject to the foregoing and to applicable law (including, without
limitation, United States federal securities laws), the Company or its
affiliates may, at any time and from time to time, purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.
BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as the initial securities
depositary for the Preferred Securities. The Preferred Securities will be issued
only as fully registered securities registered in the name of Cede & Co., DTC's
nominee. One or more fully registered global Preferred Securities certificates
will be issued, representing in the aggregate the total number of Preferred
Securities, and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the 1934 Act. DTC holds
securities that its participants ("Participants") deposit with DTC. DTC also
facilitates the settlement among Participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the NYSE, the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Commission.
Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest
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of each actual purchaser of Preferred Securities ("Beneficial Owner") is in turn
to be recorded on the Direct and Indirect Participants' records. Beneficial
Owners will not receive written confirmation from DTC of their purchases, but
Beneficial Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their holdings,
from the Direct or Indirect Participants through which the Beneficial Owners
purchased Preferred Securities. Transfers of ownership interests in the
Preferred Securities are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interests in Preferred
Securities, except in the event that use of the book-entry system for the
Preferred Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities. DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities are credited, which may or may not
be the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to DTC. If less than all of the Preferred
Securities are being redeemed, DTC will reduce the amount of the interest of
each Direct Participant in the Preferred Securities in accordance with its
procedures.
Although voting with respect to the Preferred Securities is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Preferred Securities. Under its usual
procedures, DTC would mail an Omnibus Proxy to the Trust as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts the Preferred
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
Distribution payments on the Preferred Securities will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on the relevant
payment date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payments on such
payment date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the account of customers registered in "street name," and will be the
responsibility of such Participant and not of DTC, the Trust, any trustee or the
Company, subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of distributions to DTC is the responsibility of the
Trust, disbursement of such payments to Direct Participants is the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners is the responsibility of Direct and Indirect Participants.
Except as provided herein, a Beneficial Owner in a global Preferred
Security will not be entitled to receive physical delivery of Preferred
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Preferred Securities. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of securities in definitive form. Such laws may impair the ability to
transfer beneficial interests in a global Preferred Security.
DTC may discontinue providing its services as securities depositary with
respect to the Preferred Securities at any time by giving reasonable notice to
the Trust. Under such circumstances, in the event that a successor securities
depositary is not obtained, Preferred Securities certificates will be printed
and delivered to the holders of record. Additionally, the Company may decide to
discontinue use of the system of book-entry transfers through DTC (or a
successor depositary) with respect to the Preferred Securities. In that event,
certificates for the Preferred Securities will be printed and delivered to the
holders of record.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company and the Trust believe to be
reliable, but the Company and the Trust take no responsibility for the accuracy
thereof. The Trust has no responsibility for the performance by DTC or its
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Participants of their respective obligations as described herein or under the
rules and procedures governing their respective operations.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Pursuant to the Trust Agreement, the Trust shall terminate on ,
or earlier upon (i) the occurrence of a Bankruptcy Event (as defined in the
Trust Agreement) in respect of the Company, dissolution or liquidation of the
Company, or dissolution of the Trust pursuant to a judicial decree; (ii) the
delivery of written direction to the Property Trustee by the Company, as
Depositor, at any time (which direction is optional and wholly within the
discretion of the Company, as Depositor) to terminate the Trust and distribute
the Series Junior Subordinated Notes to the holders of the Preferred
Securities in liquidation of the Trust (see "-- Special Event Redemption;
Distribution of Series Junior Subordinated Notes" above); or (iii) the payment
at maturity or redemption of all of the Series Junior Subordinated Notes, and
the consequent payment of the Trust Securities.
If an early termination occurs as described in clause (i) or (ii) above,
the Trust shall be liquidated, and the Property Trustee shall distribute to each
holder of Preferred Securities and Common Securities a like amount of Series
Junior Subordinated Notes, unless in the case of an event described in clause
(i) such distribution is determined by the Administrative Trustees not to be
practical, in which event such holders will be entitled to receive, out of the
assets of the Trust available for distribution to holders after satisfaction of
liabilities to creditors, an amount equal to the aggregate of the stated
liquidation preference of $25 per Trust Security plus accrued and unpaid
distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because the Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then subject to the next succeeding sentence, the
amounts payable directly by the Trust on the Trust Securities shall be paid on a
pro rata basis. The holder of the Common Securities will be entitled to receive
distributions upon any such dissolution pro rata with the holders of the
Preferred Securities, except that if a Subordinated Note Indenture Event of
Default has occurred and is continuing, the holders of Preferred Securities
shall have a preference over the holders of Common Securities.
EVENTS OF DEFAULT
Any one of the following events constitutes an "Event of Default" under the
Trust Agreement ("Trust Agreement Event of Default") with respect to the Trust
Securities issued thereunder (whatever the reason for such Event of Default, and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) the occurrence of an "Event of Default" as defined in Section 501
of the Subordinated Note Indenture ("Subordinated Note Indenture Event of
Default") (see "Description of the Junior Subordinated Notes -- Events of
Default" in the accompanying Prospectus); or
(ii) default by the Trust in the payment of any distribution when it
becomes due and payable, and the continuation of such default for a period
of 30 days; or
(iii) default by the Trust in the payment of any Redemption Price of
any Preferred Security or Common Security when it becomes due and payable;
or
(iv) default in the performance, or breach, of any covenant or
warranty of the Securities Trustees in the Trust Agreement (other than a
covenant or warranty a default in the performance of which or the breach of
which is dealt with in clause (ii) or (iii) above), and continuation of
such default or breach for a period of 60 days after there has been given,
by registered or certified mail, to such Securities Trustees by the holders
of at least 10% in liquidation amount of the outstanding Preferred
Securities a written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a "Notice of Default"
under the Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Trust.
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Within 90 days after the occurrence of any Trust Agreement Event of
Default, the Property Trustee shall transmit notice of any default known to the
Property Trustee to the holders of Trust Securities and the Company, unless such
Trust Agreement Event of Default shall have been cured or waived.
If a Trust Agreement Event of Default occurs and is continuing, then,
pursuant to the Trust Agreement, holders of a majority in aggregate liquidation
amount of Preferred Securities have the right to direct the exercise of any
trust or power conferred upon the Property Trustee under the Trust Agreement,
including the right to direct the Property Trustee under the Trust Agreement to
exercise the remedies available to it as holder of the Series Junior
Subordinated Notes. If the Property Trustee fails to enforce its rights under
the Series Junior Subordinated Notes, a holder of Preferred Securities may, to
the fullest extent permitted by applicable law, institute a legal proceeding
directly against the Company to enforce its rights under the Trust Agreement
without first instituting any legal proceeding against the Property Trustee or
the Trust. Notwithstanding the foregoing, a holder of Preferred Securities may
institute a legal proceeding directly against the Company, without first
instituting a legal proceeding against the Property Trustee or any other person
or entity, for enforcement of payment to such holder of principal of or interest
on the Series Junior Subordinated Notes having a principal amount equal to the
aggregate stated liquidation amount of the Preferred Securities of such holder
on or after the due dates specified in the Series Junior Subordinated Notes.
See "Relationship Among the Preferred Securities, the Series Junior
Subordinated Notes and the Guarantee" herein and "Description of the
Guarantees -- Events of Default" in the accompanying Prospectus.
Unless a Subordinated Note Indenture Event of Default shall have occurred
and be continuing, the Securities Trustees may be removed at any time by act of
the holder of the Common Securities. If a Subordinated Note Indenture Event of
Default has occurred and is continuing, any Securities Trustee may be removed at
such time by act of the holders of a majority in liquidation amount of the
Preferred Securities, delivered to the appropriate Securities Trustee (in its
individual capacity and on behalf of the Trust). No resignation or removal of
any Securities Trustee and no appointment of a successor shall be effective
until the acceptance of appointment by the successor Trustee in accordance with
the requirements of the Trust Agreement.
If a Subordinated Note Indenture Event of Default has occurred and is
continuing, the holders of Preferred Securities shall have a preference over the
holders of Common Securities upon dissolution of the Trust as described above.
See "-- Liquidation Distribution Upon Dissolution."
VOTING RIGHTS
Except as provided below and under "Description of the
Guarantees -- Amendments and Assignment" in the accompanying Prospectus and as
otherwise required by law and the Trust Agreement, the holders of the Preferred
Securities will have no voting rights.
If any proposed amendment to the Trust Agreement provides for, or the
Securities Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Preferred
Securities, whether by way of amendment to the Trust Agreement or otherwise, or
(ii) the dissolution, winding-up or termination of the Trust, other than
pursuant to the Trust Agreement, then the holders of outstanding Preferred
Securities will be entitled to vote as a class on such amendment or proposal of
the Securities Trustees, and such amendment or proposal shall not be effective
except with the approval of the holders of at least 66 2/3% in liquidation
amount of such outstanding Preferred Securities.
So long as any Series Junior Subordinated Notes are held by the Property
Trustee, the Securities Trustees shall not (i) direct the time, method and place
of conducting any proceeding for any remedy available to the Indenture Trustee
(as defined herein), or executing any trust or power conferred on the Indenture
Trustee with respect to the Series Junior Subordinated Notes, (ii) waive any
past default which is waivable under Section 513 of the Subordinated Note
Indenture, (iii) exercise any right to rescind or annul a declaration that the
principal of all the Series Junior Subordinated Notes shall be due and
payable, or (iv) consent to any amendment, modification or termination of the
Subordinated Note Indenture or the Series Junior Subordinated Notes, where
such consent shall be required, or to any other action, as the
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holder of the Series Junior Subordinated Notes, under the Subordinated Note
Indenture, without, in each case, obtaining the prior approval of the holders of
at least 66 2/3% in liquidation amount of the outstanding Preferred Securities;
provided, however, that where a consent under the Subordinated Note Indenture
would require the consent of each holder of Series Junior Subordinated Notes
affected thereby, no such consent shall be given by the Securities Trustees
without the prior consent of each holder of Preferred Securities. The Securities
Trustees shall not revoke any action previously authorized or approved by a vote
of the holders of the Preferred Securities, except pursuant to a subsequent vote
of such holders. The Property Trustee shall notify all holders of the Preferred
Securities of any notice of default received from the Indenture Trustee with
respect to the Series Junior Subordinated Notes. In addition to obtaining the
foregoing approvals of the holders of the Preferred Securities, prior to taking
any of the foregoing actions, the Securities Trustees shall obtain an opinion of
counsel experienced in such matters to the effect that the Trust will not be
classified as other than a grantor trust for federal income tax purposes on
account of such action.
Any required approval of holders of Preferred Securities may be given at a
separate meeting of holders of Preferred Securities convened for such purpose or
pursuant to written consent. The Administrative Trustees will cause a notice of
any meeting at which holders of Preferred Securities are entitled to vote to be
given to each holder of record of Preferred Securities in the manner set forth
in the Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Company, the Securities Trustees or any
affiliate of the Company or any Securities Trustee, shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
CO-PROPERTY TRUSTEES AND SEPARATE PROPERTY TRUSTEE
At any time or times, for the purpose of meeting the legal requirements of
the 1939 Act or of any jurisdiction in which any part of the Trust Property (as
defined in the Trust Agreement) may at the time be located, the holder of the
Common Securities and the Property Trustee shall have power to appoint, and upon
the written request of the Property Trustee, the Company, as Depositor, shall
for such purpose join with the Property Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to appoint,
one or more persons approved by the Property Trustee either to act as
co-property trustee, jointly with the Property Trustee, of all or any part of
such Trust Property, or to act as separate trustee of any such property, in
either case with such powers as may be provided in the instrument of
appointment, and to vest in such person or persons in such capacity, any
property, title, right or power deemed necessary or desirable, subject to the
provisions of the Trust Agreement. If the Company, as Depositor, does not join
in such appointment within 15 days after the receipt by it of a request so to
do, or in case a Subordinated Note Indenture Event of Default has occurred and
is continuing, the Property Trustee alone shall have power to make such
appointment.
AMENDMENT OF THE TRUST AGREEMENT
The Trust Agreement may be amended from time to time by the Company and the
Securities Trustees without the consent of the holders of the Trust Securities
(i) to cure any ambiguity, correct or supplement any provision therein which may
be inconsistent with any other provision therein, or to make any other
provisions with respect to matters or questions arising under the Trust
Agreement, which shall not be inconsistent with the other provisions of the
Trust Agreement, provided that the amendment does not adversely affect in any
material respect the interests of any holder of Trust Securities, or (ii) to
modify, eliminate or add to any provisions of the Trust Agreement to such extent
as shall be necessary to ensure that the Trust will not be classified as other
than a grantor trust for federal income tax purposes. Except as provided in the
succeeding paragraph, other amendments to the Trust Agreement may be made (i)
upon approval of the holders of not less than 66 2/3% in aggregate liquidation
amount of the Trust Securities then outstanding and (ii) upon receipt by the
Securities Trustees of an opinion of counsel to the effect that such amendment
will not affect the Trust's status as a grantor trust or the Trust's exemption
from the 1940 Act.
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Notwithstanding the foregoing, without the consent of each affected holder
of Trust Securities, the Trust Agreement may not be amended to (i) change the
amount or timing of any distribution on the Trust Securities or otherwise
adversely affect the amount of any distribution required to be made in respect
of the Trust Securities as of a specified date, (ii) restrict the right of a
holder of Trust Securities to institute suit for the enforcement of any such
payment on or after such date, or (iii) change the consent required to amend the
Trust Agreement.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
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 corporation or other body, except as
described below. The Trust may at the request of the Company, with the consent
of the Administrative Trustees and without the consent of the holders of the
Trust Securities, consolidate, amalgamate, merge with or into, or be replaced by
a trust organized as such under the laws of any state; provided, that (i) such
successor entity either (x) expressly assumes all of the obligations of the
Trust with respect to the Trust Securities or (y) substitutes for the Preferred
Securities other securities having substantially the same terms as the Trust
Securities (the "Successor Securities") so long as the Successor Securities rank
the same as the Trust Securities rank in priority with respect to distributions
and payments upon liquidation, redemption and otherwise, (ii) the Company
expressly appoints a trustee of such successor entity possessing the same powers
and duties as the Property Trustee as the holder of the Junior Subordinated
Notes, (iii) the Preferred Securities or any Successor Securities are listed, or
any Successor Securities will be listed upon notification of issuance, on any
national securities exchange or other organization on which the Preferred
Securities are then listed, (iv) such merger, consolidation, amalgamation or
replacement does not cause the Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization, (v) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the holders of
the Trust Securities (including any Successor Securities) in any material
respect, (vi) such successor entity has a purpose substantially identical to
that of the Trust, (vii) prior to such merger, consolidation, amalgamation or
replacement, the Company has received an opinion of counsel to the effect that
(A) such merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the holders of the Trust
Securities (including any Successor Securities) in any material respect, and (B)
following such merger, consolidation, amalgamation or replacement, neither the
Trust nor such successor entity will be required to register as an investment
company under the 1940 Act, and (viii) the Company guarantees the obligations of
such successor entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, the Trust shall not,
except with the consent of holders of 100% in liquidation amount of the Trust
Securities, 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 such consolidation, amalgamation, merger or
replacement would cause the Trust or the successor entity to be classified as
other than a grantor trust for federal income tax purposes.
Any corporation or other body into which any of the Property Trustee, the
Delaware Trustee or any Administrative Trustee that is not a natural person may
be merged or converted or with which it may be consolidated, or any corporation
or other body resulting from any merger, conversion or consolidation to which
any such Securities Trustee shall be a party, or any corporation or other body
succeeding to all or substantially all the corporate trust business of any such
Securities Trustee, shall be the successor of such Securities Trustee under the
Trust Agreement, provided such corporation is otherwise qualified and eligible
under the Trust Agreement.
PAYMENT AND PAYING AGENT
So long as DTC is acting as securities depositary for the Preferred
Securities, payments in respect of the Preferred Securities shall be made to
DTC, which is to credit the relevant accounts at DTC on the applicable
Distribution Dates. If the Preferred Securities are not held by DTC, such
payments shall be made by check mailed to the address of the holder entitled
thereto as such address shall appear on the Securities Register (as
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such term is defined in the Trust Agreement). The Paying Agent shall initially
be the Property Trustee. The Paying Agent shall be permitted to resign as Paying
Agent upon 30 days' written notice to the Administrative Trustees and the
Company. In such event, the Administrative Trustees shall appoint a successor to
act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
It is anticipated that the Property Trustee, or one of its affiliates, will
act as registrar and transfer agent (the "Securities Registrar") for the
Preferred Securities.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of the Trust, but upon payment in respect of any tax or
other governmental charges which may be imposed in relation to it.
The Securities Registrar will not be required to register or cause to be
registered any transfer of Preferred Securities after they have been called for
redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to the occurrence of a Trust Agreement Event of
Default with respect to the Trust Securities, undertakes to perform only such
duties as are specifically set forth in the Trust Agreement and, after default,
shall exercise the same degree of care as a prudent individual would exercise in
the conduct of his or her own affairs. Subject to such provisions, the Property
Trustee is under no obligation to exercise any of the powers vested in it by the
Trust Agreement at the request of any holder of Preferred Securities, unless
offered reasonable indemnity by such holder against the costs, expenses and
liabilities which might be incurred thereby.
The Chase Manhattan Bank, the Property Trustee, also serves as Subordinated
Note Indenture Trustee and Guarantee Trustee. The Company and certain of its
affiliates maintain deposit accounts and banking relationships with The Chase
Manhattan Bank. The Chase Manhattan Bank serves as trustee under other
indentures pursuant to which securities of the Company and affiliates of the
Company are outstanding.
GOVERNING LAW
The Trust Agreement and the Trust Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware;
provided that the immunities and standard of care of the Property Trustee shall
be governed by New York law.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to operate the
Trust so that the Trust will not be deemed to be an "investment company"
required to be registered under the 1940 Act or taxed as other than a grantor
trust for federal income tax purposes and so that the Series Junior
Subordinated Notes will be treated as indebtedness of the Company for federal
income tax purposes. In this connection, the Administrative Trustees and the
Company are authorized to take any action, not inconsistent with applicable law,
the Trust's certificate of trust or the Trust Agreement, that the Administrative
Trustees and the Company determine in their discretion to be necessary or
desirable for such purposes, as long as such action does not materially and
adversely affect the interests of the holders of the Preferred Securities.
DESCRIPTION OF THE SERIES JUNIOR SUBORDINATED NOTES
Set forth below is a description of the specific terms of the Series
Junior Subordinated Notes. This description supplements, and should be read
together with, the description of the general terms and provisions of the Junior
Subordinated Notes set forth in the accompanying Prospectus under the caption
"Description of the Junior Subordinated Notes." The following description does
not purport to be complete and is subject to,
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and is qualified in its entirety by reference to, the description in the
accompanying Prospectus and the Subordinated Note Indenture (as defined
therein).
GENERAL
The Series Junior Subordinated Notes will be issued as a series of Junior
Subordinated Notes under the Subordinated Note Indenture. The Series Junior
Subordinated Notes will be limited in aggregate principal amount to $ ,
such amount being the approximate aggregate liquidation amount of the Trust
Securities.
The entire principal amount of the Series Junior Subordinated Notes will
mature and become due and payable, together with any accrued and unpaid interest
thereon, including Additional Interest, if any, on . The Series
Junior Subordinated Notes are not subject to any sinking fund provision.
The terms of the Series Junior Subordinated Notes correspond to those of
the Preferred Securities, as described herein.
OPTIONAL REDEMPTION
The Company shall have the right to redeem the Series Junior Subordinated
Notes, in whole or in part, without premium, from time to time, on or after
, or at any time in whole upon the occurrence of a Special Event as
described under "Description of the Preferred Securities -- Special Event
Redemption or Distribution," upon not less than 30 nor more than 60 days'
notice, at a Redemption Price equal to 100% of the principal amount to be
redeemed plus any accrued and unpaid interest, including Additional Interest, if
any, to the Redemption Date. If a partial redemption of the Series Junior
Subordinated Notes would result in the delisting of the Preferred Securities,
the Company may only redeem the Series Junior Subordinated Notes in whole.
INTEREST
Each Series Junior Subordinated Note shall bear interest at the
Securities Rate from the Issue Date, payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year to the person in whose name
such Series Junior Subordinated Note is registered at the close of business on
the fifteenth calendar day prior to such payment date. The amount of interest
payable will be computed on the basis of a 360-day year of twelve 30-day months.
In the event that any date on which interest is payable on the Series Junior
Subordinated Notes is not a Business Day, then payment of the interest payable
on such date will be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
The Company shall have the right at any time, and from time to time, to
defer payments of interest on the Series Junior Subordinated Notes by
extending the interest payment period for up to 20 consecutive quarters, but not
beyond the stated maturity date. At the end of an Extension Period, the Company
shall pay all interest then accrued and unpaid (together with interest thereon
at the Securities Rate compounded quarterly) and all Additional Interest;
provided, that if the Company shall have given notice of its election to select
an Extension Period, (a) the Company shall not declare or pay any dividend or
distribution on, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock or make any guarantee payments with respect
to the foregoing, and (b) the Company shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities (including guarantees other than the Guarantee) issued by the Company
which rank pari passu with or junior to the Series Junior Subordinated Notes.
Prior to the termination of any Extension Period, the Company may further defer
payments of interest by extending the interest payment period, provided that
such Extension Period, together with all such previous and further extensions
thereof, may not exceed 20 consecutive quarters.
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Upon the termination of any Extension Period and the payment of all amounts then
due, the Company may select a new Extension Period, subject to the above
requirements. The Company has no present intention of exercising its rights to
defer payments of interest by extending the interest payment period on the
Series Junior Subordinated Notes. See "Certain Federal Income Tax
Considerations -- Original Issue Discount."
The Company shall give the holder or holders of the Series Junior
Subordinated Notes and the Indenture Trustee notice of its selection or
extension of an Extension Period at least one Business Day prior to the earlier
of (i) the record date relating to the interest payment date on which the
Extension Period is to commence or relating to the interest payment date on
which an Extension Period that is being extended would otherwise terminate or
(ii) the date the Company or the Trust is required to give notice to the NYSE or
other applicable self-regulatory organization of the record date or the date
such distributions are payable.
BOOK-ENTRY AND ISSUANCE
If distributed to holders of Trust Securities in connection with the
voluntary or involuntary dissolution, winding-up or liquidation of the Trust,
the Series Junior Subordinated Notes are expected to be issued in the form of
one or more global certificates registered in the name of the securities
depositary or its nominee. In such event, the procedures applicable to the
transfer and payment of the Series Junior Subordinated Notes are expected to
be substantially similar to those described with respect to the Preferred
Securities in "Description of the Preferred Securities -- Book-Entry Only
Issuance -- The Depository Trust Company."
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE SERIES JUNIOR SUBORDINATED NOTES AND THE GUARANTEE
As long as payments of interest and other payments are made when due on the
Series Junior Subordinated Notes, such payments will be sufficient to cover
distributions and payments due on the Trust Securities primarily because (i) the
aggregate principal amount of Series Junior Subordinated Notes will be equal
to the sum of the aggregate stated liquidation amount of the Trust Securities;
(ii) the interest rate and interest and other payment dates on the Series
Junior Subordinated Notes will match the distribution rate and distribution and
other payment dates for the Preferred Securities; (iii) the Company shall pay
for all costs and expenses of the Trust pursuant to the Agreement as to Expenses
and Liabilities; and (iv) the Trust Agreement provides that the Securities
Trustees shall not cause or permit the Trust to, among other things, engage in
any activity that is not consistent with the purposes of the Trust.
Payments of distributions (to the extent funds therefor are legally and
immediately available) and other payments due on the Preferred Securities (to
the extent funds therefor are legally and immediately available) are guaranteed
by the Company as and to the extent set forth under "Description of the
Guarantees" in the accompanying Prospectus. If the Company does not make
interest payments on the Series Junior Subordinated Notes, it is not expected
that the Trust will have sufficient funds to pay distributions on the Preferred
Securities. The Guarantee is a guarantee from the time of its issuance, but does
not apply to any payment of distributions unless and until the Trust has
sufficient funds legally and immediately available for the payment of such
distributions.
If the Company fails to make interest or other payments on the Series
Junior Subordinated Notes when due (taking into account any Extension Period),
the Trust Agreement provides a mechanism whereby the holders of the Preferred
Securities may appoint a substitute Property Trustee. Such holders may also
direct the Property Trustee to enforce its rights under the Series Junior
Subordinated Notes, including proceeding directly against the Company to enforce
the Series Junior Subordinated Notes. If the Property Trustee fails to enforce
its rights under the Series Junior Subordinated Notes, to the fullest extent
permitted by applicable law, any holder of Preferred Securities may institute a
legal proceeding directly against the Company to enforce the Property Trustee's
rights under the Series Junior Subordinated Notes without first instituting
any legal proceeding against the Property Trustee or any other person or entity.
Notwithstanding the foregoing, a holder of Preferred Securities may institute a
legal proceeding directly against the Company, without first instituting a legal
proceeding against the Property Trustee or any other person or entity, for
enforcement of payment to such holder of principal of or interest on the Series
Junior
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Subordinated Notes having a principal amount equal to the aggregate stated
liquidation amount of the Preferred Securities of such holder on or after the
due dates specified in the Series Junior Subordinated Notes.
If the Company fails to make payments under the Guarantee, the Guarantee
provides a mechanism whereby the holders of the Preferred Securities may direct
the Guarantee Trustee to enforce its rights thereunder. In addition, any holder
of Preferred Securities may institute a legal proceeding directly against the
Company to enforce the Guarantee Trustee's rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee or any other
person or entity.
The Guarantee, the Subordinated Note Indenture, the Series Junior
Subordinated Notes, the Trust Agreement and the Agreement as to Expenses and
Liabilities, as described above, constitute a full and unconditional guarantee
by the Company of the payments due on the Preferred Securities.
Upon any voluntary or involuntary dissolution, winding-up or termination of
the Trust, unless the Series Junior Subordinated Notes are distributed in
connection therewith, the holders of Preferred Securities will be entitled to
receive, out of assets legally available for distribution to holders, the
Liquidation Distribution in cash. See "Description of the Preferred
Securities -- Liquidation Distribution Upon Dissolution." Upon any voluntary or
involuntary liquidation or bankruptcy of the Company, the Property Trustee, as
holder of the Series Junior Subordinated Notes, would be a subordinated
creditor of the Company, subordinated in right of payment to all Senior
Indebtedness, but entitled to receive payment in full of principal and interest,
before any stockholders of the Company receive payments or distributions.
Because the Company is guarantor under the Guarantee and has agreed to pay for
all costs, expenses and liabilities of the Trust (other than the Trust's
obligations to holders of the Preferred Securities) pursuant to the Agreement as
to Expenses and Liabilities, the positions of a holder of Preferred Securities
and a holder of Series Junior Subordinated Notes relative to other creditors
and to stockholders of the Company in the event of liquidation or bankruptcy of
the Company would be substantially the same.
A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the Subordinated Note Indenture.
However, in the event of payment defaults under, or acceleration of, Senior
Indebtedness, the subordination provisions of the Series Junior Subordinated
Notes provide that no payments may be made in respect of the Series Junior
Subordinated Notes until such Senior Indebtedness has been paid in full or any
payment default thereunder has been cured or waived. Failure to make required
payments on the Series Junior Subordinated Notes would constitute an Event of
Default under the Subordinated Note Indenture except that failure to make
interest payments on the Series Junior Subordinated Notes will not be an Event
of Default during an Extension Period; provided, however, that any Extension
Period may not exceed 20 consecutive quarters or extend beyond the stated
maturity of the Series Junior Subordinated Notes.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain material United States federal income
tax consequences of the ownership and disposition of the Preferred Securities
and constitutes the opinion of Balch & Bingham LLP, counsel to the Company and
the Trust, insofar as it relates to matters of law and legal conclusions. This
summary deals only with Preferred Securities held as capital assets within the
meaning of Section 1221 of the Internal Revenue Code of 1986, as amended to the
date hereof (the "Code"), by Holders (as defined herein). Moreover, it does not
discuss all of the tax consequences that may be relevant to a Holder in light of
his particular circumstances or to Holders subject to special rules, such as
certain financial institutions, insurance companies, dealers in securities,
individual retirement and certain tax deferred accounts, and persons who engage
in a straddle or a hedge relating to a Preferred Security. Prospective investors
should consult their own tax advisors with regard to the application of the tax
considerations discussed below to their particular situations as well as the
application of any state, local or other tax laws. This summary is based on
laws, existing and proposed regulations, and applicable judicial and
administrative determinations, all of which are subject to change at any time,
and any such changes may be retroactively applied in a manner that could
adversely affect Holders. As used herein, the term "Holder" means a beneficial
owner of a Preferred Security
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that for United States federal income tax purposes is (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof, (iii) an estate or trust the income of which is subject to
United States federal income taxation regardless of its source or (iv) a trust
if (a) a court within the United States is able to exercise primary supervision
over the administration of the trust and (b) one or more U.S. persons have the
authority to control all substantial decisions of the trust. Thus, the following
summary does not address any tax consequences that apply specifically to
nonresident aliens or foreign entities.
TREATMENT OF THE TRUST AND PREFERRED SECURITIES FOR FEDERAL INCOME TAX PURPOSES
The Trust will be treated as a "grantor trust" and not as an association
taxable as a corporation for federal income tax purposes. Thus, for federal
income tax purposes, each Holder will be treated as the beneficial owner of a
pro rata undivided interest in the Series Junior Subordinated Notes and,
consequently, will be required to include in income the Holder's pro rata share
of the entire income from the Series Junior Subordinated Notes. Each Holder
generally will determine its net income or loss with respect to the Trust in
accordance with its own method of accounting, although income arising from OID,
if any, must be taken into account under the accrual method of accounting even
if the Holder otherwise would use the cash receipts and disbursements method.
PAYMENTS OF INTEREST
Except as set forth below, stated interest on a Series Junior
Subordinated Note will generally be taxable to a Holder as ordinary income at
the time it is paid or accrued in accordance with the Holder's own method of
accounting.
ORIGINAL ISSUE DISCOUNT
Under income tax regulations that recently became effective, the Company
believes that the Series Junior Subordinated Notes will not be treated as
issued with OID. It should be noted that these regulations have not yet been
addressed in any rulings or other interpretations by the Internal Revenue
Service (the "IRS"). Accordingly, it is possible that the IRS could take a
position contrary to the interpretations described herein.
The terms of the Series Junior Subordinated Notes permit the Company to
defer the payment of interest on the Series Junior Subordinated Notes at any
time and from time to time by extending the interest payment period for up to 20
consecutive quarters with respect to each Extension Period; provided, however,
that no Extension Period may extend beyond the stated maturity date of the
Series Junior Subordinated Notes. Should the Company exercise this option to
defer payments of interest, the Series Junior Subordinated Notes would at that
time be treated as issued with OID and all the stated interest payments on the
Series Junior Subordinated Notes would thereafter be treated as OID for so
long as they remained outstanding. As a result, all Holders would, in effect, be
required to accrue interest income even if such Holders are on a cash method of
accounting. Consequently, in the event that the payment of interest is deferred,
a Holder could be required to include OID in income on an economic accrual
basis, notwithstanding that the Company will not make any interest payments
during such period on the Series Junior Subordinated Notes.
MARKET DISCOUNT
A purchaser of a Preferred Security at a discount from the liquidation
amount at maturity of such purchaser's pro rata share of the Series Junior
Subordinated Notes acquires such Preferred Security with "market discount."
However, market discount with respect to a Preferred Security will be considered
to be zero if it is de minimis. Market discount will be de minimis with respect
to a Preferred Security if it is less than the product of (i) 0.25% of the
adjusted issue price of the purchaser's pro rata share of the Series Junior
Subordinated Notes multiplied by (ii) the number of complete years to maturity
of such Series Junior Subordinated Notes after the date of purchase. The
purchaser of a Preferred Security with more than a
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de minimis amount of market discount generally will be required to treat any
gain on the sale, exchange, redemption or other disposition of all or part of
the Preferred Securities (or related Series Junior Subordinated Notes) as
ordinary income to the extent of accrued (but not previously taxed) market
discount. Market discount generally will accrue ratably during the period from
the date of purchase of such Preferred Security to the maturity date of the
Series Junior Subordinated Notes, unless the Holder irrevocably elects to
accrue such market discount on the basis of a constant interest rate.
A Holder who has acquired a Preferred Security at a market discount
generally will be required to defer any deductions of interest expense
attributable to any indebtedness incurred or continued to purchase or carry the
Preferred Security, to the extent such interest expense exceeds the related
interest income. Any such deferred interest expense generally will be allowable
as a deduction not later than the year in which the related market discount
income is recognized. As an alternative to the inclusion of market discount in
income upon disposition of all or a portion of a Preferred Security or the
related Series Junior Subordinated Notes (including redemptions thereof), a
Holder may make an election (which may not be revoked without the Internal
Revenue Service's consent) to include market discount in income as it accrues on
all market discount instruments acquired by the Holder during or after the
taxable year for which the election is made. In that case, the preceding
deferral rule for interest expense will not apply.
In lieu of the foregoing treatment of market discount and interest expense,
a Holder may elect to treat any market discount (including a de minimis amount)
as OID and accrue such discount on a constant-yield basis in the same manner as
the Holder accrues OID.
SALE OF PREFERRED SECURITIES
Upon the sale, retirement (including redemption) or other taxable
disposition of all or part of a Preferred Security, a Holder thereof will
recognize gain or loss equal to the difference between the amount realized on
such sale, retirement or other disposition and such Holder's adjusted tax basis
in the Preferred Security or part thereof. If the Holder disposes of a Preferred
Security prior to the occurrence of an Extension Period, any portion of the
amount received that is attributable to accrued interest will be treated as
interest income to the Holder and will not be treated as part of the amount
realized for purposes of determining gain or loss on the disposition of the
Preferred Security. Any recognized gain or loss will be capital gain or loss,
except to the extent of any accrued market discount (see "Market Discount"
above), and such capital gain or loss will be long-term if the holding period
for the Preferred Security is more than one year at the time of sale, retirement
or other disposition. In the case of individuals, "net capital gain," i.e. the
excess of net long-term capital gain over net short-term capital loss is
generally subject to a reduced rate of federal income tax. Capital gains and
losses from property held for more than 18 months will be taken into account in
determining "adjusted net capital gain," which is subject to a further reduction
in the rate of tax pursuant to a recent amendment of the Code. Also, in taxable
years beginning after December 31, 2000, an additional reduction in the rate of
tax may be available in certain circumstances for capital gains from property
held by the taxpayer for more than five years. A Holder's adjusted tax basis in
a Preferred Security acquired by purchase will equal the cost of such Preferred
Security to the Holder, increased by the amount of any related accrued OID and
market discount included in taxable income by the Holder and reduced by any
prior payments on the Series Junior Subordinated Notes distributed on the
Preferred Security. The redemption of only part of a Preferred Security will
require an allocation of the Holder's adjusted tax basis in his pro rata share
of the related Series Junior Subordinated Notes between the portion of the
Series Junior Subordinated Notes redeemed and retained by the Holder in order
to determine gain or loss.
RECEIPT OF SERIES JUNIOR SUBORDINATED NOTES UPON LIQUIDATION OF THE TRUST
As described under "Description of the Preferred Securities -- Special
Event Redemption; Distribution of Series Junior Subordinated Notes," Series
Junior Subordinated Notes may be distributed to Holders in exchange for the
Preferred Securities and in liquidation of the Trust. Such a distribution would
be treated as a non-taxable event to each Holder and each Holder would receive
an aggregate tax basis in the Holder's Series Junior Subordinated Notes equal
to the Holder's aggregate tax basis in its Preferred Securities. A Holder's
holding period with respect to the Series Junior Subordinated Notes so
received in liquidation of the Trust would include the period for which the
Preferred Securities were held by such Holder.
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<PAGE>
INFORMATION REPORTING TO HOLDERS
Income on the Preferred Securities will be reported to Holders on Form
1099, which form should be mailed to Holders of Preferred Securities by January
31 following each calendar year.
BACKUP WITHHOLDING
A Holder may be subject to "backup withholding" under certain
circumstances. Backup withholding applies to a Holder if the Holder, among other
things, (i) fails to furnish his social security number or other taxpayer
identification number ("TIN") to the payor responsible for backup withholding
(for example, the Holder's securities broker), (ii) furnishes such payor an
incorrect TIN, (iii) fails to provide such payor with a certified statement,
signed under penalties of perjury, that the TIN provided to the payor is correct
and that the Holder is not subject to backup withholding, or (iv) fails to
report properly interest and dividends on his tax return. Backup withholding,
however, does not apply to payments made to certain exempt recipients, such as
corporations and tax-exempt organizations. The backup withholding rate is 31% of
"reportable payments," which generally will include distributions of interest
and principal payments on the Series Junior Subordinated Notes.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE MAY NOT BE APPLICABLE TO
A HOLDER, DEPENDING UPON A HOLDER'S PARTICULAR SITUATION, AND THEREFORE EACH
HOLDER SHOULD CONSULT HIS TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF
THE OWNERSHIP AND DISPOSITION OF PREFERRED SECURITIES, INCLUDING THE TAX
CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE
EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAW.
S-26
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement"), the Trust has agreed to sell to the Underwriters
named below, and the Underwriters, for whom is acting as
representative (the "Representative"), have severally agreed to purchase the
number of Preferred Securities set forth opposite their respective names below.
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all of the Preferred
Securities offered hereby if any of the Preferred Securities are purchased.
<TABLE>
<CAPTION>
NUMBER OF
NAME PREFERRED SECURITIES
---- --------------------
<S> <C>
---------
Total.............................................
=========
</TABLE>
The Underwriters have advised the Company and the Trust that they propose
to offer the Preferred Securities in part directly to the public at the price to
the public, as set forth on the cover page of this Prospectus Supplement, and in
part to certain securities dealers at such price less a concession not in excess
of $ per Preferred Security. The Underwriters may allow, and such dealers
may reallow, a concession not in excess of $ per Preferred Security to
certain other dealers. After the Preferred Securities are released for sale to
the public, the offering price and other selling terms may from time to time be
varied by the Underwriters.
The Preferred Securities are expected to be approved for listing on the
NYSE, subject to official notice of issuance. Trading of the Preferred
Securities on the NYSE is expected to commence within a 30-day period after the
initial delivery of the Preferred Securities. The Representative has advised the
Company and the Trust that it intends to make a market in the Preferred
Securities prior to the commencement of trading on the NYSE. The Representative
will have no obligation to make a market in the Preferred Securities, however,
and may cease market making activities, if commenced, at any time.
Prior to this offering, there has been no public market for the Preferred
Securities. In order to meet one of the requirements for listing the Preferred
Securities on the NYSE, the Underwriters will undertake to sell lots of 100 or
more Preferred Securities to a minimum of 400 beneficial holders.
In connection with the offering, the Underwriters may purchase and sell the
Preferred Securities in the open market. These transactions may include
over-allotment and stabilizing transactions and purchases to cover syndicate
short positions created in connection with the offering. Stabilizing
transactions consist of certain bids or purchases for the purpose of preventing
or retarding a decline in the market price of the Preferred Securities; and
syndicate short positions involve the sale by the Underwriters of a greater
number of Preferred Securities than they are required to purchase from the Trust
in the offering. The Underwriters also
S-27
<PAGE>
may impose a penalty bid, whereby selling concessions allowed to syndicate
members or other broker dealers in respect of the securities sold in the
offering for their account may be reclaimed by the syndicate if such Preferred
Securities are repurchased by the syndicate in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise affect the
market price of the Preferred Securities, which may be higher than the price
that might otherwise prevail in the open market; and these activities, if
commenced, may be discontinued at any time. These transactions may be effected
on the NYSE, in the over-the-counter market or otherwise.
The Company and the Trust have agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the 1933 Act.
Certain of the Underwriters engage in transactions with, and, from time to
time, have performed services for, the Company and its affiliates in the
ordinary course of business.
LEGAL OPINIONS
Certain matters of Delaware law relating to the validity of the Preferred
Securities will be passed upon on behalf of the Company and the Trust by
Richards, Layton & Finger, Wilmington, Delaware, special Delaware counsel to the
Company and the Trust. The validity of the Series Junior Subordinated Notes, the
Guarantee and certain matters relating thereto will be passed upon on behalf of
the Company by Balch & Bingham LLP, Birmingham, Alabama, and by Troutman Sanders
LLP, Atlanta, Georgia. Balch & Bingham LLP will also pass upon certain matters
relating to United States federal income tax considerations. Certain legal
matters will be passed upon for the Underwriters by Dewey Ballantine LLP, New
York, New York.
S-28
<PAGE>
GLOSSARY
1933 Act................... The Securities Act of 1933, as amended.
1934 Act................... The Securities Exchange Act of 1934, as amended.
1939 Act................... The Trust Indenture Act of 1939, as amended.
1940 Act................... The Investment Company Act of 1940, as amended.
Additional Interest........ Amounts payable by the Company as defined under
"Description of the Junior Subordinated
Notes -- Additional Interest" in the accompanying
Prospectus.
Administrative Trustees.... William E. Zales, Jr. and J. Randy DeRieux.
Agreement as to Expenses
and Liabilities.......... The agreement between the Company and the Trust
pursuant to which the Company has agreed to pay all
indebtedness, expenses or liabilities of the Trust,
other than the Trust's obligations to pay to the
holders of the Preferred Securities the amounts due
such holders pursuant to the terms thereof.
Code....................... The Internal Revenue Code of 1986, as amended.
Common Securities.......... The Trust Securities being sold to the Company.
Company.................... Alabama Power Company
Delaware Trustee........... Chase Manhattan Bank Delaware
DTC........................ The Depository Trust Company, a "clearing
corporation" that initially will hold (through its
agents) a global certificate evidencing the
Preferred Securities.
Distribution Dates......... March 31, June 30, September 30 and December 31 of
each year.
Extension Period........... Any period during which interest is not paid on the
Series Junior Subordinated Notes (and,
consequently, on the Preferred Securities) at the
election of the Company to the extent permitted
under the terms of the Series Junior Subordinated
Notes.
Guarantee.................. The guarantee by the Company of the payments by the
Trust on the Preferred Securities from funds
available in the Trust.
Guarantee Payments......... Payments required to be made pursuant to the
Guarantee as described in "Description of the
Guarantees -- General" in the accompanying
Prospectus.
Guarantee Trustee.......... The trustee under the Guarantee; initially, The
Chase Manhattan Bank.
Indenture Trustee.......... The trustee under the Subordinated Note Indenture;
initially, The Chase Manhattan Bank.
Issue Date................. The date set forth on the cover page on which the
Series Junior Subordinated Notes and Preferred
Securities are scheduled to be issued.
Investment Company
Act Event................ An event of the type described in "Description of
the Preferred Securities -- Special Event
Redemption; Distribution of Series Junior
Subordinated Notes."
NYSE....................... New York Stock Exchange.
S-29
<PAGE>
Preferred Securities....... The Trust Securities being offered to investors
pursuant to this Prospectus Supplement and the
accompanying Prospectus.
Property Trustee........... A trustee under the Trust designated to hold the
trust property; initially The Chase Manhattan Bank.
Record Date................ The close of business on the 15th calendar day
prior to a Distribution Date.
Redemption Price........... The stated liquidation amount of $25 per Preferred
Security, plus accrued and unpaid distributions
thereon (and interest thereon) to the date of
payment.
Securities Rate............ The per annum interest rate expressed as a
percentage of the stated liquidation amount of $25
per Preferred Security, and set forth on the cover
page of this Prospectus Supplement.
Securities Trustees........ The Property Trustee, Administrative Trustees and
Delaware Trustee.
Senior Indebtedness........ Indebtedness of the Company described hereunder
under "Description of the Junior Subordinated
Notes -- Subordination" in the accompanying
Prospectus.
Series Junior
Subordinated Notes....... The Series % junior subordinated deferrable
interest notes of the Company due
.
Special Event.............. A Tax Event or Investment Company Act Event.
Subordinated Note
Indenture................ The indenture pursuant to which the Company's
Series Junior Subordinated Notes will be issued.
Subordinated Note Indenture
Event of Default......... As described under "Description of the Junior
Subordinated Notes -- Events of Default" in the
accompanying Prospectus.
Tax Event.................. An event of the type described in "Description of
the Preferred Securities -- Special Event
Redemption; Distribution of Series Junior
Subordinated Notes."
Trust...................... Alabama Power Capital Trust , a Delaware business
trust that will issue the Trust Securities.
Trust Agreement............ The agreement pursuant to which the Trust is
organized as it may be amended and restated from
time to time.
Trust Agreement Event of
Default.................. As described under "Description of the Preferred
Securities -- Events of Default."
Trust Securities........... The Preferred Securities and the Common Securities.
S-30
<PAGE>
SUBJECT TO COMPLETION, DATED DECEMBER 2, 1997
PROSPECTUS
$750,000,000
ALABAMA POWER COMPANY
SENIOR NOTES
JUNIOR SUBORDINATED NOTES
---------------------------
ALABAMA POWER CAPITAL TRUST III
ALABAMA POWER CAPITAL TRUST IV
ALABAMA POWER CAPITAL TRUST V
TRUST PREFERRED SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED, AS SET FORTH HEREIN, BY
ALABAMA POWER COMPANY
A SUBSIDIARY OF THE SOUTHERN COMPANY
---------------------------
Alabama Power Company, an Alabama corporation (the "Company"), may offer,
from time to time, (i) its senior notes (the "Senior Notes") in one or more
series or (ii) its junior subordinated notes (the "Junior Subordinated Notes")
in one or more series. The Senior Notes will be unsecured obligations of the
Company and will rank pari passu with all other unsecured and unsubordinated
debt of the Company. The Junior Subordinated Notes will be unsecured obligations
of the Company and will be subordinate and junior in right of payment to Senior
Indebtedness (as defined herein) of the Company.
Alabama Power Capital Trust III, Alabama Power Capital Trust IV and Alabama
Power Capital Trust V, each a statutory business trust created under the laws of
the State of Delaware (individually, a "Trust" and collectively, the "Trusts"),
may offer, from time to time, trust preferred securities (collectively, the
"Preferred Securities") representing preferred undivided beneficial interests in
the assets of the respective Trusts. The Company will own all the common
securities (the "Common Securities" and, together with the Preferred Securities,
the "Trust Securities") representing common undivided beneficial interests in
the assets of the respective Trusts. The payment of periodic cash distributions
on the Preferred Securities of each Trust and payments on liquidation or
redemption with respect to such Preferred Securities, in each case to the extent
such Trust has funds legally and immediately available therefor, will be
guaranteed by the Company as described herein (individually, a "Guarantee" and
collectively, the "Guarantees"). See "Description of the Guarantees." The
Company's obligations under each Guarantee will be subordinate and junior in
right of payment to all of its other liabilities and will rank pari passu (equal
in priority) with the most senior preferred stock of the Company. Concurrently
with the issuance by a Trust of its Preferred Securities, such Trust will invest
the proceeds thereof and of the Company's purchase of the Common Securities of
such Trust in a related series of Junior Subordinated Notes of the Company with
terms corresponding to the terms of such Trust's Preferred Securities. Junior
Subordinated Notes may subsequently be distributed pro rata to holders of the
Trust Securities of a Trust in connection with the termination of such Trust
upon the occurrence of certain events as may be described in an accompanying
Prospectus Supplement.
As described herein, the Company will, through each Guarantee, the
Subordinated Note Indenture, the Junior Subordinated Notes of the related
series, the related Trust Agreement and the related Agreement as to Expenses and
Liabilities, fully and unconditionally guarantee all of each Trust's obligations
with respect to its Preferred Securities.
Specific terms of the Senior Notes or the Junior Subordinated Notes of any
series or the Preferred Securities of any Trust in respect of which this
Prospectus is being delivered will be set forth in an accompanying Prospectus
Supplement with respect to such securities, which will describe, without
limitation and where applicable, the following: (a) in the case of Senior Notes
or Junior Subordinated Notes, the specific designation, aggregate principal
amount, denominations, maturity, interest payment dates, interest rate (or the
method of determining such rate), any redemption, exchange or sinking fund
provisions, and any other specific terms of the offering, and (b) in the case of
Preferred Securities, the specific designation, number of Preferred Securities,
liquidation amount per security, distribution rate (or the method of determining
such rate), dates on which distributions will be payable, voting rights, any
redemption, exchange or sinking fund provisions, and any other rights,
preferences, privileges, limitations and restrictions.
The Senior Notes, Junior Subordinated Notes and Preferred Securities may be
offered in amounts, at prices and on terms to be determined at the time of
offering; provided, however, that the aggregate initial public offering price of
all Senior Notes, Junior Subordinated Notes and Preferred Securities shall not
exceed $750,000,000.
The Prospectus Supplement relating to any series of Senior Notes, Junior
Subordinated Notes or Preferred Securities will contain information concerning
certain United States federal income tax considerations, if applicable to such
Senior Notes, Junior Subordinated Notes or Preferred Securities.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------------
The Senior Notes, Junior Subordinated Notes and Preferred Securities may be
sold directly, through agents, underwriters or dealers as designated from time
to time, or through a combination of such methods. See "Plan of Distribution."
If agents or any underwriters or dealers are involved in the sale of Senior
Notes, Junior Subordinated Notes or Preferred Securities in respect of which
this Prospectus is being delivered, the names of such agents, underwriters or
dealers and any applicable commissions or discounts will be set forth in or may
be calculated from the Prospectus Supplement with respect to such Senior Notes,
Junior Subordinated Notes or Preferred Securities.
---------------------------
December , 1997
<PAGE>
AVAILABLE INFORMATION
The Company and the Trusts have filed with the Securities and Exchange
Commission (the "Commission") a combined registration statement on Form S-3 (the
"Registration Statement," which term encompasses any amendments thereof and
exhibits thereto) under the Securities Act of 1933, as amended (the "1933 Act").
As permitted by the rules and regulations of the Commission, this Prospectus
does not contain all of the information set forth in the Registration Statement
and the exhibits and schedules thereto, to which reference is hereby made.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports and other information with the Commission. Such reports and other
information can be inspected and copied at the public reference facilities of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and Seven World Trade Center, 13th Floor, New York, New York
10048. Copies of such material can also be obtained at prescribed rates by
writing to the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants including the Company that file electronically at
http://www.sec.gov. In addition, reports and other material concerning the
Company can be inspected at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005, on which Exchange certain of the Company's
securities are listed.
No separate financial statements of any Trust are included herein. The
Company considers that such statements would not be material to holders of the
Preferred Securities because each Trust has no independent operations and exists
for the sole purpose of investing the proceeds of the sale of its Trust
Securities in Junior Subordinated Notes.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission pursuant to the
1934 Act and are incorporated herein by reference and made a part of this
Prospectus:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
(b) the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997; and
(c) the Company's Current Reports on Form 8-K dated January 9, 1997 and
February 12, 1997.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent to the date of this
Prospectus and prior to the termination of this offering shall be deemed to be
incorporated herein by reference and made a part of this Prospectus from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A
COPY OF ANY OR ALL DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER THAN THE
EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE). SUCH REQUESTS SHOULD BE DIRECTED TO ART P. BEATTIE, VICE PRESIDENT,
SECRETARY AND TREASURER, ALABAMA POWER COMPANY, 600 NORTH 18TH STREET,
BIRMINGHAM, ALABAMA 35291, TELEPHONE: (205) 257-2505.
2
<PAGE>
SELECTED INFORMATION
The following material, which is presented herein solely to furnish limited
introductory information regarding the Company, has been selected from, or is
based upon, the detailed information and financial statements appearing in the
documents incorporated herein by reference or elsewhere in this Prospectus, is
qualified in its entirety by reference thereto and, therefore, should be read
together therewith.
ALABAMA POWER COMPANY
Business......................... Generation, transmission, distribution and
sale of electric energy
Service Area..................... Approximately 44,500 square miles
comprising most of the State of Alabama
Service Area Population (1990
Census).......................... Approximately 3,224,000
Customers at December 31, 1996... 1,251,218
Generating Capacity at December
31, 1996 (kilowatts)............. 10,641,263
Sources of Generation during 1996
(kilowatt-hours)............... Coal (72%), Nuclear (20%), Hydro (8%), Oil
and Gas (less than 0.5%)
Sources of Generation Estimated
for 1997 (kilowatt-hours)........ Coal (74%), Nuclear (19%), Hydro (7%),
Oil and Gas (less than 0.5%)
SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
12 MONTHS
YEAR ENDED DECEMBER 31, ENDED
-------------------------------------------------------------- OCTOBER 31,
1992 1993 1994(2) 1995 1996 1997(1)
---------- ---------- ---------- ---------- ---------- -----------
(THOUSANDS, EXCEPT RATIOS)
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues..... $2,846,840 $3,007,609 $2,935,142 $3,024,774 $3,120,775 $3,124,690
Income Before Interest
Charges.............. 605,673 606,093 592,540 625,850 625,354 635,715
Net Income After
Dividends on
Preferred Stock...... 338,555 346,494 356,338 360,894 371,490 378,840
Ratio of Earnings to
Fixed Charges(3)..... 3.41 3.45 3.75 3.45 3.57 3.52
Ratio of Earnings to
Fixed Charges Plus
Preferred Dividend
Requirements (Pre-
Income Tax
Basis)(4)............ 2.79 2.90 3.16 2.96 3.05 3.13
</TABLE>
(Notes on following page)
3
<PAGE>
<TABLE>
<CAPTION>
CAPITALIZATION (UNAUDITED) AS OF
SEPTEMBER 30, 1997
----------------------------------
ACTUAL AS ADJUSTED(5)
----------- --------------------
(THOUSANDS, EXCEPT PERCENTAGES)
<S> <C> <C> <C>
Common Stock Equity......................................... $2,775,321 $2,775,321 43.5%
Cumulative Preferred Stock.................................. 278,400 278,400 4.4
Company Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trusts Holding Company Junior
Subordinated Notes(6)..................................... 297,000 547,000 8.6
Senior Notes................................................ -- 250,000 3.9
Junior Subordinated Notes................................... -- 250,000 3.9
Other Long-Term Debt........................................ 2,219,594 2,284,594 35.7
---------- ---------- -----
Total, excluding amounts due within one year...... $5,570,315 $6,385,315 100.0%
========== ========== =====
</TABLE>
- ---------------
(1) See "Recent Results of Operations" herein.
(2) "Operating Revenues" for the year ended December 31, 1994, include an
adjustment due to a change in the estimating procedure for unbilled
kilowatt-hours and associated revenues.
(3) This ratio is computed as follows: (i) "Earnings" have been calculated by
adding to "Income Before Interest Charges" all income taxes deducted
therefrom and the debt portion of allowance for funds used during
construction, and (ii) "Fixed Charges" consist of "Net Interest Charges"
plus the debt portion of allowance for funds used during construction.
(4) In computing this ratio, "Preferred Dividend Requirements" represent the
before tax earnings necessary to pay such dividends, computed at the
effective tax rates for the applicable periods.
(5) Reflects (i) the issuance of $250,000,000 of new Preferred Securities,
$250,000,000 of new Senior Notes and $250,000,000 of new Junior
Subordinated Notes and (ii) the proposed issuance in November 1997 by The
Industrial Development Board of the Town of Columbia of $65,000,000
aggregate principal amount of its Variable Rate Demand Revenue Bonds
(Alabama Power Company Project) Series 1997 (Taxable) for the benefit of
the Company. Does not reflect the potential redemption of outstanding
securities with proceeds from new security issuances. The pro forma amounts
used in connection with this capitalization table are assumed solely for
the purpose of this calculation and the amounts and types of securities
that will be ultimately issued will depend upon market conditions and other
factors prevailing at the time of issuance.
(6) As described in this Prospectus, substantially all of the assets of the
respective Trusts will be the Junior Subordinated Notes of the Company, and
upon redemption of such debt, the related Preferred Securities will be
mandatorily redeemable.
ALABAMA POWER COMPANY
The Company is a corporation organized under the laws of the State of
Alabama on November 10, 1927, by the consolidation of the predecessor Alabama
Power Company, Gulf Electric Company and Houston Power Company. The predecessor
Alabama Power Company had a continuous existence since its incorporation in
1906. The principal executive offices of the Company are located at 600 North
18th Street, Birmingham, Alabama 35291, and the telephone number is (205)
257-1000.
The Company is a wholly owned subsidiary of The Southern Company, a holding
company registered under the Public Utility Holding Company Act of 1935. The
Company is engaged, within the State of Alabama, in the generation and purchase
of electricity and the distribution and sale of such electricity at retail in
over 1,000 communities (including Anniston, Birmingham, Gadsden, Mobile,
Montgomery and Tuscaloosa), and at wholesale to 15 municipally owned electric
distribution systems, 11 of which are served indirectly through sales to the
Alabama Municipal Electric Authority, and two rural distributing cooperative
associations. The Company also supplies steam service in downtown Birmingham.
The Company owns coal reserves near its Gorgas Steam Electric Generating Plant
and uses the output of coal from the reserves in its generating plants. It also
sells, and cooperates with dealers in promoting the sale of, electric
appliances.
4
<PAGE>
The Company and one of its affiliates, Georgia Power Company ("GEORGIA"),
each own 50% of the common stock of Southern Electric Generating Company
("SEGCO"). SEGCO owns generating units with an aggregate capacity of 1,019,680
kilowatts at the Ernest C. Gaston Steam Plant ("Plant Gaston") on the Coosa
River near Wilsonville, Alabama. The Company and GEORGIA are each entitled to
one-half of the capacity and energy of these units. The Company acts as SEGCO's
agent in the operation of SEGCO's units and furnishes coal to SEGCO as fuel for
its units. SEGCO also owns three 230,000 volt transmission lines extending from
Plant Gaston to the Georgia state line.
THE TRUSTS
Each Trust is a statutory business trust created under Delaware law
pursuant to the filing of a certificate of trust with the Delaware Secretary of
State on November 27, 1996, with respect to Alabama Power Capital Trust III and
Alabama Power Capital Trust IV, and November 18, 1997, with respect to Alabama
Power Capital Trust V. Each Trust's business is defined in a trust agreement,
executed by the Company, as Depositor, and the Delaware Trustee thereunder. This
trust agreement of each Trust will be amended and restated in its entirety
substantially in the form filed as an exhibit to the Registration Statement of
which this Prospectus forms a part (the "Trust Agreement"). Each Trust Agreement
will be qualified as an indenture under the Trust Indenture Act of 1939, as
amended (the "1939 Act"). Each Trust exists for the exclusive purposes of (i)
issuing its Trust Securities representing undivided beneficial interests in the
assets of such Trust, (ii) investing the gross proceeds of its Trust Securities
in a related series of Junior Subordinated Notes, and (iii) engaging in only
those other activities necessary, appropriate, convenient or incidental thereto.
Each Trust's business and affairs will be conducted by its trustees, which
shall be appointed by the Company as the holder of the Common Securities: two
employees of the Company as Administrative Trustees; The Chase Manhattan Bank as
Property Trustee; and Chase Manhattan Bank Delaware as Delaware Trustee. The
Property Trustee of each Trust will act as the indenture trustee with respect to
such Trust for purposes of compliance with the provisions of the 1939 Act.
The principal place of business of each Trust shall be c/o the Company, 600
North 18th Street, Birmingham, Alabama 35291, telephone (205) 257-2505, Attn:
Treasurer.
Reference is made to the Prospectus Supplement relating to the Preferred
Securities of a Trust for further information concerning such Trust.
ACCOUNTING TREATMENT
For financial reporting purposes, the Trusts will be treated as
subsidiaries of the Company and, accordingly, the accounts of the Trusts will be
included in the consolidated financial statements of the Company. The Preferred
Securities will be presented as a separate line item in the consolidated balance
sheet of the Company, and appropriate disclosures concerning the Preferred
Securities, the Guarantees and the Junior Subordinated Notes will be included in
the notes to the consolidated financial statements. For financial reporting
purposes, the Company will record distributions payable on the Preferred
Securities as an expense.
USE OF PROCEEDS
Each Trust will invest the proceeds received from the sale of its Preferred
Securities in Junior Subordinated Notes. Except as may be otherwise described in
an applicable Prospectus Supplement, the net proceeds received by the Company
from such investment and any proceeds received from the sale of its Senior Notes
or other sales of its Junior Subordinated Notes will be used in connection with
its ongoing construction program, to pay scheduled maturities and/or refundings
of its securities, to repay short-term indebtedness to the extent outstanding
and for other general corporate purposes.
5
<PAGE>
RECENT RESULTS OF OPERATIONS
For the twelve months ended October 31, 1997, "Operating Revenues", "Income
Before Interest Charges", and "Net Income After Dividends on Preferred Stock"
were $3,124,690,000, $635,715,000 and $378,840,000, respectively. In the opinion
of the management of the Company, the above amounts for the twelve months ended
October 31, 1997 reflect all adjustments (which were only normal recurring
adjustments) necessary to present fairly the results of operations for such
period. The "Ratio of Earnings to Fixed Charges" and the "Ratio of Earnings to
Fixed Charges Plus Preferred Dividend Requirements (Pre-Income Tax Basis)" for
the twelve months ended October 31, 1997 were 3.52 and 3.13, respectively.
DESCRIPTION OF THE SENIOR NOTES
Set forth below is a description of the general terms of the Senior Notes.
The following description does not purport to be complete and is subject to, and
is qualified in its entirety by reference to, the Senior Note Indenture, dated
as of December 1, 1997, between the Company and The Chase Manhattan Bank, as
trustee (the "Senior Note Indenture Trustee"), as to be supplemented by a
supplemental indenture thereto establishing the Senior Notes of each series (the
Senior Note Indenture, as so supplemented, is hereinafter referred to as the
"Senior Note Indenture"), the forms of which are filed as exhibits to the
Registration Statement of which this Prospectus forms a part. The terms of the
Senior Notes will include those stated in the Senior Note Indenture and those
made a part of the Senior Note Indenture by reference to the 1939 Act. Certain
capitalized terms used herein are defined in the Senior Note Indenture.
GENERAL
The Senior Notes will be issued as unsecured senior debt securities under
the Senior Note Indenture and will rank pari passu with all other unsecured and
unsubordinated debt of the Company. The Senior Notes will be effectively
subordinated to all secured debt of the Company, including its first mortgage
bonds, aggregating approximately $2,300,000,000 outstanding at September 30,
1997. The Senior Note Indenture does not limit the aggregate principal amount of
Senior Notes that may be issued thereunder and provides that Senior Notes may be
issued from time to time in one or more series pursuant to an indenture
supplemental to the Senior Note Indenture.
Reference is made to the Prospectus Supplement that will accompany this
Prospectus for the following terms of the series of Senior Notes being offered
thereby: (i) the title of such Senior Notes; (ii) any limit on the aggregate
principal amount of such Senior Notes; (iii) the date or dates on which the
principal of such Senior Notes is payable; (iv) the rate or rates at which such
Senior Notes shall bear interest, if any, or any method by which such rate or
rates will be determined, the date or dates from which such interest will
accrue, the interest payment dates on which such interest shall be payable, and
the regular record date for the interest payable on any interest payment date;
(v) the place or places where the principal of (and premium, if any) and
interest, if any, on such Senior Notes shall be payable; (vi) the period or
periods within which, the price or prices at which and the terms and conditions
on which such Senior Notes may be redeemed, in whole or in part, at the option
of the Company; (vii) the obligation, if any, of the Company to redeem or
purchase such Senior Notes; (viii) the denominations in which such Senior Notes
shall be issuable; (ix) if other than the principal amount thereof, the portion
of the principal amount of such Senior Notes which shall be payable upon
declaration of acceleration of the maturity thereof; (x) any deletions from,
modifications of or additions to the Events of Default or covenants of the
Company as provided in the Senior Note Indenture pertaining to such Senior
Notes; (xi) whether such Senior Notes shall be issued in whole or in part in the
form of a Global Security; and (xii) any other terms of such Senior Notes.
The Senior Note Indenture does not contain provisions that afford holders
of Senior Notes protection in the event of a highly leveraged transaction
involving the Company.
6
<PAGE>
EVENTS OF DEFAULT
The Senior Note Indenture provides that any one or more of the following
described events with respect to the Senior Notes of any series, which has
occurred and is continuing, constitutes an "Event of Default" with respect to
the Senior Notes of such series:
(a) failure for 10 days to pay interest on the Senior Notes of such
series, when due on an Interest Payment Date other than at maturity or upon
earlier redemption; or
(b) failure to pay principal or premium, if any, or interest on the
Senior Notes of such series when due at maturity or upon earlier
redemption; or
(c) failure for three Business Days to deposit any sinking fund
payment when due by the terms of a Senior Note of such series; or
(d) failure to observe or perform any other covenant or warranty of
the Company in the Senior Note Indenture (other than a covenant or warranty
which has expressly been included therein solely for the benefit of one or
more series of Senior Notes other than such series) for 90 days after
written notice to the Company from the Senior Note Indenture Trustee or the
holders of at least 25% in principal amount of the outstanding Senior Notes
of such series; or
(e) certain events of bankruptcy, insolvency, or reorganization of the
Company.
The holders of not less than a majority in aggregate outstanding principal
amount of the Senior Notes of any series have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Senior Note Indenture Trustee with respect to the Senior Notes of such series.
If a Senior Note Indenture Event of Default occurs and is continuing with
respect to the Senior Notes of any series, then the Senior Note Indenture
Trustee or the holders of not less than 25% in aggregate outstanding principal
amount of the Senior Notes of such series may declare the principal amount
thereof due and payable immediately by notice in writing to the Company (and to
the Senior Note Indenture Trustee if given by the holders), and upon any such
declaration such principal amount shall become immediately due and payable. At
any time after such a declaration of acceleration with respect to the Senior
Notes of any series has been made and before a judgment or decree for payment of
the money due has been obtained as provided in Article Five of the Senior Note
Indenture, the holders of not less than a majority in aggregate outstanding
principal amount of the Senior Notes of such series may rescind and annul such
declaration and its consequences if the default has been cured or waived and the
Company has paid or deposited with the Senior Note Indenture Trustee a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration and all sums paid or advanced by the Senior Note
Indenture Trustee, including reasonable compensation and expenses of the Senior
Note Indenture Trustee.
The holders of not less than a majority in aggregate outstanding principal
amount of the Senior Notes of any series may, on behalf of the holders of all
the Senior Notes of such series, waive any past default with respect to such
series, except (i) a default in the payment of principal or interest or (ii) a
default in respect of a covenant or provision which under Article Nine of the
Senior Note Indenture cannot be modified or amended thereunder without the
consent of the holder of each outstanding Senior Note of such series affected
thereby.
REGISTRATION AND TRANSFER
The Company shall not be required to (i) issue, register the transfer of or
exchange Senior Notes of any series during a period of 15 days immediately
preceding the date notice is given identifying the Senior Notes of such series
called for redemption, or (ii) register the transfer of or exchange any Senior
Notes so selected for redemption, in whole or in part, except the unredeemed
portion of any Senior Note being redeemed in part.
PAYMENT AND PAYING AGENT
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of any Senior Notes will be made only against surrender to the
Paying Agent of such Senior Notes. Principal of and interest
7
<PAGE>
on Senior Notes will be payable, subject to any applicable laws and regulations,
at the office of such Paying Agent or Paying Agents as the Company may designate
from time to time, except that, at the option of the Company, payment of any
interest may be made by wire transfer or by check mailed to the address of the
person entitled thereto as such address shall appear in the Security Register
with respect to the Senior Notes. Payment of interest on Senior Notes on any
interest payment date will be made to the person in whose name the Senior Notes
(or predecessor security) are registered at the close of business on the Record
Date for such interest payment (the fifteenth calendar day before such interest
payment date).
Unless otherwise indicated in an applicable Prospectus Supplement, the
Senior Indenture Trustee will act as Paying Agent with respect to the Senior
Notes. The Company may at any time designate additional Paying Agents or rescind
the designation of any Paying Agents or approve a change in the office through
which any Paying Agent acts.
All moneys paid by the Company to a Paying Agent for the payment of the
principal of or interest on the Senior Notes of any series which remain
unclaimed at the end of two years after such principal or interest shall have
become due and payable will be repaid to the Company, and the holder of such
Senior Notes will thereafter look only to the Company for payment thereof.
MODIFICATION
The Senior Note Indenture contains provisions permitting the Company and
the Senior Indenture Trustee, with the consent of the holders of not less than a
majority in principal amount of the outstanding Senior Notes of each series
affected thereby, to modify the Senior Note Indenture or the rights of the
holders of the Senior Note of such series; provided, that no such modification
may, without the consent of the holder of each outstanding Senior Note affected
thereby, (i) change the stated maturity of the principal of, or any installment
of principal of or interest on, any Senior Note, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or change the method of calculating the rate of interest
thereon, or impair the right to institute suit for the enforcement of any such
payment on or after the stated maturity thereof (or, in the case of redemption,
on or after the redemption date), or (ii) reduce the percentage of principal
amount of the outstanding Senior Notes of any series, the consent of whose
holders is required for any such supplemental indenture, or the consent of whose
holders is required for any waiver (of compliance with certain provisions of the
Senior Note Indenture or certain defaults thereunder and their consequences)
provided for in the Senior Note Indenture, or (iii) modify any of the provisions
of the Senior Note Indenture relating to supplemental indentures, waiver of past
defaults, or waiver of certain covenants, except to increase any such percentage
or to provide that certain other provisions of the Senior Note Indenture cannot
be modified or waived without the consent of the holder of each outstanding
Senior Note affected thereby.
In addition, the Company and the Senior Note Indenture Trustee may execute,
without the consent of any holders of Senior Notes, any supplemental indenture
for certain other usual purposes, including the creation of any new series of
senior notes.
CONSOLIDATION, MERGER AND SALE
The Company shall not consolidate with or merge into any other corporation
or convey, transfer or lease its properties and assets substantially as an
entirety to any person, unless (1) such other corporation or person is a
corporation organized and existing under the laws of the United States, any
state thereof or the District of Columbia and such other corporation or person
expressly assumes, by supplemental indenture executed and delivered to the
Senior Note Indenture Trustee, the payment of the principal of (and premium, if
any) and interest on all the Senior Notes and the performance of every covenant
of the Senior Note Indenture on the part of the Company to be performed or
observed; (2) immediately after giving effect to such transactions, no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing; and (3) the Company
has delivered to the Senior Note Indenture Trustee an officers' certificate and
an opinion of counsel, each stating that such transaction complies with the
provisions of the Senior Note Indenture governing consolidation, merger,
conveyance, transfer or lease and that all conditions precedent thereto have
been complied with.
8
<PAGE>
INFORMATION CONCERNING THE SENIOR NOTE INDENTURE TRUSTEE
The Senior Note Indenture Trustee, prior to an Event of Default with
respect to Senior Notes of any series, undertakes to perform, with respect to
Senior Notes of such series, only such duties as are specifically set forth in
the Senior Note Indenture and, in case an Event of Default with respect to
Senior Notes of any series has occurred and is continuing, shall exercise, with
respect to Senior Notes of such series, the same degree of care as a prudent
individual would exercise in the conduct of his or her own affairs. Subject to
such provision, the Senior Note Indenture Trustee is under no obligation to
exercise any of the powers vested in it by the Senior Note Indenture at the
request of any holder of Senior Notes of any series, unless offered reasonable
indemnity by such holder against the costs, expenses and liabilities which might
be incurred thereby. The Senior Note Indenture Trustee is not required to expend
or risk its own funds or otherwise incur any financial liability in the
performance of its duties if the Senior Note Indenture Trustee reasonably
believes that repayment or adequate indemnity is not reasonably assured to it.
The Chase Manhattan Bank, the Senior Note Indenture Trustee, also serves as
Subordinated Note Indenture Trustee, as Property Trustee and as Guarantee
Trustee. The Company and certain of its affiliates maintain deposit accounts and
banking relationships with The Chase Manhattan Bank. The Chase Manhattan Bank
also serves as trustee under other indentures pursuant to which securities of
the Company and affiliates of the Company are outstanding.
GOVERNING LAW
The Senior Note Indenture and the Senior Notes will be governed by, and
construed in accordance with, the internal laws of the State of New York.
MISCELLANEOUS
The Company will have the right at all times to assign any of its rights or
obligations under the Senior Note Indenture to a direct or indirect wholly-owned
subsidiary of the Company; provided, that, in the event of any such assignment,
the Company will remain primarily liable for all such obligations. Subject to
the foregoing, the Senior Note Indenture will be binding upon and inure to the
benefit of the parties thereto and their respective successors and assigns.
DESCRIPTION OF THE JUNIOR SUBORDINATED NOTES
Set forth below is a description of the general terms of the Junior
Subordinated Notes. The following description does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, the
Subordinated Note Indenture, dated as of January 1, 1997, between the Company
and The Chase Manhattan Bank, as trustee (the "Subordinated Note Indenture
Trustee"), as to be supplemented by a supplemental indenture thereto
establishing the Junior Subordinated Notes of each series (the Subordinated Note
Indenture, as so supplemented, is hereinafter referred to as the "Subordinated
Note Indenture"), the forms of which are filed as exhibits to the Registration
Statement of which this Prospectus forms a part. The terms of the Junior
Subordinated Notes will include those stated in the Subordinated Note Indenture
and those made a part of the Subordinated Note Indenture by reference to the
1939 Act. Certain capitalized terms used herein are defined in the Subordinated
Note Indenture.
GENERAL
The Junior Subordinated Notes will be issued as unsecured junior
subordinated debt securities under the Subordinated Note Indenture. The
Subordinated Note Indenture does not limit the aggregate principal amount of
Junior Subordinated Notes that may be issued thereunder and provides that Junior
Subordinated Notes may be issued from time to time in one or more series
pursuant to an indenture supplemental to the Subordinated Note Indenture.
Reference is made to the Prospectus Supplement that will accompany this
Prospectus for the following terms of the series of Junior Subordinated Notes
being offered thereby: (i) the title of such Junior Subordinated Notes; (ii) any
limit on the aggregate principal amount of such Junior Subordinated Notes;
9
<PAGE>
(iii) the date or dates on which the principal of such Junior Subordinated Notes
is payable; (iv) the rate or rates at which such Junior Subordinated Notes shall
bear interest, if any, or any method by which such rate or rates will be
determined, the date or dates from which such interest will accrue, the interest
payment dates on which such interest shall be payable, and the regular record
date for the interest payable on any interest payment date; (v) the place or
places where the principal of (and premium, if any) and interest, if any, on
such Junior Subordinated Notes shall be payable; (vi) the period or periods
within which, the price or prices at which and the terms and conditions on which
such Junior Subordinated Notes may be redeemed, in whole or in part, at the
option of the Company; (vii) the obligation, if any, of the Company to redeem or
purchase such Junior Subordinated Notes; (viii) the denominations in which such
Junior Subordinated Notes shall be issuable; (ix) if other than the principal
amount thereof, the portion of the principal amount of such Junior Subordinated
Notes which shall be payable upon declaration of acceleration of the maturity
thereof; (x) any deletions from, modifications of or additions to the Events of
Default or covenants of the Company as provided in the Subordinated Note
Indenture pertaining to such Junior Subordinated Notes; (xi) whether such Junior
Subordinated Notes shall be issued in whole or in part in the form of a Global
Security; (xii) the right, if any, of the Company to extend the interest payment
periods of such Junior Subordinated Notes; and (xiii) any other terms of such
Junior Subordinated Notes. The terms of each series of Junior Subordinated Notes
issued to a Trust will correspond to those of the related Preferred Securities
of such Trust as described in the Prospectus Supplement relating to such
Preferred Securities.
The Subordinated Note Indenture does not contain provisions that afford
holders of Junior Subordinated Notes protection in the event of a highly
leveraged transaction involving the Company.
SUBORDINATION
The Junior Subordinated Notes are subordinated and junior in right of
payment to all Senior Indebtedness (as defined below) of the Company. No payment
of principal of (including redemption payments, if any), or premium, if any, or
interest on (including Additional Interest (as defined herein)) the Junior
Subordinated Notes may be made if (a) any Senior Indebtedness is not paid when
due and any applicable grace period with respect to such default has ended with
such default not being cured or waived or otherwise ceasing to exist, or (b) the
maturity of any Senior Indebtedness has been accelerated because of a default,
or (c) notice has been given of the exercise of an option to require repayment,
mandatory payment or prepayment or otherwise. Upon any payment or distribution
of assets of the Company to creditors upon any liquidation, dissolution,
winding-up, reorganization, assignment for the benefit of creditors, marshalling
of assets or liabilities, or any bankruptcy, insolvency or similar proceedings
of the Company, the holders of Senior Indebtedness shall be entitled to receive
payment in full of all amounts due or to become due on or in respect of all
Senior Indebtedness before the holders of the Junior Subordinated Notes are
entitled to receive or retain any payment or distribution. Subject to the prior
payment of all Senior Indebtedness, the rights of the holders of the Junior
Subordinated Notes will be subrogated to the rights of the holders of Senior
Indebtedness to receive payments and distributions applicable to such Senior
Indebtedness until all amounts owing on the Junior Subordinated Notes are paid
in full.
The term "Senior Indebtedness" means, with respect to the Company, (i) any
payment due in respect of indebtedness of the Company, whether outstanding at
the date of execution of the Subordinated Note Indenture or thereafter incurred,
created or assumed, (a) in respect of money borrowed (including any financial
derivative, hedging or futures contract or similar instrument) and (b) evidenced
by securities, debentures, bonds, notes or other similar instruments issued by
the Company that, by their terms, are senior or senior subordinated debt
securities including, without limitation, all obligations under its indentures
with various trustees; (ii) all capital lease obligations; (iii) all obligations
issued or assumed as the deferred purchase price of property, all conditional
sale obligations and all obligations of the Company under any title retention
agreement (but excluding trade accounts payable arising in the ordinary course
of business and long-term purchase obligations); (iv) all obligations for the
reimbursement of any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction; (v) all obligations of the type referred
to in clauses (i) through (iv) above of other persons the payment of which the
Company is responsible or liable as obligor, guarantor or otherwise; and (vi)
all obligations of the type referred to in clauses (i) through (v) above
10
<PAGE>
of other persons secured by any lien on any property or asset of the Company
(whether or not such obligation is assumed by the Company), except for (1) any
such indebtedness that is by its terms subordinated to or pari passu with the
Junior Subordinated Notes and (2) any unsecured indebtedness between or among
the Company or its affiliates. Such Senior Indebtedness shall continue to be
Senior Indebtedness and be entitled to the benefits of the subordination
provisions contained in the Subordinated Note Indenture irrespective of any
amendment, modification or waiver of any term of such Senior Indebtedness.
The Subordinated Note Indenture does not limit the aggregate amount of
Senior Indebtedness that may be issued by the Company. As of September 30, 1997,
Senior Indebtedness of the Company aggregated approximately $2,800,000,000.
ADDITIONAL INTEREST
"Additional Interest" is defined in the Subordinated Note Indenture as (i)
such additional amounts as may be required so that the net amounts received and
retained by a holder of Junior Subordinated Notes (if the holder is a Trust)
after paying taxes, duties, assessments or governmental charges of whatever
nature (other than withholding taxes) imposed by the United States or any other
taxing authority will not be less than the amounts the holder would have
received had no such taxes, duties, assessments, or other governmental charges
been imposed; and (ii) any interest due and not paid on an interest payment
date, together with interest thereon from such interest payment date to the date
of payment, compounded quarterly, on each interest payment date.
CERTAIN COVENANTS
The Company covenants in the Subordinated Note Indenture, for the benefit
of the holders of each series of Junior Subordinated Notes, that, (i) if at such
time the Company shall have given notice of its election to extend an interest
payment period for such series of Junior Subordinated Notes and such extension
shall be continuing, (ii) if at such time the Company shall be in default with
respect to its payment or other obligations under the Guarantee with respect to
the Trust Securities, if any, related to such series of Junior Subordinated
Notes, or (iii) if at such time an Event of Default thereunder with respect to
such series of Junior Subordinated Notes shall have occurred and be continuing,
(a) the Company shall not declare or pay any dividend or make any distributions
with respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock, and (b) the Company shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities (including guarantees other than the Guarantees)
issued by the Company which rank pari passu with or junior to the Junior
Subordinated Notes. None of the foregoing, however, shall restrict (i) any of
the actions described in the preceding sentence resulting from any
reclassification of the Company's capital stock or the exchange or conversion of
one class or series of the Company's capital stock for another class or series
of the Company's capital stock, or (ii) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged.
The Subordinated Note Indenture further provides that, for so long as the
Trust Securities of any Trust remain outstanding, the Company covenants (i) to
directly or indirectly maintain 100% ownership of the Common Securities of such
Trust; provided, however, that any permitted successor of the Company under the
Subordinated Note Indenture may succeed to the Company's ownership of such
Common Securities, and (ii) to use its reasonable efforts to cause such Trust
(a) to remain a statutory business trust, except in connection with the
distribution of Junior Subordinated Notes to the holders of Trust Securities in
liquidation of such Trust, the redemption of all of the Trust Securities of such
Trust, or certain mergers, consolidations or amalgamations, each as permitted by
the related Trust Agreement, and (b) to otherwise continue to be classified as a
grantor trust for United States federal income tax purposes.
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EVENTS OF DEFAULT
The Subordinated Note Indenture provides that any one or more of the
following described events with respect to the Junior Subordinated Notes of any
series, which has occurred and is continuing, constitutes an "Event of Default"
with respect to the Junior Subordinated Notes of such series:
(a) failure for 10 days to pay interest on the Junior Subordinated
Notes of such series, including any Additional Interest (as defined in
clause (ii) of the definition thereof in the Subordinated Note Indenture)
in respect thereof, when due on an Interest Payment Date other than at
maturity or upon earlier redemption; provided, however, that a valid
extension of the interest payment period by the Company shall not
constitute a default in the payment of interest for this purpose; or
(b) failure for 10 days to pay Additional Interest (as defined in
clause (i) of the definition thereof in the Subordinated Note Indenture);
or
(c) failure to pay principal or premium, if any, or interest,
including Additional Interest (as defined in clause (ii) of the definition
thereof in the Subordinated Note Indenture), on the Junior Subordinated
Notes of such series when due at maturity or upon earlier redemption; or
(d) failure for three Business Days to deposit any sinking fund
payment when due by the terms of a Junior Subordinated Note of such series;
or
(e) failure to observe or perform any other covenant or warranty of
the Company in the Subordinated Note Indenture (other than a covenant or
warranty which has expressly been included therein solely for the benefit
of one or more series of Junior Subordinated Notes other than such series)
for 90 days after written notice to the Company from the Subordinated Note
Indenture Trustee or the holders of at least 25% in principal amount of the
outstanding Junior Subordinated Notes of such series; or
(f) certain events of bankruptcy, insolvency, or reorganization of the
Company.
The holders of not less than a majority in aggregate outstanding principal
amount of the Junior Subordinated Notes of any series have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Subordinated Note Indenture Trustee with respect to the Junior
Subordinated Notes of such series. If a Subordinated Note Indenture Event of
Default occurs and is continuing with respect to the Junior Subordinated Notes
of any series, then the Subordinated Note Indenture Trustee or the holders of
not less than 25% in aggregate outstanding principal amount of the Junior
Subordinated Notes of such series may declare the principal amount thereof due
and payable immediately by notice in writing to the Company (and to the
Subordinated Note Indenture Trustee if given by the holders), and upon any such
declaration such principal amount shall become immediately due and payable. At
any time after such a declaration of acceleration with respect to the Junior
Subordinated Notes of any series has been made and before a judgment or decree
for payment of the money due has been obtained as provided in Article Five of
the Subordinated Note Indenture, the holders of not less than a majority in
aggregate outstanding principal amount of the Junior Subordinated Notes of such
series may rescind and annul such declaration and its consequences if the
default has been cured or waived and the Company has paid or deposited with the
Subordinated Note Indenture Trustee a sum sufficient to pay all matured
installments of interest (including any Additional Interest) and principal due
otherwise than by acceleration and all sums paid or advanced by the Subordinated
Note Indenture Trustee, including reasonable compensation and expenses of the
Subordinated Note Indenture Trustee.
A holder of Preferred Securities may institute a legal proceeding directly
against the Company, without first instituting a legal proceeding against the
Property Trustee or any other person or entity, for enforcement of payment to
such holder of principal of or interest on the Junior Subordinated Notes of the
related series having a principal amount equal to the aggregate stated
liquidation amount of the Preferred Securities of such holder on or after the
due dates specified in the Junior Subordinated Notes of such series.
The holders of not less than a majority in aggregate outstanding principal
amount of the Junior Subordinated Notes of any series may, on behalf of the
holders of all the Junior Subordinated Notes of such
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series, waive any past default with respect to such series, except (i) a default
in the payment of principal or interest or (ii) a default in respect of a
covenant or provision which under Article Nine of the Subordinated Note
Indenture cannot be modified or amended thereunder without the consent of the
holder of each outstanding Junior Subordinated Note of such series affected
thereby.
REGISTRATION AND TRANSFER
The Company shall not be required to (i) issue, register the transfer of or
exchange Junior Subordinated Notes of any series during a period of 15 days
immediately preceding the date notice is given identifying the Junior
Subordinated Notes of such series called for redemption, or (ii) register the
transfer of or exchange any Junior Subordinated Notes so selected for
redemption, in whole or in part, except the unredeemed portion of any Junior
Subordinated Note being redeemed in part.
PAYMENT AND PAYING AGENT
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of any Junior Subordinated Notes will be made only against
surrender to the Paying Agent of such Junior Subordinated Notes. Principal of
and interest on Junior Subordinated Notes will be payable, subject to any
applicable laws and regulations, at the office of such Paying Agent or Paying
Agents as the Company may designate from time to time, except that, at the
option of the Company, payment of any interest may be made by wire transfer or
by check mailed to the address of the person entitled thereto as such address
shall appear in the Security Register with respect to the Junior Subordinated
Notes. Payment of interest on Junior Subordinated Notes on any interest payment
date will be made to the person in whose name the Junior Subordinated Notes (or
predecessor security) are registered at the close of business on the Record Date
for such interest payment (the fifteenth calendar day before such interest
payment date).
Unless otherwise indicated in an applicable Prospectus Supplement, the
Subordinated Note Indenture Trustee will act as Paying Agent with respect to the
Junior Subordinated Notes. The Company may at any time designate additional
Paying Agents or rescind the designation of any Paying Agents or approve a
change in the office through which any Paying Agent acts.
All moneys paid by the Company to a Paying Agent for the payment of the
principal of or interest on the Junior Subordinated Notes of any series which
remain unclaimed at the end of two years after such principal or interest shall
have become due and payable will be repaid to the Company, and the holder of
such Junior Subordinated Notes will thereafter look only to the Company for
payment thereof.
MODIFICATION
The Subordinated Note Indenture contains provisions permitting the Company
and the Subordinated Note Indenture Trustee, with the consent of the holders of
not less than a majority in principal amount of the outstanding Junior
Subordinated Notes of each series affected thereby, to modify the Subordinated
Note Indenture or the rights of the holders of the Junior Subordinated Note of
such series; provided, that no such modification may, without the consent of the
holder of each outstanding Junior Subordinated Note affected thereby, (i) change
the stated maturity of the principal of, or any installment of principal of or
interest on, any Junior Subordinated Note, or reduce the principal amount
thereof or the rate of interest (including Additional Interest) thereon or any
premium payable upon the redemption thereof, or change the method of calculating
the rate of interest thereon, or impair the right to institute suit for the
enforcement of any such payment on or after the stated maturity thereof (or, in
the case of redemption, on or after the redemption date), or (ii) reduce the
percentage of principal amount of the outstanding Junior Subordinated Notes of
any series, the consent of whose holders is required for any such supplemental
indenture, or the consent of whose holders is required for any waiver (of
compliance with certain provisions of the Subordinated Note Indenture or certain
defaults thereunder and their consequences) provided for in the Subordinated
Note Indenture, or (iii) modify any of the provisions of the Subordinated Note
Indenture relating to supplemental indentures, waiver of past defaults, or
waiver of certain covenants, except to increase any such percentage or to
provide that certain other provisions of the Subordinated Note Indenture cannot
be modified or waived without the consent of the holder
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of each outstanding Junior Subordinated Note affected thereby, or (iv) modify
the provisions of the Subordinated Note Indenture with respect to the
subordination of the Junior Subordinated Notes in a manner adverse to such
holder.
In addition, the Company and the Subordinated Note Indenture Trustee may
execute, without the consent of any holders of Junior Subordinated Notes, any
supplemental indenture for certain other usual purposes, including the creation
of any new series of junior subordinated notes.
CONSOLIDATION, MERGER AND SALE
The Company shall not consolidate with or merge into any other corporation
or convey, transfer or lease its properties and assets substantially as an
entirety to any person, unless (1) such other corporation or person is a
corporation organized and existing under the laws of the United States, any
state thereof or the District of Columbia and such other corporation or person
expressly assumes, by supplemental indenture executed and delivered to the
Subordinated Note Indenture Trustee, the payment of the principal of (and
premium, if any) and interest (including Additional Interest) on all the Junior
Subordinated Notes and the performance of every covenant of the Subordinated
Note Indenture on the part of the Company to be performed or observed; (2)
immediately after giving effect to such transactions, no Event of Default, and
no event which, after notice or lapse of time or both, would become an Event of
Default, shall have happened and be continuing; and (3) the Company has
delivered to the Subordinated Note Indenture Trustee an officers' certificate
and an opinion of counsel, each stating that such transaction complies with the
provisions of the Subordinated Note Indenture governing consolidation, merger,
conveyance, transfer or lease and that all conditions precedent thereto have
been complied with.
INFORMATION CONCERNING THE SUBORDINATED NOTE INDENTURE TRUSTEE
The Subordinated Note Indenture Trustee, prior to an Event of Default with
respect to Junior Subordinated Notes of any series, undertakes to perform, with
respect to Junior Subordinated Notes of such series, only such duties as are
specifically set forth in the Subordinated Note Indenture and, in case an Event
of Default with respect to Junior Subordinated Notes of any series has occurred
and is continuing, shall exercise, with respect to Junior Subordinated Notes of
such series, the same degree of care as a prudent individual would exercise in
the conduct of his or her own affairs. Subject to such provision, the
Subordinated Note Indenture Trustee is under no obligation to exercise any of
the powers vested in it by the Subordinated Note Indenture at the request of any
holder of Junior Subordinated Notes of any series, unless offered reasonable
indemnity by such holder against the costs, expenses and liabilities which might
be incurred thereby. The Subordinated Note Indenture Trustee is not required to
expend or risk its own funds or otherwise incur any financial liability in the
performance of its duties if the Subordinated Note Indenture Trustee reasonably
believes that repayment or adequate indemnity is not reasonably assured to it.
The Chase Manhattan Bank, the Subordinated Note Indenture Trustee, also
serves as Senior Note Indenture Trustee, as Property Trustee and as Guarantee
Trustee. The Company and certain of its affiliates maintain deposit accounts and
banking relationships with The Chase Manhattan Bank. The Chase Manhattan Bank
also serves as trustee under other indentures pursuant to which securities of
the Company and affiliates of the Company are outstanding.
GOVERNING LAW
The Subordinated Note Indenture and the Junior Subordinated Notes will be
governed by, and construed in accordance with, the internal laws of the State of
New York.
MISCELLANEOUS
The Company will have the right at all times to assign any of its rights or
obligations under the Subordinated Note Indenture to a direct or indirect
wholly-owned subsidiary of the Company; provided, that, in the event of any such
assignment, the Company will remain primarily liable for all such obligations.
Subject to the foregoing, the Subordinated Note Indenture will be binding upon
and inure to the benefit of the parties thereto and their respective successors
and assigns.
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DESCRIPTION OF THE PREFERRED SECURITIES
Each Trust may issue only one series of Preferred Securities having terms
described in the Prospectus Supplement relating thereto. The Trust Agreement of
each Trust will authorize the Administrative Trustees, on behalf of the Trust,
to issue the Preferred Securities of such Trust. The Preferred Securities of
each Trust will have such terms, including distributions, redemption, voting,
liquidation rights and such other preferred, deferral or other special rights or
such restrictions as shall be set forth in the Trust Agreement of such Trust.
Reference is made to the Prospectus Supplement relating to the Preferred
Securities of a Trust for specific terms, including (i) the distinctive
designation of such Preferred Securities; (ii) the number of Preferred
Securities issued by such Trust; (iii) the annual distribution rate (or method
of determining such rate) for Preferred Securities of such Trust and the date or
dates on which such distributions shall be payable; (iv) whether distributions
on such Preferred Securities shall be cumulative and, in the case of Preferred
Securities having cumulative distribution rights, the date or dates, or method
of determining the date or dates, from which distributions on such Preferred
Securities shall be cumulative; (v) the amount or amounts that shall be paid out
of the assets of such Trust to the holders of the Preferred Securities of such
Trust upon voluntary or involuntary dissolution, winding-up or termination of
such Trust; (vi) the obligation, if any, of such Trust to purchase or redeem
such Preferred Securities and the price or prices at which, the period or
periods within which, and the terms and conditions upon which such Preferred
Securities shall be purchased or redeemed, in whole or in part, pursuant to such
obligation; (vii) the voting rights, if any, of such Preferred Securities in
addition to those required by law, including the number of votes per Preferred
Security and any requirement for the approval by the holders of Preferred
Securities as a condition to specified action or amendments to the Trust
Agreement of such Trust; (viii) the rights, if any, to defer distributions on
the Preferred Securities by extending the interest payment period on the related
Junior Subordinated Notes; and (ix) any other relative rights, preferences,
privileges, limitations or restrictions of such Preferred Securities not
inconsistent with the Trust Agreement of such Trust or applicable law. All
Preferred Securities offered hereby will be guaranteed by the Company to the
extent set forth under "Description of the Guarantees." Any material United
States federal income tax considerations applicable to an offering of Preferred
Securities will be described in the Prospectus Supplement relating thereto.
DESCRIPTION OF THE GUARANTEES
Set forth below is a summary of information concerning the Guarantees that
will be executed and delivered by the Company for the benefit of the holders of
Preferred Securities of the respective Trusts from time to time. Each Guarantee
will be qualified as an indenture under the 1939 Act. The Chase Manhattan Bank
will act as indenture trustee under each Guarantee (the "Guarantee Trustee") for
purposes of the 1939 Act. The terms of the respective Guarantees will be those
set forth therein and those made part thereof by the 1939 Act. The following
summary does not purport to be complete and is subject in all respects to the
provisions of, and is qualified in its entirety by reference to, the Guarantees,
the form of which is filed as an exhibit to the Registration Statement of which
this Prospectus forms a part, and the 1939 Act. Each Guarantee will be held by
the Guarantee Trustee for the benefit of holders of the Preferred Securities to
which it relates.
GENERAL
Pursuant to each Guarantee, the Company will irrevocably and
unconditionally agree, to the extent set forth therein, to pay in full, to the
holders of the related Preferred Securities, the Guarantee Payments (as defined
herein), to the extent not paid by, or on behalf of, the related Trust,
regardless of any defense, right of set-off or counterclaim that the Company may
have or assert against any person. The following payments or distributions with
respect to the Preferred Securities of any Trust to the extent not paid or made
by, or on behalf of, such Trust will be subject to the Guarantee related thereto
(without duplication): (i) any accrued and unpaid distributions required to be
paid on the Preferred Securities of such Trust but if and only if and to the
extent that such Trust has funds legally and immediately available therefor,
(ii) the redemption price, including all accrued and unpaid distributions to the
date of redemption (the "Redemption Price"), with respect to any Preferred
Securities called for redemption by such Trust, but if and only to the extent
such
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Trust has funds legally and immediately available therefor, and (iii) upon a
dissolution, winding-up or termination of such Trust (other than in connection
with the distribution of Junior Subordinated Notes to the holders of Trust
Securities of such Trust or the redemption of all of the Preferred Securities of
such Trust), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid distributions on the Preferred Securities of such Trust to
the date of payment, to the extent such Trust has funds legally and immediately
available therefor, and (b) the amount of assets of such Trust remaining
available for distribution to holders of Preferred Securities of such Trust in
liquidation of such Trust (the "Guarantee Payments"). The Company's obligation
to make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Company to the holders of the related Preferred Securities or by
causing the related Trust to pay such amounts to such holders.
Each Guarantee will be a guarantee of the Guarantee Payments with respect
to the related Preferred Securities from the time of issuance of such Preferred
Securities, but will not apply to the payment of distributions and other
payments on such Preferred Securities when the related Trust does not have
sufficient funds legally and immediately available to make such distributions or
other payments. IF THE COMPANY DOES NOT MAKE INTEREST PAYMENTS ON THE JUNIOR
SUBORDINATED NOTES HELD BY THE PROPERTY TRUSTEE UNDER ANY TRUST, SUCH TRUST WILL
NOT MAKE DISTRIBUTIONS ON ITS PREFERRED SECURITIES.
SUBORDINATION
The Company's obligations under each Guarantee to make the Guarantee
Payments will constitute an unsecured obligation of the Company and will rank
(i) subordinate and junior in right of payment to all other liabilities of the
Company, including the Junior Subordinated Notes, except those obligations or
liabilities made pari passu or subordinate by their terms, (ii) pari passu with
the most senior preferred or preference stock now or hereafter issued by the
Company and with any guarantee now or hereafter entered into by the Company in
respect of any preferred or preference securities of any affiliate of the
Company, and (iii) senior to all common stock of the Company. The terms of the
Preferred Securities will provide that each holder of Preferred Securities by
acceptance thereof agrees to the subordination provisions and other terms of the
Guarantee related thereto. The Company has outstanding preferred stock that
ranks pari passu to the Guarantees and common stock that ranks junior to the
Guarantees. See "Selected Information -- Selected Financial Information."
Each Guarantee will constitute a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly against
the guarantor to enforce its rights under the guarantee without first
instituting a legal proceeding against any other person or entity).
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially and adversely
affect the rights of holders of the related Preferred Securities (in which case
no consent will be required), each Guarantee may be amended only with the prior
approval of the holders of not less than 66 2/3% in liquidation amount of such
outstanding Preferred Securities. The manner of obtaining any such approval of
holders of the Preferred Securities will be as set forth in an accompanying
Prospectus Supplement. All guarantees and agreements contained in each Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Company and shall inure to the benefit of the holders of the related
Preferred Securities then outstanding.
TERMINATION
Each Guarantee will terminate and be of no further force and effect as to
the related Preferred Securities upon full payment of the Redemption Price of
all such Preferred Securities, upon distribution of Junior Subordinated Notes to
the holders of such Preferred Securities, or upon full payment of the amounts
payable upon liquidation of the related Trust. Each Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
holder of the related Preferred Securities must restore payment of any sums paid
with respect to such Preferred Securities or under such Guarantee.
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EVENTS OF DEFAULT
An event of default under each Guarantee will occur upon the failure by the
Company to perform any of its payment obligations thereunder. The holders of a
majority in liquidation amount of the Preferred Securities to which any
Guarantee relates have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of such Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under such Guarantee. Any holder of the
related Preferred Securities may institute a legal proceeding directly against
the Company to enforce its rights under such Guarantee without first instituting
a legal proceeding against the Guarantee Trustee or any other person or entity.
The holders of a majority in liquidation amount of Preferred Securities of any
series may, by vote, on behalf of the holders of all the Preferred Securities of
such series, waive any past event of default and its consequences.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of any event of default with
respect to any Guarantee and after the curing or waiving of all events of
default with respect to such Guarantee, undertakes to perform only such duties
as are specifically set forth in such Guarantee and, in case an event of default
has occurred, shall exercise the same degree of care as a prudent individual
would exercise in the conduct of his or her own affairs. Subject to such
provisions, the Guarantee Trustee is under no obligation to exercise any of the
powers vested in it by any Guarantee at the request of any holder of the related
Preferred Securities, unless offered reasonable indemnity against the costs,
expenses and liabilities which might be incurred thereby.
The Chase Manhattan Bank, the Guarantee Trustee, also serves as Property
Trustee, as Senior Note Indenture Trustee and as Subordinated Note Indenture
Trustee. The Company and certain of its affiliates maintain deposit accounts and
banking relationships with The Chase Manhattan Bank. The Chase Manhattan Bank
serves as trustee under other indentures pursuant to which securities of the
Company and affiliates of the Company are outstanding.
GOVERNING LAW
Each Guarantee will be governed by, and construed in accordance with, the
internal laws of the State of New York.
THE AGREEMENTS AS TO EXPENSES AND LIABILITIES
Pursuant to an Agreement as to Expenses and Liabilities to be entered into
by the Company under each Trust Agreement, the Company will irrevocably and
unconditionally guarantee to each person or entity to whom each Trust becomes
indebted or liable the full payment of any indebtedness, expenses or liabilities
of such Trust, other than obligations of such Trust to pay to the holders of the
related Preferred Securities or other similar interests in such Trust the
amounts due such holders pursuant to the terms of such Preferred Securities or
such other similar interests, as the case may be.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE JUNIOR SUBORDINATED NOTES AND THE GUARANTEES
As long as payments of interest and other payments are made when due on
each series of Junior Subordinated Notes issued to a Trust, such payments will
be sufficient to cover distributions and payments due on the related Trust
Securities of such Trust primarily because (i) the aggregate principal amount of
each series of Junior Subordinated Notes will be equal to the sum of the
aggregate stated liquidation amount of the related Trust Securities; (ii) the
interest rate and interest and other payment dates on each series of Junior
Subordinated Notes will match the distribution rate and distribution and other
payment dates for the related Preferred Securities; (iii) the Company shall pay
for all costs and expenses of each Trust pursuant to the Agreements as to
Expenses and Liabilities; and (iv) each Trust Agreement provides that the
Securities
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Trustees thereunder shall not cause or permit the Trust to, among other things,
engage in any activity that is not consistent with the purposes of the Trust.
Payments of distributions (to the extent funds therefor are legally and
immediately available) and other payments due on the Preferred Securities (to
the extent funds therefor are legally and immediately available) will be
guaranteed by the Company as and to the extent set forth under "Description of
the Guarantees." If the Company does not make interest payments on any series of
Junior Subordinated Notes, it is not expected that the related Trust will have
sufficient funds to pay distributions on its Preferred Securities. Each
Guarantee is a guarantee from the time of its issuance, but does not apply to
any payment of distributions unless and until the related Trust has sufficient
funds legally and immediately available for the payment of such distributions.
If the Company fails to make interest or other payments on any series of
Junior Subordinated Notes when due (taking into account any extension period as
described in the applicable Prospectus Supplement), the Trust Agreement provides
a mechanism whereby the holders of the related Preferred Securities may appoint
a substitute Property Trustee. Such holders may also direct the Property Trustee
to enforce its rights under the Junior Subordinated Notes of such series,
including proceeding directly against the Company to enforce such Junior
Subordinated Notes. If the Property Trustee fails to enforce its rights under
any series of Junior Subordinated Notes, to the fullest extent permitted by
applicable law, any holder of related Preferred Securities may institute a legal
proceeding directly against the Company to enforce the Property Trustee's rights
under such series of Junior Subordinated Notes without first instituting any
legal proceeding against the Property Trustee or any other person or entity.
Notwithstanding the foregoing, a holder of Preferred Securities may institute a
legal proceeding directly against the Company, without first instituting a legal
proceeding against the Property Trustee or any other person or entity, for
enforcement of payment to such holder of principal of or interest on Junior
Subordinated Notes of the related series having a principal amount equal to the
aggregate stated liquidation amount of the Preferred Securities of such holder
on or after the due dates specified in the Junior Subordinated Notes of such
series.
If the Company fails to make payments under any Guarantee, such Guarantee
provides a mechanism whereby the holders of the Preferred Securities to which
such Guarantee relates may direct the Guarantee Trustee to enforce its rights
thereunder. In addition, any holder of Preferred Securities may institute a
legal proceeding directly against the Company to enforce the Guarantee Trustee's
rights under the related Guarantee without first instituting a legal proceeding
against the Guarantee Trustee or any other person or entity.
Each Guarantee, the Subordinated Note Indenture, the Junior Subordinated
Notes of the related series, the related Trust Agreement and the related
Agreement as to Expenses and Liabilities, as described above, constitute a full
and unconditional guarantee by the Company of the payments due on the related
series of Preferred Securities.
Upon any voluntary or involuntary dissolution, winding-up or termination of
any Trust, unless Junior Subordinated Notes of the related series are
distributed in connection therewith, the holders of Preferred Securities of such
Trust will be entitled to receive, out of assets legally available for
distribution to holders, a liquidation distribution in cash as described in the
applicable Prospectus Supplement. Upon any voluntary or involuntary liquidation
or bankruptcy of the Company, the Property Trustee, as holder of the related
series of Junior Subordinated Notes, would be a subordinated creditor of the
Company, subordinated in right of payment to all Senior Indebtedness, but
entitled to receive payment in full of principal and interest, before any
stockholders of the Company receive payments or distributions. Because the
Company is guarantor under each Guarantee and has agreed to pay for all costs,
expenses and liabilities of each Trust (other than the Trust's obligations to
holders of the Preferred Securities) pursuant to the related Agreement as to
Expenses and Liabilities, the positions of a holder of Preferred Securities and
a holder of Junior Subordinated Notes of the related series relative to other
creditors and to stockholders of the Company in the event of liquidation or
bankruptcy of the Company would be substantially the same.
A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the Subordinated Note Indenture.
However, in the event of payment defaults under, or
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acceleration of, Senior Indebtedness, the subordination provisions of the Junior
Subordinated Notes provide that no payments may be made in respect of the Junior
Subordinated Notes until such Senior Indebtedness has been paid in full or any
payment default thereunder has been cured or waived. Failure to make required
payments on the Junior Subordinated Notes of any series would constitute an
Event of Default under the Subordinated Note Indenture with respect to the
Junior Subordinated Notes of such series except that failure to make interest
payments on the Junior Subordinated Notes of such series will not be an Event of
Default during an extension period as described in the applicable Prospectus
Supplement.
PLAN OF DISTRIBUTION
The Company may sell the Senior Notes and the Junior Subordinated Notes and
the Trusts may sell the Preferred Securities in one or more of the following
ways from time to time: (i) to underwriters for resale to the public or to
institutional investors; (ii) directly to institutional investors; or (iii)
through agents to the public or to institutional investors. The Prospectus
Supplement with respect to each series of Senior Notes, Junior Subordinated
Notes or Preferred Securities will set forth the terms of the offering of such
Senior Notes, Junior Subordinated Notes or Preferred Securities, including the
name or names of any underwriters or agents, the purchase price of such Senior
Notes, Junior Subordinated Notes or Preferred Securities and the proceeds to the
Company or the applicable Trust from such sale, any underwriting discounts or
agency fees and other items constituting underwriters' or agents' compensation,
any initial public offering price, any discounts or concessions allowed or
reallowed or paid to dealers and any securities exchange on which such Senior
Notes, Junior Subordinated Notes or Preferred Securities may be listed.
If underwriters participate in the sale, such Senior Notes, Junior
Subordinated Notes or Preferred Securities will be acquired by the underwriters
for their own account and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale.
Unless otherwise set forth in the Prospectus Supplement, the obligations of
the underwriters to purchase any series of Senior Notes, Junior Subordinated
Notes or Preferred Securities will be subject to certain conditions precedent
and the underwriters will be obligated to purchase all of such series of Senior
Notes, Junior Subordinated Notes or Preferred Securities, if any are purchased.
Underwriters and agents may be entitled under agreements entered into with
the Company and/or the applicable Trust to indemnification against certain civil
liabilities, including liabilities under the 1933 Act. Underwriters and agents
may engage in transactions with, or perform services for, the Company in the
ordinary course of business.
Each series of Senior Notes, Junior Subordinated Notes or Preferred
Securities will be a new issue of securities and will have no established
trading market. Any underwriters to whom Senior Notes, Junior Subordinated Notes
or Preferred Securities are sold for public offering and sale may make a market
in such Senior Notes, Junior Subordinated Notes or Preferred Securities, but
such underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. The Senior Notes, Junior Subordinated Notes
or Preferred Securities may or may not be listed on a national securities
exchange.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the Preferred
Securities will be passed upon on behalf of the Company and the Trusts by
Richards, Layton & Finger, Wilmington, Delaware, special Delaware counsel to the
Company and the Trusts. The validity of the Senior Notes, the Junior
Subordinated Notes, the Guarantees and certain matters relating thereto will be
passed upon on behalf of the Company by Balch & Bingham LLP, Birmingham,
Alabama, and by Troutman Sanders LLP, Atlanta, Georgia. Certain legal matters
will be passed upon for the Underwriters by Dewey Ballantine LLP, New York, New
York.
19
<PAGE>
EXPERTS
The financial statements and schedules of the Company included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996,
incorporated by reference in this Prospectus, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports with
respect thereto, and are incorporated herein in reliance upon the authority of
said firm as experts in accounting and auditing in giving said reports. With
respect to the Company's unaudited interim financial information for the periods
ended March 31, 1997 and 1996, June 30, 1997 and 1996, and September 30, 1997
and 1996, included in the Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1997, June 30, 1997 and September 30, 1997,
respectively, and incorporated by reference herein, Arthur Andersen LLP has
applied limited procedures in accordance with professional standards for review
of such information. However, their separate reports thereon state that they did
not audit and they do not express an opinion on such interim financial
information. Accordingly, the degree of reliance on their reports on such
information should be restricted in light of the limited nature of the review
procedures employed. In addition, the accountants are not subject to the
liability provisions of Section 11 of the 1933 Act for their reports on the
unaudited interim financial information because these reports are not "reports"
or "parts" of the registration statement prepared or certified by the
accountants within the meaning of Sections 7 and 11 of said Act.
Statements as to matters of law and legal conclusions in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996, relating to
titles to property of the Company under "Item 2 -- Properties -- Titles to
Property", and relating to the Company under "Item 1 -- Business -- Regulation",
"Item 1 -- Business -- Rate Matters" and "Item 1 -- Business -- Competition",
have been reviewed by Balch & Bingham LLP, general counsel for the Company, and
such statements are made upon the authority of such firm as experts.
20
<PAGE>
======================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, ALABAMA POWER CAPITAL TRUST [ ]
OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE COMPANY OR ALABAMA POWER CAPITAL TRUST [ ] SINCE THE DATE HEREOF. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
---------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Summary of Offering....................... S-3
Risk Factors.............................. S-7
Alabama Power Capital Trust [ ]........ S-9
Capitalization............................ S-10
Accounting Treatment...................... S-10
Description of the Preferred Securities... S-11
Description of the Series Junior
Subordinated Notes...................... S-20
Relationship Among the Preferred
Securities, the Series Junior
Subordinated Notes and the Guarantee.... S-22
Certain Federal Income Tax
Considerations.......................... S-23
Underwriting.............................. S-27
Legal Opinions............................ S-28
Glossary.................................. S-29
PROSPECTUS
Available Information..................... 2
Incorporation of Certain Documents by
Reference............................... 2
Selected Information...................... 3
Alabama Power Company..................... 4
The Trusts................................ 5
Accounting Treatment...................... 5
Use of Proceeds........................... 5
Recent Results of Operations.............. 6
Description of the Senior Notes........... 6
Description of the Junior Subordinated
Notes................................... 9
Description of the Preferred Securities... 15
Description of the Guarantees............. 15
Relationship Among the Preferred
Securities, the Junior Subordinated
Notes and the Guarantees................ 17
Plan of Distribution...................... 19
Legal Matters............................. 19
Experts................................... 19
</TABLE>
======================================================
======================================================
[ ] PREFERRED SECURITIES
ALABAMA POWER
CAPITAL TRUST [ ]
% TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT
$25 PER PREFERRED SECURITY)
FULLY AND UNCONDITIONALLY
GUARANTEED, AS SET FORTH HEREIN, BY
ALABAMA POWER
COMPANY
A SUBSIDIARY OF THE SOUTHERN COMPANY
---------------------------
PROSPECTUS SUPPLEMENT
---------------------------
======================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of issuance and distribution, other than
underwriting discounts and commissions, to be borne by the Company are as
follows:
<TABLE>
<CAPTION>
EACH
INITIAL ADDITIONAL
SALE SALE
-------- ----------
<S> <C> <C>
*Filing Fees -- Securities and Exchange
Commission -- registration statement...................... $227,273 $
Charges of trustees (including counsel)..................... 9,500 9,500
*Listing fees of New York Stock Exchange.................... 135,300 --
Printing and preparation of registration statement,
prospectus, etc........................................... 40,000 15,000
Rating fees --
Moody's Investors Service, Inc............................ 40,000 40,000
Standard & Poor's Corporation............................. 42,000 --
Duff and Phelps, Inc...................................... 25,000 25,000
Services of Southern Company Services, Inc.................. 30,000 15,000
Fees and expenses of counsel................................ 90,000 65,000
Blue sky fees and expenses.................................. 3,500 3,500
Fees of accountants, Arthur Andersen LLP.................... 42,000 25,000
Miscellaneous, including telephone charges and traveling
expenses.................................................. 15,427 7,000
-------- --------
Total............................................. $700,000 $205,000
======== ========
</TABLE>
- ---------------
* The Prospectus Supplement will reflect actual filing and listing fees based
upon the amount of the related offering.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Code of Alabama, 1975, Section 10-2B-8.51 and 10-2B-8.56 gives a
corporation power 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, whether civil, criminal, administrative or investigative and whether
formal or informal 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, partner, trustee, employee or agent of
another foreign or domestic corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against expenses (including
attorneys' fees), judgments, penalties, fines and amounts paid in settlement
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 the best
interests of the corporation, when acting in his or her official capacity with
the corporation, or, in all other cases, 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. The same Sections also
give a corporation power 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 or in the right of the corporation to procure a judgment
in its favor 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, partner, trustee, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, against expenses (including attorneys' fees) reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
the best interests of the corporation, when acting in his or her official
capacity with the corporation or, in all other cases, not opposed to the best
interest of the corporation. No indemnification shall be made, however, in
respect of any claim, issue or matter as to which such person shall
II-1
<PAGE>
have not met the applicable standard of conduct, shall have been adjudged to be
liable to the corporation or, in connection with any other action, suit or
proceeding charging improper personal benefit to such person, if such person was
adjudged liable on the basis that personal benefit was improperly received by
him, unless and only to the extent that the court in which such action or suit
was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such court
shall deem proper. Also, Section 10-2B-8.52 states that, to the extent that a
director, officer, employee or agent of a corporation has been successful on the
merits or otherwise in defense of any such action, suit or proceeding, or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) reasonably incurred by him in connection
therewith, notwithstanding that he has not been successful on any other claim,
issue or matter in any such action, suit or proceeding.
Article XIII of the By-laws of the Company provides in pertinent part as
follows:
Each person who is or was a director of the corporation, officer of the
corporation or employee of the corporation holding one or more positions of
management and who was or is a party or was or is threatened to be made a party
to any threatened, pending or completed claim, action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director of the corporation or officer of the corporation,
or is or was serving at the request of the corporation as a director, officer,
employee, agent or trustee of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise, shall be indemnified by the
corporation as a matter of right against any and all expenses (including
attorneys' fees) actually and reasonably incurred by him and against any and all
claims, judgments, fines, penalties, liabilities and amounts paid in settlement
actually incurred by him in defense of such claim, action, suit or proceeding,
including appeals, to the full extent permitted by applicable law. The
indemnification provided by this Section shall inure to the benefit of the
heirs, executors and administrators of such person.
Expenses (including attorneys' fees) incurred by a director or officer of
the corporation, or by an employee of the corporation holding one or more
positions of management, with respect to the defense of any such claim, action,
suit or proceeding may be advanced by the corporation prior to the final
disposition of such claim, action, suit or proceeding, as authorized by the
board of directors in the specific case, upon receipt of an undertaking by or on
behalf of such person to repay such amount unless it shall ultimately be
determined that such person is entitled to be indemnified by the corporation
under this Section or otherwise; provided, however, that the advancement of such
expenses shall not be deemed to be indemnification unless and until it shall
ultimately be determined that such person is entitled to be indemnified by the
corporation.
The corporation may purchase and maintain insurance at the expense of the
corporation on behalf of any person who is or was a director, officer, employee
or agent of the corporation, or any person who is or was serving at the request
of the corporation as a director (or the equivalent), officer, employee, agent
or trustee of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against any liability or expense (including
attorneys' fees) asserted against him and incurred by him in any such capacity,
or arising out of his status as such, whether or not the corporation would have
the power to indemnify him against such liability or expense under this Section
or otherwise.
Without limiting the generality of the foregoing provisions of this
Section, no present or future director or officer of the corporation, or his
heirs, executors, or administrators, shall be liable for any act, omission,
step, or conduct taken or had in good faith, which is required, authorized, or
approved by any order or orders issued pursuant to the Public Utility Holding
Company Act of 1935, the Federal Power Act, or any federal or state statute or
municipal ordinance regulating the corporation, its parent or its subsidiaries
by reason of their being holding or investment companies, public utility
companies, public utility holding companies, or subsidiaries of public utility
holding companies. In any action, suit, or proceeding based on any act,
omission, step, or conduct, as in this paragraph described, the provisions
hereof shall be brought to the attention of the court. In the event that the
foregoing provisions of this paragraph are found by the court not to constitute
a valid defense on the grounds of not being applicable to the particular class
of plaintiff, each such director and officer, and his heirs, executors, and
administrators, shall be reimbursed for, or indemnified against, all expenses
and liabilities incurred by him or imposed on him, in connection with, or
arising out of, any such
II-2
<PAGE>
action, suit, or proceeding based on any act, omission, step, or conduct taken
or had in good faith as in this paragraph described. Such expenses and
liabilities shall include, but shall not be limited to, judgments, court costs,
and attorneys' fees.
The foregoing rights shall not be exclusive of any other rights to which
any such director or officer may otherwise be entitled and shall be available
whether or not the director or officer continues to be a director or officer at
the time of incurring any such expenses and liabilities.
The Company has an insurance policy covering its liabilities and expenses
which might arise in connection with its lawful indemnification of its directors
and officers for certain of their liabilities and expenses and also covering its
officers and directors against certain other liabilities and expenses.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -------
<C> <C> <S>
1.1 -- Form of Underwriting Agreement relating to Senior Notes.*
1.2 -- Form of Underwriting Agreement relating to Junior
Subordinated Notes.*
1.3 -- Form of Underwriting Agreement relating to Preferred
Securities.*
4.1 -- Form of Senior Note Indenture between Alabama Power Company
and The Chase Manhattan Bank, as Trustee.
4.2 -- Form of Supplemental Indenture to Senior Note Indenture to
be used in connection with the issuance of Senior Notes.*
4.3 -- Subordinated Note Indenture between Alabama Power Company
and The Chase Manhattan Bank, as Trustee (Designated in
the Company's Current Report on Form 8-K dated January 9,
1997 as Exhibit 4.1).
4.4 -- Form of Supplemental Indenture to Subordinated Note
Indenture to be used in connection with the issuance of
Junior Subordinated Notes (Designated in Registration No.
333-17333 as Exhibit 4.2).
4.5-A -- Certificate of Trust of Alabama Power Capital Trust III
(Designated in Registration No. 333-17333 as Exhibit
4.3-B).
4.6-B -- Certificate of Trust of Alabama Power Capital Trust IV
(Designated in Registration No. 333-17333 as Exhibit
4.3-C).
4.5-C -- Certificate of Trust of Alabama Power Capital Trust V.**
4.6-A -- Trust Agreement of Alabama Power Capital Trust III
(Designated in Registration No. 333-17333 as Exhibit
4.4-B).
4.6-B -- Trust Agreement of Alabama Power Capital Trust IV
(Designated in Registration No. 333-17333 as Exhibit
4.4-C).
4.6-C -- Trust Agreement of Alabama Power Capital Trust V.**
4.7-A -- Form of Amended and Restated Trust Agreement of Alabama
Power Capital Trust III (Designated in Registration No.
333-17333 as Exhibit 4.5-B).
4.7-B -- Form of Amended and Restated Trust Agreement of Alabama
Power Capital Trust IV (Designated in Registration No.
333-17333 as Exhibit 4.5-C).
4.7-C -- Form of Amended and Restated Trust Agreement of Alabama
Power Capital Trust V.**
4.8-A -- Form of Preferred Security of Alabama Power Capital Trust
III (included in Exhibit 4.7-A above).
4.8-B -- Form of Preferred Security of Alabama Power Capital Trust IV
(included in Exhibit 4.7-B above).
4.8-C -- Form of Preferred Security of Alabama Power Capital Trust V
(included in Exhibit 4.7-C above).
4.9 -- Form of Senior Note (included in Exhibit 4.2 above).
4.10 -- Form of Junior Subordinated Note (included in Exhibit 4.4
above).
4.11-A -- Form of Guarantee relating to Alabama Power Capital Trust
III (Designated in Registration No. 333-17333 as Exhibit
4.8-B).
4.11-B -- Form of Guarantee relating to Alabama Power Capital Trust IV
(Designated in Registration No. 333-17333 as Exhibit
4.8-C).
4.11-C -- Form of Guarantee relating to Alabama Power Capital Trust
V.**
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -------
<C> <C> <S>
4.12-A -- Form of Agreement as to Expenses and Liabilities relating to
Alabama Power Capital Trust III (included in Exhibit 4.7-A
above).
4.12-B -- Form of Agreement as to Expenses and Liabilities relating to
Alabama Power Capital Trust IV (included in Exhibit 4.7-B
above).
4.12-C -- Form of Agreement as to Expenses and Liabilities relating to
Alabama Power Capital Trust V (included in Exhibit 4.7-C
above).
5.1 -- Opinion of Balch & Bingham LLP.**
5.2-A -- Opinion of Richards, Layton & Finger relating to Alabama
Power Capital Trust III.**
5.2-B -- Opinion of Richards, Layton & Finger relating to Alabama
Power Capital Trust IV.**
5.2-C -- Opinion of Richards, Layton & Finger relating to Alabama
Power Capital Trust V.**
8.1 -- Tax Opinion of Balch & Bingham LLP.**
12.1 -- Computation of ratio of earnings to fixed charges.**
12.2 -- Computation of ratio of earnings to fixed charges plus
preferred dividend requirements (pre-income tax basis).**
15.1 -- Letter re unaudited interim financial information.**
23.1 -- Consent of Arthur Andersen LLP.**
23.2 -- Consent of Balch & Bingham LLP (included in Exhibit 5.1
above).
23.3 -- Consent of Balch & Bingham LLP (included in Exhibit 8.1
above).
23.4 -- Consent of Richards, Layton & Finger (included in Exhibits
5.2-A, 5.2-B and 5.2-C above).
24.1 -- Powers of Attorney and Resolution.**
25.1 -- Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Chase Manhattan Bank, as Senior Note
Indenture Trustee.**
25.2 -- Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Chase Manhattan Bank, as Subordinated
Note Indenture Trustee (Designated in Registration No.
333-17333 as Exhibit 25.1).
25.3 -- Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Chase Manhattan Bank, as Property
Trustee, relating to Alabama Power Capital Trust III
(Designated in Registration No. 333-17333 as Exhibit
25.4).
25.4 -- Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Chase Manhattan Bank, as Guarantee
Trustee, relating to Alabama Power Capital Trust III
(Designated in Registration No. 333-17333 as Exhibit
25.5).
25.5 -- Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Chase Manhattan Bank, as Property
Trustee, relating to Alabama Power Capital Trust IV
(Designated in Registration No. 333-17333 as Exhibit
25.6).
25.6 -- Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Chase Manhattan Bank, as Guarantee
Trustee, relating to Alabama Power Capital Trust IV
(Designated in Registration No. 333-17333 as Exhibit
25.7).
25.7 -- Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Chase Manhattan Bank, as Property
Trustee, relating to Alabama Power Capital Trust V.**
25.8 -- Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Chase Manhattan Bank, as Guarantee
Trustee, relating to Alabama Power Capital Trust V.**
</TABLE>
Exhibits listed above which have heretofore been filed with the Commission
and which were designated as noted above are hereby incorporated herein by
reference and made a part hereof with the same effect as if filed herewith.
- ---------------
* To be subsequently filed or incorporated by reference.
** Previously filed.
II-4
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) Undertaking related to Rule 415 offering:
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement; Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, S-8 or F-3 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrants
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) Undertaking related to filings incorporating subsequent Securities
Exchange Act of 1934 documents by reference:
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Company's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Undertaking related to acceleration of effectiveness:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrants pursuant to the foregoing provisions
or otherwise, the registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the
II-5
<PAGE>
payment by the registrants of expenses incurred or paid by a director,
officer or controlling person of the registrants in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrants will, unless in the opinion of their 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.
(d) The undersigned registrants hereby undertake that:
(1) 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 the registrants pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-6
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, ALABAMA POWER
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 AMENDMENT TO
THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF BIRMINGHAM, STATE OF ALABAMA, ON THE
2ND DAY OF DECEMBER, 1997.
ALABAMA POWER COMPANY
By: ELMER B. HARRIS,
President and Chief Executive
Officer
By: WAYNE BOSTON,
Attorney-in-fact
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, ALABAMA POWER
CAPITAL TRUST III CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
AMENDMENT TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF BIRMINGHAM, STATE OF
ALABAMA, ON THE 2ND DAY OF DECEMBER, 1997.
ALABAMA POWER CAPITAL TRUST III
By: ALABAMA POWER COMPANY,
Depositor
By: WAYNE BOSTON,
Assistant Secretary
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, ALABAMA POWER
CAPITAL TRUST IV CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
AMENDMENT TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF BIRMINGHAM, STATE OF
ALABAMA, ON THE 2ND DAY OF DECEMBER, 1997.
ALABAMA POWER CAPITAL TRUST IV
By: ALABAMA POWER COMPANY,
Depositor
By: WAYNE BOSTON,
Assistant Secretary
II-7
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, ALABAMA POWER
CAPITAL TRUST V CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
AMENDMENT TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF BIRMINGHAM, STATE OF
ALABAMA, ON THE 2ND DAY OF DECEMBER, 1997.
ALABAMA POWER CAPITAL TRUST V
By: ALABAMA POWER COMPANY,
Depositor
By: WAYNE BOSTON,
Assistant Secretary
II-8
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING DIRECTORS AND
OFFICERS OF ALABAMA POWER COMPANY IN THE CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
ELMER B. HARRIS President, Chief Executive
Officer and Director
(Principal Executive
Officer)
WILLIAM B. HUTCHINS, III Executive Vice President
and Chief Financial
Officer (Principal
Financial Officer)
DAVID L. WHITSON Vice President and
Comptroller (Principal
Accounting Officer)
WHIT ARMSTRONG
A. W. DAHLBERG
PETER V. GREGERSON, SR.
BILL M. GUTHRIE
CARL E. JONES, JR.
PATRICIA M. KING
JAMES K. LOWDER
WALLACE D. MALONE, JR.
WILLIAM V. MUSE Directors
JOHN T. PORTER
ROBERT D. POWERS
C. DOWD RITTER
JOHN W. ROUSE
WILLIAM J. RUSHTON, III
JAMES H. SANFORD
JOHN COX WEBB, IV
By WAYNE BOSTON December 2, 1997
(WAYNE BOSTON, ATTORNEY-IN-FACT)
</TABLE>
II-9
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER
- -------
1.1 -- Form of Underwriting Agreement relating to Senior Notes.*
1.2 -- Form of Underwriting Agreement relating to Junior
Subordinated Notes.*
1.3 -- Form of Underwriting Agreement relating to Preferred
Securities.*
4.1 -- Form of Senior Note Indenture between Alabama Power Company
and The Chase Manhattan Bank, as Trustee.
4.2 -- Form of Supplemental Indenture to Senior Note Indenture to
be used in connection with the issuance of Senior Notes.*
4.3 -- Subordinated Note Indenture between Alabama Power Company
and The Chase Manhattan Bank, as Trustee (Designated in
the Company's Current Report on Form 8-K dated January 9,
1997 as Exhibit 4.1).
4.4 -- Form of Supplemental Indenture to Subordinated Note
Indenture to be used in connection with the issuance of
Junior Subordinated Notes (Designated in Registration No.
333-17333 as Exhibit 4.2).
4.5-A -- Certificate of Trust of Alabama Power Capital Trust III
(Designated in Registration No. 333-17333 as Exhibit
4.3-B).
4.6-B -- Certificate of Trust of Alabama Power Capital Trust IV
(Designated in Registration No. 333-17333 as Exhibit
4.3-C).
4.5-C -- Certificate of Trust of Alabama Power Capital Trust V.**
4.6-A -- Trust Agreement of Alabama Power Capital Trust III
(Designated in Registration No. 333-17333 as Exhibit
4.4-B).
4.6-B -- Trust Agreement of Alabama Power Capital Trust IV
(Designated in Registration No. 333-17333 as Exhibit
4.4-C).
4.6-C -- Trust Agreement of Alabama Power Capital Trust V.**
4.7-A -- Form of Amended and Restated Trust Agreement of Alabama
Power Capital Trust III (Designated in Registration No.
333-17333 as Exhibit 4.5-B).
4.7-B -- Form of Amended and Restated Trust Agreement of Alabama
Power Capital Trust IV (Designated in Registration No.
333-17333 as Exhibit 4.5-C).
4.7-C -- Form of Amended and Restated Trust Agreement of Alabama
Power Capital Trust V.**
4.8-A -- Form of Preferred Security of Alabama Power Capital Trust
III (included in Exhibit 4.7-A above).
4.8-B -- Form of Preferred Security of Alabama Power Capital Trust IV
(included in Exhibit 4.7-B above).
4.8-C -- Form of Preferred Security of Alabama Power Capital Trust V
(included in Exhibit 4.7-C above).
4.9 -- Form of Senior Note (included in Exhibit 4.2 above).
4.10 -- Form of Junior Subordinated Note (included in Exhibit 4.4
above).
4.11-A -- Form of Guarantee relating to Alabama Power Capital Trust
III (Designated in Registration No. 333-17333 as Exhibit
4.8-B).
4.11-B -- Form of Guarantee relating to Alabama Power Capital Trust IV
(Designated in Registration No. 333-17333 as Exhibit
4.8-C).
4.11-C -- Form of Guarantee relating to Alabama Power Capital Trust
V.**
2
<PAGE>
EXHIBIT
NUMBER
- -------
4.12-A -- Form of Agreement as to Expenses and Liabilities relating to
Alabama Power Capital Trust III (included in Exhibit 4.7-A
above).
4.12-B -- Form of Agreement as to Expenses and Liabilities relating to
Alabama Power Capital Trust IV (included in Exhibit 4.7-B
above).
4.12-C -- Form of Agreement as to Expenses and Liabilities relating to
Alabama Power Capital Trust V (included in Exhibit 4.7-C
above).
5.1 -- Opinion of Balch & Bingham LLP.**
5.2-A -- Opinion of Richards, Layton & Finger relating to Alabama
Power Capital Trust III.**
5.2-B -- Opinion of Richards, Layton & Finger relating to Alabama
Power Capital Trust IV.**
5.2-C -- Opinion of Richards, Layton & Finger relating to Alabama
Power Capital Trust V.**
8.1 -- Tax Opinion of Balch & Bingham LLP.**
12.1 -- Computation of ratio of earnings to fixed charges.**
12.2 -- Computation of ratio of earnings to fixed charges plus
preferred dividend requirements (pre-income tax basis).**
15.1 -- Letter re unaudited interim financial information.**
23.1 -- Consent of Arthur Andersen LLP.**
23.2 -- Consent of Balch & Bingham LLP (included in Exhibit 5.1
above).
23.3 -- Consent of Balch & Bingham LLP (included in Exhibit 8.1
above).
23.4 -- Consent of Richards, Layton & Finger (included in Exhibits
5.2-A, 5.2-B and 5.2-C above).
24.1 -- Powers of Attorney and Resolution.**
25.1 -- Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Chase Manhattan Bank, as Senior Note
Indenture Trustee.**
25.2 -- Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Chase Manhattan Bank, as Subordinated
Note Indenture Trustee (Designated in Registration No.
333-17333 as Exhibit 25.1).
25.3 -- Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Chase Manhattan Bank, as Property
Trustee, relating to Alabama Power Capital Trust III
(Designated in Registration No. 333-17333 as Exhibit
25.4).
25.4 -- Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Chase Manhattan Bank, as Guarantee
Trustee, relating to Alabama Power Capital Trust III
(Designated in Registration No. 333-17333 as Exhibit
25.5).
25.5 -- Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Chase Manhattan Bank, as Property
Trustee, relating to Alabama Power Capital Trust IV
(Designated in Registration No. 333-17333 as Exhibit
25.6).
25.6 -- Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Chase Manhattan Bank, as Guarantee
Trustee, relating to Alabama Power Capital Trust IV
(Designated in Registration No. 333-17333 as Exhibit
25.7).
25.7 -- Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Chase Manhattan Bank, as Property
Trustee, relating to Alabama Power Capital Trust V.**
25.8 -- Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Chase Manhattan Bank, as Guarantee
Trustee, relating to Alabama Power Capital Trust V.**
Exhibits listed above which have heretofore been filed with the Commission
and which were designated as noted above are hereby incorporated herein by
reference and made a part hereof with the same effect as if filed herewith.
- ---------------
* To be subsequently filed or incorporated by reference.
** Previously filed.
EXHIBIT 4.1
DRAFT
11/28/97
ALABAMA POWER COMPANY
TO
THE CHASE MANHATTAN BANK,
TRUSTEE.
SENIOR NOTE INDENTURE
DATED AS OF DECEMBER 1, 1997
<PAGE>
ALABAMA POWER COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND
SENIOR NOTE INDENTURE, DATED AS OF DECEMBER 1, 1997
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
(S) 310(a)(1)..................................................609
(a)(2)..................................................609
(a)(3).......................................Not Applicable
(a)(4).......................................Not Applicable
(b).....................................................608
610
(S) 311(a).........................................................613
311(b)(4)...............................................613(a)
(b)(6)...............................................613(b)
(S) 312(a).....................................................701
702(a)
(c)..................................................702(b)
(S) 313(a)..................................................703(a)
313(b)..................................................703(b)
313(c)..................................................703(c)
704
(d)..................................................703(c)
(S) 314(a)...............................................704, 1006
(b)..........................................Not Applicable
(c)(1)..................................................102
(c)(2)..................................................102
(c)(3).......................................Not Applicable
(d)..........................................Not Applicable
(e).....................................................102
(S) 315(a)..................................................601(a)
(b).....................................................602
(c)..................................................601(b)
(d)..................................................601(c)
(d)(1)............................................601(a)(1)
(d)(2)............................................601(c)(2)
(d)(3)............................................601(c)(3)
(e).....................................................514
(S) 316(a).....................................................101
(a)(1)(A)...............................................502
512
(a)(1)(B)...............................................513
(a)(2).......................................Not Applicable
(b).....................................................508
(S) 317(a)(1)..................................................503
(a)(2)..................................................504
(b)....................................................1003
(S) 318(a).....................................................107
<PAGE>
TABLE OF CONTENTS
PAGE
Parties......................................................................1
Recitals of the Company......................................................1
ARTICLE ONE..................................................................1
SECTION 101. DEFINITIONS............................................1
Act........................................................1
Affiliate..................................................2
Authenticating Agent.......................................2
Board Resolution...........................................2
Business Day...............................................2
Certificate of a Firm of Independent Public Accountants....2
Commission.................................................3
Company....................................................3
Company Request or Company Order...........................3
Corporate Trust Office.....................................3
Corporation................................................3
Defaulted Interest.........................................3
Depositary.................................................3
Event of Default...........................................3
Global Security............................................3
Holder ..................................................3
Indenture..................................................4
Interest Payment Date......................................4
Maturity 4
Officers' Certificate......................................4
Opinion of Counsel.........................................4
Outstanding................................................4
Paying Agent...............................................5
Paying Agent...............................................5
Trustee....................................................5
Person ..................................................5
Predecessor Security.......................................5
Redemption Date............................................5
Redemption Price...........................................5
Regular Record Date........................................5
Responsible Officer........................................5
Security Register and Security Registrar...................6
Senior Note................................................6
Special Record Date........................................6
Stated Maturity............................................6
Trust Indenture Act........................................6
Trustee....................................................6
Vice President.............................................6
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS............................6
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.................7
SECTION 104. ACTS OF HOLDERS........................................8
SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY..................9
SECTION 106. NOTICE TO HOLDERS OF SENIOR NOTES; WAIVER..............9
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.....................10
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS..............10
SECTION 109. SUCCESSORS AND ASSIGNS................................10
SECTION 110. SEPARABILITY CLAUSE...................................10
SECTION 111. BENEFITS OF INDENTURE.................................10
SECTION 112. GOVERNING LAW.........................................11
SECTION 113. LEGAL HOLIDAYS........................................11
SECTION 114. APPOINTMENT OF AGENT FOR SERVICE......................11
ARTICLE TWO.................................................................12
SECTION 201. FORMS GENERALLY.......................................12
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.......12
SECTION 203. SENIOR NOTES ISSUABLE IN THE FORM OF A GLOBAL
SECURITY..............................................12
ARTICLE THREE...............................................................14
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES..................14
SECTION 302. EXECUTION, AUTHENTICATION, DELIVERY AND DATING........16
SECTION 303. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE...18
SECTION 304. MUTILATED, DESTROYED, LOST AND STOLEN SENIOR NOTES....19
SECTION 305. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED........20
SECTION 306. PERSONS DEEMED OWNERS.................................21
SECTION 307. CANCELLATION..........................................21
SECTION 308. COMPUTATION OF INTEREST...............................22
ARTICLE FOUR................................................................22
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE...............22
SECTION 402. APPLICATION OF TRUST..................................23
ARTICLE FIVE................................................................23
SECTION 501. EVENTS OF DEFAULT.....................................23
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT....25
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE....................................26
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM......................27
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SENIOR NOTES..............................................27
SECTION 506. APPLICATION OF MONEY COLLECTED........................28
SECTION 507. LIMITATION ON SUITS...................................28
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE
PRINCIPAL, PREMIUM AND INTEREST...........................29
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES....................29
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE........................29
SECTION 511. DELAY OR OMISSION NOT WAIVER..........................30
SECTION 512. CONTROL BY HOLDERS OF SENIOR NOTES....................30
SECTION 513. WAIVER OF PAST DEFAULTS...............................30
SECTION 514. UNDERTAKING FOR COSTS.................................31
SECTION 515. WAIVER OF STAY OR EXTENSION LAWS......................31
ARTICLE SIX.................................................................31
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES...................31
SECTION 602. NOTICE OF DEFAULTS....................................33
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.............................33
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SENIOR NOTES..........................................34
SECTION 605. MAY HOLD SENIOR NOTES.................................35
SECTION 606. MONEY HELD IN TRUST...................................35
SECTION 607. COMPENSATION AND REIMBURSEMENT........................35
SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS...............36
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY...............36
SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.....36
SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR................38
SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS..................................................39
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.....39
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT...................40
ARTICLE SEVEN...............................................................42
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
HOLDERS...................................................42
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
HOLDERS...................................................42
SECTION 703. REPORTS BY TRUSTEE....................................42
SECTION 704. REPORTS BY COMPANY....................................43
ARTICLE EIGHT...............................................................44
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS.....................................................44
SECTION 802. SUCCESSOR CORPORATION SUBSTITUTED.....................45
ARTICLE NINE................................................................45
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS....45
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.......46
SECTION 903. GENERAL PROVISIONS REGARDING SUPPLEMENTAL INDENTURE...47
SECTION 904. EXECUTION OF SUPPLEMENTAL INDENTURES..................47
SECTION 905. EFFECT OF SUPPLEMENTAL INDENTURES.....................48
SECTION 906. CONFORMITY WITH TRUST INDENTURE ACT...................48
SECTION 907. REFERENCE IN SENIOR NOTES TO SUPPLEMENTAL INDENTURES..48
ARTICLE TEN.................................................................48
SECTION 1001. PAYMENT OF PRINCIPAL AND INTEREST....................48
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY......................48
SECTION 1003. MONEY FOR SENIOR NOTES PAYMENTS TO BE HELD IN TRUST..49
SECTION 1004. CORPORATE EXISTENCE...........................................50
SECTION 1005. [RESERVED]....................................................50
SECTION 1006. STATEMENT AS TO COMPLIANCE....................................51
SECTION 1007. WAIVER OF CERTAIN COVENANTS...................................51
ARTICLE ELEVEN..............................................................51
SECTION 1101. APPLICABILITY OF ARTICLE.............................51
SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE................51
SECTION 1103. ELECTION BY TRUSTEE OF SENIOR NOTES TO BE REDEEMED...52
SECTION 1104. NOTICE OF REDEMPTION.................................52
SECTION 1105. DEPOSIT OF REDEMPTION PRICE..........................53
SECTION 1106. SENIOR NOTES PAYABLE ON REDEMPTION DATE..............53
SECTION 1107. SENIOR NOTES REDEEMED IN PART........................54
ARTICLE TWELVE..............................................................54
SECTION 1201. APPLICABILITY OF ARTICLE.............................54
SECTION 1202. SATISFACTION OF SINKING FUND
PAYMENTS WITH SENIOR NOTES.........................................55
SECTION 1203. REDEMPTION OF SENIOR NOTES FOR SINKING FUND..........55
ARTICLE THIRTEEN............................................................56
SECTION 1301. NO RECOURSE AGAINST OTHERS...........................56
SECTION 1302. ASSIGNMENT; BINDING EFFECT...........................56
<PAGE>
SENIOR NOTE INDENTURE
THIS SENIOR NOTE INDENTURE is made as of December 1, 1997, between
ALABAMA POWER COMPANY, a corporation duly organized and existing under the laws
of the State of Alabama (herein called the "Company"), having its principal
office at 600 North 18th Street, Birmingham, Alabama 35291, and THE CHASE
MANHATTAN BANK, a banking corporation duly organized and existing under the laws
of the State of New York, having its principal corporate trust office at 450
West 33rd Street, New York, New York 10001, as Trustee (herein called the
"Trustee").
W I T N E S S E T H:
WHEREAS, the Company has duly authorized the execution and delivery of
this Senior Note Indenture to provide for the issuance from time to time of its
unsecured senior debentures, notes or other evidences of indebtedness (herein
called the "Senior Notes"), to be issued in one or more series as in this Senior
Note Indenture provided; and
WHEREAS, all things necessary to make this Senior Note Indenture a
valid agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, for and in consideration of the premises and the
purchase of the Senior Notes by the Holders thereof, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders of the Senior
Notes or of series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Senior Note Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States of America, and, except as
otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are
generally accepted in the United States of America at the date of such
computation; and
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Senior Note Indenture as a whole
and not to any particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act" when used with respect to any Holder of a Senior Note, has the
meaning specified in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person or Persons authorized by the
Trustee to authenticate one or more series of Senior Notes.
"Board of Directors" means either the board of directors of the Company
or any duly authorized committee of the officers and/or directors of the Company
appointed by that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means a day other than (i) a Saturday or a Sunday, (ii)
a day on which banks in New York, New York are authorized or obligated by law or
executive order to remain closed, or (iii) a day on which the Trustee's
Corporate Trust Office is closed for business.
"Certificate of a Firm of Independent Public Accountants" means a
certificate signed by an independent public accountant or a firm of independent
public accountants who may be the independent public accountants regularly
retained by the Company or who may be other independent public accountants. Such
accountant or firm shall be entitled to rely upon an Opinion of Counsel as to
the interpretation of any legal matters relating to such certificate.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Senior Note Indenture, and
thereafter "Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President or
a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee in the Borough
of Manhattan, New York City, at which at any particular time its corporate trust
business shall be principally administered, which office at the date of
execution of this Senior Note Indenture is located at 450 West 33rd Street, New
York, New York 10001.
"Corporation" includes corporations, partnerships, limited liability
companies, associations, companies and business trusts.
"Defaulted Interest" has the meaning specified in Section 305.
"Depositary" means, unless otherwise specified by the Company pursuant
to either Section 203 or 301, with respect to Senior Notes of any series
issuable or issued as a Global Security, The Depository Trust Company, New York,
New York, or any successor thereto registered as a clearing agency under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation.
"Event of Default" has the meaning specified in Section 501.
"Global Security" means, with respect to any series of Senior Notes
issued hereunder, a Senior Note that is executed by the Company and
authenticated and delivered by the Trustee to the Depositary or pursuant to the
Depositary's instruction, all in accordance with Section 203 of this Indenture
and any indenture supplemental hereto.
"Holder," when used with respect to any Senior Note, means the Person
in whose name the Senior Note is registered in the Security Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of the particular series of Senior Notes established
as contemplated by Section 301.
"Interest Payment Date," when used with respect to any series of Senior
Notes, means the dates established for the payment of interest thereon, as
provided in the supplemental indenture for such series.
"Maturity," when used with respect to any Senior Note, means the date
on which the principal of such Senior Note or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Outstanding," when used with respect to Senior Notes, means, as of the
date of determination, all Senior Notes theretofore authenticated and delivered
under this Indenture, except:
(i) Senior Notes theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Senior Notes for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Senior Notes; provided that if
such Senior Notes are to be redeemed, notice of such redemption has
been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(iii) Senior Notes that have been paid or in exchange for or
in lieu of which other Senior Notes have been authenticated and
delivered pursuant to this Indenture, other than any such Senior Notes
in respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Senior Notes are held by a bona fide
purchaser in whose hands such Senior Notes are valid obligations of the
Company; and
(iv) Senior Notes, or portions thereof, converted into or
exchanged for another security if the terms of such Senior Notes
provide for such conversion or exchange;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Senior Notes of such series have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Senior Notes of such series owned by the Company or any Affiliate thereof shall
be disregarded and deemed not to be Outstanding. In determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Senior Notes that the
Trustee knows to be so owned by the Company or an Affiliate of the Company in
the above circumstances shall be so disregarded. Senior Notes so owned that have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Senior Notes and that the pledgee is not the Company or any
Affiliate of the Company.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Senior Notes on behalf of
the Company.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Security" of any particular Senior Note means every
previous Senior Note evidencing all or a portion of the same debt as that
evidenced by such particular Senior Note; and, for the purposes of this
definition, any Senior Note authenticated and delivered under Section 304 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Senior Note
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Senior Note.
"Redemption Date," when used with respect to any Senior Note to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Senior Note to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Senior Notes of any series means the date specified for that purpose
as contemplated by Section 301, whether or not a Business Day.
"Responsible Officer," when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any senior trust officer, any trust officer or assistant
trust officer, the controller or any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 303.
"Senior Note" has the meaning stated in the first recital of this
Indenture and more particularly means any Senior Notes authenticated and
delivered under this Indenture.
"Special Record Date" for the payment of any Defaulted Interest on the
Senior Notes of any series means a date fixed by the Trustee pursuant to Section
305.
"Stated Maturity," when used with respect to any Senior Note or any
installment of principal thereof or interest thereon, means the date specified
in such Senior Note as the fixed date on which the principal of such Senior Note
or such installment of principal or interest is due and payable.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, and any reference herein to the Trust Indenture Act or a particular
provision thereof shall mean such Trust Indenture Act or provision, as the case
may be, as amended or replaced from time to time.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
with respect to one or more series of Senior Notes pursuant to the applicable
provisions of this Indenture, and thereafter "Trustee" shall mean or include
each Person who is then a Trustee hereunder, and if at any time there is more
than one such Person, "Trustee" as used with respect to the Senior Notes of any
series shall mean the Trustee with respect to Senior Notes of that series.
"Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some matters and one or
more other such Persons as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing. Except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent, shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) The principal amount and serial numbers of Senior Notes held by any
Person, and the date of holding the same, shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of the Holder of any Senior Note shall bind every
future Holder of the same Senior Note and the Holder of every Senior Note issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Senior Note.
(e) The fact and date of execution of any such instrument or writing
and the authority of the Person executing the same may also be proved in any
other manner which the Trustee deems sufficient; and the Trustee may in any
instance require further proof with respect to any of the matters referred to in
this Section.
(f) If the Company shall solicit from the Holders of Senior Notes of
any series any Act, the Company may, at its option, by Board Resolution, fix in
advance a record date for the determination of Holders of Senior Notes entitled
to take such Act, but the Company shall have no obligation to do so. Any such
record date shall be fixed at the Company's discretion. If such a record date is
fixed, such Act may be sought or given before or after the record date, but only
the Holders of record at the close of business on such record date shall be
deemed to be Holders of Senior Notes for the purpose of determining whether
Holders of the requisite proportion of Senior Notes of such series Outstanding
have authorized or agreed or consented to such Act, and for that purpose the
Senior Notes of such series Outstanding shall be computed as of such record
date.
SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent,
election, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder of a Senior Note or by the Company
shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its Corporate
Trust Office, Attention: Corporate Trustee Administration Department,
or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to the attention of its Treasurer,
600 North 18th Street, Birmingham, Alabama 35291, or at any other
address previously furnished in writing to the Trustee by the Company.
SECTION 106. NOTICE TO HOLDERS OF SENIOR NOTES; WAIVER.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Senior Notes of any event, such notice shall
be sufficiently given if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the Security
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such Notice.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Senior Notes shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required to be a part of and govern this
Indenture, such required provision shall control.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or the Senior Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or the Senior Notes, express or implied,
shall give to any Person, other than the parties hereto, their successors
hereunder and the Holders of Senior Notes any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW.
This Indenture and the Senior Notes shall be governed by, and construed
in accordance with, the internal laws of the State of New York.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Senior Note shall not be a Business Day, then (notwithstanding
any other provision of this Indenture or of the Senior Notes) payment of
interest or principal (and premium, if any) need not be made on such date, but
may be made on the next succeeding Business Day, except that, if such Business
Day is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, provided that no interest shall accrue on the amount so payable for
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be.
SECTION 114. APPOINTMENT OF AGENT FOR SERVICE
By the execution and delivery of this Indenture, the Company hereby
appoints the Trustee as its agent upon which process may be served in any legal
action or proceeding which may be instituted in any Federal or State court in
the Borough of Manhattan, New York City, arising out of or relating to the
Senior Notes or this Indenture. Service of process upon such agent at the office
of such agent at 450 West 33rd Street, New York, New York 10001, Attention:
Corporate Trustee Administration Department (or such other address in the
Borough of Manhattan, New York City, as may be the Corporate Trust Office of the
Trustee), and written notice of such service to the Company by the Person
serving the same addressed as provided in Section 105, shall be deemed in every
respect effective service of process upon the Company in any such legal action
or proceeding, and the Company hereby submits to the jurisdiction of any such
court in which any such legal action or proceeding is so instituted. Such
appointment shall be irrevocable so long as the Holders of Senior Notes shall
have any rights pursuant to the terms thereof or of this Indenture until the
appointment of a successor by the Company with the consent of the Trustee and
such successor's acceptance of such appointment. The Company further agrees to
take any and all action, including the execution and filing of any and all such
documents and instruments, as may be necessary to continue such designation and
appointment of such agent or successor.
By the execution and delivery of this Indenture, the Trustee hereby
agrees to act as such agent and undertakes promptly to notify the Company of
receipt by it of service of process in accordance with this Section.
ARTICLE TWO
SECTION 201. FORMS GENERALLY.
The Senior Notes of each series shall be in substantially the form
appended to the supplemental indenture authorizing such series, in each case
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
or as may, consistently herewith, be determined by the officers executing such
Senior Notes, as evidenced by their execution of the Senior Notes.
The Senior Notes of each series shall be issuable in registered form
without coupons.
The definitive Senior Notes may be printed, typewritten, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers executing such Senior Notes, as evidenced by
their execution of such Senior Notes.
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The form of the Trustee's Certificate of Authentication for a series of
Senior Notes shall be in substantially the form appended to the Supplemental
Indenture authorizing such series.
SECTION 203. SENIOR NOTES ISSUABLE IN THE FORM OF A GLOBAL SECURITY.
(a) If the Company shall establish pursuant to Section 301 that the
Senior Notes of a particular series are to be issued in whole or in part in the
form of one or more Global Securities, then the Company shall execute and the
Trustee shall, in accordance with Section 302 and the Company Order delivered to
the Trustee thereunder, authenticate and deliver such Global Security or
Securities, which (i) shall represent, and shall be denominated in an amount
equal to the aggregate principal amount of the Outstanding Senior Notes of such
series to be represented by such Global Security or Securities, (ii) may provide
that the aggregate amount of Outstanding Senior Notes represented thereby may
from time to time be increased or reduced to reflect exchanges, (iii) shall be
registered in the name of the Depositary for such Global Security or Securities
or its nominee, (iv) shall be delivered by the Trustee to the Depositary or
pursuant to the Depositary's instruction and (v) shall bear a legend in
accordance with the requirements of the Depositary.
(b) Notwithstanding any other provision of this Section 203 or of
Section 303, subject to the provisions of paragraph (c) below, unless the terms
of a Global Security expressly permit such Global Security to be exchanged in
whole or in part for individual Senior Notes, a Global Security may be
transferred, in whole but not in part and in the manner provided in Section 303,
only to a nominee of the Depositary for such Global Security, or to the
Depositary, or to a successor Depositary for such Global Security selected or
approved by the Company, or to a nominee of such successor Depositary.
(c) (1) If at any time the Depositary for a Global Security notifies
the Company that it is unwilling or unable to continue as Depositary
for such Global Security or if at any time the Depositary for the
Senior Notes for such series shall no longer be eligible or in good
standing under the Securities Exchange Act of 1934, as amended, or
other applicable statute or regulation, the Company shall appoint a
successor Depositary with respect to such Global Security. If a
successor Depositary for such Global Security is not appointed by the
Company within 90 days after the Company receives such notice or
becomes aware of such ineligibility, the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and
delivery of individual Senior Notes of such series in exchange for such
Global Security, will authenticate and deliver individual Senior Notes
of such series of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of the Global
Security in exchange for such Global Security.
(2) The Company may at any time and in its sole discretion
determine that the Senior Notes of any series issued or issuable in the
form of one or more Global Securities shall no longer be represented by
such Global Security or Securities. In such event the Company will
execute, and the Trustee, upon receipt of a Company Request for the
authentication and delivery of individual Senior Notes of such series
in exchange in whole or in part for such Global Security, will
authenticate and deliver individual Senior Notes of such series of like
tenor and terms in definitive form in an aggregate principal amount
equal to the principal amount of such Global Security or Securities
representing such series in exchange for such Global Security or
Securities.
(3) If specified by the Company pursuant to Section 301 with
respect to Senior Notes issued or issuable in the form of a Global
Security, the Depositary for such Global Security may surrender such
Global Security in exchange in whole or in part for individual Senior
Notes of such series of like tenor and terms in definitive form on such
terms as are acceptable to the Company and such Depositary. Thereupon
the Company shall execute, and the Trustee shall authenticate and
deliver, without service charge, (A) to each Person specified by such
Depositary a new Senior Note or Notes of the same series of like tenor
and terms and of any authorized denomination as requested by such
Person in aggregate principal amount equal to and in exchange for such
Person's beneficial interest in the Global Security; and (B) to such
Depositary a new Global Security of like tenor and terms and in an
authorized denomination equal to the difference, if any, between the
principal amount of the surrendered Global Security and the aggregate
principal amount of Senior Notes delivered to Holders thereof.
(4) In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee will authenticate
and deliver individual Senior Notes in definitive form in authorized
denominations. Upon the exchange of the entire principal amount of a
Global Security for individual Senior Notes, such Global Security shall
be cancelled by the Trustee. Except as provided in the preceding
paragraph, Senior Notes issued in exchange for a Global Security
pursuant to this Section shall be registered in such names and in such
authorized denominations as the Depositary for such Global Security,
pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. Provided that the Company and
the Trustee have so agreed, the Trustee shall deliver such Senior Notes
to the Persons in whose names the Senior Notes are registered.
(5) Any endorsement of a Global Security to reflect the
amount, or any increase or decrease in the amount, or changes in the
rights of Holders, of Outstanding Senior Notes represented thereby
shall be made in such manner and by such Person or Persons as shall be
specified therein or in the Company Order to be delivered pursuant to
Section 302 with respect thereto. Subject to the provisions of Section
302, the Trustee shall deliver and redeliver any such Global Security
in the manner and upon instructions given by the Person or Persons
specified therein or in the applicable Company Order. If a Company
Order pursuant to Section 302 has been, or simultaneously is,
delivered, any instructions by the Company with respect to such Global
Security shall be in writing but need not be accompanied by or
contained in an Officers' Certificate and need not be accompanied by an
Opinion of Counsel.
ARTICLE THREE
THE SENIOR NOTES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Senior Notes which may be
authenticated and delivered under this Indenture is unlimited.
The Senior Notes may be issued in one or more series. There may be
established, pursuant to one or more indentures supplemental hereto, prior to
the issuance of Senior Notes of any series,
(1) the title of the Senior Notes of the series (which shall
distinguish the Senior Notes of the series from Senior Notes of all
other series);
(2) any limit upon the aggregate principal amount of the
Senior Notes of the series which may be authenticated and delivered
under this Indenture (except for Senior Notes authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Senior Notes of the series pursuant to Sections 203,
303, 304, 907 or 1107);
(3) the Person to whom interest on a Senior Note of the series
shall be payable if other than the Person in whose name that Senior
Note (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest;
(4) the date or dates on which the principal of the Senior Notes
of the series is payable;
(5) the rate or rates at which the Senior Notes of the series
shall bear interest, if any, or any method by which such rate or rates
shall be determined, the date or dates from which such interest shall
accrue, the Interest Payment Dates on which such interest shall be
payable, the Regular Record Date for the interest payable on Senior
Notes on any Interest Payment Date and the basis upon which interest
shall be calculated if other than that of a 360-day year consisting of
twelve 30-day months;
(6) the place or places where the principal of (and premium, if
any) and interest, if any, on Senior Notes of the series shall be
payable;
(7) the period or periods within which, the price or prices at
which and the terms and conditions upon which Senior Notes of the
series may be redeemed, in whole or in part, at the option of the
Company;
(8) the obligation, if any, of the Company to redeem or
purchase Senior Notes of the series pursuant to any sinking fund or
analogous provision or at the option of a Holder thereof and the period
or periods within which, the price or prices at which, and the terms
and conditions upon which, Senior Notes of the series shall be redeemed
or purchased, in whole or in part, pursuant to such obligation;
(9) the denominations in which Senior Notes of the series shall
be issuable;
(10) if the amount of payments of principal of (and premium,
if any) or interest on the Senior Notes of the series may be determined
with reference to an index or formula, the manner in which such amounts
shall be determined;
(11) if other than the principal amount thereof, the portion
of the principal amount of Senior Notes of the series which shall be
payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 502;
(12) any deletions from, modifications of or additions to the
Events of Default or covenants of the Company as provided herein
pertaining to the Senior Notes of the series, and any change in the
rights of the Trustee or Holders of such series pursuant to Section 901
or 902;
(13) any additions to the definitions currently set forth in this
Indenture with respect to such series;
(14) whether the Senior Notes of the series shall be issued in
whole or in part in the form of a Global Security or Securities; the
terms and conditions, if any, upon which such Global Security or
Securities may be exchanged in whole or in part for certificated Senior
Notes of such series and of like tenor of any authorized denomination
and the circumstances under which such exchange may occur, if other
than in the manner provided for in Section 203; the Depositary for such
Global Security or Securities; and the form of any legend or legends to
be borne by any such Global Security in addition to or in lieu of the
legend referred to in Section 203;
(15) any restriction or condition on the transferability of such
Senior Notes; and
(16) any other terms of the series.
All Senior Notes of any one series shall be substantially identical
except as to the date or dates from which interest, if any, shall accrue and
denomination and except as may otherwise be provided in the terms of such Senior
Notes determined or established as provided above. All Senior Notes of any one
series need not be issued at the same time and, unless otherwise provided, a
series may be reopened for issuances of additional Senior Notes of such series.
SECTION 302. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Senior Notes shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries.
The signature of any of these officers on the Senior Notes may be manual or
facsimile.
Senior Notes bearing the manual or facsimile signatures of individuals
who were at the time relevant to the authorization thereof the proper officers
of the Company shall bind the Company, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Senior Notes or did not hold such offices at the date of such
Senior Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Senior Notes of any series executed by
the Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Senior Notes, and the Trustee, in
accordance with the Company Order, shall authenticate and deliver such Senior
Notes. If all of the Senior Notes of any series are not to be issued at one time
and if the supplemental indenture establishing such series shall so permit, such
Company Order may set forth procedures acceptable to the Trustee for the
issuance of such Senior Notes and determining the terms of particular Senior
Notes of such series, such as interest rate, maturity date, date of issuance and
date from which interest shall accrue. In authenticating Senior Notes hereunder,
and accepting the additional responsibilities under this Indenture in relation
to such Senior Notes, the Trustee shall be entitled to receive, and (subject to
Section 601) shall be fully protected in relying upon:
(1) an Opinion of Counsel, to the effect that:
(a) the form and terms of such Senior Notes
or the manner of determining such terms have been
established in conformity with the provisions of this
Indenture; and
(b) such Senior Notes, when authenticated
and delivered by the Trustee and issued by the
Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute
valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject,
as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general
applicability relating to or affecting the
enforcement of creditors' rights and to general
equity principles; and
(2) an Officers' Certificate stating, to the best knowledge of
each signer of such certificate, that no event which is, or after
notice or lapse of time would become, an Event of Default with respect
to any of the Senior Notes shall have occurred and be continuing.
The Trustee shall not be required to authenticate such Senior Notes if the issue
of such Senior Notes pursuant to this Indenture will affect the Trustee's own
rights, duties or immunities under the Senior Notes and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee.
If all the Senior Notes of any series are not to be issued at one time,
it shall not be necessary to deliver an Opinion of Counsel and Officers'
Certificate at the time of issuance of each such Senior Note, but such opinion
and certificate shall be delivered at or before the time of issuance of the
first Senior Note of such series to be issued.
Each Senior Note shall be dated the date of its authentication.
No Senior Note shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Senior Note
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Senior Note shall be conclusive evidence, and the only evidence, that such
Senior Note has been duly authenticated and delivered hereunder and is entitled
to the benefits of this Indenture.
SECTION 303. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the office of the Security
Registrar designated pursuant to this Section 303 or Section 1002 a register
(referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Senior Notes and of transfers of Senior Notes. The Trustee is hereby
initially appointed as Security Registrar for the purpose of registering Senior
Notes and transfers of Senior Notes as herein provided.
Subject to Section 203, upon surrender for registration of transfer of
any Senior Note of any series at the office or agency maintained for such
purpose for such series, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Senior Notes of the same series, Stated Maturity
and original issue date, of any authorized denominations and of like tenor and
aggregate principal amount.
Subject to Section 203, Senior Notes of any series may be exchanged, at
the option of the Holder, for Senior Notes of the same series, Stated Maturity
and original issue date, of any authorized denominations and of like tenor and
aggregate principal amount, upon surrender of the Senior Notes to be exchanged
at any such office or agency.
Whenever any Senior Notes are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Senior Notes
that the Holder making the exchange is entitled to receive.
All Senior Notes issued upon any registration of transfer or exchange
of Senior Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the Senior
Notes surrendered upon such registration of transfer or exchange.
Every Senior Note presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Senior Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Senior Notes, other
than exchanges pursuant to Section 304, 907 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, to register the
transfer of or to exchange Senior Notes of any series during a period of 15 days
immediately preceding the date notice is given identifying the serial numbers of
the Senior Notes of that series called for redemption, or (ii) to issue, to
register the transfer of or to exchange any Senior Notes so selected for
redemption in whole or in part, except the unredeemed portion of any Senior Note
being redeemed in part.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
SECTION 304. MUTILATED, DESTROYED, LOST AND STOLEN SENIOR NOTES.
If any mutilated Senior Note is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Senior Note of the same series, Stated Maturity and original
issue date, and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Senior Note and
(ii) such security or indemnity as may be required by them to save each of them
and any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Senior Note has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Senior
Note, a new Senior Note of the same series, Stated Maturity and original issue
date, and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Senior Note has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Senior Note, pay such Senior Note.
Upon the issuance of any new Senior Note under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Senior Note of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Senior Note shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Senior Note shall be at any time enforceable by anyone, and any
such new Senior Note shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Senior Notes of that series
duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Senior Notes.
SECTION 305. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Unless otherwise provided as contemplated by Section 301 with respect
to any series of Senior Notes, interest on any Senior Note that is payable, and
is punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Senior Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Senior Note of any series that is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Senior Notes of such series
(or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Senior Note of such series and the
date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to
be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder of Senior Notes of such series at the address of such
Holder as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having
been so mailed, such Defaulted Interest shall be paid to the Persons in
whose names the Senior Notes of such series (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Senior Notes of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Senior Notes may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this Clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Senior Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Senior Note shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Senior Note.
SECTION 306. PERSONS DEEMED OWNERS.
Prior to due presentment of a Senior Note for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Senior Note is registered as the absolute owner of
such Senior Note for the purpose of receiving payment of principal of (and
premium, if any) and (subject to Section 305) interest on such Senior Note and
for all other purposes whatsoever, whether or not such Senior Note be overdue,
and neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
SECTION 307. CANCELLATION.
All Senior Notes surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by the Trustee. The Company may at any time
deliver to the Trustee for cancellation any Senior Notes previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Senior Notes so delivered shall be canceled by the
Trustee. No Senior Notes shall be authenticated in lieu of or in exchange for
any Senior Notes canceled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Senior Notes held by the Trustee
shall be disposed of in accordance with a Company Order and the Trustee shall
promptly deliver a certificate of disposition to the Company.
SECTION 308. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 301 for Senior
Notes of any series, interest on the Senior Notes of each series shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall, upon Company Request, cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Senior Notes herein expressly provided for) and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Senior Notes theretofore authenticated and
delivered (other than (i) Senior Notes that have been
destroyed, lost or stolen and that have been replaced as
provided for in Section 304 and (ii) Senior Notes for whose
payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee
for cancellation; or
(B) all such Senior Notes not theretofore delivered
to the Trustee for cancellation have become due and payable,
or have been called for redemption,
and the Company, in the case of (B) above, has deposited or caused to
be deposited with the Trustee as funds in trust for the purpose
described above an amount sufficient to pay and discharge the entire
indebtedness on such Senior Notes not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and
interest to the date of the Stated Maturity or Redemption Date, as the
case may be, or if later, the date of payment;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
In the event there are Senior Notes of two or more series hereunder,
the Trustee shall be required to execute an instrument acknowledging
satisfaction and discharge of this Indenture only if requested to do so with
respect to Senior Notes of all series as to which it is Trustee and if the other
conditions thereto are met. In the event there are two or more Trustees
hereunder, then the effectiveness of any such instrument shall be conditioned
upon receipt of such instruments from all Trustees hereunder.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. APPLICATION OF TRUST.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Senior Notes, and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company or an Affiliate acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for whose payment such money has been deposited
with the Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to Senior Notes
of any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(1) default in the payment of any interest upon any Senior
Note of that series when it becomes due and payable on an Interest
Payment Date other than at Maturity and continuance of such default for
a period of ten (10) days; or
(2) default in the payment of the principal of, (or premium, if
any) or interest on any Senior Note of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when
and as due by the terms of a Senior Note of that series and continuance
of such default for a period of 3 Business Days; or
(4) default in the performance or breach of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with or which has expressly been
included in this Indenture solely for the benefit of one or more series
of Senior Notes other than that series), and continuance of such
default or breach for a period of 90 days after there has been given,
by registered or certified mail, to the Company by the Trustee, or to
the Company and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Senior Notes of that series, a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(5) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition by one or more Persons other
than the Company seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable
federal or state law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official for the
Company or for any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of any
such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 90 consecutive days; or
(6) the commencement by the Company of a case or proceeding
under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding
to be adjudicated a bankrupt or insolvent, or the consent by it to the
entry of a decree or order for relief in respect of the Company in a
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable federal or state law, or the consent by
it to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or of any substantial
part of its property, or the making by it of an assignment for the
benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking
of corporate action by the Company in furtherance of any such action;
or
(7) any other Event of Default provided with respect to Senior
Notes of that series in the supplemental indenture authorizing such
series.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default with respect to Senior Notes of any series at
the time Outstanding occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Senior Notes of that series may declare the principal amount (or
such portion of the principal amount as may be specified in the terms of that
series) of all of the Senior Notes of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Senior Notes of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of not less than a majority in principal amount of
the Outstanding Senior Notes of that series, by written notice to the Company
and the Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Senior Notes of that series,
(B) the principal of (and premium, if any) any Senior
Notes of that series which have become due otherwise than by
such declaration of acceleration and interest thereon at the
rate or rates prescribed therefor in such Senior Notes,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Senior Notes, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due to the Trustee under
Section 607; and
(2) all Events of Default with respect to Senior Notes of that
series, other than the non-payment of the principal of Senior Notes of
that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if an Event of Default occurs under Section
501(1), (2) or (3) with respect to any Senior Notes the Company will, upon
demand of the Trustee, pay to it, for the benefit of the Holders of such Senior
Notes, the whole amount then due and payable on such Senior Notes for principal
(and premium, if any) and interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal (and
premium, if any) and on any overdue interest, at the rate or rates prescribed
therefor in such Senior Notes, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due to the Trustee under Section
607.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Senior Notes and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Senior Notes,
wherever situated.
If an Event of Default with respect to Senior Notes of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Senior Notes of such
series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the Senior
Notes or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Senior
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in
respect of the Senior Notes and to file such other papers or documents
as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due to the Trustee under Section 607) and of the
Holders of Senior Notes allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Senior Notes to make such payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders of Senior Notes, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Senior
Note any plan of reorganization, arrangement, adjustment or composition
affecting the Senior Notes or the rights of any Holder thereof or to authorize
the Trustee to vote in respect of the claim of any Holder of a Senior Note in
any such proceeding.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SENIOR NOTES.
All rights of action and claims under this Indenture or the Senior
Notes may be prosecuted and enforced by the Trustee without the possession of
any of the Senior Notes or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Senior Notes in respect of which such
judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Senior Notes, and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
First: To the payment of all amounts due the Trustee under
Section 607; and
Second: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Senior Notes in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Senior Notes for
principal (and premium, if any) and interest, respectively; and
Third: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 507. LIMITATION ON SUITS.
No Holder of any Senior Note of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Senior
Notes of that series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Senior Notes of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Senior Notes of that
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatsoever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other of such Holders or to obtain or to seek to obtain priority or preference
over any other of such Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all of such Holders.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM
AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of
any Senior Notes shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 305) interest on such Senior Note on the due dates expressed in such
Senior Note (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder of a Senior Note has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the Trustee
and the Holders of Senior Notes shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Senior Notes in the last paragraph of
Section 304, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders of Senior Notes is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Senior Note
to exercise any right or remedy upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders of Senior Notes may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders
of Senior Notes.
SECTION 512. CONTROL BY HOLDERS OF SENIOR NOTES.
The Holders of not less than a majority in principal amount of the
Outstanding Senior Notes of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Senior Notes of such series, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and could not involve the Trustee in
personal liability in circumstances where reasonable indemnity would
not be adequate, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Senior Notes of any series may, on behalf of the Holders of all the
Senior Notes of such series, waive any past default hereunder with respect to
such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Senior Note of such series, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Senior Note of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Senior Note
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the Outstanding Senior Notes of any series, or to any suit instituted
by any Holder of any Senior Note for the enforcement of the payment of the
principal of (or premium, if any) or interest on any Senior Note on or after the
Stated Maturity or Maturities expressed in such Senior Note (or, in the case of
redemption, on or after the Redemption Date).
SECTION 515. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default with respect
to Senior Notes of any series,
(1) the Trustee undertakes to perform, with respect to Senior
Notes of such series, such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may,
with respect to Senior Notes of such series, conclusively rely, as to
the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture.
(b) In case an Event of Default with respect to Senior Notes of any
series has occurred and is continuing, the Trustee shall exercise, with respect
to Senior Notes of such series, such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise, as
a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Senior Notes of any series relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Senior Notes of such series;
and
(4) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 602. NOTICE OF DEFAULTS.
Within 90 days after the occurrence of any default hereunder with
respect to the Senior Notes of any series, the Trustee shall transmit by mail to
all Holders of Senior Notes of such series entitled to receive reports pursuant
to Section 313(c) of the Trust Indenture Act, notice of all defaults hereunder
known to the Trustee, unless such default shall have been cured or waived;
provided, however, that, except in the case of a default in the payment of the
principal of (or premium, if any) or interest on any Senior Note of such series
or in the payment of any sinking fund installment with respect to Senior Notes
of such series, the Trustee shall be protected in withholding such notice if and
so long as the board of directors, the executive committee or a trust committee
of directors or Responsible Officers of the Trustee in good faith determine that
the withholding of such notice is in the interest of the Holders of Senior Notes
of such series; and provided, further, that in the case of any default of the
character specified in Section 501(4) with respect to Senior Notes of such
series, no such notice to Holders shall be given until at least 45 days after
the occurrence thereof. For the purpose of this Section, the term "default"
means any event which is, or after notice or lapse of time or both would become,
an Event of Default with respect to Senior Notes of such series.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and a resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders of Senior Notes of any series
pursuant to this Indenture, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(h) the Trustee shall not be charged with knowledge of any Event
of Default with respect to the Senior Notes of any series for which it
is acting as Trustee unless either (1) a Responsible Officer of the
Trustee assigned to the Corporate Trustee Administration Department
and agency group of the Trustee (or any successor division or
department of the Trustee) shall have actual knowledge of the Event of
Default or (2) written notice of such Event of Default shall have been
given to the Trustee by the Company, any other obligor on such Senior
Notes or by any Holder of such Senior Notes.
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SENIOR NOTES.
The recitals contained herein and in the Senior Notes (except the
Trustee's certificates of authentication) shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Senior Notes. The
Trustee or any Authenticating Agent shall not be accountable for the use or
application by the Company of Senior Notes or the proceeds thereof.
SECTION 605. MAY HOLD SENIOR NOTES.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Senior Notes and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 606. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence, willful misconduct or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence,
willful misconduct or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
As security for the performance of the obligations of the Company under
this Section the Trustee shall have a lien prior to the Senior Notes upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of, premium, if any, or interest, if any,
on particular Senior Notes.
SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire any conflicting interest, within
the meaning of the Trust Indenture Act, it shall, within 90 days after
ascertaining that it has such conflicting interest, either eliminate such
conflicting interest or resign, to the extent and in the manner provided by, and
subject to the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000, subject to supervision or examination by federal or
state authority and qualified and eligible under this Article and otherwise
permitted by the Trust Indenture Act to act as Trustee under an Indenture
qualified under the Trust Indenture Act. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Senior Notes
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Senior Notes of such series.
(c) The Trustee may be removed at any time with respect to the Senior
Notes of any series by Act of the Holders of a majority in principal amount of
the Outstanding Senior Notes of such series delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder of a Senior
Note who has been a Holder of a Senior Note for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee with respect to all Senior Notes, or (ii) subject to Section 514, any
Holder of a Senior Note who has been a bona fide Holder of a Senior Note for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with
respect to all Senior Notes and the appointment of a successor Trustee or
Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Senior Notes of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Senior Notes of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Senior Notes of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Senior Notes of any particular series) and shall comply with
the applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Senior Notes of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Senior Notes of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements of
Section 611, become the successor Trustee with respect to the Senior Notes of
such series and to that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Senior Notes of any series
shall have been so appointed by the Company or the Holders of Senior Notes and
accepted appointment in the manner required by Section 611, any Holder of a
Senior Note who has been a bona fide Holder of a Senior Note of such series for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Senior Notes of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Senior Notes of any series and each
appointment of a successor Trustee with respect to the Senior Notes of any
series by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders of such series of Senior Notes as their names and
addresses appear in the Security Register.
SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Senior Notes, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Senior Notes of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Senior Notes
of one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Senior Notes of
that or those series to which the appointment of such successor Trustee relates,
(2) if the retiring Trustee is not retiring with respect to all Senior Notes,
shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Senior Notes of that or those series as to which the
retiring Trustee is not retiring shall continue to be vested in the retiring
Trustee, and (3) shall add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, it being understood that nothing
herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Senior Notes of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Senior Notes of that or those series to which the
appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Senior Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Senior Notes so authenticated with the same
effect as if such successor Trustee had itself authenticated such Senior Notes.
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Senior Notes), the Trustee shall be subject to
the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor). For purposes of Section
311(b)(4) and (6) of the Trust Indenture Act:
(a) "cash transaction" means any transaction in which full payment for
goods or securities sold is made within seven days after delivery of the goods
or securities in currency or in checks or other orders drawn upon banks or
bankers and payable upon demand; and
(b) "self-liquidating paper" means any draft, bill of exchange,
acceptance or obligation which is made, drawn, negotiated or incurred by the
Company (or any such obligor) for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to, possession
of, or a lien upon, the goods, wares or merchandise or the receivables or
proceeds arising from the sale of the goods, wares or merchandise previously
constituting the security, provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship with the Company
(or any such obligor) arising from the making, drawing, negotiating or incurring
of the draft, bill of exchange, acceptance or obligation.
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT.
At any time when any of the Senior Notes remain Outstanding the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Senior Notes that shall be authorized to act on behalf of the Trustee to
authenticate Senior Notes of such series issued upon exchange, registration of
transfer or partial redemption thereof or pursuant to Section 304, and Senior
Notes so authenticated shall be entitled to the benefits of this Indenture and
shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Senior Notes by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by federal or state authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of Senior
Notes, if any, of the series with respect to which such Authenticating Agent
will serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
The provisions of Sections 306, 604 and 605 shall be applicable to each
Authenticating Agent.
If an appointment with respect to one or more series is made pursuant
to this Section, the Senior Notes of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
This is one of the Senior Notes of the series designated
therein referred to in the within-mentioned Indenture.
As Trustee
By:
As Authenticating Agent
By:
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not later than June 1 and December 1, in
each year, a list, in such form as the Trustee may reasonably require,
containing all the information in the possession or control of the
Company, or any of its Paying Agents other than the Trustee, as to the
names and addresses of the Holders of Senior Notes as of the preceding
May 15 or November 15, as the case may be, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of the most recent Regular Record
Date;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall comply with the obligations imposed on it pursuant to
Section 312 of the Trust Indenture Act.
(b) Every Holder of Senior Notes, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
of Senior Notes in accordance with Section 312(b) of the Trust Indenture Act,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under Section 312(b) of the Trust Indenture Act.
SECTION 703. REPORTS BY TRUSTEE.
(a) Within 60 days after May 15 of each year commencing with the first
May 15 after the first issuance of Senior Notes pursuant to this Indenture, if
required by Section 313(a) of the Trust Indenture Act, the Trustee shall
transmit a brief report dated as of such May 15 with respect to any of the
events specified in such Section 313(a) that may have occurred since the later
of the immediately preceding May 15 and the date of this Indenture.
(b) The Trustee shall transmit the reports required by Section 313(b) of
the Trust Indenture Act at the times specified therein.
(c) Reports pursuant to this Section shall be transmitted in the manner and
to the Persons required by Sections 313(c) and (d) of the Trust Indenture Act.
SECTION 704. REPORTS BY COMPANY.
The Company, pursuant to Section 314(a) of the Trust Indenture Act,
shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) that the Company may
be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, as amended; or,
if the Company is not required to file information, documents or
reports pursuant to either of said Sections, then it shall file with
the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Securities Exchange Act of
1934, as amended, in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in
such rules and regulations;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations;
(3) transmit, within 30 days after the filing thereof with the
Trustee, to the Holders of Senior Notes, in the manner and to the
extent provided in Section 313(c) of the Trust Indenture Act, such
summaries of any information, documents and reports required to be
filed by the Company pursuant to paragraphs (1) and (2) of this Section
704 as may be required by rules and regulations prescribed from time to
time by the Commission; and
(4) notify the Trustee when and as the Senior Notes of any
series become admitted to trading on any national securities exchange.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, unless
(1) in case the Company shall consolidate with or merge into
another corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, the corporation
formed by such consolidation or into which the Company is merged or the
Person which acquires by conveyance or transfer, or which leases, the
properties and assets of the Company substantially as an entirety shall
be a corporation organized and existing under the laws of the United
States of America, any State thereof or the District of Columbia and
shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of (and premium, if any) and
interest on all the Senior Notes and the performance of every covenant
of this Indenture on the part of the Company to be performed or
observed;
(2) immediately after giving effect to such transactions, no
Event of Default, and no event which, after notice or lapse of time or
both, would become an Event of Default, shall have happened and be
continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease complies with this
Article and that all conditions precedent herein provided for relating
to such transaction have been complied with.
SECTION 802. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation by the Company with or merger by the Company
into any corporation or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
801, the successor corporation formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation had been named as the Company herein, and thereafter, except in the
case of a lease, the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture and the Senior Notes.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders of Senior Notes, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Senior Notes; or
(2) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Senior Notes (and if such covenants
are to be for the benefit of less than all series of Senior Notes,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this
Indenture, to change or eliminate any restrictions on the payment of
principal (or premium, if any) on Senior Notes or to permit the
issuance of Senior Notes in uncertificated form, provided any such
action shall not adversely affect the interests of the Holders of
Senior Notes of any series in any material respect; or
(5) to change or eliminate any of the provisions of this
Indenture with respect to any series of Senior Notes theretofore
unissued; or
(6) to secure the Senior Notes; or
(7) to establish the form or terms of Senior Notes of any series
as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Senior Notes of
one or more series and to add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 611(b); or
(9) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make provisions with respect to matters or questions
arising under this indenture, provided such action shall not adversely
affect the interests of the Holders of Senior Notes of any series in
any material respect; or
(10) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the Trust Indenture Act or under
any similar federal statute hereafter enacted, and to add to this
Indenture such other provisions as may be expressly required by the
Trust Indenture Act.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Senior Notes of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Senior Notes of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Senior Note affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Senior Note, or reduce
the principal amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof, or change the method of
calculating the rate of interest thereon, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or
(2) reduce the percentage in principal amount of the
Outstanding Senior Notes of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section 902, Section
513 or Section 1007, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each
Outstanding Senior Note affected thereby, provided, however, that this
clause shall not be deemed to require the consent of any Holder of a
Senior Note with respect to changes in the references to "the Trustee"
and concomitant changes in this Section and Section 1007, or the
deletion of this proviso, in accordance with the requirements of
Sections 611(b) and 901(8).
SECTION 903. GENERAL PROVISIONS REGARDING SUPPLEMENTAL INDENTURE.
(a) A supplemental indenture which changes or eliminates any covenant
or other provision of this Indenture which has expressly been included solely
for the benefit of one or more particular series of Senior Notes, or which
modifies the rights of the Holders of Senior Notes of such series with respect
to such covenant or other provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Senior Notes of any other series.
(b) It shall not be necessary for any Act of Holders of Senior Notes
under this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act or action shall approve the
substance thereof.
SECTION 904. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties, immunities or liabilities under this Indenture or
otherwise.
SECTION 905. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Senior Notes theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 906. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 907. REFERENCE IN SENIOR NOTES TO SUPPLEMENTAL INDENTURES.
Senior Notes of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Senior Notes of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Senior Notes of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. PAYMENT OF PRINCIPAL AND INTEREST.
The Company covenants and agrees for the benefit of each series of
Senior Notes that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Senior Notes of that series in accordance with the
terms of the Senior Notes and this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company or its Affiliate will maintain an office or agency where
Senior Notes of each series may be presented or surrendered for payment, where
Senior Notes of that series may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Senior Notes of that series and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency in respect of any series of Senior
Notes or shall fail to furnish the Trustee with the address thereof, such
presentations and surrenders of Senior Notes of that series may be made and
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive
such respective presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Senior Notes of one or more series may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.
SECTION 1003. MONEY FOR SENIOR NOTES PAYMENTS TO BE HELD IN TRUST.
If the Company or one of its Affiliates shall at any time act as its
own Paying Agent with respect to any series of Senior Notes, it will, on or
before each due date of the principal of (and premium, if any) or interest on
any of the Senior Notes of that series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due until such sums shall be paid
to such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Senior Notes, it will, prior to each due date of the principal of (and
premium, if any) or interest on any Senior Notes of that series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent for any series of Senior Notes
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest on Senior Notes of that series in
trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Senior Notes of that series) in the making
of any payment of principal of (and premium, if any) or interest on the
Senior Notes of that series; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Senior Note of any series and remaining unclaimed for
two years after such principal (and premium, if any) or interest has become due
and payable shall be paid to the Company on Company Request, or (if then held by
the Company) shall be discharged from such trust; and the Holder of such Senior
Note shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper of general
circulation in New York City notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 1004. CORPORATE EXISTENCE
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the rights (charter and statutory) and franchises of the Company;
provided, however, that the Company shall not be required to preserve any such
right or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company, and that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 1005. [RESERVED]
SECTION 1006. STATEMENT AS TO COMPLIANCE
(a) The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year, a written statement, which need not comply with Section
102, signed by the principal executive officer, the principal financial officer
or the principal accounting officer of the Company, as to his or her knowledge
of the Company's compliance with all conditions and covenants under this
Indenture. For purposes of this Section 1006, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
(b) The Company shall deliver to the Trustee, within five days after
the occurrence thereof, written notice of any event which after notice or lapse
of time or both would become an Event of Default pursuant to Section 501.
SECTION 1007. WAIVER OF CERTAIN COVENANTS
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Section 1004 with respect to the
Senior Notes of any series if before the time for such compliance the Holders of
at least a majority in principal amount of the Outstanding Senior Notes of such
series shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
ARTICLE ELEVEN
REDEMPTION OF SENIOR NOTES
SECTION 1101. APPLICABILITY OF ARTICLE.
Senior Notes of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Senior Notes of any
series) in accordance with this Article.
SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Senior Notes shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of all of the Senior Notes of any series, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee in
writing of such Redemption Date. In case of any redemption at the election of
the Company of less than all the Senior Notes of any series, the Company shall,
at least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee in
writing of such Redemption Date and of the principal amount of Senior Notes of
such series to be redeemed. In the case of any redemption of Senior Notes (i)
prior to the expiration of any restriction on such redemption provided in the
terms of such Senior Notes or elsewhere in this Indenture, or (ii) pursuant to
an election of the Company which is subject to a condition specified in the
terms of such Senior Notes, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction or condition.
SECTION 1103. SELECTION BY TRUSTEE OF SENIOR NOTES TO BE REDEEMED.
If the Senior Notes are registered in the name of only one Holder, any
partial redemptions shall be pro rata. If the Senior Notes are held in
definitive form by more than one Holder and if less than all the Senior Notes of
any series are to be redeemed, the particular Senior Notes to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Senior Notes of such series not previously called for
redemption, by lot or other such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to the minimum authorized denomination for Senior Notes of that series or
any integral multiple thereof) of the principal amount of Senior Notes of such
series of a denomination larger than the minimum authorized denomination for
Senior Notes of that series.
The Trustee shall promptly notify the Company in writing of the Senior
Notes selected for redemption and, in the case of any Senior Notes selected for
partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Senior Notes shall
relate, in the case of any Senior Notes redeemed or to be redeemed only in part,
to the portion of the principal amount of such Senior Notes which has been or is
to be redeemed.
SECTION 1104. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided in Section
106 to the Holders of Senior Notes to be redeemed not less than 30 nor more than
60 days prior to the Redemption Date.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Senior Notes of any
series are to be redeemed, the identification (and, in the case of
partial redemption, the principal amounts) of the particular Senior
Notes to be redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Senior Note to be redeemed and,
if applicable, that interest thereon will cease to accrue on and after
said date,
(5) the place or places where such Senior Notes are to be
surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the
case.
Notice of redemption of Senior Notes to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1105. DEPOSIT OF REDEMPTION PRICE.
Except as otherwise provided in a supplemental indenture pursuant to
Section 301, prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company or its Affiliate is acting as
its own Paying Agent, segregate and hold in trust as provided in Section 1003)
an amount of money sufficient to pay the Redemption Price of and accrued
interest, if any, on all the Senior Notes which are to be redeemed on that date.
SECTION 1106. SENIOR NOTES PAYABLE ON REDEMPTION DATE
Notice of redemption having been given as aforesaid, the Senior Notes
so to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified together with any accrued interest thereon,
and from and after such date (unless the Company shall default in the payment of
the Redemption Price and accrued interest) such Senior Notes shall cease to bear
interest. Upon surrender of any such Senior Note for redemption in accordance
with such notice, such Senior Note shall be paid by the Company at the
Redemption Price, together with accrued interest, if any; provided, however,
that, except as otherwise provided in a supplemental indenture pursuant to
Section 301, installments of interest on Senior Notes whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Senior Notes, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 305.
If any Senior Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Senior Note.
SECTION 1107. SENIOR NOTES REDEEMED IN PART.
Any Senior Note that is to be redeemed only in part shall be
surrendered at an office or agency of the Company therefor (with, if the Company
or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Senior Note without service charge, a new Senior Note of the same series,
Stated Maturity and original issue date of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Senior Note so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Senior Notes of a series except as otherwise specified as
contemplated by Section 301 for Senior Notes of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Senior Notes of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount provided
for by the terms of Senior Notes of any series is herein referred to as an
"optional sinking fund payment". If provided for by the terms of Senior Notes of
any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Senior Notes of any series as provided for by the
terms of Senior Notes of such series.
SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SENIOR NOTES.
The Company (1) may deliver Outstanding Senior Notes of a series (other
than any previously called for redemption), and (2) may apply as a credit Senior
Notes of a series which have been redeemed either at the election of the Company
pursuant to the terms of such Senior Notes or through the application of
permitted optional sinking fund payments pursuant to the terms of such Senior
Notes, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Senior Notes of such series required to be made
pursuant to the terms of such Senior Notes as provided for by the terms of such
series; provided that such Senior Notes have not been previously so credited.
Such Senior Notes shall be received and credited for such purpose by the Trustee
at the Redemption Price specified in such Senior Notes for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
SECTION 1203. REDEMPTION OF SENIOR NOTES FOR SINKING FUND.
Not less than 60 days prior to each sinking fund payment date for any
series of Senior Notes, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Senior Notes of that series
pursuant to Section 1202 and stating the basis for such credit and that such
Senior Notes have not previously been so credited and will also deliver to the
Trustee any Senior Notes to be so delivered. Not less than 30 days before each
such sinking fund payment date the Trustee shall select the Senior Notes to be
redeemed upon such sinking fund payment date in the manner specified in Section
1103 and cause notice of the redemption thereof to be given in the name of and
at the expense of the Company in the manner provided in Section 1104. Such
notice having been duly given, the redemption of such Senior Notes shall be made
upon the terms and in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
SECTION 1301. NO RECOURSE AGAINST OTHERS
An incorporator or any past, present or future director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Senior Notes or this Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Senior Note, each Holder shall waive and release all
such liability. Such waiver and release shall be part of the consideration for
the issue of the Senior Notes.
SECTION 1302. ASSIGNMENT; BINDING EFFECT
The Company shall have the right at all times to assign any of its
rights or obligations under this Indenture to a direct or indirect wholly-owned
subsidiary of the Company, provided that, in the event of any such assignment,
the Company shall remain primarily liable for the performance of all such
obligations. This Indenture may also be assigned by the Company in connection
with a transaction described in Article Eight. This Indenture shall be binding
upon and inure to the benefit of the Company, the Trustee, the Holders, any
Security Registrar, Paying Agent, and Authenticating Agent and their respective
successors and assigns.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ALABAMA POWER COMPANY
By
Art P. Beattie
Vice President, Secretary
and Treasurer
Attest:
Wayne Boston
Assistant Secretary
THE CHASE MANHATTAN BANK
Trustee
By
L. O'Brien
Senior Trust Officer
Attest:
Senior Trust Officer
STATE OF )
) SS.:
CITY OF )
On the ____ day of December, 1997, before me personally came Art P.
Beattie, to me known, who, being by me duly sworn, did depose and say that he is
Vice President, Secretary and Treasurer of Alabama Power Company, one of the
corporations described herein and which executed the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
Notary Public
[SEAL]
My Commission Expires:
STATE OF NEW YORK )
) SS.:
CITY OF NEW YORK )
On the ____ day of December, 1997, before me personally came L.
O'Brien, to me known, who, being by me duly sworn, did depose and say that he is
a Senior Trust Officer of The Chase Manhattan Bank, one of the corporations
described herein and which executed the foregoing instrument; that he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation, and that he signed his name thereto by like authority.
Notary Public
[SEAL]
My Commission Expires:
