SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-8180
TECO ENERGY, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 59-2052286
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
702 North Franklin Street, Tampa, Florida 33602
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (813) 228-4111
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Number of shares outstanding of each of the issuer's classes of common stock,
as of the latest practicable date (July 31, 1998):
Common Stock, $1 Par Value 131,773,287<PAGE>
FORM 10-Q
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
In the opinion of management, the unaudited consolidated financial
statements include all adjustments necessary to present fairly the
results for the three-month and six-month periods ended June 30,
1998 and 1997. The current year financial statements include the
results of Griffis, Inc. and its affiliate, U. S. Propane, Inc., a
Florida propane business acquired in a January 1998 merger
transaction accounted for as a pooling of interests. The 1997
financial statements have not been restated to reflect this merger
due to its relatively small size. Reference should be made to the
explanatory notes affecting the income and balance sheet accounts
contained in TECO Energy, Inc.'s Annual Report on Form 10-K for the
year ended Dec. 31, 1997 and to the notes on pages 7 through 13 of
this report.
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FORM 10-Q
CONSOLIDATED BALANCE SHEETS
(in millions)
June 30, Dec. 31,
1998 1997
Assets
Current assets
Cash and cash equivalents $ 16.6 $ 10.6
Receivables, less allowance
for uncollectibles 226.0 222.7
Note receivable 19.0 --
Inventories, at average cost
Fuel 91.6 80.8
Materials and supplies 63.7 63.1
Prepayments 16.2 12.9
433.1 390.1
Property, plant and equipment,
at original cost
Utility plant in service
Electric 3,924.2 3,880.6
Gas 493.5 471.1
Construction work in progress 67.0 57.0
Other property 973.2 950.8
5,457.9 5,359.5
Accumulated depreciation (2,208.9) (2,123.0)
3,249.0 3,236.5
Other assets
Other investments 97.3 88.3
Deferred income taxes 94.4 88.1
Deferred charges and other assets 138.4 157.4
330.1 333.8
$4,012.2 $3,960.4
Liabilities and Capital
Current liabilities
Long-term debt due within one year $ 14.5 $ 12.7
Notes payable 412.6 447.5
Accounts payable 145.7 158.7
Customer deposits 78.2 77.9
Interest accrued 24.6 21.8
Taxes accrued 40.9 14.0
716.5 732.6
Deferred income taxes 478.8 470.9
Investment tax credits 49.2 51.7
Regulatory liability-tax related 34.4 35.1
Other deferred credits 142.1 145.2
Long-term debt, less amount due
within one year 1,108.1 1,080.2
Common equity
Common equity - 400 million shares
authorized, $1 par value - issued and
outstanding 131,679,034 in 1998 and
130,922,039 in 1997 1,548.8 1,512.2
Unearned compensation (65.7) (67.5)
$4,012.2 $3,960.4
The accompanying notes are an integral part of the consolidated financial
statements.
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FORM 10-Q
CONSOLIDATED STATEMENTS OF INCOME
(in millions)
For the three months ended June 30, 1998 1997
Revenues $490.6 $460.9
Expenses
Operation 253.7 236.0
Maintenance 31.9 29.1
Depreciation 57.4 56.2
Taxes, other than income 37.2 36.1
380.2 357.4
Income from operations 110.4 103.5
Other income (expense)
Other income (expense), net (.5) 1.2
Preferred dividend requirements of
Tampa Electric -- (.2)
(.5) 1.0
Income before interest and income taxes 109.9 104.5
Interest expense 26.0 26.7
Income before provision for income taxes 83.9 77.8
Provision for income taxes 26.0 27.3
Net income $ 57.9 $ 50.5
Average common shares outstanding 131.7 130.7
Earnings per average common share outstanding:
Basic and diluted $ 0.44 $ 0.39
Dividend rate per common share outstanding $ 0.31 $0.295
The accompanying notes are an integral part of the consolidated financial
statements.
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FORM 10-Q
CONSOLIDATED STATEMENTS OF INCOME
(in millions)
For the six months ended June 30, 1998 1997
Revenues $958.4 $911.2
Expenses
Operation 503.1 471.1
Maintenance 60.0 53.2
Non-recurring charges 25.9 --
Depreciation 114.3 111.9
Taxes, other than income 74.9 73.4
778.2 709.6
Income from operations 180.2 201.6
Other income (expense)
Allowance for other funds used
during construction -- .1
Other income (expense), net (3.3) 2.0
Preferred dividend requirements of
Tampa Electric -- (.4)
(3.3) 1.7
Income before interest and income taxes 176.9 203.3
Interest expense 52.0 53.6
Income before provision for income taxes 124.9 149.7
Provision for income taxes 36.2 48.4
Net income from continuing operations 88.7 101.3
Gain on disposal of discontinued operations,
net of income tax expense of $12.9 million
for 1998 22.2 --
Net income $110.9 $101.3
Average common shares outstanding 131.6 130.6
Earnings per average common share outstanding:
Basic-
From continuing operations $ 0.67 $ .78
Net income $ 0.84 $ .78
Diluted-
From continuing operations $ 0.67 $ .77
Net income $ 0.84 $ .77
Dividend rate per common share outstanding $0.605 $0.575
The accompanying notes are an integral part of the consolidated financial
statements.
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FORM 10-Q
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
For the six months ended June 30, 1998 1997
Cash flows from operating activities
Net income $ 110.9 $ 101.3
Adjustments to reconcile net income
to net cash:
Depreciation 114.3 111.9
Deferred income taxes -- (10.0)
Investment tax credits, net (2.5) (2.5)
Allowance for funds used
during construction -- (.1)
Amortization of unearned compensation 3.4 2.8
Gain on disposal of discontinued
operations, pretax (37.5) --
Deferred revenue (19.8) (17.1)
Deferred recovery clause 9.0 1.2
Refund to customers -- (12.1)
Non-recurring charges 25.9 --
Receivables, less allowance
for uncollectibles (3.3) (4.6)
Inventories (11.5) (14.1)
Taxes accrued 26.9 21.5
Interest accrued 2.7 2.7
Accounts payable (14.6) (9.4)
Other 11.7 2.0
215.6 173.5
Cash flows from investing activities
Capital expenditures (116.3) (106.9)
Allowance for funds used
during construction -- .1
Net proceeds from sale of assets 39.2 --
Other non-current investments (11.5) 2.1
(88.6) (104.7)
Cash flows from financing activities
Common stock 1.2 2.9
Proceeds from long-term debt -- 29.3
Repayment of long-term debt (7.7) (68.9)
Net borrowings under credit lines -- (49.8)
Net decrease in short-term debt (34.9) 106.7
Dividends (79.6) (70.1)
(121.0) (49.9)
Net increase in cash and cash equivalents 6.0 18.9
Cash and cash equivalents
at beginning of period 10.6 15.9
Cash and cash equivalents at end of period $ 16.6 $ 34.8
The accompanying notes are an integral part of the consolidated financial
statements.
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FORM 10-Q
NOTES TO FINANCIAL STATEMENTS
A. In January 1998, the company acquired an additional unregulated
Florida propane business, Griffis, Inc. and its affiliate, U. S.
Propane, Inc., in a merger transaction accounted for as a pooling of
interests. The 1997 statements have not been restated to reflect the
operations and financial position of this acquired business due to its
relatively small size.
B. As reported in the company's Annual Report on Form 10-K for the
year ended Dec. 31, 1997, the company in August 1997 announced its plan
to discontinue operations of its conventional oil and gas subsidiary,
TECO Oil & Gas, Inc.
In March 1998, TECO Oil & Gas sold its offshore assets to a
subsidiary of American Resources of Delaware for $57.7 million,
consisting of $39.2 million in cash and a subordinated note in the
principal amount of $18.5 million. TECO Energy recognized an after-tax
gain on this transaction of $23.7 million, or 18 cents per share, in the
first quarter of 1998. An estimate of activities at TECO Oil & Gas after
the Aug. 31, 1997 measurement date, including the gain on the sale of
its offshore assets, is reported as a gain on the disposal of
discontinued operations for the periods ended June 30, 1998. TECO Oil &
Gas continues to pursue the sale of its onshore assets.
A summary of the net assets of TECO Oil & Gas is as follows:
(millions) June 30, Dec. 31,
1998 1997
Note receivable from sale $19.0 $ --
Other current assets .7 1.5
Net property, plant and equipment 4.1 19.5
Other assets 7.8 4.1
Total liabilities (.5) (3.3)
Net assets $31.1 $ 21.8
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FORM 10-Q
Total revenues from discontinued operations for the three- and six-
month periods ended June 30, 1997 were $2.7 million and $6.2 million,
respectively. There were no revenues for the same periods ended June 30,
1998.
C. T E CO Energy, Inc., and its subsidiaries have made certain
commitments in connection with their continuing capital expenditure
program and estimate that capital expenditures for continuing operations
during 1998 will be as follows:
millions
Tampa Electric Company
Electric division $146
Peoples Gas System 55
TECO Power Services 60
TECO Transport Corporation 37
TECO Coal Corporation 9
Peoples Gas Company 6
Other diversified businesses 2
$315
In July 1998, Tampa Electric Company announced that it had
determined that the most cost-effective method of compliance with the
U.S. Environmental Protection Agency's (EPA) Clean Air Act Amendments
Phase II sulfur dioxide (SO2) reduction requirements is to install a flue
gas desulfurization (FGD) system at Big Bend Station units one and two.
The FGD system will be comparable to the system operated for Big Bend
units three and four. The project's estimated cost is $90 million.
Conceptual and preliminary site engineering is underway, and the project
is scheduled to be completed by the middle of 2000. Carrying charges and
other costs associated with the system are planned to be recovered
through the Environmental Cost Recovery Clause. Tampa Electric's 1998
estimated capital expenditures include $17.6 million related to this FGD
system.
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FORM 10-Q
TECO Power Services' 1998 estimated capital expenditures do not
include the investments expected to be made in connection with
independent power business expansion opportunities announced in the
third quarter of 1998 and discussed on pages 24 and 25.
D. The electric division of Tampa Electric Company recognized revenues
that had been deferred in 1995 and 1996 pursuant to regulatory
agreements approved by the Florida Public Service Commission (FPSC).
For the three- and six-month periods ended June 30, 1998, $11.1 million
and $19.8 million, respectively, of these revenues were recognized.
Previously deferred revenues of $9.8 million and $17.1 million were
recognized for the three- and six-month periods ended June 30, 1997,
respectively.
As of June 30, 1998, $12.3 million of deferred revenues were
included in other deferred credits. Accrued interest on these deferred
revenues was $8.8 million at June 30, 1998.
Effective Oct. 1, 1997, Tampa Electric's electric customers began
receiving a $25-million temporary base rate reduction over a 15-month
period pursuant to the same agreements.
E. Earnings Per Share:
In 1997, the Financial Accounting Standards Board (FASB) issued
Financial Accounting Standard (FAS) 128, Earnings per Share, which
requires disclosure of basic and diluted earnings per share and a
reconciliation (where different) of the numerator and denominator from
basic to diluted earnings per share.
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FORM 10-Q
The reconciliation of basic and diluted earnings per share is shown
below:
Three Months Ended June 30, 1998 1997
(millions, except per share amounts)
Numerator (Basic and Diluted)
Net income $57.9 $ 50.5
Denominator
Average number of shares outstanding-basic 131.7 130.7
Plus: incremental shares for assumed
conversions: Stock options at end
of period 3.2 2.7
Less: Treasury shares which could
be purchased (2.7) (2.3)
Average number of shares outstanding-diluted 132.2 131.1
Earnings per share
Basic and diluted $ .44 $ .39
Six Months Ended June 30, 1998 1997
(millions, except per share amounts)
Numerator (Basic and Diluted)
Net income from continuing operations $ 88.7 $101.3
Net income $110.9 $101.3
Denominator
Average number of shares outstanding-basic 131.6 130.6
Plus: incremental shares for assumed
conversions: Stock options at end
of period 3.3 2.7
Less: Treasury shares which could
be purchased (2.7) (2.3)
Average number of shares outstanding-diluted 132.2 131.0
Earnings per share from continuing operations
Basic $ .67 $ .78
Diluted $ .67 $ .77
Earnings per share
Basic $ .84 $ .78
Diluted $ .84 $ .77
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FORM 10-Q
F. In 1997, the FASB issued FAS 130, Reporting Comprehensive Income,
effective for fiscal periods beginning after Dec. 15, 1997. The new
standard requires that comprehensive income, which includes net income
as well as certain changes in assets and liabilities recorded in common
equity, be reported in the financial statements. For the three- and six-
month periods ended June 30, 1998 and 1997, there were no components of
comprehensive income other than net income.
G. In the first quarter of 1998, the company recognized one-time
charges at TECO Coal, TeCom and Tampa Electric Company totaling $16.5
million, after tax.
The $8.9-million after-tax charge recorded by TECO Coal was to
adjust the asset values of certain mining facilities, primarily at its
Gatliff mine, to reflect their expected value after the Tampa Electric
contract expires in 1999. TECO Coal expects no further asset adjustments
related to the expiration of the Tampa Electric contract.
TeCom recorded a one-time after-tax charge of $1.7 million to
write-off certain development costs related to residential system
features developed early in the product life and no longer in the
current system design.
As discussed in TECO Energy's 1997 Annual Report on Form 10-K, the
FPSC in September 1997 ruled that costs associated with two long-term
wholesale power sales contracts should be assigned to the wholesale
jurisdiction and that for retail rate making purposes the costs
transferred from retail to wholesale should reflect average costs rather
than the lower incremental costs on which the two contracts are based.
As a result of this decision and the related reduction of the retail
rate base upon which Tampa Electric is allowed to earn a return, these
contracts became uneconomic. One contract was terminated in 1997. As to
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FORM 10-Q
the other contract, which expires in 2001, Tampa Electric has entered
into firm power purchase contracts with third parties to provide
replacement power through 1999. The cost of purchased power under these
contracts exceeds the revenues expected through 1999. To reflect this
difference, Tampa Electric recorded a $5.9-million after-tax charge in
the first quarter of 1998.
H. In the second quarter of 1998, Tampa Electric Company filed a
registration statement on Form S-3, allowing for the issuance of up to
$200 million of medium-term notes. On July 31, 1998, the company issued
$50 million of Remarketed Notes (the Notes) due 2038. The Notes are
subject to mandatory tender on July 15, 2001, at which time they will be
remarketed or redeemed. The coupon rate for the initial term is 5.94%.
If the remarketing agent appointed by the company in connection with the
issue of the Notes exercises its right to purchase the Notes on July 15,
2001, for the following ten years the Notes will bear interest at an
annual rate of 5.41% plus a premium based on Tampa Electric Company s
then current credit spread above United States Treasury Notes with ten
years to maturity. Otherwise, the Notes may be remarketed for interest
periods selected by Tampa Electric Company at fixed or floating market
rates of interest. Net proceeds to Tampa Electric Company were 102.1
percent of the principal amount and include a premium paid to Tampa
Electric Company by the remarketing agent for the right to purchase the
Notes in 2001. Proceeds from the Note issuance were used to repay short-
term debt.
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FORM 10-Q
I. In August 1998, TECO Energy filed a registration statement on Form
S-3 covering the issuance from time to time of up to $200 million of
medium-term notes. The proceeds from the notes that may be issued under
this registration statement will be used for general corporate purposes.
No notes have been issued under this registration statement as of the
date of this filing.
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FORM 10-Q
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
This Quarterly Report on Form 10-Q contains forward-looking
statements which are subject to the inherent uncertainties in predicting
future results and conditions. Certain factors that could cause actual
results to differ materially from those projected in these forward-
looking statements include the following: general economic conditions,
particularly those in Tampa Electric's service area affecting energy
sales; weather variations affecting energy sales and operating costs;
potential competitive changes in the electric and gas industries,
particularly in the area of retail competition; regulatory actions
affecting Tampa Electric and Peoples Gas System; commodity price changes
affecting the competitive positions of Tampa Electric and the Peoples
Gas companies as well as margins at TECO Coalbed Methane and TECO Coal;
and changes in and compliance with environmental regulations that may
impose additional costs or curtail some activities. These factors are
discussed more fully under "Investment Considerations" in registrant's
Annual Report on Form 10-K for the year ended December 31, 1997, and
reference is made thereto.
Results of Operations
Three months ended June 30, 1998:
Net income for the quarter ended June 30, 1998 was $57.9 million,
or $.44 per share, up 15 percent from $50.5 million, or $.39 cents per
share, for the three-month period ended June 30, 1997. Results for the
second quarter of 1997 included a net after-tax charge of $3.3 million,
or $.02 per share, for transactions associated with the mergers
completed in June 1997.
Consolidated operating income from continuing operations was $110.4
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FORM 10-Q
million, up seven percent from $103.5 million in the second quarter of
1997. This increase was due to higher retail energy sales at Tampa
Electric's electric division, the result of warmer weather late in the
quarter and customer growth.
The following table identifies the unconsolidated revenues and
operating income from continuing operations of TECO Energy's significant
operating groups.
Contributions by operating group (unconsolidated)
Revenues Operating income*
(millions) 1998 1997 1998 1997
Tampa Electric Company
Electric division (1) $320.9 $300.0 $ 80.2 $ 72.5
Peoples Gas System 58.0 57.1 4.7 6.4
$378.9 $357.1 $ 84.9 $ 78.9
Diversified companies $163.0 $155.1 $ 27.0 $ 27.1
(1) The electric division recognized revenues previously deferred of
$11.1 million in 1998 and $9.8 million in 1997. See Note D on page
9.
* Operating income includes items that are reclassified for consolidated
financial statement purposes. The principal items are the non-
conventional fuels tax credit related to coalbed methane production and
interest expense of the limited-recourse debt related to independent
power operations, both of which are included in operating income for the
diversified companies. In the Consolidated Statements of Income, the tax
credit is part of the provision for income taxes and the interest is
part of interest expense. Certain 1997 amounts have been restated to
conform to the current year presentation.
Tampa Electric Company's Operating Results
Tampa Electric Company's second quarter operating income of $84.9
million was 8 percent higher than in 1997 primarily because of higher
energy sales at the electric division partially offset by restructuring
costs at Peoples Gas System.
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FORM 10-Q
Electric division
Operating revenues for the quarter were seven percent higher than
in 1997 due to five-percent higher retail energy sales, the result of
warmer weather in June and customer growth of 2.2 percent. These results
were partially offset by the impact of the temporary base rate reduction
discussed in Note D on page 9. During the second quarter of 1998, the
electric division recognized $11.1 million of revenues previously
deferred in accordance with FPSC-approved agreements, compared to $9.8
million of deferred revenues recognized in the second quarter of 1997.
Non-fuel operating expenses for the second quarter of 1998 were two
percent higher than in 1997 due to increased depreciation expense, the
result of higher plant balances, and higher revenue-related taxes.
Operations and maintenance expenses were essentially the same as in
1997.
Peoples Gas System
At Peoples Gas System, operating income was $1.7 million less than
in 1997's second quarter reflecting $1.6 million pretax of costs
associated with the decision to discontinue the appliance sales and
service business. Peoples Gas System expects to recoup most of these
costs by the end of the year and to realize significant cost savings
going forward.
Total revenues for the quarter were up two percent from 1997, with
residential and commercial natural gas sales (therms) 10 percent higher
than in last year's period due to customer growth and increased usage.
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FORM 10-Q
Diversified Companies-Operating Results
Unconsolidated second quarter operating income from TECO Energy's
continuing diversified companies was unchanged from that of 1997's
second quarter. Improved results at TECO Coalbed Methane and the
unregulated propane business offset the effects of lower volumes at TECO
Coal.
At TECO Coalbed Methane, operating income increased as the effects
of higher pricing, resulting from hedging arrangements, were partially
o f fset by the normal, gradual decline in production, which is
characteristic of this type of well.
P e oples Gas Company, the unregulated propane business, had
operating results above the prior year's quarter due to higher propane
gas volumes, attributable to the acquisition of the propane business
described in Note A on page 7, and improved margins.
At TECO Coal, operating income was less than in 1997's second
quarter due to the expected reduction in tonnage sold to Tampa Electric
and slightly higher mining costs.
At TECO Transport, river volumes were up over last year from
increased north-bound freight as well as from river equipment added in
the first quarter. However, temporary tow restrictions and lower rates
offset the impact of the higher volumes, providing results that were 14
percent lower than in 1997's second quarter.
Operating income at TECO Power Services was 11 percent lower than
in 1997 due to costs associated with continuing project development
activity.
At TeCom, because of a high level of product enhancement activity
in 1998, more product development costs were capitalized. In the second
quarter of 1998, TeCom capitalized $2.5 million of pretax development
costs compared with $1.7 million during the same period last year.
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FORM 10-Q
The effective income tax rate on net income from continuing
operations for the second quarter of 1998 was 31.0 percent compared to
35.0 percent last year. This decrease was primarily due to the impact of
non-deductible merger costs related to the Lykes Energy merger in 1997.
Six months ended June 30, 1998:
Net income for the six-month period ended June 30, 1998 was $110.9
million, up nine percent from $101.3 million for the same period last
year. Net income for the first half of 1998 included a net gain of $22.2
million on the sale of TECO Oil & Gas's offshore assets described in
Note B on page 7, partially offset by non-recurring, after-tax charges
of $16.8 million. These one-time, after-tax charges included write-offs
of $8.9 million at TECO Coal; $1.7 million at TeCom Inc.; and $5.9
million at Tampa Electric. The 1997 results included a $3.3-million net
after-tax charge for all merger-related transactions. Basic earnings per
share for the current-year period were $.84 compared to $.78 in 1997.
As discussed in Note G on pages 11 and 12, the one-time charges
reflect asset value adjustments, primarily at TECO Coal's Gatliff mining
facilities, relating to the expiration of the coal supply contract with
Tampa Electric in 1999; a write-off at TeCom of product development
costs associated with InterLane residential system features developed
early in the product life and no longer incorporated in the current
system design; and a charge at Tampa Electric associated with actions
to mitigate the effects of the 1997 FPSC ruling that separated certain
wholesale power sales contracts from the retail jurisdiction.
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FORM 10-Q
Net income from continuing operations, excluding the one-time
charges discussed above, was $105.5 million in 1998, compared with
$104.6 million in 1997, before merger costs. Earnings from continuing
operations for 1998's first half, after one-time charges, were $88.7
million or $.67 per share, compared to $101.3 million or $.78 cents per
share in 1997, after merger costs.
Consolidated operating income from continuing operations of $180.2
million was down from $201.6 million for the first half of 1997 as
increases from regulated electric operations and the unregulated propane
business were more than offset by the one-time charges discussed above
and lower operating results at TECO Coal and TECO Coalbed Methane.
The following table identifies the unconsolidated revenues and
operating income from continuing operations of TECO Energy's significant
operating groups.
Contributions by operating group (unconsolidated)
Revenues Operating income*
(millions) 1998 1997 1998 1997
Tampa Electric Company
Electric division (1)(2) $594.3 $572.8 $136.4 $130.4
Peoples Gas System 138.6 133.9 20.1 21.0
$732.9 $706.7 $156.5 $151.4
Diversified companies(2) $322.6 $305.2 $ 53.3 $ 54.6
(1) The electric division recognized revenues previously deferred of
$19.8 million in 1998 and $17.1 million in 1997. See Note D on page
9.
(2) Operating income for 1998 excludes the non-recurring charges
discussed previously in Note G and on pages 11 and 12.
* Operating income includes items that are reclassified for consolidated
financial statement purposes. The principal items are the non-
conventional fuels tax credit related to coalbed methane production and
interest expense of the limited-recourse debt related to independent
power operations, both of which are included in operating income for the
diversified companies. In the Consolidated Statements of Income, the tax
credit is part of the provision for income taxes and the interest is
part of interest expense. Certain 1997 amounts have been restated to
conform to the current year presentation.
Tampa Electric Company's Operating Results
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FORM 10-Q
Tampa Electric Company's first half operating income of $156.5
million was three percent higher than in 1997, primarily because of
higher energy sales at the electric division partially offset by
restructuring costs at Peoples Gas System.
Electric division
Operating revenues for the current year period increased four
percent from 1997. Retail sales volumes were up three percent, primarily
due to warmer weather in the second quarter and customer growth of over
two percent.
Non-fuel operating expenses for the first half, excluding the
$5.9-million after-tax charge discussed in Note G on pages 11 and 12,
were two percent higher than in 1997 due to increased generating unit
maintenance and increased depreciation expense resulting from higher
plant balances.
During the first six months of 1998, Tampa Electric recorded $1.1
million of after-tax charges relating to its 1996 earnings as a result
of an FPSC audit of that year which involved several adjustments,
including the establishment of an equity ratio cap of 58.7 percent for
the year 1996. Because of the return on equity thresholds in Tampa
Electric s regulatory agreements covering the years 1995 through 1999,
which are described in TECO Energy s Annual Report on Form 10-K for the
year ended Dec. 31, 1997, and the potential for customer refunds in 1999
and 2000, Tampa Electric expects continuing audit scrutiny by the FPSC
and active involvement of intervenors in any proceedings involving
returns on equity and potential refunds.
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FORM 10-Q
Peoples Gas System
At Peoples Gas System, operating income was lower than in the first
half of 1997 due to restructuring costs, which are expected to be nearly
recouped by the end of the year. Total revenues were up four percent
from 1997, with residential and commercial natural gas sales (therms)
eight percent higher than in last year's period due to customer growth
and increased usage. However, higher expenses along with $1.6 million of
costs associated with discontinuing the appliance sales and service
business led to a reduction in operating income.
Diversified Companies-Operating Results
Unconsolidated first half operating income from TECO Energy's
continuing diversified businesses, excluding the one-time charges at
TECO Coal and TeCom discussed in Note G on pages 11 and 12, was two
percent lower than in 1997's first half. Revenue growth in the non-
regulated propane business, as well as continued growth at TECO
Transport were more than offset by expected reduced coal volumes sold by
TECO Coal to Tampa Electric, and the impact of the normal, gradual
decline in production and lower average gas prices at TECO Coalbed
Methane.
P e oples Gas Company, the unregulated propane business, had
operating results above the prior year's period due to higher propane
gas volumes sold to residential and commercial customers and improved
p r icing. The volume increase was primarily attributable to the
additional Florida propane business acquired in January 1998.
- 21 -<PAGE>
FORM 10-Q
At TECO Transport, increased volumes were moved on the river for
Tampa Electric. Also contributing to higher revenues and improved
operating results was the increase in ocean-going charter business as a
result of the ship added in 1997.
Operating results for TECO Coal were 20 percent below 1997's first
half results due to the expected reduction in tonnage sold to Tampa
Electric and slightly higher mining costs.
A t TECO Coalbed Methane, the gradual, expected decline in
production levels and lower average natural gas prices for the current
year period resulted in lower operating income. Although gas prices were
lower in the current year's period, price hedges executed for May and
June production mitigated, to a substantial extent, the impact of the
lower prices on operating income.
Operating income at TECO Power Services was lower than last year
primarily due to project development costs.
At TeCom, because of a high level of product enhancement activity
in 1998, more product development costs were capitalized. For the first
half of 1998, TeCom capitalized $4.0 million of pretax development costs
compared with $3.0 million during the same period last year.
In the first quarter of 1998, TeCom recorded an after-tax charge of
$ 1 .7 million to write-off certain development costs related to
residential system features developed early in the product life and no
longer in the current system design.
The effective income tax rate on net income from continuing
operations for the six-month period ended June 30, 1998 was 29.0 percent
compared to 32.3 percent last year. This decrease was primarily due to
the impact of non-deductible merger costs related to the Lykes Energy
merger in 1997.
In March 1998, TECO Oil & Gas sold its offshore assets to a
- 22 -<PAGE>
FORM 10-Q
subsidiary of American Resources of Delaware for $57.7 million,
consisting of $39.2 million in cash and a subordinated note in the
principal amount of $18.5 million. TECO Energy recognized an after-tax
gain on this transaction of $23.7 million in the first quarter. The gain
on the sale of the offshore assets and an estimate of onshore activities
at TECO Oil & Gas were reported as a net gain on the disposal of
discontinued operations for the period ended June 30, 1998. (See Note B
on pages 7 and 8)
Liquidity, Capital Resources and Changes in Financial Condition
Cash proceeds from TECO Oil & Gas sale of its offshore assets in
March 1998 were used to reduce notes payable. The $18.5-million
subordinated note received as part of the sale, along with interest
accrued on this note, was reflected on the balance sheet at June 30,
1998.
TECO Transport entered into a capital lease agreement in March 1998
for the charter of additional capacity. This lease covers 110 river
barges and three towboats; the corresponding $35-million five-year lease
commitment was recorded as debt on the balance sheet. The agreement
provides for the acquisition of the equipment at the end of the lease
term.
As discussed in Note H on page 12, on July 31, 1998, Tampa Electric
Company issued $50 million of Remarketed Notes (the Notes) due 2038. The
Notes are subject to mandatory tender on July 15, 2001, at which time
they will be remarketed or redeemed. The coupon rate for the initial
term is 5.94%. Proceeds from the Note issuance were used to repay short-
term debt.
As discussed in Note I on page 13, in August 1998, TECO Energy
filed a registration statement on Form S-3 covering the issuance from
- 23 -<PAGE>
FORM 10-Q
time to time of up to $200 million of medium-term notes. The proceeds
from the notes that may be issued under this registration statement will
be used for general corporate purposes. No notes have been issued under
this registration statement as of the date of this filing.
As discussed in Note C on page 8, Tampa Electric announced that it
has determined that the most cost-effective method of compliance with
t h e U.S. Environmental Protection Agency's (EPA) Clean Air Act
Amendments Phase II sulfur dioxide (SO ) reduction requirements is to
2
install a flue gas desulfurization (FGD) system at Big Bend Station
units one and two. The project's estimated cost is $90 million.
Conceptual and preliminary site engineering is underway and the project
is scheduled to be completed by the middle of 2000. Carrying charges and
other costs associated with the system are planned to be recovered
through the Environmental Cost Recovery Clause.
In July 1998, a consortium that includes TECO Power Services (TPS),
Iberdrola, an electric utility in Spain, and Electricidade de Portugal
(EDP), an electric utility in Portugal, was awarded the right to buy an
80-percent ownership interest in Guatemala's largest electric utility,
Empresa Electrica de Guatemala, S.A.(EEGSA) for $520 million. This award
completes the process begun when the government of Guatemala last year
elected to privatize EEGSA. TPS will have an interest in the consortium
of at least 30 percent. Long-term financing and levels of leverage are
yet to be arranged and established. TPS has committed to invest equity
of up to $100 million in the consortium. The purchase is expected to be
completed by the end of the third quarter of 1998.
In August 1998, TPS and Mosbacher Power Partners, Ltd., an
independent power company headquartered in Houston, agreed to jointly
develop, own and operate domestic and international independent power
projects. Under this arrangement, TPS will, among other things, provide
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FORM 10-Q
capital and technical expertise to Mosbacher. In return, TPS gains
expanded domestic and international presence and the opportunity for
near-term returns, including a preferred return to TPS before other
benefits are shared. An initial investment of approximately $10 million
by TPS is anticipated, with the possibility of additional investments of
$20-$25 million in two projects in Cambodia and India, both in late
stages of development. Mosbacher's domestic projects involve two plants
already under construction. One plant, a 30-megawatt (MW) cogeneration
facility in New Jersey, is scheduled to become operational in the fourth
quarter and the other, a 230-MW cogeneration plant in Texas, is
scheduled to begin operations in the first quarter of 1999.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
TECO Energy is exposed to changes in interest rates primarily as a
result of its borrowing activities. A hypothetical increase in interest
rates of 46 basis points (10 percent of TECO Energy's weighted average
interest rate on its variable rate debt) would not have a significant
impact on TECO Energy's pretax earnings over the next fiscal year.
During 1995, TECO Energy entered into a three-year interest rate
exchange agreement to moderate its exposure to short-term interest rate
changes. This agreement, which expired in June 1998, did not have a
significant impact on interest expense for the period ended June 30,
1998.
A hypothetical decrease of 10 percent in interest rates would not
have a significant impact on the estimated fair value of TECO Energy's
long-term debt at June 30, 1998.
From time to time, TECO Energy enters into futures, swaps and
options contracts to moderate its exposure to interest rate changes. The
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FORM 10-Q
benefits of these arrangements are at risk only in the event of non-
performance by the other party to the agreement, which the company does
not anticipate. TECO Energy does not use derivatives or other financial
products for speculative purposes.
Commodity Price Risk
Currently, at Tampa Electric and Peoples Gas System, commodity
price increases due to changes in market conditions for fuel, purchased
power and natural gas are recovered through cost recovery clauses, with
no effect on earnings.
TECO Coalbed Methane is exposed to commodity price risk through the
sale of natural gas. A 10-percent change in the market price of natural
gas would not have a significant impact on TECO Energy's earnings.
From time to time, TECO Energy enters into futures, swaps and
options contracts to hedge the selling price for its physical production
at TECO Coalbed Methane, to limit exposure to gas price increases at
both the regulated natural gas utility and unregulated propane business,
and to limit exposure to fuel price increases at TECO Transport. The
benefits of these financial arrangements are at risk only in the event
of non-performance by the other party to the agreement, which the
company does not anticipate. TECO Energy does not use derivatives or
other financial products for speculative purposes.
TECO Coal is exposed to commodity price risk through coal sales. A
10-percent change in the market price of coal would not have a
significant impact on TECO Energy's earnings.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- 26 -<PAGE>
FORM 10-Q
(a) Exhibits
3 Bylaws of TECO Energy, Inc., as amended effective May 1,
1998.
4.1 First Supplemental Indenture between Tampa Electric Company
and The Bank of New York, dated as of July 15, 1998.
10.1 Form of Restricted Stock Agreement between TECO Energy,
Inc. and certain executives under the TECO Energy, Inc.
1996 Equity Incentive Plan.
10.2 Form of Restricted Stock Agreement between TECO Energy,
Inc. and G. F. Anderson under the TECO Energy, Inc. 1996
Equity Incentive Plan.
27 Financial data schedule - six months ended June 30, 1998.
(EDGAR filing only)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ending June
30, 1998.
The registrant filed a Current Report on Form 8-K dated July 20,
1998 reporting under "Item 5. Other Events" Tampa Electric
Company's plan to comply with Phase II sulfur dioxide emission
standards under the Clean Air Act Amendments.
- 27 -<PAGE>
FORM 10-Q
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
TECO ENERGY, INC.
(Registrant)
Date: Aug. 13, 1998 By: /s/G. L. Gillette
G. L. Gillette
Vice President - Finance and Chief
Financial Officer
(Principal Financial Officer)
- 28 -<PAGE>
FORM 10-Q
INDEX TO EXHIBITS
Exhibit No. Description of Exhibits Page No.
3 Bylaws of TECO Energy, Inc., as amended 30
effective May 1, 1998.
4.1 First Supplemental Indenture between Tampa 39
Electric Company and The Bank of New York,
dated as of July 15, 1998.
10.1 Form of Restricted Stock Agreement between 110
TECO Energy, Inc. and certain executives under
the TECO Energy, Inc. 1996 Equity Incentive
Plan.
10.2 Form of Restricted Stock Agreement between 114
TECO Energy, Inc. and G. F. Anderson under the
TECO Energy, Inc. 1996 Equity Incentive Plan.
27 Financial data schedule - six months ended
June 30, 1998. (EDGAR filing only)
- 29 -<PAGE>
Exhibit 3
Adopted: January 15, 1981
As Amended: April 18, 1985
April 12, 1988
April 11, 1989
October 15, 1990
April 16, 1991
January 19, 1993
October 19, 1993
July 18, 1995
April 16, 1997
January 21, 1998
May 1, 1998
BYLAWS
OF
TECO ENERGY, INC.
ARTICLE I
April 16, 1991
Name and Principal Office
The name of the Corporation is TECO Energy, Inc., and its principal
office is in Tampa, Florida.
ARTICLE II
Shareholders
SECTION 2.1. S h a r eholders' Meetings. All meetings of the
shareholders shall be held at the principal office of the Corporation in
Tampa, Florida, except in cases in which the notice thereof designates some
other place which may be either within or without the State of Florida.
April 11, 1989
January 21, 1998
SECTION 2.2. Annual Meetings. The annual meeting of the share-
holders of the Corporation shall be held on such date and at such time as
shall be fixed from time to time by the Board of Directors for the purpose
of electing directors and for the transaction of such other business as may
properly come before the meeting.
April 18, 1985
April 11, 1989
April 16, 1991
January 21, 1998
SECTION 2.3. Special Meetings. Special meetings of the
shareholders of the Corporation shall be held whenever called by the Chief
Executive Officer, the President, any Vice President, the Board of
Directors, or if demanded in writing delivered to the Secretary by the
holder or holders of not less than 50 percent of all the shares entitled to
vote at the meeting. A meeting so demanded by shareholders shall be called
by the Secretary and held on the date fixed by the Board of Directors,
which date shall not be less than 90 days after the demand is made. No
business shall be brought before any special meeting except as specified in
the written notice of meeting; provided, however, that nothing in this
Section 2.3 shall be deemed to preclude discussion by any shareholder of
any business properly brought before any special meeting.<PAGE>
-2-
January 19, 1993
SECTION 2.4. Notice of Meeting. Written notice of each meeting of
shareholders stating the date, time and place of the meeting and in the
case of a special meeting, the purpose or purposes for which the meeting is
called shall be given in person, by electronic communication or by mail not
less than ten (10) nor more than sixty (60) days before the date of the
meeting by or at the direction of the President, the Secretary or the
officer or other persons calling the meeting to each shareholder of record
entitled to vote at such meeting. If the notice is mailed at least thirty
(30) days before the date of the meeting, it may be done by a class of
United States mail other than first class.
April 16, 1991
SECTION 2.5. Waivers of Notice. Whenever any notice is required to
be given to any shareholder of the Corporation under the provisions of
these Bylaws, the Articles of Incorporation or the Florida Business
Corporation Act, as the same may be from time to time in effect, a waiver
thereof in writing signed by the person or persons entitled to such notice
either before, at or after the meeting shall be deemed equivalent to the
giving of such notice.
A shareholder's attendance at a meeting: (a) waives objection to lack
of notice or defective notice of the meeting, unless the shareholder at the
beginning of the meeting objects to holding the meeting or transacting
business at the meeting; or (b) waives objection to the consideration of a
particular matter at the meeting that is not within the purpose or purposes
described in the meeting notice, unless the shareholder objects to
considering the matter when it is presented.
SECTION 2.6. Quorum. Except as otherwise provided in the Articles
of Incorporation at any meeting of the shareholders, a majority of the
outstanding shares of the stock of the Corporation issued and outstanding
and entitled to vote represented by shareholders of record in person or by
proxy shall constitute a quorum for the transaction of business at any
meeting of the shareholders, but in no event shall a quorum consist of less
than one-third of the shares entitled to vote at the meeting. Except as
otherwise provided by law or in the Articles of Incorporation when a quorum
is present at any meeting, a majority of the stock represented thereat
shall decide any question properly brought before such meeting.
April 16, 1991
October 19, 1993
SECTION 2.7. Voting and Proxies. Each share of stock entitled to
voting privileges shall entitle the holder of record thereof to one vote
upon each proposal presented at any meeting of the shareholders except as
otherwise provided in the Articles of Incorporation. Votes may be cast
either in person or by proxy.
April 16, 1991
SECTION 2.8. Fixing Record Date or Closing Transfer Books. For the
purpose of determining the shareholders for any purpose, the Board of
Directors may either require the stock transfer books to be closed for up
to 70 days or fix a record date not more than 70 days before the date on
which the action requiring the determination is to be taken. However, a
record date shall not precede the date upon which the resolution fixing the
record date is adopted.<PAGE>
-3-
When a determination of the shareholders entitled to vote at any
meeting has been made, that determination shall apply to any adjournment of
the meeting, unless the Board of Directors fixes a new record date. The
Board of Directors shall fix a new record date if the meeting is adjourned
to a date more than 120 days after the date fixed for the original meeting.
If no record date is so fixed and the stock transfer books are not so
closed by the Board of Directors, the record date for the determination of
shareholders entitled to notice of or to vote at a meeting of the
shareholders, or entitled to receive payment of a dividend, or for any
other purpose shall be: (a) for the purpose of a meeting of the
shareholders, the later of (i) the day 20 days before the day on which the
notice of such meeting is mailed and (ii) the day on which the resolution
of the Board of Directors authorizing the notice of such meeting is
adopted; or (b) for the purposes of entitlement to receive payment of a
dividend or for any other purpose, the day on which the resolution of the
Board of Directors declaring such dividend or authorizing other action is
adopted.
April 18, 1985
SECTION 2.9. Shareholder Action. Any action required or permitted
to be taken by the shareholders of the Corporation must be effected at a
duly called annual or special meeting of such holders and may not be
effected by any consent in writing by such holders.
April 12, 1988
April 16, 1991
SECTION 2.10. Control-Share Acquisition Act. Section 607.0902 of the
F l orida Business Corporation Act shall not apply to control-share
acquisitions (as defined in such section) of shares of the Corporation
unless and until these Bylaws shall be amended to delete this Section 2.10.
April 11, 1989
October 15, 1990
May 1, 1998
SECTION 2.11. Notification of Shareholder Proposed Business. To
properly bring business before the annual meeting of shareholders, written
notice of such shareholder's intent to make such proposal or proposals must
be given either by personal delivery or by United States mail postage
prepaid and received by the Secretary of the Corporation not later than 90
days in advance of the anniversary date of the immediately preceding annual
meeting of shareholders; provided, however, that in the event that the
annual meeting is called for a date that is not within 30 days before or
after such anniversary date, notice by the shareholder in order to be
timely must be so received not later than the close of business on the
tenth day following the day on which notice of the date of the annual
meeting was mailed or public disclosure of the date of the annual meeting
was made, whichever first occurs. A shareholder's notice to the Secretary
shall set forth as to each item of business the shareholder proposes to
bring before the annual meeting: (a) a brief description of the business
desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting; (b) the name and record
address of the shareholder who proposes such business; (c) the number of
shares of capital stock of the Corporation beneficially owned by the
shareholder; and (d) a description of all arrangements or understandings
between the shareholder and any other person or persons (naming such person
or persons) pursuant to which the proposal or proposals are to be made by
the shareholder and any material interest of the shareholder in the
business being proposed. The chairman of the meeting may refuse to
-4-
acknowledge the proposal of any person not made in compliance with the
foregoing procedures.
Notwithstanding anything in the Bylaws to the contrary, no business
shall be brought before or conducted at the annual meeting by a shareholder
except in accordance with the procedures set forth in this Section 2.11;
provided, however, that nothing in this Section 2.11 shall be deemed to
preclude discussion by any shareholder of any business properly brought
before the annual meeting.
ARTICLE III
Board of Directors
SECTION 3.1. General Powers. All business of the Corporation shall
be managed by its Board of Directors who shall have full control of the
affairs of the Corporation and may exercise all its powers except as
otherwise provided by law and in the Articles of Incorporation. The Board
of Directors shall have the authority to fix the compensation of the Direc-
tors unless otherwise provided in the Articles of Incorporation.
April 18, 1985
SECTION 3.2. Number, Election and Terms. The number of Directors of
the Corporation, which number shall be not less than three nor more than
fifteen, shall be fixed from time to time by resolution of the Board of
Directors. The Directors, other than those who may be elected by the
holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation to elect Directors under
specified circumstances, shall be classified, with respect to the time for
which they severally hold office, into three classes, as nearly equal in
number as possible. Such classes shall originally consist of one class of
four Directors who shall be elected at the annual meeting of shareholders
held in 1985 for a term expiring at the annual meeting of shareholders to
be held in 1986; a second class of four Directors who shall be elected at
the annual meeting of shareholders held in 1985 for a term expiring at the
annual meeting of shareholders to be held in 1987; and a third class of
five Directors who shall be elected at the annual meeting of shareholders
held in 1985 for a term expiring at the annual meeting of shareholders to
be held in 1988; with each class to hold office until its successor is
elected and qualified. The Board of Directors shall increase or decrease
the number of Directors in one or more classes as may be appropriate
whenever it increases or decreases the number of Directors pursuant to this
Section 3.2, in order to ensure that the three classes shall be as nearly
equal in number as possible. At each annual meeting of the shareholders of
the Corporation, the successors of the class of Directors whose term
expires at the meeting shall be elected to hold office for a term expiring
at the annual meeting of shareholders held in the third year following the
year of their election. All Directors shall be of full age. Directors
need not be shareholders of the Corporation nor residents of the State of
Florida.
SECTION 3.3. Chairman. The Board of Directors in its discretion may
elect a Chairman of the Board of Directors who when present shall preside
at all meetings of the Board and who shall have such other powers as may at
any time be prescribed by these Bylaws and by the Board of Directors.
July 18, 1995
SECTION 3.4. Meetings. Regular meetings of the Board of Directors
shall be held in such places and at such times either within or without the
State of Florida as the Board may by vote from time to time determine; and
if so determined, no notice thereof need be given. Special meetings of the
-5-
Board of Directors may be held at any time or place either within or
without the State of Florida whenever called by the Chief Executive
Officer, the President, a Vice President or two or more Directors. Notice
of a special meeting stating the date, time and place of the meeting shall
be given by the Secretary or an Assistant Secretary or officer calling the
meeting to each Director either by mail not less than 48 hours before the
time of the meeting or by telephone or facsimile or other form of
electronic communication on 24 hours' notice or on such shorter notice as
the person or persons calling such meeting may deem necessary or
appropriate in the circumstances. Notwithstanding the foregoing, special
meetings may be held without notice to any Director provided such Director
is present at such meeting (except when such Director states, at the
beginning of the meeting or promptly upon arrival at the meeting, any
objection to the transaction of business because the meeting is not
lawfully called or convened) or waives notice thereof in writing either
before or after the meeting.
SECTION 3.5. Quorum. A majority of the Board of Directors shall
constitute a quorum for the transaction of business, but a lesser number
may fill vacancies on the Board of Directors as provided in Section 3.6 of
these Bylaws; and a majority of Directors present though less than a quorum
may adjourn any meeting of the Board of Directors from time to time to
another time and place; and the meeting may be held as adjourned without
further notice. When a quorum is present at any meeting, a majority of the
members in attendance thereat may decide any question brought before such
meeting.
April 18, 1985
SECTION 3.6. Newly Created Directorships and Vacancies. Except as
may be otherwise provided for or fixed by or pursuant to any provisions of
the Articles of Incorporation, as amended from time to time, relating to
the rights of the holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation to
elect Directors under specified circumstances, newly created directorships
resulting from any increase in the number of Directors and any vacancies on
the Board of Directors resulting from death, resignation, disqualification,
removal or other cause shall be filled only by the affirmative vote of a
majority of the remaining Directors then in office, even though less than a
quorum of the Board of Directors. Any Director elected in accordance with
the preceding sentence shall hold office until the next election of
Directors by the shareholders and until such Director's successor shall
have been elected and qualified. No decrease in the number of Directors
constituting the Board of Directors shall shorten the term of any incumbent
Director.
April 18, 1985
October 15, 1990
May 1, 1998
SECTION 3.7. Notification of Nominations. Subject to the rights of
holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation to elect Directors under
specified circumstances, nominations for the election of Directors may be
made by the Board of Directors or a proxy committee appointed by the Board
of Directors or by any shareholder entitled to vote in the election of
Directors generally. However, any shareholder entitled to vote in the
election of Directors generally may nominate one or more persons for
election as Directors at a meeting only if written notice of such
shareholder's intent to make such nomination or nominations has been given,
either by personal delivery or by United States mail, postage prepaid, to
the Secretary of the Corporation not later than (i) with respect to an
-6-
election to be held at an annual meeting of shareholders, 90 days in
advance of the anniversary date of the immediately preceding annual meeting
of shareholders; provided, however, that in the event that the annual
meeting is called for a date that is not within 30 days before or after
such anniversary date, notice by the shareholder in order to be timely must
be so received not later than the close of business on the tenth day
following the day on which notice of the date of the annual meeting was
mailed or public disclosure of the date of the annual meeting was made,
whichever first occurs; and (ii) with respect to an election to be held at
a special meeting of shareholders for the election of Directors, the close
of business on the tenth day following the day on which notice of such
special meeting was mailed or public disclosure of such meeting was made to
shareholders. A shareholder's notice to the Secretary shall set forth:
(a) the name and address of the shareholder who intends to make the
n o mination and of the person or persons to be nominated; (b) a
representation that the shareholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to nominate the person or persons
specified in the notice; (c) a description of all arrangements or
understandings between the shareholder and each nominee and any other
person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the shareholder; (d) such other
information regarding each nominee proposed by such shareholder as would be
required to be included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission, had the nominee been
nominated or intended to be nominated, by the Board of Directors; and (e)
the consent of each nominee to serve as a Director of the Corporation if so
elected. The chairman of the meeting may refuse to acknowledge the
nomination of any person not made in compliance with the foregoing
procedure.
April 18, 1985
SECTION 3.8. Executive and Other Committees. The Board of Directors
may by resolution adopted by a majority of the full Board of Directors
designate from their number an Executive Committee and one or more other
committees, each of which to the extent provided by such resolution or
these Bylaws and permitted by the laws of Florida shall have and may
exercise the powers of the Board of Directors when the Board is not in ses-
sion in the management of the business of the Corporation. All such
committees shall report to the Board at or prior to each meeting of the
Board all action taken by said committees since the preceding meeting of
the Board. Each such committee may make rules for the holding and conduct
of its meetings and the keeping of the records thereof.
The Board of Directors may by resolution adopted by a majority of the
full Board of Directors designate one or more Directors as alternate
members of any such committee who may act in the place and stead of any
member absent or disqualified from voting at any meeting of such committee.
April 18, 1985
April 16, 1991
SECTION 3.9. Consent in Lieu of Meeting. Any action of the Board of
Directors or of any committee thereof which is required or permitted to be
taken at a meeting may be taken without a meeting if written consent
setting forth the action so to be taken is signed by all of the members of
the Board or the committee, as the case may be.<PAGE>
-7-
ARTICLE IV
Officers
April 16, 1991
April 16, 1997
SECTION 4.1. Election. (Appointment). The officers of the Company
shall be a President, a Treasurer, a Secretary, such other officers as the
Board of Directors may in its discretion elect or appoint including, but
not limited to, a Chairman of the Board, Vice Presidents, and assistant
officers, and such assistant officers as the President may in his
discretion appoint. The officers elected or appointed by the Board of
Directors shall be elected or appointed by the Board of Directors from
time-to-time, and a regular meeting of the Board of Directors may be held
without notice for this purpose immediately after the annual meeting of the
shareholders and at the same place. Assistant officers may be appointed by
the President from time-to-time. All officers shall hold office until
their successors shall be elected or appointed and shall qualify or until
their earlier resignation, removal from office or death. Any vacancy
however occurring in the offices of President, Treasurer or Secretary shall
be, and any vacancy however occurring in any other office may be, filled by
the Board of Directors. Any vacancy however occurring in the offices of
assistant officers may also be filled by the President.
The Board of Directors or the President may in their discretion from
time-to-time also appoint divisional officers.
January 21, 1998
SECTION 4.2. Eligibility. The President and the Chairman of the
Board of Directors shall be Directors of the Corporation. The Vice
Presidents, Secretary and the Treasurer and such other officers as may be
elected or appointed may be, but need not be, Directors of the Corporation.
Any person may hold two or more offices. For so long as the Corporation or
any of its subsidiaries are impacted by 46 U.S.C. 802 et. seq., the
President, Chief Executive Officer and Chairman of the Board, if any, shall
be United States citizens.
SECTION 4.3. Chief Executive Officer. If a Chairman of the Board of
Directors should be elected pursuant to these Bylaws, the Board of
Directors shall designate either the Chairman of the Board of Directors or
the President to be the Chief Executive Officer of the Corporation. If no
such Chairman should be elected, the President shall be the Chief Executive
Officer of the Corporation. The Chief Executive Officer shall, subject to
the control of the Board of Directors, have general charge of the business
and affairs of the Corporation, the power to sign deeds and contracts for
the Corporation, and such other powers and duties as may at any time be
prescribed by these Bylaws and by the Board of Directors. During the
absence or incapacity of the Chairman of the Board of Directors if he shall
have been designated Chief Executive Officer, the President shall be the
Chief Executive Officer.
SECTION 4.4. President and Vice Presidents. The President, subject
to the direction of the Board of Directors and of the Chairman of the Board
of Directors (if such Chairman is the Chief Executive Officer), shall
s u p ervise the administration of the business and affairs of the
Corporation. The President shall have the power to sign certificates of
stock, bonds, deeds and contracts for the Corporation and such other powers
and duties as may at any time be prescribed by these Bylaws and by the
-8-
Board of Directors. He shall preside at all meetings of the shareholders
unless a Chairman of the Board of Directors shall have been elected, shall
have been designated to be the Chief Executive Officer of the Corporation,
and is present and presides at such shareholders' meeting. The President
shall preside at all meetings of the Board of Directors when present,
unless a Chairman of the Board of Directors has been elected and is present
and presides at such Directors' meeting.
Except as expressly limited by vote of the Board of Directors, any
Vice President shall perform the duties and have the powers of the
President during the absence or disability of the President, shall have the
power to sign certificates of stock, bonds, deeds and contracts of the
Corporation, and shall perform such other duties and have such other powers
as the Board of Directors shall from time to time designate.
SECTION 4.5. Secretary. The Secretary of the Corporation shall be
present at all meetings of the shareholders, the Board of Directors and the
Executive Committee, respectively, shall keep an accurate record of the
proceedings at such meetings in books provided for that purpose, which
books shall be opened at all times during business hours for such
inspection as is required by law, shall with the President or a Vice
President sign certificates of stock, shall perform all the duties commonly
incident to his office and shall perform such other duties and have such
other powers as the Board of Directors shall from time to time designate.
An Assistant Secretary or a Secretary pro tempore may perform any of the
Secretary's duties.
SECTION 4.6. Treasurer. The Treasurer shall have the care and
custody of the funds of the Corporation and shall have and exercise under
the supervision of the Board of Directors all the powers and duties
commonly incident to his office and shall give bond in such sum and with
such sureties as may be required by the Board of Directors. He shall have
the custody of all the money, funds and valuable papers and documents of
the Corporation except his own bond, if any, which shall be in the custody
of the Chief Executive Officer. He shall deposit all the funds of the
Corporation in such bank or banks, trust company or trust companies or with
such firm or firms doing a banking business as the Directors shall desig-
nate. He may endorse for deposit or collection all notes, checks, drafts
and other obligations payable to the Corporation or its order. He may
issue notes and accept drafts on behalf of the Corporation, and he shall
keep accurate books of account of the Corporation's transactions which
shall be the property of the Corporation and together with all its property
in his possession shall be subject at all times to the inspection and
control of the Directors.
ARTICLE V
April 12, 1988
Indemnification
April 16, 1991
April 16, 1997
Any person who is or was an officer, director or employee of the
Company and who is or was a party to any threatened, pending or completed
proceeding, by reason of the fact that he is or was a director, officer or
employee of the Company or is or was serving at the request of the Company
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall be indemnified
by the Company to the full extent permitted by law against all expenses and
liabilities incurred in connection with such proceeding, including any
appeal thereof. Such persons shall also be entitled to advancement of
expenses incurred in defending a proceeding in advance of its final
<PAGE>
-9-
disposition to the full extent permitted by law, subject to the conditions
imposed by law.
Any indemnification or advance of expenses under this article shall be
paid promptly, and in any event within 30 days, after the receipt by the
Company of a written request therefor from the person to be indemnified,
unless with respect to a claim for indemnification the person is not
entitled to indemnification under this article. Unless otherwise provided
by law, the burden of proving that the person is not entitled to
indemnification shall be on the Company.
The right of indemnification under this article shall be a contract
right inuring to the benefit of the persons entitled to be indemnified
hereunder and no amendment or repeal of this article shall adversely affect
any right of such persons existing at the time of such amendment or repeal.
The indemnification provided hereunder shall inure to the benefit of
t h e heirs, executors and administrators of a person entitled to
indemnification hereunder.
As used in this article, the terms "Company", "other enterprises",
"expenses", "liability", "proceeding", "agent" and "serving at the request
of the Company" shall have the meanings ascribed to them in Section
607.0850 of the Florida Business Corporation Act or any successor statute.
The right of indemnification under this article shall be in addition
to and not exclusive of all other rights to which persons entitled to
indemnification hereunder may be entitled. Nothing contained in this
article shall affect any rights to indemnification to which persons
entitled to indemnification hereunder may be entitled by contract or
otherwise under law.
ARTICLE VI
Resignations and Removals
SECTION 6.1. Resignations. Any Director, officer or agent of the
Corporation may resign at any time by giving written notice to the Board of
Directors or to the Chairman of the Board or to the President or to the
Secretary of the Corporation, and any member of any committee may resign by
giving written notice either as aforesaid or to the committee of which he
is a member or the chairman thereof. Any such resignation shall take
effect at the time specified therein or if the time be not specified, upon
receipt thereof; and unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
April 18, 1985
April 16, 1991
SECTION 6.2. Removal. Subject to the rights of any class or series
of stock having a preference over the Common Stock as to dividends or upon
liquidation to elect Directors under specified circumstances, any Director
may be removed from office, with or without cause, only by a majority vote
of the entire Board of Directors or by the affirmative vote of the holders
of 80 percent of the combined voting power of the then outstanding shares
of stock entitled to vote generally in the election of Directors, voting
together as a single class. The Board of Directors by vote of not less
than a majority of the entire Board may remove from office any officer,
assistant officer, agent or member of any committee whether elected or
appointed by it or the Chief Executive Officer at any time with or without
cause, and any assistant officer appointed by the Chief Executive Officer
may likewise be removed by the Chief Executive Officer. Any such removal
-10-
from office shall not affect the contract rights, if any, of the person so
removed.
ARTICLE VII
Capital Stock and Transfer of Stock
April 16, 1997
SECTION 7.1. Stock Certificates. Every shareholder shall be entitled
to have a certificate or certificates representing all shares of the
capital stock of the Company to which such shareholder is entitled and,
subject to applicable statutory requirements, in form prescribed by the
Board of Directors, duly numbered and sealed with the corporate seal of the
Company or bearing a facsimile thereof, engraved, lithographed or printed,
and setting forth the number and kind of shares represented thereby. Such
certificates shall be signed by the President or a Vice President and by
the Secretary or an Assistant Secretary of the Company. If certificates of
capital stock of the Company are manually signed on behalf of a Transfer
Agent, the signatures of the officers of the Company may be facsimiles,
engraved, lithographed or printed.
If any officer who shall have signed or whose facsimile signature
shall have been placed on a stock certificate shall have ceased to be such
officer for any reason before such certificate shall have been issued, such
certificate shall nevertheless be valid.
SECTION 7.2. Transfer Agent and Registrar. The Board of Directors
may appoint one or more Transfer Agents and/or Registrars for its stock of
any class or classes and may require stock certificates to be countersigned
and/or registered by one or more of such Transfer Agents and/or Registrars.
SECTION 7.3. Transfer of Stock. No transfer of the capital stock of
the Corporation shall be valid against the Corporation, its shareholders
(other than the transferor) and its creditors for any purposes (except to
render the transferee liable for debts of the Corporation to the extent
provided by law) until the transfer of such stock shall have been
registered upon the Corporation's stock transfer books.
Shares of capital stock shall be transferable on the books of the
Corporation by assignment in writing signed by the holder of record
thereof, his attorney legally constituted or his legal representatives upon
surrender of the certificate or certificates therefor and subject to any
valid restriction on the transfer thereof pursuant to law, the Articles of
Incorporation, these Bylaws or any agreement to which the Corporation is a
party. Except as otherwise required by law, neither the Corporation nor
any transfer or other agent of the Corporation shall be bound to take
notice of or recognize any trust, express, implied or constructive, or any
charge or equity affecting any of the shares of the capital stock, or to
ascertain or inquire whether any sale or transfer of any such share by any
holder of record thereof, his attorney legally constituted, or his legal
representative, is authorized by such trust, charge or equity or to
recognize any person as having any interest therein except the holder of
record thereof at the time of any such determination.
SECTION 7.4 Loss of Certificates. In case of the loss, mutilation
or destruction of a certificate of stock, a duplicate certificate may be
issued upon such terms as the Board of Directors shall prescribe.
-11-
ARTICLE VIII
Bonds and Debentures
Every bond or debenture issued by the Corporation shall be signed by
the President or a Vice President and by the Treasurer or an Assistant
Treasurer or by the Secretary or an Assistant Secretary, and sealed with
the seal of the Corporation. The seal may be facsimile, engraved or
printed. Where such bond or debenture is authenticated with the manual
signature of an authorized officer of the corporate or other trustee
designated by the indenture of trust or other agreement under which said
security is issued, the signature of any of the Corporation's officers
named herein may be facsimile. In case any officer who signed or whose
facsimile signature has been used on any such bond or debenture shall cease
to be an officer of the Corporation for any reason before the same has been
delivered by the Corporation, such bond or debenture may be issued and
delivered as though the person who signed it or whose facsimile signature
has been used thereon had not ceased to be such officer.
ARTICLE IX
Checks, Drafts and Certain Other
Obligations For the Payment of Money
All notes and other evidences of indebtedness of the Corporation other
than debentures or bonds shall be signed by such officers, agents or other
persons as the Board of Directors shall by vote or resolution direct. All
checks, drafts or other orders for the payment of money shall be signed by
such officers, agents or other persons as the President or Treasurer may
designate. The signature of any such officer, agent or other person so
designated to sign checks, drafts or other orders for the payment of money
may be facsimile if authorized by the President or the Treasurer.
ARTICLE X
Seal
The seal of the Corporation shall have the words "TECO Energy, Inc.,
Florida, 1981, Corporate Seal" inscribed thereon and may be a facsimile,
engraved, printed or an impression seal.
ARTICLE XI
April 18, 1985
Amendments
The Board of Directors may by majority vote of those present at any
meeting at which a quorum is present alter, amend or repeal these Bylaws,
or adopt such other Bylaws as in their judgment may be advisable for the
regulation of the conduct of the affairs of the Corporation, provided that
a n y such alteration, amendment, repeal or adoption shall not be
inconsistent with the Articles of Incorporation. These Bylaws may be
altered, amended or repealed, and new Bylaws may be adopted by shareholders
at any regular or special meeting of shareholders only if such alteration,
amendment, repeal or adoption is approved by the affirmative vote of the
holders of at least 80% of the voting power of all shares of the
Corporation entitled to vote generally in the election of Directors voting
together as a single class; provided that notice of such proposed
alteration, amendment, repeal or adoption shall be included in the notice
of such meeting.<PAGE>
Exhibit 4.1
TAMPA ELECTRIC COMPANY
and
THE BANK OF NEW YORK
As Trustee
____________
FIRST SUPPLEMENTAL INDENTURE
dated as of July 15, 1998
Supplementing the Indenture
dated as of July 1, 1998
____________
$50,000,000
Remarketed Notes Due 2038
<PAGE>
This First Supplemental Indenture, dated as of the 15th day of July,
1998 between Tampa Electric Company, a corporation duly organized and
existing under the laws of the State of Florida (hereinafter called the
"Company") and having its principal office at TECO Plaza, 702 North
Franklin Street, Tampa, Florida 33602, and The Bank of New York,
(hereinafter called the "Trustee") and having its principal corporate trust
office at 101 Barclay Street, 21st Floor, New York, New York, 10286.
WITNESSETH:
WHEREAS, the Company and the Trustee entered into an Indenture, dated
as of July 1, 1998 (the "Original Indenture"), pursuant to which one or
more series of debt of the Company (the "Securities") may be issued from
time to time; and
WHEREAS, Section 201 of the Original Indenture permits the terms of
any series of Securities to be established in an indenture supplemental to
the Original Indenture; and
WHEREAS, Section 901(7) of the Original Indenture provides that a
supplemental indenture may be entered into by the Company and the Trustee
without the consent of any Holders of the Securities to establish the form
and terms of the Securities of any series; and
WHEREAS, the Company has requested the Trustee to join with it in the
execution and delivery of this First Supplemental Indenture in order to
supplement and amend the Original Indenture by, among other things,
establishing the form and terms of one series of Securities to be known as
the Company's "Remarketed Notes Due 2038" (the "Notes") and amending and
adding certain provisions thereof for the benefit of the Holders of the
Notes; and
WHEREAS, the Company and the Trustee desire to enter into this First
Supplemental Indenture for the purposes set forth in Sections 201 and 901
of the Original Indenture as referred to above; and
WHEREAS, the Company has furnished the Trustee with a Board Resolution
authorizing the execution of this First Supplemental Indenture; and
WHEREAS, all things necessary to make this First Supplemental
Indenture a valid agreement of the Company and the Trustee and a valid
supplement to the Original Indenture have been done,
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
to be issued hereunder by holders thereof, the Company and the Trustee
mutually covenant and agree, for the equal and proportionate benefit of the
respective holders from time to time of the Notes, as follows:
ARTICLE ONE
Definitions and Other Provisions of General Application
Section 101. Definitions
All capitalized terms that are used herein and not otherwise defined
herein shall have the meanings assigned to them in the Original Indenture.
The Original Indenture together with this First Supplemental Indenture are
hereinafter sometimes collectively referred to as the "Indenture."
"Applicable Spread" shall mean the lowest bid indication, expressed as
a spread (in the form of a percentage or in basis points) above the Base
Rate, obtained by the SPURS Agent on the applicable Determination Date from
the bids quoted by up to five Reference Corporate Dealers for the full
aggregate outstanding principal amount of the Notes at the Dollar Price,
but assuming (i) an issue date equal to the applicable SPURS Remarketing
Date, with settlement on such date without accrued interest, (ii) a
maturity date equal to the next succeeding Interest Rate Adjustment Date of
the Notes, and (iii) a stated annual interest rate, payable semiannually on
each Interest Payment Date, equal to the Base Rate plus the spread bid by
the applicable Reference Corporate Dealer. If fewer than five Reference
Corporate Dealers bid as described above, then the Applicable Spread shall
be the lowest of such bid indications obtained as described above. The
SPURS Interest Rate announced by the SPURS Agent, absent manifest error,
shall be binding and conclusive upon the Beneficial Owners and holders of
the Notes, the Company and the Trustee.
"Base Rate" shall mean the interest rate established by the SPURS
Agent, after consultation with the Company, as the applicable "base rate"
at commencement of the applicable SPURS Mode.
"Beneficial Owner" shall mean, for Notes in book-entry form, the
Person who acquires an interest in the Notes, which is reflected on the
records of the Depositary through its participants.
"Business Day" shall mean any day that is not a day on which banking
institutions in New York, New York, or the state in which the office of the
Trustee at which the Indenture is administered are authorized or obligated
by law or executive order to close; provided, however, that with respect to
Notes in the Long Term Rate Mode or the SPURS Mode as to which LIBOR is an
applicable Interest Rate Basis, such day is also a London Business Day (as
hereinafter defined). "London Business Day" shall mean (i) if the Index
Currency (as hereinafter defined) is other than European Currency Units
("ECU"), any day on which dealings in such Index Currency are transacted in
the London interbank market or (ii) if the Index Currency is ECU, any day
that does not appear as an ECU non-settlement day on the display designated
as "ISDE" on the Reuters Monitor Money Rates Service (or a day so
designated by the ECU Banking Association) or, if ECU non-settlement days
do not appear on the page (and are not so designated), is a day on which
payments in ECU can be settled in the international banking market.
"Calculation Agent" shall have the meaning specified in Section 206(a)
hereof.
"Calculation Date" shall have the meaning specified in Section 206(a)
hereof.
"CD Rate" shall have the meaning specified in Section 206(b)(1)
hereof.
"CMT Rate" shall have the meaning specified in Section 206(b)(2)
hereof.
"Commercial Paper Term Mode" shall mean, with respect to any Note, the
Interest Rate Mode in which the interest rate on such Note is reset on a
periodic basis that shall not be less than one calendar day nor more than
364 consecutive calendar days and interest is paid as provided for such
Interest Rate Mode in Section 204(e)(1) hereof.
"Commercial Paper Term Period" shall mean, with respect to any Note,
the Interest Rate Period in the Commercial Paper Term Mode that is a period
of not less than one nor more than 364 consecutive calendar days, as
determined by the Company or, if not so determined, by the Remarketing
Agent for such Note (in its best judgment in order to obtain the lowest
interest cost for the Note). Each Commercial Paper Term Period will
commence on the Interest Rate Adjustment Date therefor and end on the day
preceding the date specified by such Remarketing Agent as the first day of
the next Interest Rate Period for the Notes. The interest rate for any
Commercial Paper Term Period relating to any Note will be determined not
later than 11:50 a.m., New York City time, on the Interest Rate Adjustment
Date for the Note, which is the first day of each Interest Period for such
Note.
"Comparable Treasury Issues" shall mean the United States Treasury
security or securities selected by the SPURS Agent as having an actual or
interpolated maturity or maturities comparable or applicable to the
remaining term to the next succeeding Interest Rate Adjustment Date of the
Notes being purchased.
"Comparable Treasury Price" shall mean, with respect to the SPURS
Remarketing Date, (a) the offer prices for the Comparable Treasury Issues
(expressed in each case as a percentage of its principal amount) at 11:00
a.m. on the Determination Date, as set forth on Telerate Page 500 (or such
other page as may replace Telerate Page 500) or (b) if such page (or any
successor page) is not displayed or does not contain such offer prices on
such Determination Date, (i) the average of the Reference Treasury Dealer
Quotations for such SPURS Remarketing Date, after excluding the highest and
lowest of such Reference Treasury Dealer Quotations, or (ii) if the SPURS
Agent obtains fewer than four such Reference Treasury Dealer Quotations,
the average of all such Reference Treasury Dealer Quotations. "Telerate
Page 500" shall mean the display designated as "Telerate Page 500" on Dow
Jones Markets (or such other page as may replace Telerate Page 500 on such
service) or such other service displaying the offer prices specified in (a)
above as may replace Dow Jones Markets.
"Composite Quotations" shall mean the daily statistical release
entitled "Composite 3:30 P.M. Quotations for United States Government
Securities" published by the Federal Reserve Bank of New York or any
successor publication.
"Depositary" shall have the meaning specified in Section 203 hereof.
"Designated CMT Telerate Page" shall mean the display on the Dow Jones
Markets (or any successor service) on the page specified in the applicable
Floating Interest Rate Notice (or any other page as may replace such page
on such service for the purpose of displaying Treasury Constant Maturities
as reported in H.15(519)) for the purpose of displaying Treasury Constant
Maturities as reported in H.15(519). If no such page is specified in the
applicable Floating Interest Rate Notice, the page shall be 7052 for the
most recent week.
"Designated CMT Maturity Index" shall mean the original period to
maturity of the United States Treasury securities (either 1, 2, 3, 5, 7,
10, 20 or 30 years) specified in the applicable Floating Interest Rate
Notice with respect to which the CMT Rate will be calculated. If no such
maturity is specified in the applicable Floating Interest Rate Notice, the
Designated CMT Maturity Index shall be 2 years.
"Designated LIBOR Page" shall mean (a) if "LIBOR Reuters" is specified
in the applicable Floating Interest Rate Notice, the display on the Reuters
Monitor Money Rates Service (or any successor service) on the page
specified in such Floating Interest Rate Notice (or any other page as may
replace such page on such service) for the purpose of displaying the London
interbank rates of major banks for the Index Currency, or (b) if "LIBOR
Telerate" is specified in the applicable Floating Interest Rate Notice or
neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the applicable
Floating Interest Rate Notice as the method for calculating LIBOR, the
display on the Dow Jones Markets (or any successor service) on the page
specified in such Floating Interest Rate Notice (or any other page as may
replace such page on such service) for the purpose of displaying the London
interbank rates of major banks for the Index Currency.
"Determination Date" shall mean the third Business Day immediately
preceding the applicable SPURS Remarketing Date.
"Dollar Price" shall mean the present value determined by the SPURS
Agent, as of the applicable SPURS Remarketing Date, of the Remaining
Scheduled Payments discounted to such SPURS Remarketing Date, on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day
months), at the Treasury Rate.
"DTC Participant" shall mean an account maintained by an institution
with the Depositary through which securities are held by such institution
and accounted for by a book-entry registration and transfer system.
"Federal Funds Rate" shall have the meaning specified in Section
206(b)(3) hereof.
"Floating Interest Rate Notice" shall have the meaning specified in
Section 206(a) hereof. The form of Floating Rate Interest Notice is set
forth as Exhibit C to this First Supplemental Indenture.
"Floating Rate Maximum Interest Rate" and "Floating Rate Minimum
Interest Rate" have the respective meanings specified in Section 206(a)
hereof.
"H.15(519)" shall mean "Statistical Release H.15(519), Selected
Interest Rates" published by the Board of Governors of the Federal Reserve
System or any successor publication.
"Index Currency" shall mean the currency or composite currency
specified in the applicable Floating Interest Rate Notice as to which LIBOR
will be calculated. If no such currency or composite currency is specified
in the applicable Floating Interest Rate Notice, the Index Currency will be
United States dollars.
"Index Maturity" shall mean the period to maturity of the instrument
or obligation with respect to which the related Interest Rate Basis or
Bases will be calculated.
"Initial Interest Rate" shall mean the annual rate of interest
applicable to the Notes during the Initial Interest Rate Period.
"Initial Interest Rate Period" shall mean the period from the Original
Issue Date to, but excluding, Initial SPURS Remarketing Date.
"Initial SPURS Agent" shall mean the SPURS Agent with the option to
purchase the Notes on the Initial SPURS Remarketing Date.
"Initial SPURS Remarketing Date" shall mean the date designated by the
Initial SPURS Agent, after consultation with the Company, upon which the
Initial SPURS Agent may, if it has so elected, remarket the Notes at the
SPURS Interest Rate.
"Interest Determination Date" shall have the meaning specified in
Section 206(a) hereof.
"Interest Payment Date" shall have the meaning set forth in Section
204(c) hereof.
"Interest Rate Adjustment Date" shall mean (i) for a particular
Interest Rate Period in any Interest Rate Mode, each date, which shall be a
Business Day, on which interest and, in the case of a floating interest
rate, the Spread (if any) and the Spread Multiplier (if any) on the Notes
subject thereto commences to accrue at the rate determined and announced by
the applicable Remarketing Agent for such Interest Rate Period, and (ii)
for Notes in the Initial Interest Rate Period, the Original Issue Date.
"Interest Rate Basis" shall have the meaning specified in Section
206(a) hereof.
"Interest Rate Mode" shall mean the mode in which the interest rate on
a Note is being determined, i.e., the Commercial Paper Term Mode, the Long
Term Rate Mode or the SPURS Mode.
"Interest Rate Period" shall mean (a) with respect to any Note in the
Commercial Paper Term Mode or Long Term Rate Mode, the period of time
commencing on the Interest Rate Adjustment Date and extending either (i)
to, but not including, the immediately succeeding Interest Rate Adjustment
Date or (ii) if there is no succeeding Interest Rate Adjustment Date, to,
but not including, the Stated Maturity, and during which such Note bears
interest at a particular fixed interest rate or floating interest rate, and
(b) with respect to any Note in the SPURS Mode, the SPURS Rate Period.
"Interest Reset Date" and "Interest Reset Period" have the respective
meanings specified in Section 206(a) hereof.
"LIBOR" shall have the meaning specified in Section 206(b)(4) hereof.
"Long Term Rate Mode" shall mean, with respect to any Note, the
Interest Rate Mode in which the interest rate on such Note is reset in a
Long Term Rate Period and interest is paid as provided for such Interest
Rate Mode in Section 204(e)(2) hereof.
"Long Term Rate Period" shall mean, with respect to any Note, any
period of more than 364 days and not exceeding the remaining term to the
Stated Maturity of such Note.
"Notification Date" shall mean a Business Day not later than five (5)
Business Days prior to the applicable SPURS Remarketing Date.
"Optional Redemption" shall mean the redemption of any Note prior to
its maturity at the option of the Company as described herein.
"Optional Redemption Price" shall have the meaning specified in
Section 305(c) hereof.
"Original Issue Date" shall mean the date upon which the Notes are
initially issued by the Company, such date to be set forth on the face of
the Note.
"Prime Rate" shall have the meaning specified in Section 206(b)(5)
hereof.
"Principal Financial Center" shall mean the capital city of the
country issuing the Index Currency, except that with respect to United
Stated dollars, Australian dollars, Deutsche marks, Dutch guilders, Italian
lire, Swiss francs and ECUs, the Principal Financial Center shall be the
City of New York, Sydney, Frankfurt, Amsterdam, Milan, Zurich and
Luxembourg, respectively.
"Reference Corporate Dealers" shall mean such Reference Corporate
Dealers as shall be appointed by the SPURS Agent after consultation with
the Company.
"Reference Treasury Dealers" shall mean such Reference Treasury
Dealers as shall be appointed by the SPURS Agent after consultation with
the Company.
"Reference Treasury Dealer Quotation" shall mean, with respect to each
Reference Treasury Dealer and the SPURS Remarketing Date, the offer prices
for the Comparable Treasury Issues (expressed in each case as a percentage
of its principal amount) quoted in writing to the SPURS Agent by such
Reference Treasury Dealer by 3:30 p.m., New York City time, on the
Determination Date.
"Remaining Scheduled Payments" shall mean, with respect to the Notes,
the remaining scheduled payments of the principal thereof and interest
thereon, calculated at the Base Rate only, that would be due after the
SPURS Remarketing Date to and including the next succeeding Interest Rate
Adjustment Date.
"Remarketing Agent" shall mean such agent or agents, including any
standby remarketing agent (each a "Standby Remarketing Agent"), as the
Company may appoint from time to time for the purpose of remarketing of the
Notes, as set forth in the remarketing agreement that the Company shall
enter into prior to the remarketing of such Notes.
"Reuters Screen U.S. PRIME 1 Page" shall mean the display designated
as page "U.S. PRIME 1" on the Reuters Monitor Money Rates Service (or any
successor service) on the U.S. PRIME 1 Page (or such other page as may
replace the U.S. PRIME 1 Page on such service) for the purpose of
displaying prime rates or base lending rates of major United States banks.
"Special Interest Rate" shall have the meaning set forth in Section
205 hereof.
"Special Mandatory Purchase" shall have the meaning specified in
Section 210(a) hereof.
"Spread" shall mean the number of basis points to be added to or
subtracted from the related Interest Rate Basis or Bases applicable to an
Interest Rate Period for such Note.
"Spread Multiplier" shall mean the percentage of the related Interest
Rate Basis or Bases applicable to an Interest Rate Period by which such
Interest Rate Basis or Bases will be multiplied to determine the applicable
interest rate from time to time for an Interest Rate Period.
"SPURS Agent" shall mean the remarketing agent granted the option
under a SPURS Remarketing Agreement to purchase Notes in the SPURS Mode and
subsequently remarket the repurchased Notes at a SPURS Interest Rate.
"SPURS Interest Rate" shall mean the rate equal to the Base Rate
established by a SPURS Agent, after consultation with the Company, at or
prior to the commencement of the applicable SPURS Mode, plus the Applicable
Spread, which will be based on the Dollar Price.
"SPURS Mode" shall mean, with respect to any Note, the Interest Rate
Mode in which such Note shall bear interest and be subject to remarketing
as "Structured PUtable Remarketable Securities" ("SPURS") as provided for
in Article Three hereof.
"SPURS Period" shall mean, with respect to any Note remarketed by the
Initial SPURS Agent on the Initial SPURS Remarketing Date, that portion of
the SPURS Rate Period commencing on the Initial SPURS Remarketing Date up
to, but excluding, the next succeeding Interest Rate Adjustment Date.
"SPURS Rate Period" shall mean an Interest Rate Period for any Note in
the SPURS Mode established by the Company as a period of more than 364 days
and less than the remaining term to the Stated Maturity of such Note;
provided, however, that such Interest Rate Period must end on the day prior
to an Interest Payment Date for such Note. The SPURS Rate Period shall
consist of the period to and excluding the SPURS Remarketing Date and the
period from and including the SPURS Remarketing Date to, but excluding, the
next succeeding Interest Rate Adjustment Date.
"SPURS Remarketing Agreement" shall mean the agreement by and between
the Company and the SPURS Agent dated as of the date commencing the
applicable SPURS Rate Period that sets forth the rights and obligations of
the Company and the SPURS Agent with respect to the remarketing of Notes in
the SPURS Mode.
"SPURS Remarketing Date" shall mean the date designated by the SPURS
Agent, after consultation with the Company, upon which the SPURS Agent may
elect to remarket the Notes at the SPURS Interest Rate.
"Stated Maturity" shall mean July 15, 2038.
"Treasury Bills" shall have the meaning specified in Section 206(b)(6)
hereof.
"Treasury Rate" shall have the meaning specified in Section 206(b)(6)
hereof.
"Weekly Rate Period" shall have the meaning specified in Section
204(e)(1) hereof.
Section 102. Section References
Each reference to a particular section set forth in this First
Supplemental Indenture shall, unless the context otherwise requires, refer
to this First Supplemental Indenture.
ARTICLE TWO
Designation and Terms of the Notes
Section 201. Establishment of Series
There is hereby created a series of Securities to be known and
designated as the "Remarketed Notes Due 2038" (the "Notes"), which shall
rank equally with each other and all other unsecured and unsubordinated
indebtedness of the Company. For the purposes of the Original Indenture,
the Notes shall constitute a single series of Securities.
Section 202. Variations in Terms of Notes
Subject to the terms and conditions set forth in the Original
Indenture and in this First Supplemental Indenture, the terms of any
particular Note may vary from the terms of any other Note as contemplated
by Section 301 of the Original Indenture, and the terms for a particular
Note will be set forth in such Note as delivered to the Trustee or an
Authenticating Agent for authentication pursuant to Section 303 of the
Original Indenture.
Section 203. Amount and Denominations; the Depositary
The aggregate principal amount of Notes that may be issued under this
First Supplemental Indenture is limited to $50,000,000.
The Notes shall be issuable only in fully registered form and will
initially be registered in the name of The Depository Trust Company or its
successor ("Depositary"), or its nominee who is hereby designated as "U.S.
Depositary" under the Original Indenture. The authorized denominations of
Notes shall be $100,000 and integral multiples of $1,000 in excess thereof.
Section 204. Interest Rates, Interest Payment Dates and Interest
Rate Periods
(a) Initial Interest Rate. The Notes shall initially bear interest
at the annual rate set forth in Annex A thereof (the "Initial Interest
Rate") from the Original Issue Date to, but excluding, the Initial SPURS
Remarketing Date.
(b) Interest Rate(s) Subsequent to the Initial Interest Rate. If the
Initial SPURS Agent elects to purchase the Notes as described in Section
304 hereof, the Notes shall be subject to mandatory tender to the Initial
SPURS Agent on the Initial SPURS Remarketing Date, except in the limited
circumstances described in Section 304 hereof, and shall for the SPURS
Period bear interest at the SPURS Interest Rate as described in Section
304(b) hereof.
If the Initial SPURS Agent does not purchase the Notes on the Initial
SPURS Remarketing Date, thereafter each Note shall bear interest at a rate
or rates in a new SPURS Mode, a Long Term Rate Mode or a Commercial Paper
Term Mode if remarketed as provided for in Section 209 hereof, or otherwise
shall be redeemed by the Company as provided for under Section 210(b)
hereof. Each Note may bear interest for designated Interest Rate Periods
in the same or a different Interest Rate Mode from other Notes. The
interest rate for the Notes shall be established periodically by the
applicable Remarketing Agent as provided for in Section 209 hereof. Each
Note will set forth on Annex A thereof the then applicable Interest Rate
Mode of such Note, its interest rate, each Interest Rate Adjustment Date,
the Interest Rate Period and such other information indicated in the form
of Annex A attached to Exhibit A hereto.
(c) Payment of Interest. Interest shall be payable on any Note at
maturity and (i) for the Initial Interest Rate Period, on the dates set
forth on the face thereof; (ii) for any Interest Rate Period in the
Commercial Paper Term Mode, on the Interest Rate Adjustment Date commencing
the next succeeding Interest Rate Period for such Note and on such other
dates (if any) as shall be established upon conversion of such Note to the
Commercial Paper Term Mode or upon remarketing of the Note in a new
Interest Rate Period in the Commercial Paper Term Mode and set forth in
Annex A to the applicable Note; and (iii) in the Long Term Rate Mode or
SPURS Mode, no less frequently than semiannually on such dates as will be
established upon conversion of such Note to the Long Term Rate Mode or the
SPURS Mode (or upon remarketing of the Note in a new Interest Rate Period
in the Long Term Rate Mode or the SPURS Mode, as the case may be) and set
forth in Annex A to the applicable Note in the case of a fixed interest
rate, or as described below in Section 206 in the case of a floating
interest rate, and on the Interest Rate Adjustment Date commencing the next
succeeding Interest Rate Period (each such date, an "Interest Payment
Date"). Such interest will be payable to the holder thereof as of the
related Record Date, which, for any Note (x) during the Initial Interest
Rate Period is the fifteenth calendar day (whether or not a Business Day)
immediately preceding the related Interest Payment Date; (y) in the
Commercial Paper Term Mode, is the Business Day prior to the related
Interest Payment Date; and (z) in the Long Term Rate Mode or the SPURS
Mode, is the fifteenth calendar day (whether or not a Business Day)
immediately preceding the related Interest Payment Date. If any Interest
Payment Date would otherwise be a day that is not a Business Day, such
Interest Payment Date will be postponed to the next succeeding Business
Day, and no interest will accrue on such payment for the period from and
after such Interest Payment Date to the date of such payment on the next
succeeding Business Day.
(d) Computation of Interest. Interest on Notes bearing interest in
the Commercial Paper Term Mode or at a floating interest rate during an
Interest Rate Period in the Long Term Rate Mode or the SPURS Mode will be
computed on the basis of actual days elapsed over 360; provided that, if an
applicable Interest Rate Basis is the CMT Rate or Treasury Rate (each as
defined in Section 206 hereof), interest will be computed on the basis of
actual days elapsed over the actual number of days in the year. Interest
on Notes bearing interest at a fixed rate in the Long Term Rate Mode or
SPURS Mode will be computed on the basis of a year of 360 days consisting
of twelve 30-day months. Interest on Notes at the Initial Interest Rate
will be computed on the basis of a year of 360 days consisting of twelve
30-day months.
(e) Interest Rate Modes. The Interest Rate Period for each interest
rate mode shall be determined in accordance with this subsection (e)
subject to possibility of extension of such period pursuant to standby
remarketing arrangements, if any, as described in Section 209(b) hereof.
(1) Commercial Paper Term Mode. The Interest Rate Period for
any Note in the Commercial Paper Term Mode will be a period of not less
than one nor more than 364 consecutive calendar days (a "Commercial Paper
Term Period"), as determined by the Company (as described in Section 207
below) or, if not so determined, by the Remarketing Agent for such Note (in
its best judgment in order to obtain the lowest interest cost for such
Note). Each Commercial Paper Term Period will commence on the Interest
Rate Adjustment Date therefor and end on the day preceding the date
specified by such Remarketing Agent as the first day of the next Interest
Rate Period for such Note. A "Weekly Rate Period" is a Commercial Paper
Term Period and shall be a period of seven days commencing on any Interest
Rate Adjustment Date and ending on the day preceding the first day of the
next Interest Rate Period for such Note. The interest rate for any
Commercial Paper Term Period relating to a Note shall be determined not
later than 11:50 a.m., New York City time, on the Interest Rate Adjustment
Date for such Note (subject to Section 209 hereof), which is the first day
of each Interest Period for such Note.
(2) Long Term Rate Mode. The Interest Rate Period for any Note
in the Long Term Rate Mode shall be established by the Company (as
described in Section 207 hereof) as a period of more than 364 days and not
exceeding the remaining term to the Stated Maturity of such Note (a "Long
Term Rate Period"). The interest rate, or Spread (if any) and Spread
Multiplier (if any), for any Note in the Long Term Rate Mode shall be
determined not later than 11:50 a.m., New York City time, on the Interest
Rate Adjustment Date for such Note, which is the first day of each Interest
Rate Period for such Note.
(3) SPURS Mode. So long as any Note is in a SPURS Mode during
the period up to, but excluding, the applicable SPURS Remarketing Date, the
provisions set forth in this Article Two are applicable to the remarketing
of Notes generally, but only to the extent expressly provided in Article
Three. The Interest Rate Period for any Note in the SPURS Mode shall be
established by the Company (as described in Section 207 hereof) as a period
of more than 364 days and not exceeding the remaining term to the Stated
Maturity of such Note (a "SPURS Rate Period"). A SPURS Rate Period shall
consist of the period to and excluding the SPURS Remarketing Date and the
period from and including the SPURS Remarketing Date to, but excluding, the
next succeeding Interest Rate Adjustment Date, as described in Article
Three and subject to the conditions therein and otherwise herein described.
The interest rate and, in the case of a floating interest rate, the Spread
(if any), and the Spread Multiplier (if any) to the SPURS Remarketing Date
for any Note in the SPURS Mode shall be determined not later than 11:50
a.m., New York City time, on the Interest Rate Adjustment Date for such
Note, which for the SPURS Mode is the first day of each Interest Rate
Period for such Note.
Section 205. Determination of Interest Rates
The interest rate and, in the case of a floating interest rate, the
Spread (if any), and the Spread Multiplier (if any), for any Note shall be
established by the applicable Remarketing Agent in a remarketing as
provided for in Section 207 hereof or otherwise not later than the first
day of each succeeding Interest Rate Period for such Note, which must be a
Business Day (each an "Interest Rate Adjustment Date"), and will be the
minimum rate of interest and, in the case of a floating interest rate,
Spread (if any) and Spread Multiplier (if any) necessary in the judgment of
such Remarketing Agent to produce a par bid in the secondary market for
such Note on the date the interest rate is established. Such rate will be
effective for the next succeeding Interest Rate Period for such Note
commencing on such Interest Rate Adjustment Date.
In the event that (i) the applicable Remarketing Agent has been
removed or has resigned and no successor has been appointed; or (ii) such
Remarketing Agent has failed to announce the appropriate interest rate,
Spread (if any) or Spread Multiplier (if any), as the case may be, on the
Interest Rate Adjustment Date for any Note for whatever reason; or (iii)
the appropriate interest rate, Spread (if any) or Spread Multiplier (if
any), as the case may be, or Interest Rate Period cannot be determined for
any Note for whatever reason, then the next succeeding Interest Rate Period
for such Note shall be automatically converted to a Weekly Rate Period, and
the rate of interest thereon will be equal to the Federal Funds Rate (such
rate of interest being referred to herein as the "Special Interest Rate").
After any Interest Rate Adjustment Date any Beneficial Owner may
contact the Trustee or the Remarketing Agent in order to be advised of the
interest rate applicable to such Beneficial Owner's remarketed Notes. No
notice of the applicable interest rate will be sent to Beneficial Owners.
The interest rate and other terms announced by the Remarketing Agent,
absent manifest error, shall be binding and conclusive upon the Beneficial
Owners, the Company and the Trustee.
Section 206. Election and Determination of a Floating Interest Rate
by the Company
(a) While any Note bears interest in the Long Term Rate Mode or the
SPURS Mode (with respect to the period from, and including, the Interest
Rate Adjustment Date commencing such period to, but excluding, the SPURS
Remarketing Date), the Company may elect a floating interest rate by
providing notice, which shall be submitted or promptly confirmed in writing
(which includes facsimile or appropriate electronic media), received by the
Trustee and the Remarketing Agent for such Note (the "Floating Interest
Rate Notice") not less than ten (10) days prior to the Interest Rate
Adjustment Date for such Long Term Rate Period or SPURS Rate Period. The
Floating Interest Rate Notice must identify by CUSIP number or otherwise
the portion of the Note to which it relates and state the Interest Rate
Period (or portion thereof, in the case of the SPURS Mode) therefor to
which it relates. Each Floating Interest Rate Notice must also state the
Interest Rate Basis or Bases, the initial Interest Reset Date, the Interest
Reset Period and Interest Reset Dates, the Interest Rate Period and
Interest Payment Dates, the Index Maturity and the Floating Rate Maximum
Interest Rate and/or Floating Rate Minimum Interest Rate, if any. If one
or more of the applicable Interest Rate Bases is LIBOR or the CMT Rate, the
Floating Interest Rate Notice shall also specify the Index Currency and
Designated LIBOR Page or the Designated CMT Maturity Index and Designated
CMT Telerate Page, respectively. A form of Floating Interest Rate Notice
is attached hereto as Exhibit C.
If any Note bears interest at a floating rate in a Long Term Rate
Period or SPURS Rate Period, such Note shall bear interest at the rate
determined by reference to the applicable Interest Rate Basis or Bases (a)
plus or minus the Spread (if any) and/or (b) multiplied by the Spread
Multiplier (if any) specified by the Remarketing Agent, in the case of a
Long Term Rate Period, or the SPURS Agent, in the case of a SPURS Rate
Period. Commencing on the Interest Rate Adjustment Date for such Interest
Rate Period, the rate at which interest on such Note will be payable shall
be reset as of each Interest Reset Date during such Interest Rate Period
specified in the applicable Floating Interest Rate Notice.
The applicable floating interest rate on any Note during any Interest
Rate Period shall be determined by reference to the applicable Interest
Rate Basis or Bases, which may include (i) the CD Rate, (ii) the CMT Rate,
(iii) the Federal Funds Rate, (iv) LIBOR, (v) the Prime Rate, (vi) the
Treasury Rate or (vii) such other Interest Rate Basis or interest rate
formula as may be specified in the applicable Floating Interest Rate Notice
(each, an "Interest Rate Basis").
Unless otherwise specified in the applicable Floating Interest Rate
Notice, the interest rate with respect to each Interest Rate Basis shall be
determined in accordance with the applicable provisions of this Section
206. Except as set forth above or in the applicable Floating Interest Rate
Notice, the interest rate in effect on each day shall be (i), if such day
is an Interest Reset Date, the interest rate determined as of the Interest
Determination Date immediately preceding such Interest Reset Date or (ii),
if such day is not an Interest Reset Date, the interest rate determined as
of the Interest Determination Date immediately preceding the most recent
Interest Reset Date. If any Interest Reset Date would otherwise be a day
that is not a Business Day, such Interest Reset Date shall be postponed to
the next succeeding Business Day, unless LIBOR is an applicable Interest
Rate Basis and such Business Day falls in the next succeeding calendar
month, in which case such Interest Reset Date shall be the immediately
preceding Business Day. In addition, if the Treasury Rate is an applicable
Interest Rate Basis and the Interest Determination Date would otherwise
fall on an Interest Reset Date, then such Interest Reset Date shall be
postponed to the next succeeding Business Day.
The applicable Floating Interest Rate Notice will specify whether the
rate of interest will be reset daily, weekly, monthly, quarterly,
semiannually or annually or on such other specified basis (each, an
"Interest Reset Period") and the dates on which such rate of interest will
be reset (each, an "Interest Reset Date"). Unless otherwise specified in
the applicable Floating Interest Rate Notice, the Interest Reset Dates will
be, in the case of a floating interest rate which resets: (i) daily, each
Business Day; (ii) weekly, the Wednesday of each week (unless the Treasury
Rate is an applicable Interest Rate Basis, in which case the Tuesday of
each week except as described below); (iii) monthly, the third Wednesday of
each month; (iv) quarterly, the third Wednesday of March, June, September
and December of each year; (v) semiannually, the third Wednesday of the two
months specified in the applicable Floating Interest Rate Notice; and (vi)
annually, the third Wednesday of the month specified in the applicable
Floating Interest Rate Notice.
The interest rate applicable to each Interest Reset Period commencing
on the related Interest Reset Date shall be the rate determined as of the
applicable Interest Determination Date. The "Interest Determination Date"
shall mean (i), with respect to the CD Rate, the CMT Rate, the Federal
Funds Rate and the Prime Rate, the second Business Day immediately
preceding the applicable Interest Reset Date; (ii) with respect to LIBOR,
the second London Business Day immediately preceding the applicable
Interest Reset Date, unless the Index Currency is British pounds sterling,
in which case it shall mean the applicable Interest Reset Date; and (iii)
with respect to the Treasury Rate, the day within the week in which the
applicable Interest Reset Date falls upon which day Treasury Bills are
normally auctioned; provided, however, that if an auction is held on the
Friday of the week preceding the applicable Interest Reset Date, the
"Interest Determination Date" shall mean such preceding Friday. If the
interest rate of any Note is a floating interest rate determined with
reference to two or more Interest Rate Bases specified in the applicable
Floating Interest Rate Notice, the Interest Determination Date pertaining
to the Note shall be the most recent Business Day which is at least two
Business Days prior to the applicable Interest Reset Date on which each
Interest Rate Basis shall determinable. Each Interest Rate Basis will be
determined as of such date, and the applicable interest rate shall take
effect on the related Interest Reset Date.
Either or both of the following may also apply to the floating
interest rate on any Note for an Interest Rate Period: (i) a floating rate
maximum interest rate, or ceiling, that may accrue during any Interest
Reset Period (the "Floating Rate Maximum Interest Rate") and (ii) a
floating rate minimum interest rate, or floor, that may accrue during any
Interest Reset Period (the "Floating Rate Minimum Interest Rate"). In
addition to any Floating Rate Maximum Interest Rate that may apply, the
interest rate on any Note shall in no event be higher than the maximum rate
permitted under the law of the State of New York, as the same may be
modified by United States laws of general application.
Except as provided below or in the applicable Floating Interest Rate
Notice, interest will be payable, in the case of floating interest rates
which reset: (i) daily, weekly or monthly, on the third Wednesday of each
month; (ii) quarterly, on the third Wednesday of March, June, September and
December of each year; (iii) semiannually, on the third Wednesday of the
two months of each year specified in the applicable Floating Interest Rate
Notice; and (iv) annually, on the third Wednesday of the month of each year
specified in the applicable Floating Interest Rate Notice and, in each
case, on the Business Day immediately following the applicable Long Term
Rate Period or SPURS Rate Period, as the case may be. If any Interest
Payment Date for the payment of interest at a floating rate (other than
following the end of the applicable Long Term Rate Period or SPURS Rate
Period, as the case may be) would otherwise be a day that is not a Business
Day, such Interest Payment Date will be postponed to the next succeeding
Business Day, except that if LIBOR is an applicable Interest Rate Basis and
such Business Day falls in the next succeeding calendar month, such
Interest Payment Date will be the immediately preceding Business Day.
All percentages resulting from any calculation of floating interest
rates will be rounded to the nearest one hundred thousandth of a percentage
point, with five one-millionths of a percentage point rounded upwards
(e.g., 9.876545% (or .09876545) would be rounded to 9.87655% (or
.0987655)), and all amounts used in or resulting from such calculation will
be rounded, in the case of United States dollars, to the nearest cent or,
in the case of a foreign currency or composite currency, to the nearest
unit (with one-half cent or unit being rounded upwards).
Accrued floating rate interest will be calculated by multiplying the
principal amount of the applicable Note by an accrued interest factor. Such
accrued interest factor will be computed by adding the interest factor
calculated for each day in the applicable Interest Reset Period. Unless
otherwise specified in the applicable Floating Interest Rate Notice, the
interest factor for each such day will be computed by dividing the interest
rate applicable to such day by 360, if an applicable Interest Rate Basis is
the CD Rate, the Federal Funds Rate, LIBOR or the Prime Rate, or by the
actual number of days in the year if an applicable Interest Rate Basis is
the CMT Rate or the Treasury Rate. Unless otherwise specified in the
applicable Floating Interest Rate Notice, if the floating interest rate is
calculated with reference to two or more Interest Rate Bases, the interest
factor will be calculated in each period in the same manner as if only one
of the applicable Interest Rate Bases applied as specified in the
applicable Floating Interest Rate Notice.
For any Note bearing interest at a floating rate, the applicable
Remarketing Agent shall determine the interest rate in effect from the
Interest Rate Adjustment Date for such Note to the initial Interest Reset
Date. The interest rate in effect for each Interest Reset Period thereafter
shall be determined by a calculation agent selected by the Company (a
"Calculation Agent"). Upon request of the Beneficial Owner of a Note,
after any Interest Rate Adjustment Date, the Calculation Agent or the
Remarketing Agent shall disclose the interest rate and, in the case of a
floating interest rate, Interest Rate Basis or Bases, Spread (if any) and
Spread Multiplier (if any), and in each case the other terms applicable to
such Note then in effect and, if determined, the interest rate that will
become effective as a result of a determination made for the next
succeeding Interest Reset Date with respect to such Note. Except as
described herein with respect to a Note earning interest at floating rates,
the Beneficial Owner of a note shall not be entitled to receive notice of
the applicable interest rate, Spread (if any) or Spread Multiplier (if
any).
Unless otherwise specified in the applicable Floating Interest Rate
Notice, the "Calculation Date," if applicable, pertaining to any Interest
Determination Date will be the earlier of (i) the tenth calendar day after
such Interest Determination Date or, if such day is not a Business Day, the
next succeeding Business Day or (ii) the Business Day immediately preceding
the applicable Interest Payment Date or the Stated Maturity, as the case
may be.
(b) Interest Rate Bases for Floating Interest Rates. The basis for
the floating interest rate on any Note during any Interest Rate Period may
include, but is not limited to, any of the following bases (each, an
"Interest Rate Basis"):
(1) If an Interest Rate Basis for any Note is specified in the
applicable Floating Interest Rate Notice as the "CD Rate," the CD Rate
shall mean, with respect to any Interest Determination Date relating to a
Note for which the interest rate is determined with reference to the CD
Rate (a "CD Rate Interest Determination Date"), the rate on such date for
negotiable United States dollar certificates of deposit having the Index
Maturity specified in the applicable Floating Interest Rate Notice as
published in H.15(519) under the heading "CDs (Secondary Market)," or, if
not published by 3:00 p.m., New York City time, on the related Calculation
Date, the rate on such CD Rate Interest Determination Date for negotiable
United States dollar certificates of deposit of the Index Maturity
specified in the applicable Floating Interest Rate notice as published in
Composite Quotations under the heading "Certificates of Deposit." If such
rate is not yet published in either H.15(519) or Composite Quotations
by 3:00 p.m., New York City time, on the related Calculation Date, then the
CD Rate on such CD Rate Interest Determination Date shall be calculated by
the Calculation Agent and shall be the arithmetic mean of the secondary
market offered rates as of 10:00 a.m., New York City time, on such CD Rate
Interest Determination Date, of three leading nonbank dealers in negotiable
United States dollar certificates of deposit in the City of New York (which
may include the Remarketing Agent or its affiliates) selected by the
Calculation Agent, after consultation with the Company, for negotiable
United States dollars certificates of deposit of major United States money
center banks for negotiable certificates of deposit with a remaining
maturity closest to the Index Maturity specified in the applicable Floating
Interest Rate Notice in an amount that is representative for a single
transaction in that market at that time; provided, however, that if the
dealers so selected by the Calculation Agent are not quoting as mentioned
in this sentence, the CD Rate determined as of such CD Rate Interest
Determination Date will be the CD Rate in effect on such CD Rate Interest
Determination Date.
(2) If an Interest Rate Basis for any Note is specified in the
applicable Floating Interest Rate Notice as the "CMT Rate," the CMT Rate
shall mean, with respect to any Interest Determination Date relating to a
Note for which the interest rate is determined with reference to the CMT
Rate (a "CMT Rate Interest Determination Date"), the rate displayed on the
Designated CMT Telerate Page under the caption "...Treasury Constant
Maturities ... Federal Reserve Board Release H.15 ... Mondays Approximately
3:45 P.M.," under the column for the Designated CMT Maturity Index for (i),
if the Designated CMT Telerate Page is 7055, the rate on such CMT Rate
Interest Determination Date and (ii) if the Designated CMT Telerate Page is
7052, the weekly or monthly average, as specified in the Floating Interest
Rate Notice, for the week or the month, as applicable, ended immediately
preceding the week or the month, as applicable, in which the related CMT
Rate Interest Determination Date occurs. If such rate is no longer
displayed on the relevant page or is not displayed by 3:00 p.m., New York
City time, on the related Calculation Date, then the CMT Rate for such CMT
Rate Interest Determination Date shall be such treasury constant maturity
rate for the Designated CMT Maturity Index as published in H.15(519). If
such rate is no longer published or is not published by 3:00 p.m., New York
City time, on the related Calculation Date, then the CMT Rate on such CMT
Rate Interest Determination Date shall be such treasury constant maturity
rate for the Designated CMT Maturity Index (or other United States Treasury
rate for the Designated CMT Maturity Index) for the CMT Rate Interest
Determination Date with respect to such Interest Reset Date as may then be
published by either the Board of Governors of the Federal Reserve System or
the United States Department of the Treasury that the Calculation Agent
determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in H.15(519). If such
information is not provided by 3:00 p.m., New York City time, on the
related Calculation Date, then the CMT Rate on the CMT Rate Interest
Determination Date shall be calculated by the Calculation Agent and shall
be a yield to maturity, based on the arithmetic mean of the secondary
market closing offer side prices as of approximately 3:30 p.m., New York
City time, on such CMT Rate Interest Determination Date reported, according
to their written records, by three leading primary United States government
securities dealers each, a "Reference Dealer") in the City of New York
(which may include the Remarketing Agent or its affiliates) selected by the
Calculation Agent after consultation with the Company (from five such
Reference Dealers selected by the Calculation Agent, after consultation
with the Company, and eliminating the highest quotation (or, in the event
of equality, one of the highest) and the lowest quotation (or, in the event
of equality, one of the lowest)), for the most recently issued direct
noncallable fixed rate obligations of the United States ("Treasury Notes")
with an original maturity of approximately the Designated CMT Maturity
Index and a remaining term to maturity of not less than such Designated CMT
Maturity Index minus one year. If the Calculation Agent is unable to
obtain three such Treasury Note quotations, the CMT Rate on such CMT Rate
Interest Determination Date shall be calculated by the Calculation Agent
and shall be a yield to maturity based on the arithmetic mean of the
secondary market offer side prices as of approximately 3:30 p.m., New York
City time, on such CMT Rate Interest Determination Date of three Reference
Dealers in the City of New York (from five such Reference Dealers selected
by the Calculation Agent, after consultation with the Company, and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for Treasury Notes with an original maturity of the number of
years that is the next highest to the Designated CMT Maturity Index and a
remaining term to maturity closest to the Designated CMT Maturity Index and
in an amount of at least U.S. $100 million. If three or four (and not
five) of such Reference Dealers are quoting as described above, then the
CMT Rate shall be based on the arithmetic mean of the offer prices obtained
and neither the highest nor the lowest of such quotes shall be eliminated;
provided, however, that if fewer than three Reference Dealers so selected
by the Calculation Agent, after consultation with the Company, are quoting
as mentioned herein, the CMT Rate determined as of such CMT Rate Interest
Determination Date shall be the CMT Rate in effect on such CMT Rate
Interest Determination Date. If two Treasury Notes with an original
maturity as described in the second preceding sentence have remaining terms
to maturity equally close to the Designated CMT Maturity Index, the
Calculation Agent, after consultation with the Company, shall obtain from
five Reference Dealers quotations for the Treasury Note with the shorter
remaining term to maturity.
(3) If an Interest Rate Basis for any Note is specified in the
applicable Floating Interest Rate Notice as the "Federal Funds Rate," the
Federal Funds Rate shall mean, with respect to any Interest Determination
Date relating to a Note for which the interest rate is determined with
reference to the Federal Funds Rate (a "Federal Funds Rate Interest
Determination Date"), the rate on such date for United States dollar
federal funds as published in H.15(519) under the heading "Federal Funds
(Effective)" or, if not published by 3:00 p.m., New York City time, on the
Calculation Date, the rate on such Federal Funds Rate Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate." If such rate is not published in either
H.15(519) or Composite Quotations by 3:00 p.m., New York City time, on the
related Calculation Date, then the Federal Funds Rate on such Federal Funds
Rate Interest Determination Date shall be calculated by the Calculation
Agent and shall be the arithmetic mean of the rates for the last
transaction in overnight United States dollar federal funds arranged by
three leading brokers of federal funds transactions in The City of New York
(which may include the Remarketing Agent or its affiliates) selected by the
Calculation Agent after consultation with the Company, prior to 9:00 a.m.,
New York City time, on such Federal Funds Rate Interest Determination Date;
provided, however, that if the brokers so selected by the Calculation Agent
are not quoting as mentioned in this sentence, the Federal Funds Rate
determined as of such Federal Funds Rate Interest Determination Date shall
be the Federal Funds Rate in effect on such Federal Funds Rate Interest
Determination Date.
(4) If an Interest Rate Basis for any Note is specified in the
applicable Floating Interest Rate Notice as "LIBOR," LIBOR shall mean the
rate determined by the Calculation Agent as of the applicable Interest
Determination Date (a "LIBOR Interest Determination Date") in accordance
with the following provisions:
(i) If (a) "LIBOR Reuters" is specified in the applicable
Floating Interest Rate Notice, the arithmetic mean of the offered
rates (unless the Designated LIBOR Page by its terms provides
only for a single rate, in which case such single rate will be
used) for deposits in the Index Currency having the Index
Maturity specified in the applicable Floating Interest Rate
Notice, commencing on the applicable Interest Reset Date, that
appear (or, if only a single rate is required as aforesaid,
appears) on the Designated LIBOR Page as of 11:00 a.m., London
time, on such LIBOR Interest Determination Date, or (b) "LIBOR
Telerate" is specified in the applicable Floating Interest Rate
Notice, or if neither "LIBOR Reuters" nor "LIBOR Telerate" is
specified in the applicable Floating Interest Rate Notice as the
method for calculating LIBOR, the rate for deposits in the Index
Currency having the Index Maturity specified in the applicable
Floating Interest Rate Notice, commencing on such Interest Reset
Date, that appears on the Designated LIBOR Page as of 11:00 a.m.,
London time, on such LIBOR Interest Determination Date. If fewer
than two such offered rates appear, or if no such rate appears,
as applicable, LIBOR on such LIBOR Interest Determination Date
will be determined in accordance with the provisions described in
clause (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on
which fewer than two offered rates appear, or no rate appears, as
the case may be, on the Designated LIBOR Page as specified in
clause (i) above, the Calculation Agent shall request the
principal London offices of each of four major reference banks in
the London interbank market, as selected by the Calculation
Agent, after consultation with the Company, to provide the
Calculation Agent with its offered quotation for deposits in the
Index Currency for the period of the Index Maturity specified in
the applicable Floating Interest Rate Notice, commencing on the
applicable Interest Reset Date, to prime banks in the London
interbank market at approximately 11:00 a.m., London time, on
such LIBOR Interest Determination Date and in a principal amount
that is representative for a single transaction in such Index
Currency in such market at such time. If at least two such
quotations are so provided, then LIBOR on such LIBOR Interest
Determination Date shall be the arithmetic mean of such
quotations. If fewer than two such quotations are so provided,
then LIBOR on such LIBOR Interest Determination Date shall be the
arithmetic mean of the rates quoted at approximately 11:00 a.m.,
in the applicable Principal Financial Center, on such LIBOR
Interest Determination Date by three major banks in such
Principal Financial Center selected by the Calculation Agent,
after consultation with the Company, for loans in the Index
Currency to leading European banks, having the Index Maturity
specified in the applicable Floating Interest Rate Notice and in
a principal amount that is representative for a single
transaction in such Index Currency in such market at such time;
provided, however, that if the banks so selected by the
Calculation Agent are not quoting as mentioned in this sentence,
LIBOR determined as of such LIBOR Interest Determination Date
shall be LIBOR in effect on such LIBOR Interest Determination
Date.
(5) If an Interest Rate Basis for any Note is specified in the
applicable Floating Interest Rate Notice as the "Prime Rate," Prime Rate
shall mean, with respect to any Interest Determination Date relating to a
Note for which the interest rate is determined with reference to the Prime
Rate (a "Prime Rate Interest Determination Date"), the rate on such date as
such rate is published in H.15(519) under the heading "Bank Prime Loan."
If such rate is not published prior to 3:00 p.m., New York City time, on
the related Calculation Date, then the Prime Rate shall be the arithmetic
mean of the rates of interest publicly announced by each bank that appears
on the Reuters Screen U.S. PRIME 1 Page (as defined below) as such bank's
prime rate or base lending rate as in effect for such Prime Rate Interest
Determination Date. If fewer than four such rates appear on the Reuters
Screen U.S. PRIME 1 Page for such Prime Rate Interest Determination Date,
the Prime Rate shall be the arithmetic mean of the prime rates quoted on
the basis of the actual number of days in the year divided by a 360-day
year as of the close of business on such Prime Rate Interest Determination
Date by four major money center banks (which may include the Calculation
Agent) in the City of New York selected by the Calculation Agent, after
consultation with the Company. If fewer than four such quotations are so
provided, the Prime Rate shall be the arithmetic mean of four prime rates
quoted on the basis of the actual number of days in the year divided by a
360-day year as of the close of business on such Prime Rate Interest
Determination Date as furnished in the City of New York by the major money
center banks, if any, that have provided such quotations and by as many
substitute banks or trust companies (which may include the Calculation
Agent) as necessary in order to obtain four such prime rate quotations,
provided such substitute banks or trust companies are organized and doing
business under the laws of the United States, or any State thereof, have
total equity capital of at least U.S. $500 million and are each subject to
supervision or examination by Federal or State authority, selected by the
Calculation Agent, after consultation with the Company, to provide such
rate or rates; provided, however, that if the banks or trust companies so
selected by the Calculation Agent are not quoting as mentioned in this
sentence, the Prime Rate determined as of such Prime Rate Interest
Determination Date shall be the Prime Rate in effect on such Prime Rate
Interest Determination Date.
(6) If an Interest Rate Basis for any Note is specified in the
applicable Floating Interest Rate Notice as the "Treasury Rate," Treasury
Rate shall mean, with respect to any Interest Determination Date relating
to a Note for which the interest rate is determined with reference to the
Treasury Rate (a "Treasury Rate Interest Determination Date"), as the rate
from the auction held on such Treasury Rate Interest Determination Date
(the "Auction") of direct obligations of the United States ("Treasury
Bills") having the Index Maturity specified in the applicable Floating
Interest Rate Notice, as such rate is published in H.15(519) under the
heading "Treasury Bills-auction average (investment)" or, if not published
by 3:00 p.m., New York City time, on the related Calculation Date, the
auction average rate of such Treasury Bills (expressed as a bond equivalent
on the basis of a year of 365 or 366 days, as applicable, and applied on a
daily basis) as otherwise announced by the United States Department of the
Treasury. In the event that the results of the Auction of Treasury Bills
having the Index Maturity specified in the applicable Floating Interest
Rate Notice are not reported as provided above by 3:00 p.m., New York City
time, on such Calculation Date, or if no such Auction is held, then the
Treasury Rate shall be calculated by the Calculation Agent, and will be a
yield to maturity (expressed as a bond equivalent on the basis of a year of
365 or 366 days, as applicable, and applied on a daily basis) of the
arithmetic mean of the secondary market bid rates, as of approximately 3:30
p.m., New York City time, on such Treasury Rate Interest Determination
Date, of three leading primary United States government securities dealers
(which may include the Remarketing Agent or its affiliates) selected by the
Calculation Agent, after consultation with the Company, for the issue of
Treasury Bills with a remaining maturity closest to the Index Maturity
specified in the applicable Floating Interest Rate Notice; provided,
however, that if the dealers so selected by the Calculation Agent are not
quoting as mentioned in this sentence, the Treasury Rate determined as of
such Treasury Rate Interest Determination Date shall be the Treasury Rate
in effect on such Treasury Rate Interest Determination Date.
Section 207. Conversion Between Interest Rate Modes by the Company
The Company may, at its option, convert the Interest Rate Mode of the
Notes upon (i) any Interest Rate Adjustment Date, (ii) election of a SPURS
Agent to remarket the Notes, subject to the provisions of Section 305
hereof, or (iii) failure of the SPUR Agent to purchase the Notes on the
applicable SPURS Remarketing Date as described in Section 304 hereof, in
each case in accordance with the procedures provided for in this Section.
(a) Conversion Between Commercial Paper Term Periods. Each Note in a
Commercial Paper Term Period may be remarketed into the same Interest Rate
Period or converted at the option of the Company to a different Commercial
Paper Term Period on any Interest Rate Adjustment Date upon either receipt
by the Remarketing Agent and the Trustee of a notice, which will be
submitted promptly confirmed in writing (which includes facsimile or
appropriate electronic media), from the Company (a "Conversion Notice")
prior to 9:30 a.m., New York City time, or the remarketing of such Note,
whichever occurs later, on such Interest Rate Adjustment Date.
(b) Conversion from the Commercial Paper Term Mode to the Long Term
Rate Mode or the SPURS Mode. Each Note in the Commercial Paper Term Mode
may be converted at the option of the Company to the Long Term Rate Mode or
the SPURS Mode on any Interest Rate Adjustment Date upon receipt not less
than ten (10) days prior to such Interest Rate Adjustment Date by the
Remarketing Agent and the Trustee of a Conversion Notice from the Company.
(c) Conversion Between Long Term Rate Periods or from the Long Term
Rate Mode or the SPURS Mode to the Commercial Paper Term Mode, Long Term
Rate Mode or the SPURS Mode. Each Note in a Long Term Rate Period may be
remarketed in the same Interest Rate Period or converted at the option of
the Company to a different Long Term Rate Period or from the Long Term Rate
Mode to the Commercial Paper Term Mode or the SPURS Mode, or from the SPURS
Mode to a different SPURS Mode or to the Long Term Rate Mode or the
Commercial Paper Term Mode, on any Interest Rate Adjustment Date for such
Note upon receipt by the Trustee and the Remarketing Agent for such Note of
a Conversion Notice from the Company not less than ten (10) days prior to
such Interest Rate Adjustment Dates; provided that the notice required for
conversion from the initial SPURS Mode shall not be required until the
latest of the day after the Initial SPURS Agent notifies the Company that
it will not purchase the Notes for remarketing, the day the Initial SPURS
Agent fails to so purchase the Notes or the day the Company elects to
convert the Notes to a new Interest Rate Mode after the Initial SPURS Agent
has elected to remarket the Notes.
(d) Conversion Notice. Each Conversion Notice must state each Note
to which it relates and the new Interest Rate Mode (if applicable), the new
Interest Rate Period, the date of the applicable conversion (the
"Conversion Date") and, with respect to any Long Term Rate Period, any
optional redemption or repayment terms for each such Note.
(e) Revocation or Change of Conversion Notice or Floating Interest
Rate Notice. The Company may, upon written notice received by the Trustee
and the applicable Remarketing Agent, revoke any Conversion Notice or
Floating Interest Rate Notice or change the Interest Rate Mode to which
such Conversion Notice relates or change any Floating Interest Rate Notice
up to 9:30 a.m., New York City time, on the Conversion Date, subject to the
limitation set forth in subsection (f) of this Section. If the Company
revokes a Conversion Notice or the Trustee and the Remarketing Agent fail
to receive a Conversion Notice from the Company by the specified date in
advance of the Interest Rate Adjustment Date for a Note, the Note shall be
converted automatically to the Weekly Rate Period.
(f) Limitation on Conversion, Change of Conversion Notice or Floating
Interest Rate Notice and Revocation. Notwithstanding the foregoing
subsections (a), (b), (c), (d) and (e), the Company may not, without the
consent of the applicable Remarketing Agent, convert any Note or revoke or
change any Conversion Notice or Floating Interest Rate Notice at or after
the time at which such Remarketing Agent has determined the interest rate,
or Spread (if any) and Spread Multiplier (if any), for any Note being
remarketed (i.e., the time at which such Note has been successfully
remarketed, subject to settlement on the related Interest Rate Adjustment
Date). The Remarketing Agent may advise the Company of indicative rates
from time to time, or at any time upon the request of the Company, prior to
making such determination of the interest rate, Spread or Spread
Multiplier, as the case may be.
Section 208. Automatic Tender of Notes on the Interest Rate
Adjustment Date
Each Note shall be automatically tendered for purchase, or deemed
tendered for purchase, on each Interest Rate Adjustment Date relating
thereto. Notes shall be purchased or redeemed on the Interest Rate
Adjustment Date relating thereto as described in Section 209 or 210 hereof.
Section 209. Remarketing
(a) Appointment of Remarketing Agent. In connection with the
conversion by the Company of any Note as set forth in Section 207 hereof,
the Company shall enter into a remarketing agreement with a Remarketing
Agent on or prior to the remarketing of such Notes, which Remarketing Agent
shall be responsible for the remarketing of such Notes. When any Note is
tendered under Section 208 hereof to the Remarketing Agent for remarketing,
the Remarketing Agent will use its reasonable efforts to remarket such Note
on behalf of the Beneficial Owner thereof at a price equal to 100% of the
principal amount thereof. The Remarketing Agent may purchase tendered
Notes for its own account in a remarketing, but will not be obligated to do
so. The Company may offer to purchase Notes in a remarketing, provided
that the interest rate established with respect to Notes in such
remarketing is not different from the interest rate that would have been
established if the Company had not purchased such Notes. Any Notes for
which the Company shall have given a notice of redemption to the Trustee
and the Remarketing Agent will not be considered in a remarketing.
(b) Remarketing Procedures. With respect to each Note for which
there is to be established an interest rate from time to time by a
Remarketing Agent responsible for the remarketing thereof, such interest
rate shall be set in accordance with the procedures of paragraphs (i) and
(ii) below.
(i) Determination of Interest Rate. By 11:00 a.m., New York
City time, on the Interest Rate Adjustment Date for any Note, the
applicable Remarketing Agent will determine the interest rate for such Note
being remarketed to the nearest one hundred thousandth (0.00001) of one
percent per annum for the next Interest Rate Period in the case of a fixed
interest rate, and the Spread (if any) and Spread Multiplier (if any) in
the case of a floating interest rate; provided, that between 11:00 a.m.,
New York City time, and 11:50 a.m., New York City time, the Remarketing
Agent and the Standby Remarketing Agent, if any, will use their reasonable
efforts to determine the interest rate for any Notes not successfully
remarketed as of the applicable deadline specified in this paragraph. In
determining the applicable interest rate for such Note and other terms,
such Remarketing Agent will, after taking into account market conditions as
reflected in the prevailing yields on fixed and variable rate taxable debt
securities, (i) consider the principal amount of all Notes tendered or to
be tendered on such date and the principal amount of such Notes prospective
purchasers are or may be willing to purchase and (ii) contact, by telephone
or otherwise, prospective purchasers and ascertain the interest rates
therefor at which they would be willing to hold or purchase such Notes.
(ii) Notification of Results; Settlement. By 12:30 p.m., New
York City time, on the Interest Rate Adjustment Date of any Notes, the
applicable Remarketing Agent will notify the Company and the Trustee in
writing (which may include facsimile or other electronic transmission), of
(i) the interest rate or, in the case of a floating interest rate, the
initial interest rate, the Spread and Spread Multiplier and the initial
Interest Reset Date, applicable to such Notes for the next Interest Rate
Period, (ii) the Interest Rate Adjustment Date, (iii) the Interest Payment
Dates for any Notes in the Commercial Paper Term Mode (if other than the
Interest Rate Adjustment Date), the Long Term Rate Mode or the SPURS Mode,
(iv) the optional redemption terms, if any, and early remarketing terms, if
any, in the case of a remarketing into a Long Term Rate Period, (v) the
aggregate principal amount of tendered Notes and (vi) the aggregate
principal amount of such tendered Notes that such Remarketing Agent was
able to remarket, at a price equal to 100% of the principal amount thereof
plus accrued interest, if any. Immediately after receiving such notice
and, in any case, not later than 1:30 p.m., New York City time, the Trustee
will transmit such information and any other settlement information
required by the Depositary, to the extent such information has been
provided to the Trustee, to the Depositary in accordance with the
Depositary's procedures as in effect from time to time.
By telephone at approximately 1:00 p.m., New York City time, on such
Interest Rate Adjustment Date, the applicable Remarketing Agent will advise
each purchaser of Notes (or the DTC Participant of each such purchaser who
it is expected in turn will advise such purchaser) of the principal amount
of such Notes that such purchaser is to purchase.
Each purchaser of Notes in a remarketing will be required to give
instructions to its DTC Participant to pay the purchase price therefor in
same day funds to the applicable Remarketing Agent against delivery of the
principal amount of such Notes by book-entry through the Depositary by 3:00
p.m., New York City time, on the Interest Rate Adjustment Date.
All tendered Notes will be automatically delivered to the account of
the Trustee (or such other account meeting the requirements of the
Depositary's procedures as in effect from time to time), by book-entry
through the Depositary against payment of the purchase price or redemption
price therefor, on the Interest Rate Adjustment Date relating thereto.
The applicable Remarketing Agent will make, or cause the Trustee to
make, payment to the DTC Participant of each tendering Beneficial Owner of
Notes subject to a remarketing, by book-entry through the Depositary by the
close of business on the Interest Rate Adjustment Date against delivery
through the Depositary of such Beneficial Owner's tendered Notes, of the
purchase price for tendered Notes that have been sold in the remarketing.
If any such Notes were purchased pursuant to a Special Mandatory Purchase,
subject to receipt of funds from the Company or, if applicable, an
institution providing credit support, as the case may be, the Trustee will
make such payment of the purchase price of such Notes plus accrued
interest, if any, to such date.
The transactions described above for a remarketing of any Notes will
be executed on the Interest Rate Adjustment Date for such Notes through the
Depositary in accordance with the procedures of the Depositary, and the
accounts of the respective the DTC Participants will be debited and
credited and such Notes delivered by book-entry as necessary to effect the
purchases and sales thereof, in each case as determined in the related
remarketing.
Except as otherwise set forth in Section 210 hereof, any Notes
tendered in a remarketing will be purchased solely out of the proceeds
received from purchasers of such Notes in such remarketing, and none of the
Trustee, the applicable Remarketing Agent, any Standby Remarketing Agent or
the Company will be obligated to provide funds to make payment upon any
Beneficial Owner's tender in a remarketing.
Although tendered Notes will be subject to purchase by a Remarketing
Agent in a remarketing, such Remarketing Agent and any Standby Remarketing
Agent will not be obligated to purchase any such Notes.
The settlement and remarketing procedures described above, including
provisions for payment by purchasers of tendered Notes or for payment to
selling Beneficial Owners of tendered Notes, may be modified to the extent
required by the Depositary. In addition, each Remarketing Agent may, in
accordance with the terms of the Indenture, modify the settlement and
remarketing procedures set forth above in order to facilitate the
settlement and remarketing process.
As long as the Depositary's nominee holds the certificates
representing the Notes in the book-entry system of the Depositary, no
certificates for such Notes will be delivered by any selling Beneficial
Owner to reflect any transfer of Notes effected in any remarketing.
The Trustee shall confirm to the Depositary the interest rate for the
following Interest Rate Period in accordance with the Depositary's
procedures as in effect from time to time.
The interest rate announced by the applicable Remarketing Agent,
absent manifest error, shall be binding and conclusive upon the Beneficial
Owners, the Company and the Trustee.
(c) Failed Remarketing. Notes not successfully remarketed will be
subject to Special Mandatory Purchase by the Company as set forth in
Section 210 hereof.
Section 210. Purchase and Redemption of Notes
(a) Special Mandatory Purchase. Subject to certain exceptions, if on
any Interest Rate Adjustment Date for any Notes, the applicable Remarketing
Agent and the applicable Standby Remarketing Agent(s) have not remarketed
all such Notes, the Notes that have not been remarketed are subject to
Special Mandatory Purchase (a "Special Mandatory Purchase") by the Company.
The Company is obligated to pay all accrued and unpaid interest, if any, on
unremarketed Notes to such Interest Rate Adjustment Date. Payment of the
principal amount of unremarketed Notes by the Company, and payment of
accrued and unpaid interest, if any, by the Company, will be made by
deposit of same-day funds with the Trustee (or such other account meeting
the requirements of the Depositary's procedures as in effect from time to
time) irrevocably in trust for the benefit of the Beneficial Owners of
Notes subject to Special Mandatory Purchase by 3:00 p.m., New York City
time, on such Interest Rate Adjustment Date.
Failure by the Company to purchase Notes pursuant to a Special
Mandatory Purchase will constitute an Event of Default under the Indenture
as set forth in Section 401 hereof in which event the date of such failure
shall constitute a date of Maturity for such Notes and the principal
thereof may be declared due and payable in the manner and with the effect
provided in the Indenture. Following such failure to pay pursuant to a
Special Mandatory Purchase, such Notes will bear interest at the Special
Interest Rate as provided for in Section 205 hereof.
(b) Optional Redemption on any Interest Rate Adjustment Date. Each
Note will be subject to redemption at the option of the Company in whole or
in part on any Interest Rate Adjustment Date relating thereto without
notice to the holders thereof at a redemption price equal to 100% of the
principal amount thereof.
(c) Redemption While Notes are in the Long Term Rate Mode. Any Notes
in the Long Term Rate Mode are subject to redemption at the option of the
Company at the times and upon the terms specified at the time of conversion
to or within such Long Term Rate Mode.
(d) Allocation. Except in the case of a Special Mandatory Purchase,
if the Notes are to be redeemed in part, the Depositary, after receiving
notice of redemption specifying the aggregate principal amount of Notes to
be so redeemed, will determine by lot (or otherwise in accordance with the
procedures of the Depositary) the principal amount of such Notes to be
redeemed from the account of each DTC Participant. After making its
determination as described above, the Depositary will give notice of such
determination to each DTC Participant from whose account such Notes are to
be redeemed. Each such DTC Participant, upon receipt of such notice will
in turn determine the principal amount of Notes to be redeemed from the
accounts of the Beneficial Owners of such Notes for which it serves as DTC
Participant, and give notice of such determination to the Remarketing
Agent.
Section 211. Form and Other Terms of the Notes
(a) Attached hereto as Exhibit A is the form of Note, which form is
hereby established as the form in which Notes may be issued bearing
interest at the Initial Interest Rate or in the Commercial Paper Term Mode,
the Long Term Rate Mode or the SPURS Mode. Annex A to Exhibit A is deemed
to be a part of such Note and such Annex may be changed upon the mutual
agreement of the Company and the Trustee to reflect changes occasioned by
remarketings.
(b) Subject to (a) above, any Note may be issued in such other form
as may be provided by, or not inconsistent with, the terms of the Original
Indenture and this First Supplemental Indenture.
ARTICLE THREE
The SPURS Mode
Section 301. Applicability of Article
The provisions of this Article Three shall apply to any Note in the
SPURS Mode. To the extent that any provision of this Article Three
conflicts with any provision of Article Two, the provisions set forth in
this Article Three shall govern.
Section 302. Initial SPURS Rate Period
The Notes shall be issued initially in a SPURS Mode with respect to
which the Company shall have on the Original Issue Date entered into a
SPURS Remarketing Agreement. With respect to Notes within a SPURS Rate
Period commencing on the Original Issue Date, references in this Article
Three to (i) the SPURS Agent and SPURS Remarketing Date shall mean the
Initial SPURS Agent and the Initial SPURS Remarketing Date and (ii) the
Interest Rate Adjustment Date upon which the SPURS Rate Period commences
shall mean the Original Issue Date.
Section 303. Interest to SPURS Remarketing Date
Each Note in the SPURS Mode will bear interest at the annual interest
rate established by the SPURS Agent from, and including, the Interest Rate
Adjustment Date commencing the Interest Rate Period for the SPURS Mode to,
but excluding, the SPURS Remarketing Date. Such interest rate will be the
minimum rate of interest and, in the case of a floating interest rate,
Spread (if any) and Spread Multiplier (if any) necessary in the judgment of
such SPURS Agent to produce a par bid in the secondary market for such Note
on the date the interest rate is established. The designated SPURS
Remarketing Date shall be an Interest Payment Date within such Interest
Rate Period.
Section 304. Tender to and Remarketing by the SPURS Agent
The obligations of the SPUR Agent set forth herein shall be performed
under the applicable SPURS Remarketing Agreement.
(a) Mandatory Tender. Provided that the SPURS Agent gives notice to
the Company and the Trustee on or before the Notification Date of its
intention to purchase the Notes for remarketing, each Note will be
automatically tendered, or deemed tendered, to the SPURS Agent for
remarketing at the SPURS Interest Rate on the SPURS Remarketing Date,
except in the circumstances described in subsection (b)(2) and Section 305
below with regard to failure of the SPURS Agent to purchase the Notes. The
purchase price for the tendered Notes to be paid by the SPURS Agent will
equal 100% of the principal amount thereof. When the Notes are tendered
for remarketing, the SPURS Agent may remarket the Notes for its own account
at varying prices to be determined by the SPURS Agent at the time of each
sale. From and including the SPURS Remarketing Date to, but excluding, the
next succeeding Interest Rate Adjustment Date, the Notes will bear interest
at the SPURS Interest Rate. If the SPURS Agent elects to remarket the
Notes, the obligation of the SPURS Agent to purchase the Notes on the SPURS
Remarketing Date is subject to the conditions set forth in the applicable
SPURS Remarketing Agreement.
(b) Remarketing. The remarketing of the notes purchased by SPURS
Agent under the SPURS Remarketing Agreement shall be carried out in
accordance with the following procedures:
(1) The SPURS Interest Rate. Subject to the SPURS Agent's
election to remarket the Notes as provided in subsection (a) above, the
SPURS Interest Rate shall be determined by the SPURS Agent by 3:30 p.m.,
New York City time, on the third Business Day immediately preceding the
SPURS Remarketing Date (the "Determination Date") to the nearest one
hundred-thousandth (0.00001) of one percent per annum and will be equal to
the Base Rate established by the SPURS Agent, after consultation with the
Company, at or prior to the commencement of the SPURS Mode (the "Base
Rate"), plus the Applicable Spread, which will be based on the Dollar Price
of the Notes.
(2) Notification of Results; Settlement. Provided the SPURS
Agent has previously notified the Company and the Trustee on the
Notification Date of its intention to purchase all tendered Notes on the
SPURS Remarketing Date, the SPURS Agent will notify the Company, the
Trustee and the Depositary by telephone, confirmed in writing, by 4:00
p.m., New York City time, on the Determination Date, of the SPURS Interest
Rate.
All of the tendered Notes will be automatically delivered to the
account of the Trustee, by book-entry through the Depositary pending
payment of the purchase price therefor, on the SPURS Remarketing Date.
In the event that the SPURS Agent purchases the tendered Notes on the
SPURS Remarketing Date, the SPURS Agent will make or cause the Trustee to
make payment to the DTC Participant of each tendering Beneficial Owner of
Notes, by book-entry through the Depositary by the close of business on the
SPURS Remarketing Date against delivery through the Depositary of such
Beneficial Owner's tendered Notes. If the SPURS Agent does not purchase
all of the Notes on the SPURS Remarketing Date, the Company may attempt to
convert the Notes to a new Interest Rate Mode, such interest rate to be
determined as provided for in Section 205 hereof, and settlement will be
effected as described in this Section 304(b). In any case, the Company
will make or cause the Trustee to make payment of interest to each
Beneficial Owner of Notes due on the SPURS Remarketing Date by book-entry
through the Depositary by the close of business on the SPURS Remarketing
Date.
The transactions in this subsection (b)(2) hereof will be executed on
the SPURS Remarketing Date through the Depositary in accordance with the
procedures of the Depositary, and the accounts of the respective DTC
Participants will be debited and credited and the Notes delivered by
book-entry as necessary to effect the purchases and sales thereof.
Transactions involving the sale and purchase of Notes remarketed by
the SPURS Agent on and after a SPURS Remarketing Date will settle in
immediately available funds through the Depositary's Same-Day Funds
Settlement System.
The tender and settlement procedures described above, including
provisions for payment by purchasers of Notes in the remarketing or for
payment to selling Beneficial Owners of tendered Notes, may be modified to
the extent required by the Depositary or to the extent required to
facilitate the tender and remarketing of Notes in certificated form, if the
book-entry system is no longer available for the Notes at the time of the
remarketing. In addition, the SPURS Agent may, in accordance with the
terms of the Indenture, modify the tender and settlement procedures set
forth above in order to facilitate the tender and settlement process.
As long as the Depositary's nominee holds the certificates
representing any Notes in the book-entry system of the Depositary, no
certificates for such Notes will be delivered by any selling Beneficial
Owner to reflect any transfer of such Notes effected in the remarketing.
Section 305. Conversion or Redemption Following Election by the
SPURS Agent to Remarket
(a) If the SPURS Agent elects to remarket the Notes on the SPURS
Remarketing Date, the Notes will be subject to mandatory tender to the
SPURS Agent for remarketing on such date, in each case subject to the
conditions set forth in Section 304 hereof, and to the Company's right to
either convert the Notes to a new Interest Rate Mode on the SPURS
Remarketing Date or to redeem the Notes from the SPURS Agent, in each case
as described in the next sentence. The Company will notify the SPURS Agent
and the Trustee, not later than the Business Day immediately preceding the
Determination Date, if the Company irrevocably elects to exercise its right
to either convert the Notes to a new Interest Rate Mode, or to redeem the
Notes in whole, but not in part, from the SPURS Agent at the Optional
Redemption Price, in each case on the SPURS Remarketing Date.
(b) In the event that the Company irrevocably elects to convert the
Notes to a new Interest Rate Mode, then as of the SPURS Remarketing Date
the Notes will cease to be in the SPURS Mode, the SPURS Remarketing Date
will constitute an Interest Rate Adjustment Date, and the Notes shall be
subject to remarketing on such date by a Remarketing Agent appointed in the
Commercial Paper Term Mode or the Long Term Rate Mode or a new SPURS Mode
established in accordance with the procedures set forth in Section 207
hereof; provided that, in such case, the notice period required for
conversion shall be the period commencing on the Determination Date. In
such case, the Company shall pay to the SPURS Agent the excess of the
Dollar Price of the Notes over 100% of the principal amount of the Notes in
same-day funds by wire transfer to an account designated by the SPURS Agent
on the SPURS Remarketing Date.
(c) In the event that the Company irrevocably elects to redeem the
Notes, the "Optional Redemption Price" shall be the greater of either (i)
100% of the principal amount of the Notes or (ii) the Dollar Price, plus in
either case accrued and unpaid interest from the SPURS Remarketing Date on
the principal amount being redeemed to the date of redemption. If the
Company elects to redeem the Notes, it shall pay the redemption price
therefor in same-day funds by wire transfer to an account designated by the
SPURS Agent on the SPURS Remarketing Date.
(d) If notice has been given as provided in the Indenture and funds
for the redemption of any Notes called for redemption shall have been made
available on the redemption date referred to in such notice, such Notes
shall cease to bear interest on the date fixed for such redemption
specified in such notice and the only right of the SPURS Agent from and
after the redemption date shall be to receive payment of the Optional
Redemption Price upon surrender of such Notes in accordance with such
notice.
ARTICLE FOUR
Additional Events of Default with Respect to the Notes
Section 401. Definition
All of the events specified in clauses (1), (2) and (4) through (6) of
Section 501(a) of the Original Indenture shall be "Events of Default" with
respect to the Notes. In addition, the following event that shall have
occurred and be continuing shall be an additional Event of Default with
respect to each series of Notes: (7) default in the payment of the
purchase price with respect to the Special Mandatory Purchase on the
applicable Interest Rate Adjustment Date in accordance with Section 210(a)
hereof.
ARTICLE FIVE
Authentication and Delivery of the Notes
Section 501. Authentication and Delivery
As provided in and pursuant to Section 303 of the Original Indenture,
each time that the Company delivers Notes to the Trustee or Authenticating
Agent for authentication, the Company shall deliver a Supplemental Company
Order in the form of Exhibit B to this First Supplemental Indenture for the
authentication and delivery of such Notes and the Trustee or such
Authenticating Agent shall authenticate and deliver such Notes.
ARTICLE SIX
Supplemental Indentures
Section 601. Effect On Original Indenture
The First Supplemental Indenture is a supplement to the Original
Indenture. As supplemented by this First Supplemental Indenture, the
Original Indenture is in all respects ratified, approved and confirmed, and
the Original Indenture and this First Supplemental Indenture shall together
constitute one and the same instrument.
ARTICLE SEVEN
Miscellaneous
Section 701. Counterparts
This First Supplemental Indenture 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 by one and the same
instrument.
Section 702. Recitals
The recitals contained herein shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of
this First Supplemental Indenture.
Section 703. Governing Law
This First Supplemental Indenture shall be governed by and construed
in accordance with the laws of the jurisdiction that govern the Original
Indenture and its construction.
[The balance of this page intentionally left blank.]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed and their respective corporate
seals to be hereunto affixed and attested, all as of the date and year
first written above.
TAMPA ELECTRIC COMPANY
By:
Girard F. Anderson
Chairman of the Board and Chief Executive
Officer
[Corporate Seal]
THE BANK OF NEW YORK, AS TRUSTEE
By:
Name:
Title:
[Corporate Seal]
<PAGE>
State of )
) SS.:
County of )
On the __________ day of ________________, 1998 before me personally
came Girard F. Anderson, to me known, who, being by me duly sworn, did
depose and say that he is Chairman of the Board and Chief Executive Officer
of TAMPA ELECTRIC COMPANY, one of the corporations described in 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
State of New York )
) SS.:
County of New York )
On the ________ day of __________________ 1998 before me personally
came ______________________________________ to me known, who, being by me
duly sworn, did depose and say that he/she is ____________________________
of THE BANK OF NEW YORK, one of the corporations described in and which
executed the foregoing instrument; that he/she 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/she signed his/her names thereto by like
authority.
Notary Public
EXHIBIT A
FORM OF NOTE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
CUSIP NO.: [ ]
TAMPA ELECTRIC COMPANY
Remarketed Note Due 2038
$50,000,000
NO. [ ]
Check this box if the Note is a Global Note.
Applicable if the Note is a Global Note:
This Note is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of Cede & Co., or
such other nominee of The Depository Trust Company, a New York corporation,
or any successor depositary ("Depositary"), as requested by an authorized
representative of the Depositary. This Note is exchangeable for Notes
registered in the name of a person other than the Depositary or its nominee
only in the limited circumstances described in the Indenture and may not be
transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary.
ORIGINAL ISSUE DATE:
July __, 1998
ISSUE PRICE: 100%
(as a percentage of
principal amount)
STATED MATURITY:
July 15, 2038,
subject to mandatory
tender to the SPURS
Agent, if any, as
described on the
reverse of this
Note.
INTEREST RATE: To
but excluding
July 15, 2001,
[___%] per annum.
Thereafter, at the
interest rate set
forth in Annex A
hereto.
INTEREST PAYMENT
DATES: January 15
and July 15 of each
year, up to but
excluding July 15,
2001 and commencing
January 15, 1999.
From and including
July 15, 2001, on
the dates described
in Annex A hereto.
SPECIFIED CURRENCY:
U.S. dollars (if
other than U.S.
dollars): N/A
AUTHORIZED
DENOMINATIONS: N/A
(Only applicable if
Specified Currency
is other than U.S.
dollars)
DEPOSITARY: The
Depository Trust
Company
INITIAL SPURS
AGENT:Citibank,
N.A., or its
assignee or
successor
SINKING FUND: N/A
YIELD TO MATURITY:
N/A
REDEMPTION,
REPURCHASE AND
CONVERSION OPTIONS:
See reverse of this
Note.
REMARKETING
PROVISIONS: See
reverse of this
Note.
<PAGE>
THIS NOTE SHALL NOT BE VALID FOR ANY PURPOSE UNLESS PRESENTED TOGETHER WITH
AN ANNEX A HERETO (INCLUDING ANY CONTINUATION THEREOF). REFERENCE IS MADE
TO ANNEX A FOR CERTAIN TERMS OF THIS NOTE.
TAMPA ELECTRIC COMPANY, a corporation duly organized and existing
under the laws of the State of Florida (herein called the "Company," which
term includes any successor Corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum set forth in Annex A on the Stated
Maturity, upon the presentation and surrender hereof at the principal
corporate trust office of The Bank of New York, or its successor in trust
(the "Trustee") or such other office as the Trustee has designated in
writing, and to pay interest on the unpaid principal balance hereof at a
rate per annum (assuming a 360-day year consisting of twelve 30-day months)
equal to the Initial Interest Rate set forth in Annex A for the period from
the Original Issue Date to, but excluding, July 15, 2001 (the "Initial
SPURS Remarketing Date"). If the Initial SPURS Agent (as defined above and
set forth in Annex A) elects to purchase this Note on the Initial SPURS
Remarketing Date, except in the limited circumstances described on the
reverse of this Note, (a) this Note will be subject to mandatory tender to
the Initial SPURS Agent at 100% of the aggregate principal amount thereof
for remarketing on the Initial SPURS Remarketing Date, on the terms and
subject to the conditions described on the reverse of this Note, and (b)
will for the period from the Initial SPURS Remarketing Date to, but
excluding July 15, 2011, bear interest at the SPURS Interest Rate (as
defined on the reverse of this Note). If the Initial SPURS Agent does not
purchase this Note on the Initial SPURS Remarketing Date, this Note
automatically will be subject to mandatory tender at 100% of the principal
amount thereof for redemption on such date by the Company or for
remarketing on such date by a Remarketing Agent (as defined on the Reverse
of this Note) in a Commercial Paper Term Mode, Long Term Rate Mode or a new
SPURS Mode and will bear interest at a rate and for a period set forth in
Annex A hereto.
Interest will be payable on the Interest Payment Dates to the Person
in whose name this Note is registered at the close of business on the
related Record Date as provided below or as set forth in Annex A. In each
case, payments shall be made in accordance with the provisions hereof,
including any additional terms specified in Annex A, until the principal
hereof is paid or duly made available for payment. References herein to
"this Note," "hereof," "herein" and comparable terms shall include Annex A.
So long as this Note bears interest in the Commercial Paper Term Mode,
interest will be payable on the Interest Rate Adjustment Date which
commences the next succeeding Interest Rate Period for this Note and on
such other dates (if any) as will be established by the Company and set
forth in Annex A upon conversion of this Note to the Commercial Paper Term
Mode or upon remarketing of this Note in a new Interest Rate Period in the
Commercial Paper Term Mode. So long as this Note bears interest in the
Long Term Rate Mode or the SPURS Mode, interest will be payable no less
frequently than semiannually on such dates as will be established by the
Company and set forth in Annex A upon conversion of this Note to the Long
Term Rate Mode or the SPURS Mode (or upon remarketing of this Note in a new
Interest Rate Period in the Long Term Rate Mode or the SPURS Mode, as the
case may be) in the case of a fixed interest rate, or as set forth below
under "INTEREST RATE" in the case of a floating interest rate and on the
Interest Rate Adjustment Date commencing the next succeeding Interest Rate
Period. Such interest will be payable to the Holder hereof as of the
related Record Date, which, so long as this Note bears interest (i) in the
Initial Interest Rate Period, are the dates specified in Annex A; (ii) in
the Commercial Paper Term Mode, is the Business Day prior to the related
Interest Payment Date; and (iii) in the Long Term Rate Mode or the SPURS
Mode, is the fifteenth calendar day (whether or not a Business Day)
immediately preceding the related Interest Payment Date. Except as
provided below under "FLOATING INTEREST RATES," if any Interest Payment
Date would otherwise be a day that is not a Business Day, such Interest
Payment Date will be postponed to the next succeeding Business Day, and no
interest will accrue on such payment for the period from and after such
Interest Payment Date to the date of such payment on the next succeeding
Business Day. Interest on this Note while bearing interest in the
Commercial Paper Term Mode or at a floating interest rate during a Long
Term Rate Period or a SPURS Rate Period will be computed on the basis of
actual days elapsed over 360; provided that, if an applicable Interest Rate
Basis is the CMT Rate or Treasury Rate (each as defined below), interest
will be computed on the basis of actual days elapsed over the actual number
of days in the year. Interest on this Note while bearing interest in the
Long Term Rate Mode or the SPURS Mode will be computed on the basis of a
year of 360 days consisting of twelve 30-day months. Interest on this Note
while bearing interest at the Initial Interest Rate will be computed on the
basis of a year of 360 days consisting of twelve 30-day months.
Payment of the principal of (and premium, if any) and any such
interest on this Note shall be made in immediately available funds at the
office or agency of the Company maintained for that purpose in the City of
New York in the State of New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and in Annex A hereto, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose. <PAGE>
IN WITNESS WHEREOF, TAMPA ELECTRIC COMPANY has caused this instrument
to be duly executed.
TAMPA ELECTRIC COMPANY
By:___________________________
Name:
Title:
Date:__________________________
[SEAL]
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the series
designated therein referred
to in the within-mentioned
Indenture.
THE BANK OF NEW YORK
as Authenticating Agent for the Trustee
By:
Authorized Signatory
Date:<PAGE>
(REVERSE OF NOTE)
TAMPA ELECTRIC COMPANY
Remarketed Note Due 2038
This Note is one of a duly authorized issue of securities of the
Company (herein called the "Notes"), issued and to be issued under an
Indenture dated as of July 1, 1998, as supplemented by the First
Supplemental Indenture, dated as of July 15, 1998 (as further amended or
supplemented, the "Indenture"), between the Company and The Bank of New
York, as trustee (the "Trustee", which term includes any successor Trustee
under the Indenture), to which Indenture reference is hereby made for a
statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Notes are, and are to be,
authenticated and delivered. This Note is one of the securities of the
series designated on the face hereof, limited in aggregate principal amount
to $50,000,000.
DEFINITIONS
The following terms, as used herein, have the following meanings
unless the context or use clearly indicates another or different meaning or
intent:
"Applicable Spread" shall mean the lowest bid indication, expressed as
a spread (in the form of a percentage or in basis points) above the Base
Rate, obtained by the SPURS Agent on the applicable Determination Date from
the bids quoted by up to five Reference Corporate Dealers for the full
aggregate outstanding principal amount of the Notes at the Dollar Price,
but assuming (i) an issue date equal to the applicable SPURS Remarketing
Date, with settlement on such date without accrued interest, (ii) a
maturity date equal to the next succeeding Interest Rate Adjustment Date of
the Notes, and (iii) a stated annual interest rate, payable semiannually on
each Interest Payment Date, equal to the Base Rate plus the spread bid by
the applicable Reference Corporate Dealer. If fewer than five Reference
Corporate Dealers bid as described above, then the Applicable Spread shall
be the lowest of such bid indications obtained as described above. The
SPURS Interest Rate announced by the SPURS Agent, absent manifest error,
shall be binding and conclusive upon the Beneficial Owners and holders of
the Notes, the Company and the Trustee.
"Base Rate" shall mean the interest rate established by the SPURS
Agent, after consultation with the Company, as the applicable "base rate"
at or prior to the commencement of the SPURS Mode and set forth in Annex A
hereto.
"Beneficial Owner" shall mean, if this Note is in book-entry form, the
Person who acquires an interest in the Note, which is reflected on the
records of Depositary through its participants.
"Business Day" shall mean any day that is not a day on which banking
institutions in New York, New York, or the state in which the office of the
Trustee at which the Indenture is administered are authorized or obligated
by law or executive order to close; provided, however, that with respect to
Notes in the Long Term Rate Mode or the SPURS Mode as to which LIBOR is an
applicable Interest Rate Basis, such day is also a London Business Day (as
hereinafter defined). "London Business Day" means (i) if the Index
Currency (as hereinafter defined) is other than European Currency Units
("ECU"), any day on which dealings in such Index Currency are transacted in
the London interbank market or (ii) if the Index Currency is ECU, any day
that does not appear as an ECU non-settlement day on the display designated
as "ISDE" on the Reuters Monitor Money Rates Service (or a day so
designated by the ECU Banking Association) or, if ECU non-settlement days
do not appear on the page (and are not so designated), is a day on which
payments in ECU can be settled in the international banking market.
"Calculation Agent" shall mean, if this Note bears interest at a
floating rate, an entity selected by the Company that will determine the
interest rate in effect for each Interest Reset Period of this Note
subsequent to the initial Interest Reset Date.
"Calculation Date" shall have the meaning set forth under "FLOATING
INTEREST RATES" below.
"CD Rate" shall have the meaning set forth under "FLOATING INTEREST
RATES" below.
"CMT Rate" shall have the meaning set forth under "FLOATING INTEREST
RATES" below.
"Commercial Paper Term Mode" shall mean the Interest Rate Mode in
which the interest rate on this Note is reset on a periodic basis that
shall not be less than one calendar day nor more than 364 consecutive
calendar days and interest is paid as provided for such Interest Rate Mode
as set forth herein.
"Commercial Paper Term Period" shall mean the Interest Rate Period for
this Note in the Commercial Paper Term Mode that is a period of not less
than one nor more than 364 consecutive calendar days, as determined by the
Company (as described below under "CONVERSION") or, if not so determined,
by the Remarketing Agent for this Note (in its best judgment in order to
obtain the lowest interest cost for such Note). Each Commercial Paper Term
Period will commence on the Interest Rate Adjustment Date therefor and end
on the day preceding the date specified by such Remarketing Agent as the
first day of the next Interest Rate Period for this Note. The interest rate
for any Commercial Paper Term Period relating to this Note will be
determined not later than 11:50 a.m., New York City time, on the Interest
Rate Adjustment Date for this Note, which is the first day of each Interest
Period for this Note.
"Comparable Treasury Issues" shall mean the United States Treasury
security or securities selected by the SPURS Agent as having an actual or
interpolated maturity or maturities comparable or applicable to the
remaining term to the next succeeding Interest Rate Adjustment Date of this
Note when purchased by such SPURS Agent.
"Comparable Treasury Price" shall mean, with respect to a SPURS
Remarketing Date, (a) the offer prices for the Comparable Treasury Issues
(expressed in each case as a percentage of its principal amount) at 11:00
a.m. on the Determination Date, as set forth on Telerate Page 500 (or such
other page as may replace Telerate Page 500) or (b) if such page (or any
successor page) is not displayed or does not contain such offer prices on
such Determination Date, (i) the average of the Reference Treasury Dealer
Quotations for such SPURS Remarketing Date, after excluding the highest and
lowest of such Reference Treasury Dealer Quotations, or (ii) if the
applicable SPURS Agent obtains fewer than four such Reference Treasury
Dealer Quotations, the average of all such Reference Treasury Dealer
Quotations. "Telerate Page 500" shall mean the display designated as
"Telerate Page 500" on Dow Jones Markets (or such other page as may replace
Telerate Page 500 on such service) or such other service displaying the
offer prices specified in (a) above as may replace Dow Jones Markets.
"Composite Quotations" shall mean the statistical release entitled
"Composite 3:30 P.M. Quotations for United States Government Securities"
published by the Federal Reserve Bank of New York or any successor
publication.
"Depositary" shall mean The Depository Trust Company or any successor
depositary.
"Designated CMT Telerate Page" shall mean the display on the Dow Jones
Markets (or any successor service) on the page specified in the applicable
Floating Interest Rate Notice (or any other page as may replace such page
on such service for the purpose of displaying Treasury Constant Maturities
as reported in H.15(519)) for the purpose of displaying Treasury Constant
Maturities as reported in H.15(519). If no such page is specified in the
applicable Floating Interest Rate Notice, the page shall be 7052 for the
most recent week.
"Designated CMT Maturity Index" shall mean the original period to
maturity of the United States Treasury securities (either 1, 2, 3, 5, 7,
10, 20 or 30 years) specified in the applicable Floating Interest Rate
Notice with respect to which the CMT Rate will be calculated. If no such
maturity is specified in the applicable Floating Interest Rate Notice, the
Designated CMT Maturity Index shall be 2 years.
"Designated LIBOR Page" shall mean (a) if "LIBOR Reuters" is specified
in the applicable Floating Interest Rate Notice, the display on the Reuters
Monitor Money Rates Service (or any successor service) on the page
specified in such Floating Interest Rate Notice (or any other page as may
replace such page on such service) for the purpose of displaying the London
interbank rates of major banks for the Index Currency, or (b) if "LIBOR
Telerate" is specified in the applicable Floating Interest Rate Notice or
neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the applicable
Floating Interest Rate Notice as the method for calculating LIBOR, the
display on the Dow Jones Markets (or any successor service) on the page
specified in such Floating Interest Rate Notice (or any other page as may
replace such page on such service) for the purpose of displaying the London
interbank rates of major banks for the Index Currency.
"Determination Date" shall mean the third Business Day immediately
preceding the applicable SPURS Remarketing Date.
"Dollar Price" shall mean the present value determined by the SPURS
Agent, as of the applicable SPURS Remarketing Date, of the Remaining
Scheduled Payments discounted to such SPURS Remarketing Date, on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day
months), at the Treasury Rate.
"DTC Participant" shall mean an account maintained by an institution
with the Depositary through which securities are held by such institution
and accounted for by a book-entry registration and transfer system.
"Federal Funds Rate" shall have the meaning set forth under "FLOATING
INTEREST RATES" below.
"Floating Interest Rate Notice" shall mean the notice described under
"FLOATING INTEREST RATES" below, which is to be provided by the Company to
the Trustee and the Remarketing Agent in the event the Company elects to
apply a floating interest rate to this Note.
"Floating Rate Maximum Interest Rate" and "Floating Rate Minimum
Interest Rate" have the respective meanings specified under "FLOATING
INTEREST RATES" below.
"H.15 (519)" shall mean "Statistical Release H.15(519), Selected
Interest Rates" published by the Board of Governors of the Federal Reserve
System or any successor publication.
"Index Currency" shall mean the currency or composite currency
specified in the applicable Floating Interest Rate Notice as to which LIBOR
will be calculated. If no such currency or composite currency is specified
in the applicable Floating Interest Rate Notice, the Index Currency will be
United States dollars.
"Index Maturity" shall mean the period to maturity of the instrument
or obligation with respect to which the related Interest Rate Basis or
Bases will be calculated.
"Initial Interest Rate" shall mean the annual rate of interest
applicable to this Note during the Initial Interest Rate Period as set
forth on Annex A hereto.
"Initial Interest Rate Period" shall mean the period from the Original
Issuance Date to, but excluding, the Initial SPURS Remarketing Date.
"Initial SPURS Agent" means the SPURS Agent with the option to
purchase this Note on the Initial SPURS Remarketing Date, the identity of
which Initial SPURS Agent is set forth in Annex A hereto.
"Initial SPURS Remarketing Date" shall mean the date designated by the
Initial SPURS Agent, after consultation with the Company, upon which the
Initial SPURS Agent may, if it has so elected, remarket this Note at the
SPURS Interest Rate, which date is set forth in Annex A hereto.
"Interest Determination Date" shall have the meaning specified under
"FLOATING INTEREST RATES" below.
"Interest Payment Date" shall mean the date on which interest on this
Note is paid, which date(s) shall be set forth in Annex A hereto.
"Interest Rate Adjustment Date" shall mean (i) for a particular
Interest Rate Period in any Interest Rate Mode, each date, which shall be a
Business Day, on which interest and, in the case of a floating interest
rate, the Spread (if any) and the Spread Multiplier (if any) on this Note
subject thereto commences to accrue at the rate determined and announced by
the applicable Remarketing Agent for such Interest Rate Period, and (ii)
during the Initial Interest Rate Period, the Original Issue Date.
"Interest Rate Basis" shall mean the interest rate or interest rate
formula to be referenced in determining a floating interest rate, as
described under "FLOATING INTEREST RATES" below.
"Interest Rate Mode" shall mean the mode in which the interest rate on
a Note is being determined, i.e., the Commercial Paper Term Mode, the Long
Term Rate Mode or the SPURS Mode.
"Interest Rate Period" shall mean (a) if this Note is in the
Commercial Paper Mode or Long Term Rate Mode, the period of time commencing
on the Interest Rate Adjustment Date and extending either (i) to, but not
including, the immediately succeeding Interest Rate Adjustment Date or
(ii), if there is no succeeding Interest Rate Adjustment date, to, but
excluding, the Stated Maturity, and during which this Note bears interest
at a particular fixed interest rate or floating interest rate; and (b) if
this Note is in a SPURS Mode, the SPURS Rate Period.
"Interest Reset Date" and "Interest Reset Period" have the respective
meanings specified under "FLOATING INTEREST RATES" below.
"LIBOR" shall have the meaning specified under "FLOATING INTEREST
RATES" below.
"Long Term Rate Mode" shall mean the Interest Rate Mode in which the
interest rate on this Note is reset in a Long Term Rate Period and interest
is paid as provided for such Interest Rate Mode as set forth herein.
"Long Term Rate Period" shall mean any period of more than 364 days
and not exceeding the remaining term to the Stated Maturity of this Note.
"Notification Date" shall mean a Business Day not later than five
Business Days prior to the applicable SPURS Remarketing Date.
"Optional Redemption" shall mean the redemption of this Note prior to
its maturity at the option of the Company as described herein.
"Optional Redemption Price" shall mean, at any given time, the
greater of either (i) 100% of the principal amount of this Note or (ii) the
Dollar Price plus in either case accrued and unpaid interest from the SPURS
Remarketing Date on the principal amount being redeemed to the date of
redemption.
"Original Issue Date" shall have the meaning set forth on the face
hereof.
"Prime Rate" shall have the meaning specified under "FLOATING INTEREST
RATES" below.
"Principal Financial Center" shall mean the capital city of the
country issuing the Index Currency, except that with respect to United
Stated dollars, Australian dollars, Deutsche marks, Dutch guilders, Italian
lire, Swiss francs and ECUs, the Principal Financial Center shall be the
City of New York, Sydney, Frankfurt, Amsterdam, Milan, Zurich and
Luxembourg, respectively.
"Reference Corporate Dealers" shall mean such Reference Corporate
Dealers as shall be appointed by the SPURS Agent after consultation with
the Company and each to be set forth in Annex A hereto.
"Reference Treasury Dealers" shall mean such Reference Treasury
Dealers as shall be appointed by the SPURS Agent after consultation with
the Company and each to be set forth in Annex A hereto.
"Reference Treasury Dealer Quotation" shall mean, with respect to each
Reference Treasury Dealer and the SPURS Remarketing Date, the offer prices
for the Comparable Treasury Issues (expressed in each case as a percentage
of its principal amount) quoted in writing to the SPURS Agent by such
Reference Treasury Dealer by 3:30 p.m., New York City time, on the
Determination Date.
"Remaining Scheduled Payments" shall mean the remaining scheduled
payments of the principal thereof and interest thereon, calculated at the
Base Rate only, that would be due after the SPURS Remarketing Date to and
including the next succeeding Interest Rate Adjustment Date.
"Remarketing Agent" shall mean such agent or agents, including any
standby remarketing agent (each a "Standby Remarketing Agent"), as the
Company may appoint from time to time for the purpose of remarketing of
this Note, as set forth in the remarketing agreement that the Company shall
enter into prior to the remarketing of such Notes.
"Reuters Screen U.S. PRIME 1 Page" shall mean the display designated
as page "U.S. PRIME 1" on the Reuters Monitor Money Rates Service (or any
successor service) on the U.S. PRIME 1 Page (or such other page as may
replace the U.S. PRIME 1 Page on such service) for the purpose of
displaying prime rates or base lending rates of major United States banks.
"Special Interest Rate" shall have the meaning set forth below under
subsection (d) of "INTEREST RATE."
"Special Mandatory Purchase" shall mean the obligation of the Company
to purchase Notes not successfully remarketed by the Remarketing Agent and
the applicable Standby Remarketing Agent(s) by 3:00 p.m., New York City
time, on any Interest Rate Adjustment Date.
"Spread" shall mean the number of basis points to be added to or
subtracted from the related Interest Rate Basis or Bases applicable to an
Interest Rate Period for such Note.
"Spread Multiplier" shall mean the percentage of the related Interest
Rate Basis or Bases applicable to an Interest Rate Period by which such
Interest Rate Basis or Bases will be multiplied to determine the applicable
interest rate from time to time for an Interest Rate Period.
"SPURS Agent" shall mean the remarketing agent granted the option
under a SPURS Remarketing Agreement to purchase this Note in the SPURS Mode
and subsequently remarket the repurchased Note at a SPURS Interest Rate.
"SPURS Interest Rate" shall mean the rate equal to the Base Rate
established by a SPURS Agent, after consultation with the Company, at or
prior to the commencement of the applicable SPURS Mode, plus the Applicable
Spread, which will be based on the Dollar Price.
"SPURS Mode" shall mean the Interest Rate Mode in which this Note
shall bear interest and be subject to remarketing as "Structured PUtable
Remarketable Securities."
"SPURS Period" shall mean, if this Note is remarketed by the Initial
SPURS Agent on the Initial SPURS Remarketing Date, that portion of the
SPURS Rate Period commencing on the Initial SPURS Remarketing Date up to,
but excluding, the next succeeding Interest Rate Adjustment Date. The
SPURS Period is set forth in Annex A hereto.
"SPURS Rate Period" shall mean an Interest Rate Period for this Note
if in a SPURS Mode established by the Company as a period of more than 364
days and less than the remaining term to the Stated Maturity of such Note;
provided, however, that such Interest Rate Period must end on the day prior
to an Interest Payment Date for such Note. The SPURS Rate Period shall
consist of the period to and excluding the SPURS Remarketing Date and the
period from and including the SPURS Remarketing Date to, but excluding, the
next succeeding Interest Rate Adjustment Date.
"SPURS Remarketing Agreement" shall mean the agreement by and between
the Company and the SPURS Agent dated as of the date commencing the
applicable SPURS Rate Period which sets forth the rights and obligations of
the Company and the SPURS Agent with respect to the remarketing of Notes in
the SPURS Mode.
"SPURS Remarketing Date" shall mean the date designated by the SPURS
Agent, after consultation with the Company, upon which the SPURS Agent may
elect to remarket this Note at the SPURS Interest Rate.
"Stated Maturity" shall mean July 15, 2038.
"Treasury Bills" shall have the meaning specified under "FLOATING
INTEREST RATES" below.
"Treasury Rate" shall have the meaning specified under "FLOATING
INTEREST RATES" below.
"Weekly Rate Period" is a Commercial Paper Term Period and will be a
period of seven days commencing on any Interest Rate Adjustment Date and
ending on the day preceding the first day of the next Interest Rate Period
for such Note.
INTEREST RATE
(a) Initial Interest Rate. This Note will bear interest at the rate
per annum (assuming a 360-day year consisting of twelve 30-day months)
during the Initial Interest Rate Period identified as the Initial Interest
Rate in Annex A hereto.
(b) Subsequent Interest Rates. (i) If the Initial SPURS Agent
elects to purchase this Note as described herein, this Note will be subject
to mandatory tender to the Initial SPURS Agent on the Initial SPURS
Remarketing Date, except in the limited circumstances described herein, and
will, for the SPURS Period bear interest at the SPURS Interest Rate as
defined herein and which will be set forth in Annex A hereto.
(ii) If the Initial SPURS Agent does not purchase this Note on
the Initial SPURS Remarketing Date, this Note automatically will be subject
to mandatory tender at 100% of the principal amount thereof for redemption
on such date by the Company or for remarketing on such date by a
Remarketing Agent in a Commercial Paper Term Mode, a Long Term Rate Mode or
a new SPURS Mode and will bear interest at a rate and for a period set
forth in Annex A hereto.
(iii) The interest rate and, in the case of a floating
interest rate, the Spread (if any) and the Spread Multiplier (if any) for
this Note will be announced by the applicable Remarketing Agent on or prior
to the Interest Rate Adjustment Date for the next succeeding Interest Rate
Period, and will be the minimum interest rate per annum and, in the case of
a floating interest rate, the Spread (if any) and the Spread Multiplier (if
any) necessary, during the Interest Rate Period commencing on such Interest
Rate Adjustment Date, in the judgement of the Remarketing Agent, to produce
a par bid in the secondary market for this Note on the date the interest
rate is established. Such rate will be effective for the next succeeding
Interest Rate Period for this Note commencing on such Interest Rate
Adjustment Date.
(c) Floating Interest Rates. The provisions governing floating
interest rates for this Note appear below under "FLOATING INTEREST RATES."
(d) Failure of Remarketing Agent or Agents to Announce Interest. In
the event that (i) the applicable Remarketing Agent has been removed or has
resigned and no successor has been appointed, or (ii) such Remarketing
Agent has failed to announce the appropriate interest rate, Spread (if any)
or Spread Multiplier (if any), as the case may be, on the Interest Rate
Adjustment Date of this Note for whatever reason, or (iii) the appropriate
interest rate, Spread (if any), or Spread Multiplier (if any), as the case
may be, or Interest Rate Period cannot be determined for this Note for
whatever reason, then the next succeeding Interest Rate Period for this
Note will be automatically converted to a Weekly Rate Period, and the rate
of interest thereon will be equal to the Federal Funds Rate (the "Special
Interest Rate").
(e) Notice of Interest Rate; Binding Effect. After any Interest Rate
Adjustment Date of this Note, the Remarketing Agent or the SPURS Agent, as
the case may be, will notify the Company and the Trustee of the interest
rate, Spread (if any) and the Spread Multiplier (if any). Immediately upon
receipt of such notice, the Trustee will transmit such information to the
Depositary in accordance with the Depositary's procedures as in effect from
time to time and note such rate in Annex A. The Trustee shall confirm to
the Depositary the interest rate for the following Interest Rate Period in
accordance with the Depositary's procedures as in effect from time to time.
Any Beneficial Owner may contact the Trustee or the Remarketing Agent in
order to be advised of the interest rate applicable to such Beneficial
Owner's Remarketed Notes. No notice of the applicable interest rate will
be sent to Beneficial Owners.
The interest rate and other terms announced by the Remarketing Agent,
absent manifest error, will be binding and conclusive upon the Beneficial
Owners, the Company and the Trustee.
(f) Conversion. This Note may be converted at the option of the
Company to the Commercial Paper Term Mode, Long Term Rate Mode or SPURS
Mode on any Interest Rate Adjustment Date for this Note in accordance with
the procedures set forth in the Indenture, and will be subject to mandatory
tender by the Beneficial Owner thereof as described herein on such Interest
Rate Adjustment Date. The Beneficial Owner of this Note will be deemed to
have automatically tendered for purchase such Note on each Interest Rate
Adjustment Date upon which such conversion occurs and will not be entitled
to further accrual of interest on this Note after such date.
TENDER
This Note will be automatically tendered for purchase, or deemed
tendered for purchase, on each Interest Rate Adjustment Date relating
hereto. Notes will be purchased on such Interest Rate Adjustment Date in
accordance with the procedures set forth in "REMARKETING AND SETTLEMENT"
or, as the case may be, "SPURS MODE" below.
REMARKETING AND SETTLEMENT
Interest Rate Adjustment Date; Determination of Interest Rate. By
11:00 a.m., New York City time, on the Interest Rate Adjustment Date for
this Note, the applicable Remarketing Agent will determine the interest
rate for such Note being remarketed to the nearest one hundred thousandth
(0.00001) of one percent per annum for the next Interest Rate Period in the
case of a fixed interest rate, and the Spread (if any) and Spread
Multiplier (if any) in the case of a floating interest rate; provided, that
between 11:00 a.m., New York City time, and 11:50 a.m., New York City time,
the Remarketing Agent and the Standby Remarketing Agent, if any, will use
their reasonable efforts to determine the interest rate for this Note if it
is not successfully remarketed as of the applicable deadline specified in
this paragraph. In determining the applicable interest rate for this Note
and other terms, such Remarketing Agent will, after taking into account
market conditions as reflected in the prevailing yields on fixed and
variable rate taxable debt securities, (i) consider the principal amount of
all Notes tendered or to be tendered on such date and the principal amount
of such Notes prospective purchasers are or may be willing to purchase and
(ii) contact, by telephone or otherwise, prospective purchasers and
ascertain the interest rates therefor at which they would be willing to
hold or purchase such Notes.
Notification of Results; Settlement. By 12:30 p.m., New York City
time, on the Interest Rate Adjustment Date of this Note, the applicable
Remarketing Agent will notify the Company and the Trustee in writing (which
may include facsimile or other electronic transmission), of (i) the
interest rate or, in the case of a floating interest rate, the initial
interest rate, the Spread and Spread Multiplier and the initial Interest
Reset Date, applicable to this Note for the next Interest Rate Period, (ii)
the Interest Rate Adjustment Date, (iii) the Interest Payment Dates if this
Notes is in the Commercial Paper Term Mode (if other than the Interest Rate
Adjustment Date), the Long Term Rate Mode or the SPURS Mode, (iv) the
optional redemption terms, if any, and early remarketing terms, if any, in
the case of a remarketing into a Long Term Rate Period, (v) the aggregate
principal amount of all tendered Notes and (vi) the aggregate principal
amount of such tendered Notes that such Remarketing Agent was able to
remarket, at a price equal to 100% of the principal amount thereof plus
accrued interest, if any. Immediately after receiving such notice and, in
any case, not later than 1:30 p.m., New York City time, the Trustee will
transmit such information and any other settlement information required by
the Depositary to the Depositary in accordance with the Depositary's
procedures as in effect from time to time.
By telephone at approximately 1:00 p.m., New York City time, on such
Interest Rate Adjustment Date, the applicable Remarketing Agent will advise
each purchaser of this Note (or the DTC Participant of each such purchaser
who it is expected in turn will advise such purchaser) of the principal
amount of such Notes that such purchaser is to purchase.
Each purchaser of this Note in a remarketing will be required to give
instructions to its DTC Participant to pay the purchase price therefor in
same day funds to the applicable Remarketing Agent against delivery of the
principal amount of this Note by book-entry through the Depositary by 3:00
p.m., New York City time, on the Interest Rate Adjustment Date.
When tendered, or deemed tendered, this Note will be automatically
delivered to the account of the Trustee (or such other account meeting the
requirements of the Depositary's procedures as in effect from time to
time), by book-entry through the Depositary against payment of the purchase
price or redemption price therefor, on the Interest Rate Adjustment Date
relating thereto.
The applicable Remarketing Agent will make, or cause the Trustee to
make, payment to the DTC participant of each tendering Beneficial Owner of
Notes subject to a remarketing, by book-entry through the Depositary by the
close of business on the Interest Rate Adjustment Date against delivery
through the Depositary of such Beneficial Owner's tendered Notes, of the
purchase price for tendered Notes that have been sold in the remarketing.
If this Note was purchased pursuant to a Special Mandatory Purchase,
subject to receipt of funds from the Company or, if applicable, an
institution providing credit support, as the case may be, the Trustee will
make such payment of the purchase price of this Notes plus accrued
interest, if any, to such date.
The transactions described above for a remarketing of this Note will
be executed on the Interest Rate Adjustment Date for this Note through the
Depositary in accordance with the procedures of the Depositary, and the
accounts of the respective DTC Participants will be debited and credited
and such Notes delivered by book-entry as necessary to effect the purchases
and sales thereof, in each case as determined in the related remarketing.
Except as otherwise set forth below, this Note when tendered in a
remarketing will be purchased solely out of the proceeds received from
purchasers of this Note in such remarketing, and none of the Trustee, the
applicable Remarketing Agent, any Standby Remarketing Agent or the Company
will be obligated to provide funds to make payment upon any Beneficial
Owner's tender in a remarketing.
Although tendered Notes will be subject to purchase by a Remarketing
Agent in a remarketing, such Remarketing Agent and any Standby Remarketing
Agent will not be obligated to purchase any such Notes.
The settlement and remarketing procedures described above, including
provisions for payment by purchasers of tendered Notes or for payment to
selling Beneficial Owners of tendered Notes, may be modified to the extent
required by the Depositary. In addition, each Remarketing Agent may, in
accordance with the terms of the Indenture, modify the settlement and
remarketing procedures set forth above in order to facilitate the
settlement and remarketing process.
As long as the Depositary's nominee holds the certificates
representing this Note in the book-entry system of the Depositary, no
certificates for this Note will be delivered by any selling Beneficial
Owner to reflect any transfer of Notes effected in any remarketing.
Failed Remarketing. If on any Interest Rate Adjustment Date for this
Note the applicable Remarketing Agent and applicable Standby Remarketing
Agent(s) have not successfully remarketed this Note, it will be subject to
Special Mandatory Purchase by the Company, as described under "REDEMPTION
AND ACCELERATION Special Mandatory Purchase" below.
TRANSFER OR EXCHANGE
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registerable in the
Security Register, upon surrender of this Note for registration of transfer
at the office or agency of the Company in any place where the principal of
(and premium, if any) and interest on this Note are payable, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory
to the Company and the Security Registrar duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or
more new Notes of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued
to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons and,
except for such Notes issued in book-entry form, only in denominations of
$100,000 and any integral multiple of $1,000. As provided in the Indenture
and subject to certain limitations therein set forth, this Note is
exchangeable for a like aggregate principal amount of Notes of this series
and of like tenor of a different authorized denomination, as requested by
the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer,
the Company or the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
REDEMPTION AND ACCELERATION
Special Mandatory Purchase. Subject to certain exceptions, if on any
Interest Rate Adjustment Date for this Note, the applicable Remarketing
Agent and applicable Standby Remarketing Agent(s) have not remarketed all
the Notes, Notes that have not been remarketed are subject to Special
Mandatory Purchase by the Company. The Company shall be obligated to pay
all accrued and unpaid interest, if any, on unremarketed Notes to such
Interest Rate Adjustment Date. Payment of the principal amount of
unremarketed Notes by the Company, and payment of accrued and unpaid
interest, if any, by the Company, will be made by deposit of same-day funds
with the Trustee (or such other account meeting the requirements of the
Depositary's procedures as in effect from time to time) irrevocably in
trust for the benefit of the Beneficial Owners of Notes subject to Special
Mandatory Purchase by 3:00 p.m., New York City time, on such Interest Rate
Adjustment Date.
Failure by the Company to purchase this Note pursuant to a Special
Mandatory Purchase will constitute an Event of Default under the Indenture
in which event the date of such failure shall constitute a date of Maturity
for this Note and the principal thereof may be declared due and payable in
the manner and with the effect provided in the Indenture. Following such
failure to pay pursuant to a Special Mandatory Purchase, this Note will
bear interest at the Special Interest Rate as provided above "INTEREST
RATE."
Optional Redemption on any Interest Rate Adjustment Date. This Note is
subject to redemption at the option of the Company in whole or in part on
any Interest Rate Adjustment Date relating thereto without notice to the
holders thereof at a redemption price equal to 100% of the principal amount
set forth in Annex A hereto.
Redemption While This Note is in the Long Term Rate Mode. If this Note
is in the Long Term Rate Mode, it is subject to redemption at the option of
the Company at the times and upon the terms specified at the time of
conversion to or within such Long Term Rate Mode as set forth in Annex A
hereto.
Notice of redemption shall be given by mail to the registered owner of
this Note, not less than 30 nor more than 60 days prior to the Redemption
Date, all as provided in the Indenture. The Company shall not be required
to (a) issue, register the transfer of or exchange Notes of this series
during a period beginning at the opening of business 15 days before the day
of the mailing of the relevant notice of redemption and ending at the close
of business on the day of such mailing or (b) register the transfer of or
exchange any Notes selected for redemption, in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
In the event of redemption of this Note in part only, a new Note or
Notes of this series, of like tenor, for the unredeemed portion hereof will
be issued in the name of the registered owner hereof upon the cancellation
hereof.
Allocation. Except in the case of a Special Mandatory Purchase, if
this Note is to be redeemed in part, the Depositary, after receiving notice
of redemption specifying the aggregate principal amount of this Note to be
so redeemed, will determine by lot (or otherwise in accordance with the
procedures of the Depositary) the principal amount this Note to be redeemed
from the account of each DTC Participant. After making its determination
as described above, the Depositary will give notice of such determination
to each DTC Participant from whose account this Notes is to be redeemed.
Each such DTC Participant, upon receipt of such notice will in turn
determine the principal amount of this Note to be redeemed from the
accounts of the Beneficial Owners of this Note for which it serves as DTC
Participant, and give notice of such determination to the Remarketing
Agent.
Acceleration. If any Event of Default with respect to the Notes shall
occur and be continuing, the principal of the Notes may be declared due and
payable in the manner and with the effect provided in the Indenture.
SPURS MODE
Notwithstanding anything herein to the contrary, the provisions of
this section shall apply to this Note when it is in a SPURS Mode and shall
supersede any conflicting provisions of general applicability contained
elsewhere herein, during the period from, and including, the commencement
of a SPURS Rate Period to, but excluding, the next succeeding Interest Rate
Adjustment Date (or, if the SPURS Agent does not elect to purchase this
Note on the applicable SPURS Remarketing Date designated for such SPURS
Mode or if after electing to so purchase this Note the SPURS Agent fails to
so purchase this Note for any reason, to the SPURS Remarketing Date).
During the period in which this Note is in a SPURS Mode, this Note shall
bear interest and be subject to remarketing by the applicable SPURS Agent
designated by the Company as described herein and identified in Annex A
hereto.
With respect to this Note in the SPURS Rate Period commencing on the
Original Issue Date, references herein to (i) the SPURS Agent and SPURS
Remarketing Date shall mean the Initial SPURS Agent and the Initial SPURS
Remarketing Date and (ii) the Interest Rate Adjustment Date on which the
SPURS Rate Period commences shall mean the Original Issue Date.
(a) Interest to SPURS Remarketing Date. The Interest Rate Period for
this Note in the SPURS Mode will be established by the Company (as
described under "INTEREST RATE" above) as a period of more than 364 days
and not exceeding the remaining term to the Stated Maturity of this Note;
provided, however, that such Interest Rate Period must end on the day prior
to an Interest Payment Date for this Note. A SPURS Rate Period shall
consist of the period to and excluding the SPURS Remarketing Date and the
period from and including the SPURS Remarketing Date to but excluding the
next succeeding Interest Rate Adjustment Date (set forth in Annex A
hereto), or, if the Remarketing Agent does not purchase the Notes thereon,
the Interest Rate Adjustment Date. The interest rate and, in the case of a
floating interest rate, the Spread (if any), and the Spread Multiplier (if
any), to the SPURS Remarketing Date for this Note if it is in the SPURS
Mode will be determined not later than 11:50 a.m., New York City time, on
the Interest Rate Adjustment Date of this Note, which for the SPURS Mode is
the first day of each Interest Rate Period for this Note. Such interest
rate will be the minimum rate of interest and, in the case of a floating
interest rate, Spread (if any) and Spread Multiplier (if any) necessary in
the judgment of such SPURS Agent to produce a par bid in the secondary
market for this Note on the date the interest is established. The
designated SPURS Remarketing Date shall be an Interest Payment Date within
such Interest Rate Period.
(b) Mandatory Tender. Provided that the SPURS Agent gives notice to
the Company and the Trustee on or before the Notification Date of its
intention to purchase the Notes for remarketing, this Note will be
automatically tendered to such SPURS Agent for purchase on the applicable
SPURS Remarketing Date, except in the circumstances described under
"Conversion or Redemption" below. The purchase price for the tendered
Notes to be paid by the SPURS Agent will be equal to 100% of the aggregate
principal amount thereof. When this Note is tendered to the SPURS Agent
for remarketing, the SPURS Agent may remarket the Note for its own account
at varying prices to be determined by the SPURS Agent at the time of each
sale. If the SPURS Agent elects to remarket the Note, the obligation of
the SPURS Agent to purchase the Note on the SPURS Remarketing Date is
subject to certain condition including no material adverse change in the
condition of the Company and its subsidiaries, considered as one
enterprise, shall have occurred and that no Event of Default (as defined in
the Indenture), or any event which, with the giving of notice or passage of
time, or both, would constitute an Event of Default, with respect to this
Note shall have occurred and be continuing.
(c) Remarketing; SPURS Interest Rate. The SPURS Interest Rate will
be determined by the SPURS Agent by 3:30 p.m., New York City time, on the
Determination Date to the nearest one hundred-thousandth (0.00001) of one
percent per annum, and will be equal to the sum of the Base Rate and the
Applicable Spread, which will be based on the Dollar Price of the Notes as
of the SPURS Remarketing Date.
(d) Notification of Results; Settlement. Provided the SPURS Agent
has previously notified the Company and the Trustee on the Notification
Date of its intention to purchase all tendered Notes on the SPURS
Remarketing Date, the SPURS Agent will notify the Company, the Trustee and
the Depositary by telephone, confirmed in writing, by 4:00 p.m., New York
City time, on the Determination Date, of the SPURS Interest Rate.
If the SPURS Agent does not elect to purchase this Note for
remarketing on the SPURS Remarketing Date or if the SPURS Agent gives
notice of its election to remarket this Note but for any reason does not
purchase all tendered Notes on the SPURS Remarketing Date, then this Note
will be subject to remarketing on such date by a Remarketing Agent
appointed by the Company in the Commercial Paper Term Mode or the Long Term
Rate Mode or a new SPURS Mode established by the Company; provided that, in
such case, the notice period required for conversion shall be the lesser of
ten (10) days and the period commencing the date that the SPURS Agent
notifies the Company that it will not purchase the Notes for remarketing on
the SPURS Remarketing Date or fails to so purchase, as the case may be.
The tendered Note will be automatically delivered to the account of
the Trustee, by book-entry through the Depositary pending payment of the
purchase price therefor, on the applicable SPURS Remarketing Date.
The SPURS Agent will make or cause the Trustee to make payment to the
Participant of each tendering Beneficial Owner of Notes, by book-entry
through the Depositary by the close of business on the SPURS Remarketing
Date against delivery through the Depositary by the close of business on
the SPURS Remarketing Date of such Beneficial Owner's tendered Notes.
The transactions described above will be executed on the SPURS
Remarketing Date through the Depositary in accordance with the procedures
of the Depositary, and the accounts of the respective DTC Participants will
be debited and credited and the Notes delivered by book-entry as necessary
to effect the purchases and sales thereof.
Transactions involving the sale and purchase of the Notes remarketed
by a SPURS Agent on or after a SPURS Remarketing Date will settle in
immediately available funds through the Depositary's Same-Day Funds
Settlement System.
The tender and settlement procedures described above, including
provisions for payment by purchasers of Notes in the remarketing or for
payment to selling Beneficial Owners of tendered Notes, may be modified,
notwithstanding any contrary terms of the Indenture, to the extent required
by the Depositary or, if the book-entry system is no longer available this
Note at the time of the remarketing, to the extent required to facilitate
the tendering and remarketing of this Note in certificated form. In
addition, the SPURS Agent may, notwithstanding any contrary terms of the
Indenture, modify the settlement procedures set forth above in order to
facilitate the settlement process.
As long as the Depositary's nominee holds the certificates
representing any Notes in the book-entry system of the Depositary, no
certificates for this Note will be delivered by any selling Beneficial
Owner to reflect any transfer of such Notes effected in the remarketing.
In addition, under the terms of this Note, the Company has agreed that,
notwithstanding any provision to the contrary set forth in the Indenture,
(a) it will use reasonable commercial efforts to maintain this Note in
book-entry form with the Depositary or any successor thereto and to appoint
a successor depositary to the extent necessary to maintain this Note in
book-entry form and (b) it will waive any discretionary right it otherwise
has under the Indenture to cause this Note to be issued in certificated
form.
(e) Conversion or Redemption. If the SPURS Agent elects to remarket
the Notes on the SPURS Remarketing Date, this Note will be subject to
mandatory tender to the SPURS Agent for remarketing on such date, subject
to the Company's right to convert the Note to a new Interest Rate Mode or
to redeem the Note from the SPURS Agent, in each case as described in the
next sentence. The Company will notify the SPURS Agent and the Trustee not
later than the Business Day immediately preceding the Determination Date if
the Company irrevocably elects to exercise its right to either convert the
Note to a new Interest Rate Mode or to redeem the Note from the SPURS Agent
at the Optional Redemption Price, in each case, on the applicable SPURS
Remarketing Date.
In the event that the Company irrevocably elects to convert the Note
to a new Interest Rate Mode, then as of the SPURS Remarketing Date, this
Note will be subject to remarketing on such date by a Remarketing Agent
appointed by the Company in a new SPURS Mode, a Long Term Rate Mode or a
Commercial Paper Term Mode established by the Company in accordance with
the procedures set forth herein; provided that, in such case, the notice
required for conversion shall be given no later than the Initial
Determination Date. In such case, the Company shall pay to the Initial
SPURS Agent the excess of the Dollar Price of the Notes over 100% of the
principal amount of the Notes in same-day funds by wire transfer to an
account designated by the Initial SPURS Agent.
In the event that the Company irrevocably elects to redeem this Note
from the SPURS Agent, it shall pay such SPURS Agent the Optional Redemption
Price in same-day funds by wire transfer to an account designated by the
SPURS Agent on the SPURS Remarketing Date.
If notice has been given as provided in the Indenture and funds for
the redemption of this Note called for redemption shall have been made
available on the redemption date referred to in such notice, this Note
shall cease to bear interest on the date fixed for such redemption
specified in such notice and the only right of the SPURS Agent from and
after the redemption date shall be to receive payment of the Optional
Redemption Price upon surrender of this Note in accordance with such
notice.
FLOATING INTEREST RATES
While this Note bears interest in the Long Term Rate Mode or the SPURS
Mode (with respect to the period from, and including, the Interest Rate
Adjustment Date commencing such period to, but excluding, the SPURS
Remarketing Date), the Company may elect a floating interest rate by
providing a notice, which will be submitted or promptly confirmed in
writing (which includes facsimile or appropriate electronic media),
received by the Trustee and the Remarketing Agent (a "Floating Interest
Rate Notice") for such Note not less than ten (10) days prior to the
Interest Rate Adjustment Date for such Long Term Rate Period or SPURS Rate
Period. The Floating Interest Rate Notice must identify by CUSIP number or
otherwise the portion of the Note to which it relates and state the
Interest Rate Period (or portion thereof, in the case of the SPURS Mode)
therefor to which it relates. Each Floating Interest Rate Notice must also
state the Interest Rate Basis or Bases, the initial Interest Reset Date,
the Interest Reset Period and Interest Reset Dates, the Interest Rate
Period and Interest Payment Dates, the Index Maturity and the Floating Rate
Maximum Interest Rate and/or Floating Rate Minimum Interest Rate, if any.
If one or more of the applicable Interest Rate Bases is LIBOR or the CMT
Rate, the Floating Interest Rate Notice will also specify the Index
Currency and Designated LIBOR Page or the Designated CMT Maturity Index and
Designated CMT Telerate Page, respectively.
If this Note bears interest at a floating rate in a Long Term Rate
Period or SPURS Rate Period, such Note will bear interest at the rate
determined by reference to the applicable Interest Rate Basis or Bases (a)
plus or minus the Spread, if any, and/or (b) multiplied by the Spread
Multiplier, if any, specified by the Remarketing Agent, in the case of a
Long Term Rate Period, or the SPURS Agent, in the case of a SPURS Rate
Period. Commencing on the Interest Rate Adjustment Date for such Interest
Rate Period, the rate at which interest on such Note will be payable will
be reset as of each Interest Reset Date during such Interest Rate Period
specified in the applicable Floating Interest Rate Notice.
The applicable floating interest rate on this Note during any Interest
Rate Period will be determined by reference to the applicable Interest Rate
Basis or Interest Rate Bases, which may include (i) the CD Rate, (ii) the
CMT Rate, (iii) the Federal Funds Rate, (iv) LIBOR, (v) the Prime Rate,
(vi) the Treasury Rate or (vii) such other Interest Rate Basis or interest
rate formula as may be specified in the applicable Floating Interest Rate
Notice (each, an "Interest Rate Basis").
Unless otherwise specified in the applicable Floating Interest Rate
Notice, the interest rate with respect to each Interest Rate Basis will be
determined in accordance with the applicable provisions below. Except as
set forth above or in the applicable Floating Interest Rate Notice, the
interest rate in effect on each day will be (i) if such day is an Interest
Reset Date, the interest rate determined as of the Interest Determination
Date immediately preceding such Interest Reset Date or (ii), if such day is
not an Interest Reset Date, the interest rate determined as of the Interest
Determination Date immediately preceding the most recent Interest Reset
Date. If any Interest Reset Date would otherwise be a day that is not a
Business Day, such Interest Reset Date will be postponed to the next
succeeding Business Day, unless LIBOR is an applicable Interest Rate Basis
and such Business Day falls in the next succeeding calendar month, in which
case such Interest Reset Date will be the immediately preceding Business
Day. In addition, if the Treasury Rate is an applicable Interest Rate
Basis and the Interest Determination Date would otherwise fall on an
Interest Reset Date, then such Interest Reset Date will be postponed to the
next succeeding Business Day.
The applicable Floating Interest Rate Notice will specify whether the
rate of interest will be reset daily, weekly, monthly, quarterly,
semiannually or annually or on such other specified basis (each, an
"Interest Reset Period") and the dates on which such rate of interest will
be reset (each, an "Interest Reset Date"). Unless otherwise specified in
the applicable Floating Interest Rate Notice, the Interest Reset Dates will
be, in the case of a floating interest rate which resets: (i) daily, each
Business Day; (ii) weekly, the Wednesday of each week (unless the Treasury
Rate is an applicable Interest Rate Basis, in which case the Tuesday of
each week except as described below); (iii) monthly, the third Wednesday of
each month; (iv) quarterly, the third Wednesday of March, June, September
and December of each year, (v) semiannually, the third Wednesday of the two
months specified in the applicable Floating Interest Rate Notice; and (vi)
annually, the third Wednesday of the month specified in the applicable
Floating Interest Rate Notice.
The interest rate applicable to each Interest Reset Period commencing
on the related Interest Reset Date will be the rate determined as of the
applicable Interest Determination Date. The "Interest Determination Date"
with respect to the CD Rate, the CMT Rate, the Federal Funds Rate and the
Prime Rate will be the second Business Day immediately preceding the
applicable Interest Reset Date; and the "Interest Determination Date" with
respect to LIBOR will be the second London Business Day immediately
preceding the applicable Interest Reset Date, unless the Index Currency is
British pounds sterling, in which case the "Interest Determination Date"
will be the applicable Interest Reset Date. The "Interest Determination
Date" with respect to the Treasury Rate will be the day within the week in
which the applicable Interest Reset Date falls upon which day Treasury
Bills (as defined below) are normally auctioned (Treasury Bills are
normally sold at an auction held on Monday of each week, unless that day is
a legal holiday, in which case the auction is normally held on the
following Tuesday, except that such auction may be held on the preceding
Friday); provided, however, that if an auction is held on the Friday of the
week preceding the applicable Interest Reset Date, the "Interest
Determination Date" will be such preceding Friday. If the interest rate of
this Note is a floating interest rate determined with reference to two or
more Interest Rate Bases specified in the applicable Floating Interest Rate
Notice, the "Interest Determination Date" pertaining to this Note will be
the most recent Business Day which is at least two Business Days prior to
the applicable Interest Reset Date on which each Interest Rate Basis is
determinable. Each Interest Rate Basis will be determined as of such date,
and the applicable interest rate will take effect on the related Interest
Reset Date.
Either or both of the following may also apply to the floating
interest rate on this Note for an Interest Rate Period: (i) a floating rate
maximum interest rate, or ceiling, that may accrue during any Interest
Reset Period (the "Floating Rate Maximum Interest Rate") and (ii) a
floating rate minimum interest rate, or floor, that may accrue during any
Interest Reset Period (the "Floating Rate Minimum Interest Rate"). In
addition to any Floating Rate Maximum Interest Rate that may apply, the
interest rate on this Note will in no event be higher than the maximum rate
permitted by New York law, as the same may be modified by United States
laws of general application.
Except as provided below or in the applicable Floating Interest Rate
Notice, interest will be payable, in the case of floating interest rates
which reset: (i) daily, weekly or monthly, on the third Wednesday of each
month or on the third Wednesday of March, June, September and December of
each year, as specified in the applicable Floating Interest Rate Notice;
(ii) quarterly, on the third Wednesday of March, June, September and
December of each year; (iii) semiannually, on the third Wednesday of the
two months of each year specified in the applicable Floating Interest Rate
Notice; and (iv) annually, on the third Wednesday of the month of each year
specified in the applicable Floating Interest Rate Notice and, in each
case, on the Business Day immediately following the applicable Long Term
Rate Period or SPURS Rate Period, as the case may be. If any Interest
Payment Date for the payment of interest at a floating rate (other than
following the end of the applicable Long Term Rate Period or SPURS Rate
Period, as the case may be) would otherwise be a day that is not a Business
Day, such Interest Payment Date will be postponed to the next succeeding
Business Day, except that if LIBOR is an applicable Interest Rate Basis and
such Business Day falls in the next succeeding calendar month, such
Interest Payment Date will be the immediately preceding Business Day.
All percentages resulting from any calculation of floating interest
rates will be rounded to the nearest one hundred thousandth of a percentage
point, with five one-millionths of a percentage point rounded upwards
(e.g., 9.876545% (or .09876545) would be rounded to 9.87655% (or
.0987655)), and all amounts used in or resulting from such calculation will
be rounded, in the case of United States dollars, to the nearest cent or,
in the case of a foreign currency or composite currency, to the nearest
unit (with one-half cent or unit being rounded upwards).
Accrued floating rate interest will be calculated by multiplying the
principal amount of the this Note by an accrued interest factor. Such
accrued interest factor will be computed by adding the interest factor
calculated for each day in the applicable Interest Reset Period. Unless
otherwise specified in the applicable Floating Interest Rate Notice, the
interest factor for each such day will be computed by dividing the interest
rate applicable to such day by 360, if an applicable Interest Rate Basis is
the CD Rate, the Federal Funds Rate, LIBOR or the Prime Rate, or by the
actual number of days in the year if an applicable Interest Rate Basis is
the CMT Rate or the Treasury Rate. Unless otherwise specified in the
applicable Floating Interest Rate Notice, if the floating interest rate is
calculated with reference to two or more Interest Rate Bases, the interest
factor will be calculated in each period in the same manner as if only one
of the applicable Interest Rate Bases applied as specified in the
applicable Floating Interest Rate Notice.
If this Note bears interest at a floating rate, the applicable
Remarketing Dealer will determine the interest rate in effect from the
Interest Rate Adjustment Date for this Note to the initial Interest Reset
Date. A calculation agent selected by the Company (a "Calculation Agent")
will determine the interest rate in effect for each Interest Reset Period
thereafter. Upon request of the Beneficial Owner of this Note, after any
Interest Rate Adjustment Date, the Calculation Agent or the Remarketing
Dealer will disclose the interest rate and, in the case of a floating
interest rate, Interest Rate Basis or Bases, Spread (if any) and Spread
Multiplier (if any), and in each case the other terms applicable to this
Note then in effect and, if determined, the interest rate that will become
effective as a result of a determination made for the next succeeding
Interest Reset Date with respect to this Note. Except as described herein
if this Note is earning interest at floating rates, no notice of the
applicable interest rate, Spread (if any) or Spread Multiplier (if any)
will be sent to the Beneficial Owner of this Note.
Unless otherwise specified in the applicable Floating Interest Rate
Notice, the "Calculation Date," if applicable, pertaining to any Interest
Determination Date will be the earlier of (i) the tenth calendar day after
such Interest Determination Date or, if such day is not a Business Day, the
next succeeding Business Day or (ii) the Business Day immediately preceding
the applicable Interest Payment Date or Maturity, as the case may be.
CD Rate. If an Interest Rate Basis for this Note is specified in the
applicable Floating Interest Rate Notice as the "CD Rate," the CD Rate
shall mean, with respect to any Interest Determination Date relating to
this Note for which the interest rate is determined with reference to the
CD Rate (a "CD Rate Interest Determination Date"), the rate on such date
for negotiable United States dollar certificates of deposit having the
Index Maturity specified in the applicable Floating Interest Rate Notice as
published in H.15(519) under the heading "CDs (Secondary Market)," or, if
not published by 3:00 p.m., New York City time, on the related Calculation
Date, the rate on such CD Rate Interest Determination Date for negotiable
United States dollar certificates of deposit of the Index Maturity
specified in the applicable Floating Interest Rate Notice as published in
Composite Quotations under the heading "Certificates of Deposit." If such
rate is not yet published in either H.15(519) or Composite Quotations by
3:00 p.m., New York City time, on the related Calculation Date, then the CD
Rate on such CD Rate Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of the secondary market
offered rates as of 10:00 a.m., New York City time, on such CD Rate
Interest Determination Date, of three leading nonbank dealers in negotiable
United States dollar certificates of deposit in the City of New York (which
may include the Remarketing Agent or its affiliates) selected by the
Calculation Agent, after consultation with the Company, for negotiable
United States dollars certificates of deposit of major United States money
center banks for negotiable certificates of deposit with a remaining
maturity closest to the Index Maturity specified in the applicable Floating
Interest Rate Notice in an amount that is representative for a single
transaction in that market at that time; provided, however, that if the
dealers so selected by the Calculation Agent are not quoting as mentioned
in this sentence, the CD Rate determined as of such CD Rate Interest
Determination Date will be the CD Rate in effect on such CD Rate Interest
Determination Date.
CMT Rate. If an Interest Rate Basis for this Note is specified in the
applicable Floating Interest Rate Notice as the "CMT Rate," the CMT Rate
shall mean, with respect to any Interest Determination Date relating to
this Note for which the interest rate is determined with reference to the
CMT Rate (a "CMT Rate Interest Determination Date"), the rate displayed on
the Designated CMT Telerate Page (as defined below) under the caption
"...Treasury Constant Maturities ... Federal Reserve Board Release H.15 ...
Mondays Approximately 3:45 P.M.," under the column for the Designated CMT
Maturity Index (as defined below) for (i) if the Designated CMT Telerate
Page is 7055, the rate on such CMT Rate Interest Determination Date and
(ii) if the Designated CMT Telerate Page is 7052, the weekly or monthly
average, as specified in the Floating Interest Rate Notice, for the week or
the month, as applicable, ended immediately preceding the week or the
month, as applicable, in which the related CMT Rate Interest Determination
Date occurs. If such rate is no longer displayed on the relevant page or
is not displayed by 3:00 p.m., New York City time, on the related
Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index as published in H.15(519). If such rate is
no longer published or is not published by 3:00 p.m., New York City time,
on the related Calculation Date, then the CMT Rate on such CMT Rate
Interest Determination Date will be such treasury constant maturity rate
for the Designated CMT Maturity Index (or other United States Treasury rate
for the Designated CMT Maturity Index) for the CMT Rate Interest
Determination Date with respect to such Interest Reset Date as may then be
published by either the Board of Governors of the Federal Reserve System or
the United States Department of the Treasury that the Calculation Agent
determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in H.15(519). If such
information is not provided by 3:00 p.m., New York City time, on the
related Calculation Date, then the CMT Rate on the CMT Rate Interest
Determination Date will be calculated by the Calculation Agent and will be
a yield to maturity, based on the arithmetic mean of the secondary market
closing offer side prices as of approximately 3:30 p.m., New York City
time, on such CMT Rate Interest Determination Date reported, according to
their written records, by three leading primary United States government
securties dealers (each, a "Reference Dealer") in the City of New York
(which may include the Remarketing Agent or its affiliates) selected by the
Calculation Agent after consultation with the Company (from five such
Reference Dealers selected by the Calculation Agent, after consultation
with the Company, and eliminating the highest quotation (or, in the event
of equality, one of the highest) and the lowest quotation (or, in the event
of equality, one of the lowest)), for the most recently issued direct
noncallable fixed rate obligations of the United States ("Treasury Notes")
with an original maturity of approximately the Designated CMT Maturity
Index and a remaining term to maturity of not less than such Designated CMT
Maturity Index minus one year. If the Calculation Agent is unable to
obtain three such Treasury Note quotations, the CMT Rate on such CMT Rate
Interest Determination Date will be calculated by the Calculation Agent and
will be a yield to maturity based on the arithmetic mean of the secondary
market offer side prices as of approximately 3:30 p.m., New York City time,
on such CMT Rate Interest Determination Date of three Reference Dealers in
the City of New York (from five such Reference Dealers selected by the
Calculation Agent, after consultation with the Company, and eliminating the
highest quotation (or, in the event of equality, one of the highest) and
the lowest quotation (or, in the event of equality, one of the lowest)),
for Treasury Notes with an original maturity of the number of years that is
the next highest to the Designated CMT Maturity Index and a remaining term
to maturity closest to the Designated CMT Maturity Index and in an amount
of at least U.S. $100 million. If three or four (and not five) of such
Reference Dealers are quoting as described above, then the CMT Rate will be
based on the arithmetic mean of the offer prices obtained and neither the
highest nor the lowest of such quotes will be eliminated; provided,
however, that if fewer than three Reference Dealers so selected by the
Calculation Agent, after consultation with the Company, are quoting as
mentioned herein, the CMT Rate determined as of such CMT Rate Interest
Determination Date will be the CMT Rate in effect on such CMT Rate Interest
Determination Date. If two Treasury Notes with an original maturity as
described in the second preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the Calculation Agent,
after consultation with the Company, will obtain from five Reference
Dealers quotations for the Treasury Note with the shorter remaining term to
maturity.
Federal Funds Rate. If an Interest Rate Basis for this Note is
specified in the applicable Floating Interest Rate Notice, as the "Federal
Funds Rate", the Federal Funds Rate means, with respect to any Interest
Determination Date relating to this Note for which the interest rate is
determined with reference to the Federal Funds Rate (a "Federal Funds Rate
Interest Determination Date"), the rate on such date for United States
dollar federal funds as published in H.15(519) under the heading "Federal
Funds (Effective)" or, if not published by 3:00 p.m., New York City time,
on the Calculation Date, the rate on such Federal Funds Rate Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate." If such rate is not published in either
H.15(519) or Composite Quotations by 3:00 p.m., New York City time, on the
related Calculation Date, then the Federal Funds Rate on such Federal Funds
Rate Interest Determination Date will be calculated by the Calculation
Agent and will be the arithmetic mean of the rates for the last transaction
in overnight United States dollar federal funds arranged by three leading
brokers of federal funds transactions in the City of New York (which may
include the Remarketing Agent or its affiliates) selected by the
Calculation Agent after consultation with the Company, prior to 9:00 a.m.,
New York City time, on such Federal Funds Rate Interest Determination Date;
provided, however, that if the brokers so selected by the Calculation Agent
are not quoting as mentioned in this sentence, the Federal Funds Rate
determined as of such Federal Funds Rate Interest Determination Date will
be the Federal Funds Rate in effect on such Federal Funds Rate Interest
Determination Date.
LIBOR. If an Interest Rate Basis for this Note is specified in the
applicable Floating Interest Rate Notice as "LIBOR," LIBOR shall mean the
rate determined by the Calculation Agent as of the applicable Interest
Determination Date (a "LIBOR Interest Determination Date") in accordance
with the following provisions:
(i) If (a) "LIBOR Reuters" is specified in the applicable Floating
Interest Rate Notice, the arithmetic mean of the offered rates (unless
the Designated LIBOR Page by its terms provides only for a single
rate, in which case such single rate will be used) for deposits in the
Index Currency having the Index Maturity specified in the applicable
Floating Interest Rate Notice, commencing on the applicable Interest
Reset Date, that appear (or, if only a single rate is required as
aforesaid, appears) on the Designated LIBOR Page as of 11:00 a.m.,
London time, on such LIBOR Interest Determination Date, or (b) "LIBOR
Telerate" is specified in the applicable Floating Interest Rate
Notice, or if neither "LIBOR Reuters" nor "LIBOR Telerate" is
specified in the applicable Floating Interest Rate Notice as the
method for calculating LIBOR, the rate for deposits in the Index
Currency having the Index Maturity specified in the applicable
Floating Interest Rate Notice, commencing on such Interest Reset Date,
that appears on the Designated LIBOR Page as of 11:00 a.m., London
time, on such LIBOR Interest Determination Date. If fewer than two
such offered rates appear, or if no such rate appears, as applicable,
LIBOR on such LIBOR Interest Determination Date will be determined in
accordance with the provisions described in clause (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which
fewer than two offered rates appear, or no rate appears, as the case
may be, on the Designated LIBOR Page as specified in clause(i) above,
the Calculation Agent will request the principal London offices of
each of four major reference banks in the London interbank market, as
selected by the Calculation Agent, after consultation with the
Company, to provide the Calculation Agent with its offered quotation
for deposits in the Index Currency for the period of the Index
Maturity specified in the applicable Floating Interest Rate Notice,
commencing on the applicable Interest Reset Date, to prime banks in
the London interbank market at approximately 11:00 a.m., London time,
on such LIBOR Interest Determination Date and in a principal amount
that is representative for a single transaction in such Index Currency
in such market at such time. If at least two such quotations are so
provided, then LIBOR on such LIBOR Interest Determination Date will be
the arithmetic mean of such quotations. If fewer than two such
quotations are so provided, then LIBOR on such LIBOR Interest
Determination Date will be the arithmetic mean of the rates quoted at
approximately 11:00 a.m., in the applicable Principal Financial
Center, on such LIBOR Interest Determination Date by three major banks
in such Principal Financial Center selected by the Calculation Agent,
after consultation with the Company, for loans in the Index Currency
to leading European banks, having the Index Maturity specified in the
applicable Floating Interest Rate Notice and in a principal amount
that is representative for a single transaction in such Index Currency
in such market at such time; provided, however, that if the banks so
selected by the Calculation Agent are not quoting as mentioned in this
sentence, LIBOR determined as of such LIBOR Interest Determination
Date will be LIBOR in effect on such LIBOR Interest Determination
Date.
Prime Rate. If an Interest Rate Basis for this Note is specified in
the applicable Floating Interest Rate Notice as the "Prime Rate," Prime
Rate shall mean, with respect to any Interest Determination Date relating
to this Note for which the interest rate is determined with reference to
the Prime Rate (a "Prime Rate Interest Determination Date"), the rate on
such date as such rate is published in H.15(519) under the heading "Bank
Prime Loan." If such rate is not published prior to 3:00 p.m., New York
City time, on the related Calculation Date, then the Prime Rate will be the
arithmetic mean of the rates of interest publicly announced by each bank
that appears on the Reuters Screen U.S. PRIME 1 Page as such bank's prime
rate or base lending rate as in effect for such Prime Rate Interest
Determination Date. If fewer than four such rates appear on the Reuters
Screen U.S. PRIME 1 Page for such Prime Rate Interest Determination Date,
the Prime Rate will be the arithmetic mean of the prime rates quoted on the
basis of the actual number of days in the year divided by a 360-day year as
of the close of business on such Prime Rate Interest Determination Date by
four major money center banks (which may include the Calculation Agent) in
the City of New York selected by the Calculation Agent, after consultation
with the Company. If fewer than four such quotations are so provided, the
Prime Rate will be the arithmetic mean of four prime rates quoted on the
basis of the actual number of days in the year divided by a 360-day year as
of the close of business on such Prime Rate Interest Determination Date as
furnished in the City of New York by the major money center banks, if any,
that have provided such quotations and by as many substitute banks or trust
companies (which may include the Calculation Agent) as necessary in order
to obtain four such prime rate quotations, provided such substitute banks
or trust companies are organized and doing business under the laws of the
United States, or any State thereof, have total equity capital of at least
U.S. $500 million and are each subject to supervision or examination by
Federal or State authority, selected by the Calculation Agent, after
consultation with the Company, to provide such rate or rates; provided,
however, that if the banks or trust companies so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the Prime
Rate determined as of such Prime Rate Interest Determination Date will be
the Prime Rate in effect on such Prime Rate Interest Determination Date.
Treasury Rate. If an Interest Rate Basis for this Note is specified
in the applicable Floating Interest Rate Notice as the "Treasury Rate,"
Treasury Rate means, with respect to any Interest Determination Date
relating to this Note for which the interest rate is determined with
reference to the Treasury Rate (a "Treasury Rate Interest Determination
Date"), as the rate from the auction held on such Treasury Rate Interest
Determination Date (the "Auction") of direct obligations of the United
States ("Treasury Bills") having the Index Maturity specified in the
applicable Floating Interest Rate Notice, as such rate is published in
H.15(519) under the heading "Treasury Bills-auction average (investment)"
or, if not published by 3:00 p.m., New York City time, on the related
Calculation Date, the auction average rate of such Treasury Bills
(expressed as a bond equivalent on the basis of a year of 365 or 366 days,
as applicable, and applied on a daily basis) as otherwise announced by the
United States Department of the Treasury. In the event that the results of
the Auction of Treasury Bills having the Index Maturity specified in the
applicable Floating Interest Rate Notice are not reported as provided above
by 3:00 p.m., New York City time, on such Calculation Date, or if no such
Auction is held, then the Treasury Rate will be calculated by the
Calculation Agent, and will be a yield to maturity (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the arithmetic mean of the secondary market
bid rates, as of approximately 3:30 p.m., New York City time, on such
Treasury Rate Interest Determination Date, of three leading primary United
States government securities dealers (which may include the Remarketing
Agent or its affiliates) selected by the Calculation Agent, after
consultation with the Company, for the issue of Treasury Bills with a
remaining maturity closest to the Index Maturity specified in the
applicable Floating Interest Rate Notice; provided, however, that if the
dealers so selected by the Calculation Agent are not quoting as mentioned
in this sentence, the Treasury Rate determined as of such Treasury Rate
Interest Determination Date will be the Treasury Rate in effect on such
Treasury Rate Interest Determination Date.
OTHER PROVISIONS
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Holders of the Securities of each series
to be affected under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of a majority in principal amount
of the Securities at the time Outstanding of each series to be affected and
of the Holders of 66 2/3% in principal amount of the Securities at the time
Outstanding of all series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal
amount of the Securities of each series at the time Outstanding, on behalf
of the Holders of all Securities of such series, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. To the extent permitted by
law, any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if
any) and interest on this Note at the times, place and rate, and in the
coin or currency, herein prescribed.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
This Note shall be governed by and construed in accordance with the
laws of The State of New York.<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT--______CUSTODIAN_____
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with right Under Uniform Gifts to Minors
of survivorship and not as Act
tenants in common ___________________________
(State)
Additional abbreviations may also be used though not in the above
list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Security or
Other Identifying Number of Assignee
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
the within Security of Tampa Electric Company and does hereby irrevocably
constitute and appoint
__________________________________________________ attorney to transfer
said Security on the
books of the Company, with full power of substitution in the premises.
Dated:
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular,
without alteration or enlargement or any change whatsoever.
ANNEX A
Remarketed Note Due 2038
Initial Interest Rate Period
CUSIP Number:
Principal Amount: $50,000,000
Original Issue Date: July ___, 1998
Issue Price: 100%
Stated Maturity: July 15, 2038
Initial Interest Rate: [ ]% per annum
Interest Payment Dates: July 15 and January 15, commencing
January 15, 1999
Record Dates: Fifteenth calendar day immediately
preceding the related Interest Payment
Date whether or not a Business Day
Initial SPURS Agent: Citibank, N.A.
Initial SPURS
Remarketing Date: July 15, 2001
SPURS Period: July 15, 2001 up to, but excluding, July
15, 2011
Base Rate: 5.41%
SPURS Interest Rate:
Reference Corporate Dealers: Citicorp Securities, Inc.
Morgan Stanley & Co. Incorporated
Bear Stearns & Co. Inc.
Chase Securities Inc.
Goldman, Sachs & Co.
Reference Treasury Dealers: Citicorp Securities, Inc.
Morgan Stanley & Co. Incorporated
Bear Stearns & Co. Inc.
Chase Securities Inc.
Goldman, Sachs & Co.
<PAGE>
Subsequent Interest Rate Period(s)
CUSIP Number:
Principal Amount:
Interest Rate Adjustment Date:
Record Date(s):
Interest Payment Date(s):
Interest Rate Mode:
[ ] Commercial Paper Term Mode
[ ] Long Term Rate Mode
[ ] SPURS Mode
[ ] SPURS Agent:
[ ] SPURS Remarketing Date:
[ ] SPURS Rate Period:
[ ] Base Rate:
[ ] SPURS Interest Rate:
[ ] Reference Corporate Dealers:
[ ] Reference Treasury Dealers:
<PAGE>
Interest Rate:
[ ] Fixed Rate:
[ ] Floating Rate:
Calculation Agent: . . . . . . . . . . . . . . . . . .
Initial Interest Rate to Initial Interest Reset
Date:
Interest Rate Basis(es):
[ ] CD Rate
Index Maturity:
[ ] CMT Rate
Index Maturity:
Designated CMT Telerate Page:
[ ] Commercial Paper Rate
Index Maturity:
[ ] Federal Funds Rate
[ ] LIBOR
[ ] LIBOR Reuters
Index Currency:
Index Maturity:
[ ] LIBOR Telerate
Index Currency:
Index Maturity:
[ ] Prime Rate
[ ] Treasury Rate
Index Maturity:
Spread (+/-):
Spread Multiplier:
Floating Rate Maximum Interest Rate:
Floating Rate Minimum Interest Rate:
Initial Interest Reset Date:
Interest Reset Date:
Interest Reset Period(s):
Day Count Convention:
[ ] Actual/360
[ ] Actual/Actual
[ ] 30/360
Applicable Interest Rate Basis:
Optional Redemption Provisions (Long Term Rate Mode):
Applicable Redemption Period Redemption Price
Other or Alternative Terms of Optional Repayment:
Early Remarketing Provisions (Long Term Rate Mode):
Initial Early Remarketing Date:_____________
Initial Early Remarketing Premium:__________
Annual Early Remarketing Premium Percentage
Reduction:_________
Other or Alternative Terms of Early Remarketing:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
Other Provisions:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________<PAGE>
EXHIBIT B
TAMPA ELECTRIC COMPANY
REMARKETED NOTES DUE 2038
SUPPLEMENTAL COMPANY ORDER
Pursuant to Article Five of the First Supplemental
Indenture, dated as of July 15, 1998, to the Indenture, dated as
of July 1, 1998, as amended, you are instructed to prepare and
authenticate a Note, of the series identified above, in the
principal amount of $______________. The Note is being delivered
in exchange for issued and outstanding Notes of the series
identified above.
IN WITNESS WHEREOF, I have hereunto set my hand this _____
day of ______, 1998.
TAMPA ELECTRIC COMPANY
By:
Name:
Title:
<PAGE>
EXHIBIT C
[Tampa Electric Company Letterhead]
FLOATING INTEREST RATE NOTICE
[Date]
To: [Remarketing Agent(s)]
[Address]
The Bank of New York
10161 Centurion Parkway
Jacksonville, Florida 32256
Attention: Corporate Trust Trustee Administration
Telecopy: (904) 645-1997
Re: Remarketed Notes Due 2038 (the "Notes")
Ladies and Gentlemen:
This Floating Interest Rate Notice relates to (i)
$_______________ principal amount of the Notes (CUSIP No.
___________) and (ii) the proposed [Long Term Rate Period] [SPURS
Rate Period] of the Note (the "Interest Rate Period") commencing
on ___________ and ending on ___________. Capitalized terms used
and not otherwise defined herein shall have their respective
meanings assigned to them in the Notes.
We hereby notify you that the above-referenced Notes will
bear the following floating rate terms during the Interest Rate
Period specified above:
1. The Interest Rate Basis(es) shall be:
[ ] CD Rate, where the Index Maturity will be
______________;
[ ] CMT Rate, where the Designated CMT Maturity Index will
be _____________, and the Designated CMT Telerate Page
will be ____________;
[ ] Federal Funds Rate;
[ ] LIBOR Reuters, where the Index Currency will be
___________, and the Designated LIBOR Page will be
__________;
[ ] LIBOR Telerate, where the Index Currency will be
_____________ , and the Designated LIBOR Page will be
_____________;
[ ] Prime Rate;
[ ] Treasury Rate
2. The floating interest rate will be reset as follows:
[ ] Initial Interest Reset Date will be __________ ;
[ ] Interest Reset Dates will be _____________;
[ ] Interest Reset Period will be ____________;
3. The interest will be paid as follows:
[ ] Interest Payment Dates will be _____________;
[ ] Interest Rate Period will be ____________;
[ ] Index Maturity will be _________;
[ ] Floating Rate Maximum Interest Rate will be
____________;
[ ] Floating Rate Minimum Interest Rate will be
______________.
4. Day Count Convention:
[ ] Actual/360;
[ ] Actual/Actual;
[ ] 30/360.
5. Other terms: [ ]
Each Beneficial Owner of the Note will be deemed to have
tendered such Note as of the Interest Rate Adjustment Date and
will not be entitled to further accrual of interest after the
Interest Rate Adjustment Date.
TAMPA ELECTRIC COMPANY
By:
Name:
Title:
<PAGE>
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION. . . . . . . . . . . . . . . . . . . . . . 2
Section 101 Definitions. . . . . . . . . . . . . . . . . . . . . . 2
Section 102 Section References . . . . . . . . . . . . . . . . . . 8
ARTICLE TWO DESIGNATION AND TERMS OF THE NOTES . . . . . . . . . . 8
Section 201. Establishment of Series. . . . . . . . . . . . . . . . 8
Section 202. Variations in Terms of Notes . . . . . . . . . . . . . 8
Section 203. Amount and Denominations; the Depositary . . . . . . . 9
Section 204. Interest Rates, Interest Payment Dates and
Interest Rate Periods. . . . . . . . . . . . . . . . . 9
Section 205. Determination of Interest Rates. . . . . . . . . . . .11
Section 206. Election and Determination of a Floating
Interest Rate by the
Company. . . . . . . . . . . . . . . . . . . . . . . .12
Section 207. Conversion Between Interest Rate Modes by the
Company. . . . . . . . . . . . . . . . . . . . . . . .19
Section 208. Automatic Tender of Notes on the Interest Rate
Adjustment Date. . . . . . . . . . . . . . . . . . . .21
Section 209. Remarketing. . . . . . . . . . . . . . . . . . . . . .21
Section 210. Purchase and Redemption of Notes . . . . . . . . . . .23
Section 211. Form and Other Terms of the Notes. . . . . . . . . . .24
ARTICLE THREE THE SPURS MODE . . . . . . . . . . . . . . . . . . . .25
Section 301. Applicability of Article . . . . . . . . . . . . . . .25
Section 302. Initial SPURS Rate Period. . . . . . . . . . . . . . .25
Section 303. Interest to SPURS Remarketing Date . . . . . . . . . .25
Section 304. Tender to and Remarketing by the SPURS Agent . . . . .25
Section 305. Conversion or Redemption Following Election by
the SPURS
Agent to Remarket. . . . . . . . . . . . . . . . . . .27
ARTICLE FOUR ADDITIONAL EVENTS OF DEFAULT WITH RESPECT
TO THE NOTES . . . . . . . . . . . . . . . . . . . . .28
Section 401. Definition . . . . . . . . . . . . . . . . . . . . . .28
ARTICLE FIVE AUTHENTICATION AND DELIVERY OF THE NOTES . . . . . . .28
Section 501. Authentication and Delivery. . . . . . . . . . . . . .28
ARTICLE SIX SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . . . .29
Section 601. Effect On Original Indenture . . . . . . . . . . . . .29
ARTICLE SEVEN MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . .29
Section 701. Counterparts . . . . . . . . . . . . . . . . . . . . .29
Section 702. Recitals . . . . . . . . . . . . . . . . . . . . . . .29
Section 703. Governing Law. . . . . . . . . . . . . . . . . . . . .29
Exhibit 10.1
TECO ENERGY, INC.
1996 EQUITY INCENTIVE PLAN
Restricted Stock Agreement
TECO Energy, Inc. (the "Company") and ___________________ (the
"Grantee") have entered into this Restricted Stock Agreement (the
"Agreement") dated April 15, 1998 under the Company's 1996 Equity Incentive
Plan (the "Plan"). Capitalized terms not otherwise defined herein have the
meanings given to them in the Plan.
1. Grant of Restricted Stock. Pursuant to the Plan and subject to
the terms and conditions set forth in this Agreement, the Company hereby
grants, issues and delivers to the Grantee ______ shares of its Common
Stock (the "Restricted Stock").
2. Restrictions on Stock. Until the restrictions terminate under
Section 3, unless otherwise determined by the Committee:
(a) the Restricted Stock may not be sold, assigned, pledged or
transferred by the Grantee; and
(b) all shares of Restricted Stock will be forfeited and
returned to the Company if the Grantee ceases to be an employee of the
Company or any business entity in which the Company owns directly or
indirectly 50% or more of the total voting power or has a significant
financial interest as determined by the Committee (an "Affiliate").
3. Termination of Restrictions. The restrictions on all shares of
Restricted Stock will terminate on the earliest to occur of the following
events:
(a) the Grantee's death;
(b) the termination of Grantee's employment with the Company or
any Affiliate because of a disability that would entitle the Grantee to
benefits under the long-term disability benefits program of the Company for
which the Grantee is eligible, as determined by the Committee;
(c) the termination by the Company or any Affiliate of Grantee's
employment other than for Cause as determined by the Committee. "Cause"
means (i) willful and continued failure of the Grantee to substantially
perform his duties with the Company or such Affiliate (other than by reason
o f physical or mental illness) after written demand specifically
identifying such failure is given to the Grantee by the Company, or (ii)
willful conduct by the Grantee that is demonstrably and materially
injurious to the Company. For purposes of this subsection, "willful"
conduct requires an act, or failure to act, that is not in good faith and
that is without reasonable belief that the action or omission was in the
best interest of the Company or the Affiliate;<PAGE>
(d) the Grantee's attainment of the age at which benefits are
payable under the TECO Energy Group Retirement Plan or any successor
thereto without reduction for commencement of benefits before normal
retirement age, or any earlier date that the Committee determines will
constitute a normal retirement for purposes of this Agreement;
(e) upon a Change in Control. For purposes of this Agreement, a
"Change in Control" means a change in control of the Company of a nature
that would be required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), whether or not the Company is in
fact required to comply therewith; provided, that, without limitation, such
a Change in Control shall be deemed to have occurred if:
(1) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than the Company, any trustee or
other fiduciary holding securities under an employee benefit plan of
the Company or a corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as
their ownership of stock of the Company is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or more of
t h e combined voting power of the Company's then outstanding
securities;
(2) during any period of twenty-four (24) consecutive
months (not including any period prior to the date of this Agreement),
individuals who at the beginning of such period constitute the Board
of Directors of the Company and any new director (other than a
director designated by a person who has entered into an agreement with
the Company to effect a transaction described in subsections (1), (3)
or (4) of this Section 3(e)) whose election by the Board of Directors
of the Company or nomination for election by the shareholders of the
Company was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election
was previously so approved, cease for any reason to constitute a
majority thereof;
(3) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than
(i) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 50%
of the combined voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation or
(ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
"person" (as defined above) acquires 30% or more of the combined
voting power of the Company's then outstanding securities; or
(4) the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
- 2 -<PAGE>
disposition by the Company of all or substantially all of the
Company's assets; or
(f) the fifth anniversary of the date of this Agreement.
4. Rights as Shareholder. Subject to the restrictions and other
limitations and conditions provided in this Agreement, the Grantee as owner
of the Restricted Stock will have all the rights of a shareholder,
including but not limited to the right to receive all dividends paid on,
and the right to vote, such Restricted Stock.
5. Stock Certificates. Each certificate issued for shares of
Restricted Stock will be registered in the name of the Grantee and
deposited by the Grantee, together with a stock power endorsed in blank,
with the Company and will bear a legend in substantially the following
form:
THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK
REPRESENTED HEREBY ARE SUBJECT TO THE TERMS, CONDITIONS AND
RESTRICTIONS (INCLUDING RESTRICTIONS ON TRANSFER AND FORFEITURE
PROVISIONS) CONTAINED IN AN AGREEMENT BETWEEN THE REGISTERED
OWNER AND TECO ENERGY, INC. A COPY OF SUCH AGREEMENT WILL BE
FURNISHED TO THE HOLDER OF THIS CERTIFICATE UPON WRITTEN REQUEST
AND WITHOUT CHARGE.
Upon the termination of the restrictions imposed under this Agreement
as to any shares of Restricted Stock deposited with the Company hereunder,
the Company will return to the Grantee (or to such Grantee's legal
representative, beneficiary or heir) certificates, without such legend, for
such shares.
6. Notice of Election Under Section 83(b). If the Grantee makes an
election under Section 83(b) of the Internal Revenue Code of 1986, as
amended, he will provide a copy thereof to the Company within thirty days
of the filing of such election with the Internal Revenue Service.
7. Withholding Taxes. The Grantee will pay to the Company, or make
provision satisfactory to the Committee for payment of, any taxes required
by law to be withheld in respect of the Restricted Stock no later than the
date of the event creating the tax liability. In the Committee's
discretion, such tax obligations may be paid in whole or in part in shares
of Common Stock, including the Restricted Stock, valued at fair market
value on the date of delivery. The Company and its Affiliates may, to the
extent permitted by law, deduct any such tax obligations from any payment
of any kind otherwise due to the Grantee.
8. The Committee. Any determination by the Committee under, or
interpretation of the terms of, this Agreement or the Plan will be final
and binding on the Grantee.
9. Limitation of Rights. The Grantee will have no right to
continued employment by virtue of this grant of Restricted Stock.
10. Amendment. The Company may amend, modify or terminate this
Agreement, including substituting another Award of the same or a different
- 3 -<PAGE>
type and changing the date of realization, provided that the Grantee's
consent to such action will be required unless the action, taking into
account any related action, would not adversely affect the Grantee.
11. G o verning Law. This Agreement will be governed by and
interpreted in accordance with the laws of Florida.
TECO ENERGY, INC.
By: ______________________
G. F. Anderson
Chairman of the Board and
Chief Executive Officer
_________________________
Signature of Grantee
- 4 -<PAGE>
Exhibit 10.2
TECO ENERGY, INC.
1996 EQUITY INCENTIVE PLAN
Restricted Stock Agreement
TECO Energy, Inc. (the "Company") and _______________________(the
"Grantee") have entered into this Restricted Stock Agreement (the
"Agreement") dated April 15, 1998 under the Company's 1996 Equity Incentive
Plan (the "Plan"). Capitalized terms not otherwise defined herein have the
meanings given to them in the Plan.
1. Grant of Restricted Stock. Pursuant to the Plan and subject to
the terms and conditions set forth in this Agreement, the Company hereby
grants, issues and delivers to the Grantee _________ shares of its Common
Stock (the "Restricted Stock").
2. Restrictions on Stock. Until the restrictions terminate under
Section 3, unless otherwise determined by the Committee:
(a) the Restricted Stock may not be sold, assigned, pledged or
transferred by the Grantee; and
(b) all shares of Restricted Stock will be forfeited and
returned to the Company if the Grantee ceases to be an employee of the
Company or any business entity in which the Company owns directly or
indirectly 50% or more of the total voting power or has a significant
financial interest as determined by the Committee (an "Affiliate").
3. Termination of Restrictions. The restrictions on all shares of
Restricted Stock will terminate on the earliest to occur of the following:
(a) the Grantee's death;
(b) the termination of Grantee's employment with the Company or
any Affiliate because of a disability that would entitle the Grantee to
benefits under the long-term disability benefits program of the Company for
which the Grantee is eligible, as determined by the Committee;
(c) the termination by the Company or any Affiliate of Grantee's
employment other than for Cause as determined by the Committee. "Cause"
means (i) willful and continued failure of the Grantee to substantially
perform his duties with the Company or such Affiliate (other than by reason
o f physical or mental illness) after written demand specifically
identifying such failure is given to the Grantee by the Company, or (ii)
willful conduct by the Grantee that is demonstrably and materially
injurious to the Company. For purposes of this subsection, "willful"
conduct requires an act, or failure to act, that is not in good faith and
that is without reasonable belief that the action or omission was in the
best interest of the Company or the Affiliate;
(d) April 15, 1999; or
(e) upon a Change in Control. For purposes of this Agreement, a
"Change in Control" means a change in control of the Company of a nature
that would be required to be reported in response to Item 6(e) of Schedule<PAGE>
14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), whether or not the Company is in
fact required to comply therewith; provided, that, without limitation, such
a Change in Control shall be deemed to have occurred if:
(1) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than the Company, any trustee or
other fiduciary holding securities under an employee benefit plan of
the Company or a corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as
their ownership of stock of the Company is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or more of
t h e combined voting power of the Company's then outstanding
securities;
(2) during any period of twenty-four (24) consecutive
months (not including any period prior to the date of this Agreement),
individuals who at the beginning of such period constitute the Board
of Directors of the Company and any new director (other than a
director designated by a person who has entered into an agreement with
the Company to effect a transaction described in subsections (1), (3)
or (4) of this Section 3(e)) whose election by the Board of Directors
of the Company or nomination for election by the shareholders of the
Company was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election
was previously so approved, cease for any reason to constitute a
majority thereof;
(3) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than
(i) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 50%
of the combined voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation or
(ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
"person" (as defined above) acquires 30% or more of the combined
voting power of the Company's then outstanding securities; or
(4) the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets.
4. Rights as Shareholder. Subject to the restrictions and other
limitations and conditions provided in this Agreement, the Grantee as owner
of the Restricted Stock will have all the rights of a shareholder,
including but not limited to the right to receive all dividends paid on,
and the right to vote, such Restricted Stock.
5. Stock Certificates. Each certificate issued for shares of
Restricted Stock will be registered in the name of the Grantee and
- 2 -<PAGE>
deposited by the Grantee, together with a stock power endorsed in blank,
with the Company and will bear a legend in substantially the following
form:
THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK
REPRESENTED HEREBY ARE SUBJECT TO THE TERMS, CONDITIONS AND
RESTRICTIONS (INCLUDING RESTRICTIONS ON TRANSFER AND FORFEITURE
PROVISIONS) CONTAINED IN AN AGREEMENT BETWEEN THE REGISTERED
OWNER AND TECO ENERGY, INC. A COPY OF SUCH AGREEMENT WILL BE
FURNISHED TO THE HOLDER OF THIS CERTIFICATE UPON WRITTEN REQUEST
AND WITHOUT CHARGE.
Upon the termination of the restrictions imposed under this Agreement
as to any shares of Restricted Stock deposited with the Company hereunder,
the Company will return to the Grantee (or to such Grantee's legal
representative, beneficiary or heir) certificates, without such legend, for
such shares.
6. Notice of Election Under Section 83(b). If the Grantee makes an
election under Section 83(b) of the Internal Revenue Code of 1986, as
amended, he will provide a copy thereof to the Company within thirty days
of the filing of such election with the Internal Revenue Service.
7. Withholding Taxes. The Grantee will pay to the Company, or make
provision satisfactory to the Committee for payment of, any taxes required
by law to be withheld in respect of the Restricted Stock no later than the
date of the event creating the tax liability. In the Committee's
discretion, such tax obligations may be paid in whole or in part in shares
of Common Stock, including the Restricted Stock, valued at fair market
value on the date of delivery. The Company and its Affiliates may, to the
extent permitted by law, deduct any such tax obligations from any payment
of any kind otherwise due to the Grantee.
8. The Committee. Any determination by the Committee under, or
interpretation of the terms of, this Agreement or the Plan will be final
and binding on the Grantee.
9. Limitation of Rights. The Grantee will have no right to
continued employment by virtue of this grant of Restricted Stock.
10. Amendment. The Company may amend, modify or terminate this
Agreement, including substituting another Award of the same or a different
type and changing the date of realization, provided that the Grantee's
consent to such action will be required unless the action, taking into
account any related action, would not adversely affect the Grantee.
- 3 -<PAGE>
11. G o verning Law. This Agreement will be governed by and
interpreted in accordance with the laws of Florida.
TECO ENERGY, INC.
By: ______________________
R. A. Dunn
Vice President-Human Resources
_________________________
Signature of Grantee
- 4 -<PAGE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE TECO
ENERGY, INC. CONSOLIDATED BALANCE SHEETS, CONSOLIDATED STATEMENTS OF INCOME
AND CONSOLIDATED STATEMENTS OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000350563
<NAME> TECO Energy, Inc.
<MULTIPLIER> 1000000
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<PERIOD-TYPE> 6-mos
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,763
<OTHER-PROPERTY-AND-INVEST> 486
<TOTAL-CURRENT-ASSETS> 433
<TOTAL-DEFERRED-CHARGES> 233
<OTHER-ASSETS> 97
<TOTAL-ASSETS> 4,012
<COMMON> 132
<CAPITAL-SURPLUS-PAID-IN> 359
<RETAINED-EARNINGS> 1,058
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,549
0
0
<LONG-TERM-DEBT-NET> 1,075
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 413
<LONG-TERM-DEBT-CURRENT-PORT> 13
0
<CAPITAL-LEASE-OBLIGATIONS> 34
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 928
<TOT-CAPITALIZATION-AND-LIAB> 4,012
<GROSS-OPERATING-REVENUE> 958
<INCOME-TAX-EXPENSE> 36
<OTHER-OPERATING-EXPENSES> 778 <F1>
<TOTAL-OPERATING-EXPENSES> 778
<OPERATING-INCOME-LOSS> 180
<OTHER-INCOME-NET> (3)
<INCOME-BEFORE-INTEREST-EXPEN> 177
<TOTAL-INTEREST-EXPENSE> 52
<NET-INCOME> 111 <F2>
0
<EARNINGS-AVAILABLE-FOR-COMM> 111
<COMMON-STOCK-DIVIDENDS> 80
<TOTAL-INTEREST-ON-BONDS> 24
<CASH-FLOW-OPERATIONS> 216
<EPS-PRIMARY> .67 <F3>
<EPS-DILUTED> .84 <F3>
<FN>
<F1> Includes $25.9 million, pretax of non-recurring charges.
<F2> Includes $22.2 million, after tax, for gain on disposal of discontinued
operations.
<F3> Includes $.17 per share for gain on disposal of discontinued operations
and a $.13 per share charge for non-recurring charges.
</FN>
<PAGE>
</TABLE>
