<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U5S
ANNUAL REPORT
For the year ended December 31, 1999
Filed pursuant to the
Public Utility Holding Company Act of 1935 by
ALLEGHENY ENERGY, INC.
10435 Downsville Pike
Hagerstown, Maryland 21740-1766
<PAGE>
ITEM 1. SYSTEM COMPANIES AND INVESTMENT THEREIN AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
Number of % of Issuer's Owner's
Type of Common Voting Book Book
Name of Company Company Shares Owned Power Value Value
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Allegheny Energy, Inc. (AYE) Holding
Allegheny Energy Service Corporation (AESC) Service 5,000 100 $ 50 $ 50
Monongahela Power Company (MP) Electric 5,891,000 100 578,951 578,951
The Potomac Edison Company (PE) Electric 22,385,000 100 700,422 701,887
West Penn Power Company (1) (WPP) Electric 24,361,586 100 79,658 94,782
West Virginia Power & Transmission Company* (2) 30,000 100 3,945 3,940
West Penn West Virginia Water Power Company* (3) 5 100 (5) 1
Unsecured debt 15 15
West Penn Funding Corporation (WPFC) (4) None None 138,716 138,716
West Penn Funding, LLC (WPFLLC) (5) None None 3,031 2,968
West Penn Transferring Agent LLC (WPTA) (5) None None 1,072 1,072
Allegheny Energy Supply Company, LLC (6) None None 512,699 658,784
Allegheny Energy Units 1 & 2, LLC (6) None None 64,799 64,799
Allegheny Ventures, Inc. (AYP) (6) 100 100 39,118 39,118
AYP Energy, Inc. (7) 100 100 0 0
Allegheny Communications Connect, Inc. (8) 100 100 25,517 25,517
Allegheny Energy Solutions, Inc. (9) 100 100 471 471
Ohio Valley Electric Corporation (OVEC) (1) (10) 12,500 12-1/2 1,250 1,250
Indiana-Kentucky Electric Corporation (IKEC) (10) 17,000 100 3,400 3,400
Subsidiaries of More Than One
System Company
Allegheny Generating Company (AGC) Generating
Owners:
Monongahela Power Company 270 27 41,713 41,713
The Potomac Edison Company 280 28 43,258 43,258
Allegheny Energy Supply Company, LLC 450 45 69,521 69,521
Allegheny Pittsburgh Coal Company* (APC) (11)
Owners:
Monongahela Power Company 2,500 25 (3,325) (3,325)
Unsecured debt 3,495 3,495
The Potomac Edison Company 2,500 25 (3,325) (3,325)
Unsecured debt 3,617 3,617
West Penn Power Company 5,000 50 (6,648) (6,648)
Unsecured debt 7,061 7,061
</TABLE>
*Inactive
(1) Exempt from registration as a holding company under Section 3(a) pursuant
to Rule 2.
(2) Owns land for power development.
(3) Owns land for water power development.
(4) See paragraph below.
(5) Limited liability company. See paragraph below.
(6) Unregulated nonutility. See paragraph below.
(7) Bulk power marketer. See paragraph below.
(8) Exempt telecommunications company. See paragraph below.
(9) Unregulated marketer of electric energy and other energy related services.
See paragraph below
(10) Allegheny Energy, Inc. owns 12-1/2% of the capital stock of Ohio Valley
Electric Corporation, the balance owned by unaffiliated companies. Ohio
Valley Electric Corporation owns 100% of the capital stock of Indiana-
Kentucky Electric Corporation. These companies were formed October 1,
1952, to build electric generating facilities to supply power under a
long-term contract to the Energy Research and Development Administration's
(formerly Atomic Energy Commission) uranium diffusion project at
Portsmouth, Ohio. See Holding Company Act Release No. 11578.
(11) Owns coal reserves as a long-term resource.
2
<PAGE>
ITEM 1. SYSTEM COMPANIES AND INVESTMENT THEREIN AS OF DECEMBER 31, 1999
(Continued)
In 1999, WPP formed West Penn Funding Corporation (WPFC). WPFC,
incorporated in Delaware, is a wholly owned subsidiary of WPP and the
sole member of West Penn Funding, LLC (WPFLLC).
In 1999, WPP formed West Penn Funding, LLC (WPFLLC). WPFLLC, incorporated
in Delaware and a subsidiary of West Penn Funding Corporation (WPFC), is a
limited liability company formed for the sole purpose of purchasing and
owning Intangible Transition Property (ITP), pledging its interest in ITP
and other collateral to bond trustee, and performing activities that are
necessary, suitable or convenient to accomplish these purposes.
In 1999, WPP formed West Penn Transferring Agent, LLC (WPTA), a subsidiary
of WPP. WPTA was formed to transfer assets of WPP to a newly formed
subsidiary of AYE, Allegheny Energy Supply Company, LLC.
In 1999 AYE formed a new subsidiary Allegheny Energy Supply Company, LLC
(Allegheny Energy Supply) in order to consolidate AYE's unregulated energy
supply business. Allegheny Energy Supply is a unregulated energy supply
company that actively markets competitive wholesale electricity throughout
the eastern United States, retail electricity in states where customer
choice is being implemented, and operates regulated generation for its
affiliates. Allegheny Energy Supply was formed when one of AYE's
subsidiaries, WPP, transferred its generating capacity of 3,778 megawatts
(MW) at book value to Allegheny Energy Supply, as allowed by the final
settlement in WPP's Pennsylvania restructuring case. Allegheny Energy
Supply also purchased from AYP Energy its 276 MW of merchant capacity at
Fort Martin Unit No. 1.
Allegheny Energy Units 1 & 2, LLC is an exempt wholesale generator that
owns two 44-MW simple-cycle gas combustion turbines that will be transferred
to Allegheny Energy Supply in 2000.
Allegheny Ventures Inc. (AYP), formerly known as AYP Capital, Inc. which was
formed in 1994 and incorporated in Delaware, is Allegheny Energy's new
business development company that invests in and develops unregulated
telecommunications and energy-related projects through its two wholly owned
subsidiaries, Allegheny Communications Connect, Inc. (ACC) and Allegheny
Energy Solutions. ACC formed in 1996 is an exempt telecommunications
company under the Public Utility Holding Company Act of 1935 (PUHCA).
ACC delivers telecommunications services over an advanced fiber optic
network to retail customers throughout the Mid-Atlantic region. Allegheny
Energy Solutions formed in 1997 is entering the distributed generation
market for business customers. AYP Energy, Inc., also a subsidiary of
Allegheny Ventures, sold to Allegheny Energy Supply its 276 MW of merchant
capacity at Fort Martin Unit No. 1 during 1999.
3
<PAGE>
Allegheny Power Service Corporation
Articles of Amendment
Allegheny Power Service Corporation, a Maryland corporation having its
principal office in Washington County, Maryland (hereinafter called the
Corporation), hereby certifies to the State Department of Assessments
and Taxation of Maryland, that:
FIRST: The Charter of the Corporation is hereby amended by striking out
the Second Article and inserting in lieu thereof the following:
II.
The name of the Corporation (which is hereinafter called the
"Corporation") is ALLEGHENY ENERGY SERVICE CORPORATION
SECOND: The Board of Directors of the corporation on July 15, 1999, duly
adopted a resolution in which was set forth the foregoing amendment to
the Charter, declaring that the said amendment of the Charter was
advisable and directing that it be submitted for action thereon by the
stockholders.
THIRD: By written consent dated July 16, 1999, the sole stockholder of
the Corporation duly approved the amendment of the Charter of the
Corporation here in above set forth.
IN WITNESS WHEREOF, Allegheny Power Service Corporation has caused these
presents to be signed in its name on its behalf by its President and its
corporate seal to be here unto affixed and attested to by its Secretary
on July 16, 1999, and its President acknowledges that these Articles of
Amendment are the act and deed of the Corporation and, under penalties
of perjury, that the matters and facts set forth herein with respect to
authorization and approval are true in all material respects to the best
of his knowledge, information and belief.
Allegheny Power Service Corporation
By /s/ Alan J. Noia, President
/s/ E. M. Beck, Secretary
Dated: July 16, 1999
4
<PAGE>
ITEM 2. ACQUISITIONS OR SALES OF UTILITY ASSETS.
West Virginia Power.
ITEM 3. ISSUE, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF SYSTEM
SECURITIES.
None, except as reported in certificates filed pursuant to Rule
24, Form U-6B-2, Form 10-K 1999, and Schedules IX for Monongahela
Power Company, The Potomac Edison Company, and West Penn Power
Company.
5
<PAGE>
ITEM 4. ACQUISITION, REDEMPTION, OR RETIREMENT OF SYSTEM SECURITIES
Calendar Year 1999
(Dollar Amounts in Thousands)
<TABLE>
<CAPTION>
Name of
Company
Acquiring,
Redeeming,
or Retiring Number of Shares or Principal Amount Commission
Name of Issuer and Title of Issue Securities Acquired Redeemed Retired Consideration Authorization
West Penn Power Company
<S> <C> <C> <C> <C> <C>
6-3/8% First Mortgage Bonds West Penn Power Co. $80,000 $80,000 $80,280 Rule 42
7-7/8% First Mortgage Bonds West Penn Power Co. 70,000 70,000 70,897 Rule 42
7-3/8% First Mortgage Bonds West Penn Power Co. 45,000 45,000 45,473 Rule 42
8-7/8% First Mortgage Bonds West Penn Power Co. 100,000 100,000 102,865 Rule 42
7-7/8% First Mortgage Bonds West Penn Power Co. 135,000 135,000 137,803 Rule 42
8-1/8% First Mortgage Bonds West Penn Power Co. 65,000 65,000 67,595 Rule 42
7-3/4% First Mortgage Bonds West Penn Power Co. 30,000 30,000 30,973 Rule 42
$525,000 $525,000 $535,886
AYP Energy, Inc.
Medium-Term Notes AYP Energy Inc $30,000 $30,000 $30,000 Rule 42
</TABLE>
In October 1999 AYP Energy, Inc. prepaid $30 million of it bank loan, reducing
the obligation from $160 million to $130 million. In December 1999, the $130
million debt obligation was assigned to Allegheny Energy Supply Company, Inc.
6
<PAGE>
ITEM 5. INVESTMENTS IN SECURITIES OF NON-SYSTEM COMPANIES.
1. Eight investments aggregating $112,685, one of which at $82,000
is related to industrial development.
2. None
7
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS
Part 1. Names, principal business addresses, and positions of
executives, officers and directors of all system companies as
of December 31, 1999.
The following symbols are used in the tabulation:
CH Chairman X Member of Executive Committee
GC General Counsel A Member of Audit Committee
P President F Member of Finance Committee
SVP Senior Vice President O Member of Operating Committee
VP Vice President M Member of Management Review and
Director Affairs Committee
T Treasurer NB Member of New Business Committee
S Secretary S Member of Strategic Affairs
Committee
C Controller VPO Vice President-Operations
D Director VPAP Vice President & Assistant
to President
df Director's fees s Salary
8
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued
<TABLE>
<CAPTION>
Allegheny The West
Allegheny Energy Allegheny Monongahela Potomac Penn
Energy, Service Ventures, Power Edison Power
Inc. Corporation Inc. Company Company Company
<S> <C> <C> <C> <C> <C> <C>
Paul M. Barbas VP VP s P D
10435 Downsville Pike
Hagerstown, MD
Eileen M. Beck S s S S S S S
10435 Downsville Pike
Hagerstown, MD
David C. Benson VP s
800 Cabin Hill Drive
Greensburg, PA
Regis F. Binder VP T s VP T VP T T T T
10435 Downsville Pike
Hagerstown, MD
Donald F. Feenstra VP s
800 Cabin Hill Drive
Greensburg, PA
Richard J. Gagliardi VP s VP VP D
10435 Downsville Pike
Hagerstown, MD
Thomas K. Henderson VP GC s VP D VP VP VP VP
10435 Downsville Pike
Hagerstown, MD
Kenneth M. Jones VP C s VP
10435 Downsville Pike
Hagerstown, MD
Thomas J. Kloc VP C VP C s D C VP C C C
10435 Downsville Pike
Hagerstown, MD
James D. Latimer s VP VP VP
10435 Downsville Pike
Hagerstown, MD
Michael P. Morrell SVP SVP s D VP D VP D VP D VP
10435 Downsville Pike O O O O
Hagerstown, MD
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Alan J. Noia CH P D X F NB s CH P D X CH D D CH X D CH X D CH X
10435 Downsville Pike O O O O
Hagerstown, MD
</TABLE>
9
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued
<TABLE>
<CAPTION>
Allegheny The West
Allegheny Energy Allegheny Monongahela Potomac Penn
Energy, Service Ventures, Power Edison Power
Inc. Corporation Inc. Company Company Company
<S> <C> <C> <C> <C> <C> <C>
Karl V. Pfirrmann s VP
800 Cabin Hill Drive
Greensburg, PA
Jay S. Pifer SVP s SVP D VP O P D O P D O P D O
800 Cabin Hill Drive
Greensburg, PA
Victoria V. Schaff VP s VP
10435 Downsville Pike
Hagerstown, MD
Peter J. Skrgic SVP s SVP VP D O D O VP VP D O D O VP
800 Cabin Hill Drive
Greensburg, PA
Robert R. Winter s VP VP VP
800 Cabin Hill Drive
Greensburg, PA
</TABLE>
10
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued
<TABLE>
<CAPTION>
Allegheny The West
Allegheny Energy Allegheny Monongahela Potomac Penn
Energy, Service Ventures, Power Edison Power
Inc. Corporation Inc. Company Company Company
<S> <C> <C> <C> <C> <C> <C>
Eleanor Baum df D F M D df D df D df D
51 Astor Pl.
NY, NY
William L. Bennett df D A NB S D df D df D df D
3501 Frontage Road
Tampa, FL
Wendell F. Holland df D A NB D df D df D df D
1025 Laurel Oak Road
Voorhees, NJ
Phillip E. Lint df D A F NB D dfD df D df D
19 High Point Road s
Westport, Ct
Frank A. Metz, Jr. df D F M X D X df D X df D X df D X
P. O. Box 26 s
Sloatsburg, NY
Steven H. Rice df D X F M D X df D X df D X df D X
999 Bedford Street s
Stamford, CT 06905
Gunnar E. Sarsten df D NB M D df D df D df D
11436 Scarborough's s
Neck Road
P.O. Box 459
Belle Haven, VA
</TABLE>
11
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued
<TABLE>
<CAPTION>
Allegheny The West
Allegheny Energy Allegheny Monongahela Potomac Penn
Energy, Service Ventures, Power Edison Power
Inc. Corporation Inc. Company Company Company
<S> <C> <C> <C> <C> <C>
Coulter R. Boyle, III
110 E. Wayne Street
Fort Wayne, IN
John D. Brodt
P.O. Box 468
Piketon, OH
H. Peter Burg
76 Main Street
Akron, OH
E. Linn Draper, Jr.
1 Riverside Plaza
Columbus, OH
Donald R. Feenstra
800 Cabin Hill Drive
Greensburg, PA
Arthur R. Garfield
76 S. Main Street
Akron, OH
David L. Hart
1 Riverside Plaza
Columbus, OH
Chris Hermann
200 W. Main Street
Louisville, KY
Allen M. Hill
1065 Woodman Dr.
Dayton, OH
J. Gordon Hurst
20 NW Fourth Street
Evansville, IN
David E. Jones
P.O. Box 468
Piketon, OH
John R. Jones, III
1 Riverside Plaza
Columbus, OH
William J. Lhota
1 Riverside Plaza
Columbus, OH
Wayne T. Lucas
220 W. Main Street
Louisville, KY
</TABLE>
12
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued
<TABLE>
<CAPTION>
Allegheny The West
Allegheny Energy Allegheny Monongahela Potomac Penn
Energy, Service Ventures, Power Edison Power
Inc. Corporation Inc. Company Company Company
<S> <C> <C> <C> <C> <C> <C>
James J. Markowsky
1 Riverside Plaza
Columbus, OH
Alan J. Noia
10435 Downsville Pike
Hagerstown, MD
Armando A. Pena
1 Riverside Plaza
Columbus, OH
Guy L. Pipitone
76 S. Main Street
Akron, OH
Jackson H. Randolph
P.O. Box 960
Cincinnati, OH
Ronald G. Reherman
20 NW Fourth Street
Evansville, IN
Peter J. Skrgic
800 Cabin Hill Drive
Greensburg, PA
William E. Walters
110 E. Wayne Street
South Bend, IN
</TABLE>
13
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued
<TABLE>
<CAPTION>
West Virginia West Penn Ohio Indiana
Allegheny Allegheny Power and West Virginia Valley Kentucky
Generating Pittsburgh Transmission Water Power Electric Electric
Company Coal Company Company Company Corporation Corporation
<S> <C> <C> <C> <C> <C> <C>
Eileen M. Beck S S S S
10435 Downsville Pike
Hagerstown, MD
David C. Benson
800 Cabin Hill Drive
Greensburg, PA
Regis F. Binder (1) T T T T
10435 Downsville Pike
Hagerstown, MD
Donald R. Feenstra D
800 Cabin Hill Drive
Greensburg, PA
Richard J. Gagliardi
10435 Downsville Pike
Hagerstown, MD
Thomas K. Henderson D VP VP D D VP
10435 Downsville Pike
Hagerstown, MD
Thomas J. Kloc VP D C D C VP D C D VP C
10435 Downsville Pike
Hagerstown, MD
James D. Latimer D VP
10435 Downsville Pike
Hagerstown, MD
Michael P. Morrell D VP D
10435 Downsville Pike
Hagerstown, MD
Alan J. Noia D CH P P D P D D D X
10435 Downsville Pike
Hagerstown, MD
</TABLE>
14
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued
<TABLE>
<CAPTION>
West Virginia West Penn Ohio Indiana
Allegheny Allegheny Power and West Virginia Valley Kentucky
Generating Pittsburgh Transmission Water Power Electric Electric
Company Coal Company Company Company Corporation Corporation
<S> <C> <C> <C> <C> <C> <C>
Karl V. Pfirrmann
800 Cabin Hill Drive
Greensburg, PA
Jay S. Pifer VP D D VP P D
800 Cabin Hill Drive
Greensburg, PA
Victoria V. Schaff
10435 Downsville Pike
Hagerstown, MD
Peter J. Skrgic VP D D D VP D D D X
800 Cabin Hill Drive
Greensburg, PA
Robert R. Winter VP
800 Cabin Hill Drive
Greensburg, PA
</TABLE>
15
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued
<TABLE>
<CAPTION>
West Virginia West Penn Ohio Indiana
Allegheny Allegheny Power and West Virginia Valley Kentucky
Generating Pittsburgh Transmission Water Power Electric Electric
Company Coal Company Company Company Corporation Corporation
<S> <C> <C> <C> <C> <C> <C>
Eleanor Baum
51 Astor Place
NY, NY
William L. Bennett
3501 Frontage Road
Tampa, FL
Wendell F. Holland
1025 Laurel Oak Road
Voorhees, NJ
Phillip E. Lint
19 High Point Road
Westport, CT
Frank A. Metz, Jr.
P.O. Box 26
Sloatsburg, NY
Steven H. Rice
999 Bedford Street
Stamford, CT 06905
Gunnar E. Sarsten
11436 Scarborough's
Neck Road
P.O. Box 459
Belle Haven, VA
</TABLE>
16
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued
<TABLE>
<CAPTION>
West Virginia West Penn Ohio Indiana
Allegheny Allegheny Power and West Virginia Valley Kentucky
Generating Pittsburgh Transmission Water Power Electric Electric
Company Coal Company Company Company Corporation Corporation
<S> <C> <C> <C> <C> <C> <C>
Coulter R. Boyle, III D
110 E. Wayne Street
Fort Wayne, IN 46802
John D. Brodt s S T S T
P.O. Box 468
Piketon, OH 45661
H. Peter Burg D
76 S. Main Street
Akron, OH 443008-1890
E. Linn Draper, Jr. P D X P D X
1 Riverside Plaza
Columbus, OH 43216
Donald R. Feenstra D
800 Cabin Hill Drive
Greensburg, PA
Arthur R. Garfield D X D X
76 S. Main Street
Akron, OH 43808-1890
David L. Hart VPAP VPAP
1 Riverside Plaza
Columbus, OH 43216-6631
Chris Hermann D X
200 W. Main Street
Louisville, KY 40202
Allen M. Hill D
1065 Woodman Dr.
Dayton, OH 45432
J. Gordon Hurst D
20 NW Fourth Street
Evansville, IN 47741-0001
David E. Jones VPO s VPO
P.O. Box 468
Piketon, OH 45661
John R. Jones, III D
1 Riverside Plaza
Columbus, OH 43216-6631
William J. Lhota D
1 Riverside Plaza
Columbus, OH 43216-66631
Wayne T. Lucas D
220 W. Main Street
Louisville, KY 40202
</TABLE>
17
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued
<TABLE>
<CAPTION>
West Virginia West Penn Ohio Indiana
Allegheny Allegheny Power and West Virginia Valley Kentucky
Generating Pittsburgh Transmission Water Power Electric Electric
Company Coal Company Company Company Corporation Corporation
<S> <C> <C> <C> <C> <C> <C>
James J. Markowsky D
1 Riverside Plaza
Columbus, OH 43216-6631
Alan J. Noia D X
10435 Downsville Pike
Hagerstown, MD 21740
Armando A. Pena VP VP
1 Riverside Plaza
Columbus, OH 43216-6631
Guy L. Pipitone D
76 S. Main Street
Akron, OH 44308-1890
Jackson H. Randolph D X
P.O. Box 960
Cincinnati, OH 45202-0960
Ronald G. Reherman D D
20 NW Fourth Street
Evansville, IN47741-0001
Peter J. Skrgic D D X
800 Cabin Hill Drive
Greensburg, PA 15601
William E. Walters D
110 E. Wayne Street
South Bend, IN 46601
</TABLE>
18
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued
<TABLE>
<CAPTION>
Allegheny
Energy Unit 1 Allegheny West Penn West Penn
and Unit 2, Energy Supply Funding Funding,
LLC Company, LLC Corporation LLC
<S> <C> <C> <C> <C>
Eileen M. Beck S S
10435 Downsville Pike
Hagerstown, MD 21740
Eileen M. Beck S S
23258-2 Renaissance Drive
Las Vegas, NV 87119
David C. Benson VP VP
RD 12, P.O. Box 1000
Roseytown Road
Greensburg, PA 15601
Regis F. Binder T T
10435 Downsville Pike
Hagerstown, MD 21740
Terence A. Burke D D
23258-2 Renaissance Drive
Las Vegas, NV 87119
Kristin W. Eppes VP VP
23258-2 Renaissance Drive
Las Vegas, NV 87119
Donald R. Feenstra VP VP
800 Cabin Hill Drive
Greensburg, PA 15601
Mark A. Ferrucci D
23258-2 Renaissance Drive
Las Vegas, NV 87119
Richard J. Gagliardi D
10435 Downsville Pike
Hagerstown, MD 21740
Robert W. Grier VP D VP
23258-2 Renaissance Drive
Las Vegas, NV 87119
Thomas K. Henderson VP D
10435 Downsville Pike
Hagerstown, MD 21740
Thomas J. Kloc C
10435 Downsville Pike
Hagerstown, MD 21740
Kim E. Lutthans D
23258-2 Renaissance Drive
Las Vegas, NV 87119
Michael P. Morrell VP D P P
10435 Downsville Pike
Hagerstown, MD 21740
</TABLE>
19
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued
<TABLE>
<CAPTION>
Allegheny
Energy Unit 1 Allegheny West Penn West Penn
and Unit 2, Energy Supply Funding Funding,
LLC Company, LLC Corporation LLC
<S> <C> <C> <C> <C>
Alan J. Noia Ch Ch D
10435 Downsville Pike
Hagerstown, MD 21740
Bruce M. Sedlock Ch D D
23258-2 Renaissance Drive
Las Vegas, NV 87119
Thomas C. Sheppard, Jr. D
23258-2 Renaissance Drive
Las Vegas, NV 87119
Peter J. Skrgic P * P D
800 Cabin Hill Drive
Greensburg, PA 15601
Keith L. Warchol T VP T
23258-2 Renaissance Drive
Las Vegas, NV 87119
Anthony Wilson VP VP
23258-2 Renaissance Drive
Las Vegas, NV 87119
</TABLE>
*Sole Member
20
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued
<TABLE>
<CAPTION>
Allegheny West Penn Allegheny
Energy Transferring Communications AYP Energy
Solutions, Inc. Agent LLC Connect, Inc. Inc.
<S> <C> <C> <C> <C>
Paul M. Barbas P D D P D
10435 Downsville Pike
Hagerstown, MD 21740
Eileen M. Beck S S S S
10435 Downsville Pike
Hagerstown, MD 21740
David C. Benson
RD 12, P.O. Box 1000
Roseytown Road
Greensburg, PA 15601
Regis F. Binder VP D T D T VP T
10435 Downsville Pike
Hagerstown, MD 21740
Terence A. Burke
10435 Downsville Pike
Hagerstown, MD 21740
Kristin W. Eppes
10435 Downsville Pike
Hagerstown, MD 21740
Donald R. Feenstra
800 Cabin Hill Drive
Greensburg, PA 15601
Mark A. Ferrucci
23258-2 Renaissance Drive
Las Vegas, NV 87119
Richard J. Gagliardi VP D VP D VP D
10435 Downsville Pike
Hagerstown, MD 21740
Robert W. Grier
10435 Downsville Pike
Hagerstown, MD 21740
Thomas K. Henderson D VP D VP D
10435 Downsville Pike
Hagerstown, MD 21740
Thomas J. Kloc C D C VP C D
10435 Downsville Pike
Hagerstown, MD 21740
Kim E. Lutthans
23258-2 Renaissance Drive
Las Vegas, NV 87119
</TABLE>
21
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued
<TABLE>
<CAPTION>
Allegheny West Penn Allegheny
Energy Transferring Communications AYP Energy
Solutions, Inc. Agent LLC Connect, Inc. Inc.
<S> <C> <C> <C> <C>
Michael P. Morrell VP D VP D VP D
10435 Downsville Pike
Hagerstown, MD 21740
Alan J. Noia Ch D Ch D Ch D Ch D
10435 Downsville Pike
Hagerstown, MD 21740
Jay S. Pifer VP D
800 Cabin Hill Drive
Greensburg, PA 15601
Bruce M. Sedlock
800 Cabin Hill Drive
Greensburg, PA 15601
Thomas C. Sheppard, Jr.
1310 Fairmont Avenue
Fairmont, WV 26554
Peter J. Skrgic P D VP D VP D
800 Cabin Hill Drive
Greensburg, PA 15601
Keith L. Warchol
10435 Downsville Pike
Hagerstown, MD 21740
Anthony Wilson
10435 Downsville Pike
Hagerstown, MD 21740
</TABLE>
22
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - continued
PART II Financial connections of officers and directors as of
December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Name of Officer Name and Location of Positions Held in Applicable
or Director Financial Institution Financial Institution Exemption Rule
A. M. Hill Fifth Third Bancorp Director No interlocking
Cincinnati, OH 45201 authority required
William J. Lhota Huntington Director Rule 70(c) & (f)
Bancshares, Inc.
Huntington Center
41 S. High Street
Columbus, OH 43215
J. H. Randolph PNC Bank Corporation Director Title 17,Reg.
Pittsburgh, PA 250.70 (e)
R. G. Reherman National City Director No interlocking
Bancshares, Inc. authority required
Evansville, IN 47741
</TABLE>
ITEM 6.
PART III. Disclosures for Allegheny companies are as follows:
(1) Allegheny Energy, Inc. (AE), Allegheny Energy Service Corporation
(AESC), Monongahela Power Company (Monongahela and M), The Potomac
Edison Company (Potomac Edison and PE), West Penn Power Company
(West Penn and WP), and Allegheny Generating Company (AGC)
sections of the combined Annual Report on Form 10-K for 1999 of
AE, M, PE, WP, and AGC on pages 56 through 65 and of the AE Proxy
Statement on pages 10 through 12. The executive officers of AE
are also executive officers of AESC and receive their compensation
from AESC as shown on page 5 and together with the directors owned
beneficially 167,206 shares of common stock of AE. AESC does not
file a proxy statement or Form 10-K.
(2) Allegheny Pittsburgh Coal Company, West Virginia Power and
Transmission Company, West Penn West Virginia Water Power
Company, Allegheny Energy Unit 1 and Unit 2, LLC, Allegheny
Energy Supply Company, LLC, West Penn Funding Corporation,
Allegheny Energy Solutions, Inc., West Penn Transferring Agent,
LLC, Allegheny Communications Connect, Inc., and AYP Energy,
Inc. do not file proxy statements or Form 10-K's. Their
directors and executive officers do not receive any compensation
from these companies, but receive compensation as employees of
certain of the companies as reported in (1) above. West Penn
Funding, LLC files a 10-K. Its officers and directors do not
receive any compensation from this company, but receive
compensation as employees of certain of the companies reported
in (1) above.
(3) Ohio Valley Electric Corporation and Indiana-Kentucky Electric
Corporation do not file proxy statements or Form 10-K's. These
companies are not wholly owned by Allegheny Energy, Inc., or its
subsidiaries (see page 1 of this Form U5S) and none of their
executive officers are employees of the Allegheny Energy
companies. Except for two executive officers whose compensation
was $232,505, directors and executive officers do not receive any
compensation from these companies. The compensation and interest
in system securities of directors who are employees of the
Allegheny Energy companies are reported in (1) above.
23
<PAGE>
ITEM 6. PART III
(1) ae, agc, m, pe, wpp
(FROM 1999 Form 10-K)
ITEM 11. EXECUTIVE COMPENSATION
During 1999, and for 1998 and 1997, the annual compensation paid
by AE, Monongahela, Potomac Edison, West Penn and AGC directly or
indirectly to their Chief Executive Officer and each of the four most
highly paid executive officers of the System whose cash compensation
exceeded $100,000 for services in all capacities to such companies was
as follows:
Summary Compensation Tables (a)
AE, Monongahela, Potomac Edison, West Penn and AGC
Annual Compensation
All
Name Long-Term Other
and Annual No. of Performance Compen-
Principal Incentive Options Plan Payout sation
Position(b) Year Salary($) ($)(c) (d) ($)(d) ($)(e)
Alan J. Noia, 1999 575,000 312,500 190,000 260,183 112,350
Chief Executive Officer 1998 525,000 180,500 - 286,655 184,788
1997 460,000 253,000 - 250,657 124,495
Peter J. Skrgic, 1999 290,000 196,800 80,000 158,372 6,925
Senior Vice President 1998 280,008 123,000 - 204,753 50,757
Supply 1997 265,000 155,400 - 150,394 91,409
Michael P. Morrell (f) 1999 260,000 156,000 66,000 96,154 27,592
Senior Vice President & 1998 255,000 117,000 - 114,870 28,599
Chief Financial Officer 1997 240,000 95,200 - (f) 26,068
Jay S. Pifer, 1999 255,000 146,400 66,000 96,154 7,073
Senior Vice President 1998 250,008 66,500 - 131,042 41,542
Delivery 1997 240,000 95,200 - 150,394 67,810
Richard J. Gagliardi 1999 210,000 113,400 52,000 79,186 14,713
Vice President 1998 200,016 60,400 - 114,662 25,345
Administration 1997 190,000 75,600 - 100,263 25,340
(a) The individuals appearing in this chart perform policy-
making functions for each of the Registrants. The
compensation shown is for all services in all capacities
to AE and its subsidiaries. All salaries and bonuses of
these executives are paid by AESC. AE, Monongahela,
Potomac Edison, West Penn and AGC have no paid
employees.
(b) See Executive Officers of the Registrants for all
positions held.
(c) Incentive awards (primarily Annual Incentive Plan
awards) are based upon performance in the year in which
the figure appears but are paid in the following year.
The Annual Incentive Plan will be continued for 2000.
24
<PAGE>
ITEM 6. PART III
(1) ae, agc, m, pe, wpp
(FROM 1999 Form 10-K)
(d) In 1994, the Board of Directors of the Company
implemented a Performance Share Plan (the "Plan") for
senior officers of the Company and its subsidiaries
which was approved by the shareholders of AE at the
annual meeting in May 1994. The first Plan cycle began
on January 1, 1994 and ended on December 31, 1996. A
second cycle began on January 1, 1995 and ended on
December 31, 1997. The figure shown for 1997 represents
the dollar value paid in 1998 to each of the named
executive officers who participated in Cycle II. A
third cycle began on January 1, 1996 and ended on
December 31, 1998. The figure shown for 1998 represents
the dollar value paid in 1999 to each of the named
executive officers who participated in Cycle III. A
fourth cycle began on January 1, 1997 and ended on
December 31, 1999. The figure shown for 1999 represents
the dollar value paid in 2000 to each of the named
executive officers who participated in Cycle IV. In
1998, the Board of Directors of AE implemented a new
Long-Term Incentive Plan, which was approved by the
shareholders of AE at the AE annual meeting in May 1998.
A fifth cycle (the first three-year performance period
of this new Plan) began on January 1, 1998 and will end
on December 31, 2000. A sixth cycle began on January 1,
1999 and will end on December 31, 2001. After
completion of each cycle, AE stock, stock options (for
Cycle V), cash, a combination, or just AE stock (Cycle
VI) may be paid if performance criteria have been met.
(e) The figures in this column include the present value of
the executives' cash value at retirement attributable to
the current year's premium payment for both the
Executive Life Insurance and Secured Benefit Plans
(based upon the premium, future valued to retirement,
using the policy internal rate of return minus the
corporation's premium payment), as well as the premium
paid for the basic group life insurance program plan and
the contribution for the Employee Stock Ownership and
Savings Plan (ESOSP) established as a non-contributory
stock ownership plan for all eligible employees
effective January 1, 1976, and amended in 1984 to
include a savings program.
Effective January 1, 1992, the basic group life
insurance provided employees was reduced from two times
salary during employment, which reduced to one times
salary after five years in retirement, to a new plan
which provides one times salary until retirement and
$25,000 thereafter. Some executive officers and other
senior managers remain under the prior plan. In order
to pay for this insurance for these executives, during
1992 insurance was purchased on the lives of each of
them, except Mr. Morrell, who is not covered by this
plan. Effective January 1, 1993, Allegheny started to
provide funds to pay for the future benefits due under
the supplemental retirement plan (Secured Benefit Plan).
To do this, during 1993 Allegheny purchased life
insurance on the lives
25
<PAGE>
ITEM 6. PART III
(1) ae, agc, m, pe, wpp
(FROM 1999 Form 10-K)
of the covered executives. The premium costs of both
policies plus a factor for the use of the money are
returned to Allegheny at the earlier of (a) death of the
insured or (b) the later of age 65 or 10 years from the
date of the policy's inception. Under the ESOSP for
1999, all eligible employees may elect to have from 2%
to 12% of their compensation contributed to the Plan as
pre-tax contributions and an additional 1% to 6% as post-
tax contributions. Employees direct the investment of
these contributions into one or more of nine available
funds. Fifty percent of the pre-tax contributions up to
6% of compensation are matched with common stock of AE.
Effective January 1 1997, the maximum amount of any
employee's compensation that may be used in these
computations is $160,000. Employees' interests in the
ESOSP vest immediately. Their pre-tax contributions may
be withdrawn only upon meeting certain financial
hardship requirements or upon termination of employment.
For 1999, the figure shown includes amounts representing
(a) the aggregate of life insurance premiums and dollar
value of the benefit to the executive officer of the
remainder of the premium paid on the Group Life
Insurance program and the Executive Life Insurance and
Secured Benefit Plans, and (b) ESOSP contributions,
respectively, as follows: Mr. Noia $107,550 and $4,800;
Mr. Skrgic $2,593 and $4,332; Mr. Morrell $23,391 and
$4,201; Mr. Pifer $2,273 and $4,800; Mr. Gagliardi
$10,399 and $4,314.
(f) Michael P. Morrell joined Allegheny on May 1, 1996, and
did not receive a payment from the Long-Term Performance
Plan for the second Plan cycle. His Cycle III payout is
prorated for the period May 1, 1996 - December 31, 1998.
26
<PAGE>
ITEM 6. PART III
(1) ae, agc, m, pe, wpp
(FROM 1999 Form 10-K)
ALLEGHENY ENERGY, INC. LONG-TERM INCENTIVE PLAN
SHARES AWARDED IN LAST FISCAL YEAR (CYCLE VI)
<TABLE>
<CAPTION>
Estimated Future Payout
Number of Performance Threshold Target Maximum
Shares Period Until Number of Number of Number of
Name Payout Shares Shares Shares
__________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Alan J. Noia
Chief Executive Officer 5,165 1999-2001 2,583 5,165 10,330
Peter J. Skrgic
Senior Vice President 2,645 1999-2001 1,323 2,645 5,290
Michael P. Morrell
Senior Vice President 2,149 1999-2001 1,075 2,149 4,298
Jay S. Pifer
Senior Vice President 1,983 1999-2001 992 1,983 3,966
Richard J. Gagliardi
Vice President 1,488 1999-2001 744 1,488 2,976
</TABLE>
The named executives were awarded the above number of performance
shares for Cycle VI. Such number of shares are only targets. As
described below, no payouts will be made unless certain criteria are
met. Each executive's 1999-2001 target long-term incentive opportunity
was converted into performance shares equal to an equivalent number of
shares of AE common stock based on the price of such stock on December
31, 1998. At the end of this three-year performance period, the
performance shares attributed to the calculated award will be valued
based on the price of AE common stock on December 31, 2001 and will
reflect dividends that would have been paid on such stock during the
performance period as if they were reinvested on the date paid. If an
executive retires, dies or otherwise leaves the employment of Allegheny
prior to the end of the three-year period, the executive may still
receive an award based on the number of months worked during the
period. The final value of an executive's account, if any, will be
paid to the executive in early 2002.
The actual payout of an executive's award may range from 0 to
200% of the target amount, before dividend reinvestment. The
Management Review and Director Affairs Committee of the Board of
Directors may decide to convert the value of such performance shares to
stock options at that time or deliver cash or shares of common stock.
The payout is based upon stockholder performance versus the peer group.
The stockholder rating is then compared to a pre-established percentile
ranking chart to determine the payout percentage of target. A ranking
below 30% results in a 0% payout. The minimum payout begins at the 30%
ranking, which results in a payout of 60% of target, ranging up to a
payout of 200% of target if there is a 90% or higher ranking.
27
<PAGE>
ITEM 6. PART III
(1) ae, agc, m, pe, wpp
(FROM 1999 Form 10-K)
Stock Option Grants in 1999 (1)
<TABLE>
<CAPTION>
____________________________________________________________________________________
Number of % of Grant
Securities Total Options Date
Underlying Granted to Exercise Expiration Present
Name Options Employees Price Date Value(2)
Granted(1) in 1999 ($/Sh) ($)
____________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Alan J. Noia 40,000 3.64% 30.1875 02/22/2009 $203,102
150,000 13.66% 31.4895 12/02/2009 794,480
____________________________________________________________________________________
Peter J. Skrgic 20,000 1.82% 30.1875 02/22/2009 101,551
60,000 5.46% 31.4895 12/02/2009 317,792
____________________________________________________________________________________
Michael P. Morrell 16,000 1.46% 30.1875 02/22/2009 81,241
50,000 4.55% 31.4895 12/02/2009 264,827
____________________________________________________________________________________
Jay S. Pifer 16,000 1.46% 30.1875 02/22/2009 81,241
50,000 4.55% 31.4895 12/02/2009 264,827
____________________________________________________________________________________
Richard J. Gagliardi 12,000 1.09% 30.1875 02/22/2009 60,930
40,000 3.64% 31.4895 12/02/2009 211,861
____________________________________________________________________________________
</TABLE>
(1) Options become exercisable three years after date of the grant.
(2) The Black-Scholes option pricing model was chosen to estimate the
Grant Date Present Value of the options set forth in this table.
Allegheny Energy's use of this model should not be construed as an
endorsement of its accuracy of valuing options. All stock option
valuation models, including the Black-Scholes model, require a
prediction about the future movement of the stock price. The following
assumptions were made for purposes of calculating the Grant Date
Present Value: an option term of 10 years, volatility of 22.83%
dividend yield at 5.83%, and interest rate of 6.25%. The real value of
the options in this table depends upon the actual performance of
Allegheny Energy's stock during the applicable period.
Retirement Plan
Allegheny maintains a Retirement Plan covering substantially all
employees. The Retirement Plan is a noncontributory, trusteed pension
plan designed to meet the requirements of Section 401(a) of the
Internal Revenue Code of 1986, as amended (the Code). Each covered
employee is eligible for retirement at normal retirement date (age 65),
with early retirement permitted. In addition, executive officers and
other senior managers participate in a supplemental executive
retirement plan (Secured Benefit Plan).
Pursuant to the Secured Benefit Plan, senior executives of
Allegheny companies who retire at age 60 or over with 40 or more years
of service are entitled to a
28
<PAGE>
ITEM 6. PART III
(1) ae, agc, m, pe, wpp
(FROM 1999 Form 10-K)
supplemental retirement benefit in an
amount that, together with the benefits under the basic plan and from
other employment, will equal 60% of the executive's highest average
monthly earnings for any 36 consecutive months. Beginning February 1,
1996, the earnings include 50% of the actual award paid under the
Annual Incentive Plan and beginning January 1, 1999, include 100% of
the actual award paid under the Annual Incentive Plan. The
supplemental benefit is reduced for less than 40 years service and for
retirement age from 60 to 55. It is included in the amounts shown
where applicable. To provide funds to pay such benefits, beginning
January 1, 1993, Allegheny purchased insurance on the lives of the
participants in the Secured Benefit Plan. If the assumptions made as
to mortality experience, policy dividends, and other factors are
realized, Allegheny will recover all premium payments, plus a factor
for the use of the Allegheny's money. The portion of the premiums for
this insurance required to be deemed "compensation" by the Securities
and Exchange Commission is included in the "All Other Compensation"
column on page 57 of this Form 10-K. All executive officers are
participants in the Secured Benefit Plan. It also provides for use of
Average Compensation in excess of Code maximums.
The following table shows estimated maximum annual benefits
payable to participants in the Secured Benefit Plan following
retirement (assuming payments on a normal life annuity basis and not
including any survivor benefit) to an employee in specified
remuneration and years of credited service classifications. These
amounts are based on an estimated Average Compensation (defined as 12
times the highest average monthly earnings including overtime and other
salary payments actually earned, whether or not payment is deferred,
for any 36 consecutive calendar months), retirement at age 65 and
without consideration of any effect of various options which may be
elected prior to retirement. The benefits listed in the Pension Plan
Table are not subject to any deduction for Social Security or any other
offset amounts.
PENSION PLAN TABLE
Years of Credited Service
<TABLE>
<CAPTION>
Average Compensation(a) 15 Years 20 Years 25 Years 30 Years 35 Years 40 Years
<S> <C> <C> <C> <C> <C> <C>
$ 200,000 $ 60,000 $ 80,000 $100,000 $110,000 $115,000 $120,000
300,000 90,000 120,000 150,000 165,000 172,500 180,000
400,000 120,000 160,000 200,000 220,000 230,000 240,000
500,000 150,000 200,000 250,000 275,000 287,500 300,000
600,000 180,000 240,000 300,000 330,000 345,000 360,000
700,000 210,000 280,000 350,000 385,000 402,500 420,000
800,000 240,000 320,000 400,000 440,000 460,000 480,000
900,000 270,000 360,000 450,000 495,000 517,000 540,000
1,000,000 300,000 400,000 500,000 550,000 575,000 600,000
</TABLE>
(a) The earnings of Messrs. Noia, Skrgic, Pifer, Morrell and Gagliardi
covered by the plan correspond substantially to such amounts shown for
them in the summary compensation table. As of December 31, 1999, they
had accrued 30, 35, 35, 3-1/2 and 21 years of credited service,
respectively, under the Retirement Plan. Pursuant to an agreement with
Mr. Morrell, at the end of ten years of employment with the Company,
Mr. Morrell will be credited with an additional eight years of service.
29
<PAGE>
ITEM 6. PART III
(1) ae, agc, m, pe, wpp
(FROM 1999 Form 10-K)
Change In Control Contracts
AE has entered into Change in Control contracts with the named and
certain other Allegheny executive officers (Agreements). Each Agreement
sets forth (i) the severance benefits that will be provided to the
employee in the event the employee is terminated subsequent to a Change in
Control of AE (as defined in the Agreements), and (ii) the employee's
obligation to continue his or her employment after the occurrence of
certain circumstances that could lead to a Change in Control. The
Agreements provide generally that if there is a Change in Control, unless
employment is terminated by AE for Cause, Disability or Retirement or by
the employee for other than Good Reason (each as defined in the
Agreements), severance benefits payable to the employee will consist of a
cash payment equal to 2.99 times the employee's base annual salary and
target short-term incentive together with AE maintaining existing benefits
for the employee and the employee's dependents for a period of three
years. Each Agreement expires on December 31, 2001, but is automatically
extended for one year periods thereafter unless either AE or the employee
gives notice otherwise. Notwithstanding the delivery of such notice, the
Agreements will continue in effect for thirty-six months after a Change in
Control.
Compensation of Directors
Each of the directors is also a director of the following
subsidiaries of the Company: Monongahela, Potomac Edison, West Penn, and
AESC (Allegheny companies). In 1999, directors who were not officers or
employees (outside directors) received for all services to the Company and
Allegheny companies (a) $17,000 in retainer fees (annual retainer fee
increased from $16,000 to $20,000 effective October 1, 1999), (b) $800 for
each committee meeting attended and $250 for each Board meeting of each
company attended through September 30, 1999 and (c) effective October 1,
1999 $1,000 for each committee meeting of each company attended. The
Board meeting fee did not change. The Chairperson of each committee
receives an additional fee of $4,000 per year. Under an unfunded deferred
compensation plan, a director may elect to defer receipt of all or part of
his or her director's fees for succeeding calendar years to be payable
with accumulated interest when the director ceases to be such, in equal
annual installments, or, upon authorization by the Board of Directors, in
a lump sum. In addition to the foregoing compensation, effective October
1, 1999 the outside directors of the company receive an annual retainer of
$12,000 worth of Common Stock (in lieu of the 200 shares of Common Stock
received pursuant to the Allegheny Energy, Inc. Restricted Stock Plan for
Outside Directors, which was terminated September 30, 1999). Further, a
Deferred Stock Unit Plan for Outside Directors provides for a lump sum
payment (payable at the director's election in one or more installments,
including interest thereon equivalent to the dividend yield) to directors
calculated by reference to the price of the Company's Common Stock.
Directors who serve at least five years on the Board and leave at or after
age 65, or upon death or disability, or as otherwise directed by the
Board, will receive such payments. In 1999 the Company credited each
outside director's account with 275 deferred stock units. The number will
increase to 300 in 2000; to 325 in 2001; to 350 in 2002; and to 375 in
2003. Effective September 1, 1999, outside directors are also granted
1,000 stock options each year. In 1999, each director received three-
years' worth, with 1,000 options to vest each year 1999-2001.
30
<PAGE>
ITEM 6. PART III
(1) ae, agc, m, pe, wpp
(FROM 1999 Form 10-K)
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The table below shows the number of shares of AE common stock that
are beneficially owned, directly or indirectly, by each director and
named executive officer of AE, Monongahela, Potomac Edison, West Penn,
and AGC and by all directors and executive officers of each such
company as a group as of December 31, 1999. To the best of the
knowledge of AE, there is no person who is a beneficial owner of more
than 5% of the voting securities of AE.
Executive Shares of
Officer or APS Percent
Name Director of Common Stock of Class
Eleanor Baum AE,MP,PE,WP 3,374* .037% or less
William L. Bennett AE,MP,PE,WP 4,144* "
Richard J. Gagliardi AE 14,231 "
Thomas K. Henderson AGC 7,698 "
Wendell F. Holland AE,MP,PE,WP 1,701* "
Thomas J. Kloc AGC 5,014 "
Phillip E. Lint AE,MP,PE,WP 2,155* "
Frank A. Metz, Jr. AE,MP,PE,WP 4,138* "
Michael P. Morrell AE,MP,PE,WP,AGC 3,870 "
Alan J. Noia AE,MP,PE,WP,AGC 41,314 "
Jay S. Pifer AE,MP,PE,WP 19,496 "
Steven H. Rice AE,MP,PE,WP 4,471* "
Gunnar E. Sarsten AE,MP,PE,WP 7,374* "
Peter J. Skrgic AE,MP,PE,WP,AGC 23,351 "
All directors and executive officers
of AE as a group (19 persons) 167,206 Less than .16%
All directors and executive officers
of MP as a group (19 persons) 155,732 Less than .15%
All directors and executive officers
of PE as a group (19 persons) 155,732 "
All directors and executive officers
of WP as a group (19 persons) 155,732 "
All directors and executive officers
of AGC as a group (7 persons) 90,100 .09%
*Excludes the outside directors' accounts in the Deferred Stock Unit Plan
which, at March 1, 2000, were valued at the number of shares shown:
Baum 3,976; Bennett 2,132; Holland 1,982; Lint 5,691; Metz 4,260; Rice
2,713; and Sarsten 3,654.
31
<PAGE>
ITEM 6. PART III
(1) ae, agc, m, pe, wpp
(FROM 1999 Form 10-K)
All of the shares of common stock of Monongahela (5,891,000), Potomac
Edison (22,385,000), and West Penn (24,361,586) are owned by AE. All
of the common stock of AGC is owned by Monongahela (270 shares),
Potomac Edison (280 shares), and Allegheny Energy Supply Company, LLC
(450 shares).
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
32
<PAGE>
ITEM 6. PART III
(1) AE
(FROM 1999 Proxy Statement)
MANAGEMENT REVIEW AND DIRECTOR AFFAIRS COMMITTEE REPORT
GENERAL
The compensation program for executive officers of the
Company and its subsidiaries is directed by the Management Review
and Director Affairs Committee (the Committee) of the Company's
Board of Directors. The Committee recommends the annual
compensation program for each year to the Board of Directors of
the Company and of each subsidiary for its approval.
The Committee continues to believe that with the advent of
competition to this industry that a large portion of compensation
should be included in incentive plans. For 2000, a substantial
portion of total compensation will continue to be linked to
corporate and business performance.
The executive compensation program is intended to meet three
objectives:
Create a strong link between executive compensation and
total return to stockholders.
Offer compensation opportunities that are competitive with
the median level of opportunity in the marketplace, at
expected levels of performance, but exceed median levels
for performance exceeding expectations.
Ensure internal compensation equity -- maintaining a
reasonable relationship between compensation and the
duties and responsibilities of each executive position.
In a further effort to tie the executive compensation
program to the overall success of Allegheny, stock ownership
guidelines were adopted in 1999 for the executive officers. The
guidelines require the Chief Executive Officer (CEO) to own stock
valued at 3.5 times his base salary; the business unit Presidents
and Senior Vice Presidents at 1.75 times base salary; and the
Vice Presidents at one times base salary. They have until
December 31, 2003 to meet the guidelines.
EXECUTIVE COMPENSATION PROGRAM
The Company's executive compensation program has four
components: base salary, short-term and long-term incentive
awards, and stock options.
The Company's executive compensation is both market- and
performance-based. The Committee believes that it is necessary
to use both market- and performance-based compensation to meet
the challenges of intensifying competitive, economic, and
regulatory pressures.
33
<PAGE>
ITEM 6. PART III
(1) AE
(FROM 1999 Proxy Statement)
To ensure that the Company's salary structure and total
compensation continue to be competitive, they are compared each
year through an annual compensation survey, prepared by a leading
consulting firm, with those of comparable electric utilities --
50 or more for 1999. The survey companies are part of the Energy
Services Industry Database of the consulting firm.
In 1999, over 46% of these survey companies are included in
the Dow Jones Electric Index to which the Company's performance
is compared on page 18 of this proxy statement. This comparison,
conducted by a national compensation consulting firm, involves
matching Company positions, including the CEO, with those in the
survey companies that have comparable duties and
responsibilities. For 1999, the survey indicated that the
Company's executive salary structure was below the median. This
survey data became the basis for the consulting firm's
recommendations as to market prices for each position and total
compensation in line with the survey average for comparable
positions.
Base salary:
The base salaries of all executive officers, including the
CEO, are reviewed annually by the Committee, which makes
recommendations to the Board of Directors. In recommending base
salary levels, the Committee gives most weight to the performance
of each executive. The Committee receives a report from the CEO
including (a) a performance assessment of each executive (other
than himself) based on that executive's position-specific
responsibilities and a performance evaluation by his or her
supervisor and (b) a specific salary recommendation for each. In
determining its recommendations to the Board, the Committee also
takes into consideration operating performance, including such
factors as safety, efficiency, competitive position, customer
satisfaction, and financial results, including such things as
total return, earnings per share, quality of earnings, dividends
paid, and dividend payout ratio.
Short-term Incentive Awards:
The Allegheny Energy Annual Incentive Plan (the Annual
Incentive Plan) is designed to supplement base salaries and
provide cash incentive compensation opportunities to attract,
retain, and motivate a senior group of managers, including
executive officers, selected by the Committee. The Annual
Incentive Plan provides for establishment of individual incentive
awards based on corporate performance. Corporate performance
measures are based on net income available to common
shareholders, achieved shareholder return, overall corporate
financial results (changes in earnings per share, dividends paid
per share, and dividend payout ratios), cost of service to
customers, and Company performance, including competitive
position. In addition, individual and departmental performance
goals are set on a position specific basis for participants.
Operating, management, or financial areas to be emphasized,
as well as performance targets, are determined each year by the
Committee with the recommendations of the CEO. The target awards
under the 1999 Incentive Plan
34
<PAGE>
ITEM 6. PART III
(1) AE
(FROM 1999 Proxy Statement)
were determined by the Committee,
and participants could earn from zero to 1 1/2 times the target
award. For the 1999 Incentive Plan the targets were $312,500 for
Mr. Noia and from $90,000 to $160,000 for the other named
officers. Targets for other participants were from $90,000 and
lower, which are approximately 50% or less of 1999 base salary.
Annual Incentive Plan awards earned are paid in the year after
the year for which they are earned. Awards earned for performance
in 1997, 1998, and 1999 are included in the Annual Compensation
Table for those years under the column "Incentive Awards" for the
individuals named therein.
Long-term Incentive Awards: Performance Shares and Stock Options
The Allegheny Energy, Inc. Long-term Incentive Plan (the
Incentive Plan) replaced the Allegheny Power System Performance
Share Plan (the Performance Share Plan) in 1998. Both plans were
designed as an aid in attracting and retaining individuals of
outstanding ability. Awards earned under both plans are based on
performance over 3-year "cycles." Eleven executive officers of
the Company and its subsidiaries were selected by the Committee
to participate in Cycle IV (1997-1999); eleven in Cycle V (1998-
2000), and fifteen in Cycle VI (1999-2001). Cycle IV provides for
the establishment of corporate incentive awards based on meeting
specific stockholder and customer performance rankings (total
stockholder return ranking in the Dow Jones Electric Utility
Index and cost of customer service versus nine other utilities).
Cycles V and VI are based solely on total stockholder return
ranking in the Dow Jones Electric Utility Index.
The Cycle IV target awards under the Performance Share Plan
range from $70,000 for the named officers to $230,000 for Mr.
Noia, which equate to 2,300 to 7,570 shares of stock as of
January 1, 1997, the start of the performance cycle. The actual
award calculated under the Plan equaled 108% of the target
amount. The dollar value of such shares calculated as of December
31, 1999, including reinvested dividends, is included in the
compensation table on page 13.
The Cycle V target awards under the Incentive Plan range
from $80,000 for the named officers to $262,500 for Mr. Noia,
which equate to 2,461 to 8,077 shares of stock as of January 1,
1998, the start of the performance cycle.
The Cycle VI target awards under the Incentive Plan range
from $45,000 for the named officers to $156,250 for Mr. Noia,
which equate to 1,488 to 5,165 shares of stock as of January 1,
1999, the start of the performance cycle. The target opportunity
and the corresponding number of equivalent performance shares
allocated to each named executive officer for Cycle VI are listed
in the Long-term Incentive Plan Table on page 15.
The actual payouts will be determined in 2001 for Cycle V
and in 2002 for Cycle VI, after completion of each cycle and
determination of the actual stockholder rankings. The actual
awards may be paid in Company stock or stock
35
<PAGE>
ITEM 6. PART III
(1) AE
(FROM 1999 Proxy Statement)
options (for Cycle V) and just Company stock (Cycle VI) and can range from
0 to 200% of the targeted shares noted above.
During 1999, as approved by stockholders during 1998, the
executive officers were granted stock options, based upon surveys
of competitive grant levels for similar positions. Like
performance shares, the magnitude of such awards is determined by
the Committee. Stock options are granted with an exercise price
equal to or greater than the fair market value of Allegheny
common stock on the day of grant, and become exercisable after
the expiration of a period of time, typically three years and
generally continue to be exercisable until ten years from the
date granted. Such stock options provide incentive for the
creation of shareholder value over the long term since the full
benefit of the compensation package cannot be realized unless an
appreciation in the price of Allegheny common stock occurs over a
specified number of years.
For Mr. Noia, the Committee developed salary and Annual
Incentive Plan award recommendations for the Board's
consideration. The base salary recommendation was based upon the
Committee's evaluation of his performance as CEO and of his
responsibilities in the context of the Company's overall
financial and operating performance, including the factors
described in the next sentence. The Annual Incentive Plan
recommendation was based primarily on 1999 corporate financial
results, including total shareholder return, changes in earnings
per share, dividends paid per share, and dividend payout ratios;
the overall quality and cost of service rendered to customers;
and overall Allegheny Energy performance, including competitive
position. Mr. Noia's 1999 total compensation reflected the
Committee's evaluation of his performance as CEO and the
described overall results.
Section 162(m) of the Internal Revenue Code generally limits
to $1 million the corporate deduction for compensation paid to
executive officers named in the Proxy Statement, unless certain
requirements are met. This Committee has carefully considered the
effect of this tax code provision on the current executive
compensation program. At this time, Allegheny's deduction for
officer compensation is not limited by the provisions of Section
162(m). The Committee intends to take such actions with respect
to the executive compensation program, if necessary, to preserve
the corporate tax deduction for executive compensation paid.
No current member of the Management Review and Director
Affairs Committee is or ever was an employee of the Company or
any of its subsidiaries.
FRANK A. METZ, JR., Chairman
ELEANOR BAUM
STEVEN H. RICE
GUNNAR E. SARSTEN
36
<PAGE>
ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS
(a) Expenditures, disbursements, or payments during the year, in money,
goods or services, directly or indirectly to or for the account of any
political party, candidate for public office or holder of such office, or
any committee or agent therefor (or any officer or employee acting as
such).
None.
(b) Expenditures, disbursements, or payments during the year, in money,
goods or services, directly or indirectly to or for the account of any
citizens' group, taxpayers' group, or public relations counsel (or any
officer or employee acting as such).
None.
37
<PAGE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS
Calendar Year 1999
<TABLE>
<CAPTION>
Part I. Between System Companies In effect
Date of on Dec. 31
<S> <C> <C> <C> <C> <C>
Transaction Serving Company Receiving Company Compensation Contract (Yes or No)
Operating, maintenance, Monongahela Power Company The Potomac Edison Company $56,392 5/29/73 Yes
accounting, supervisory, effective
and other administrative 05/31/74
or other services
</TABLE>
West Penn Power Company has an Operational Service Contract with The Potomac
Edison Company (effective 12/23/77) for which the compensation was $115,327
in 1999.
West Penn Power Company tests meters for The Potomac Edison Company. The
compensation for this service was $58,551 in 1999.
Part II. Between System Companies and others
<TABLE>
<CAPTION>
In effect
Date of on Dec. 31
Transaction Serving Company Receiving Company Compensation Contract (Yes or No)
<S> <C> <C> <C> <C> <C>
Engineering, drafting and American Electric Power Ohio Valley Electric $1,041,345 12/27/56 Yes
other technicial and Corporation Corporation
administrative services
Engineering, drafting and American Electric Power Indiana-Kentucky $945,101 12/27/56 Yes
other technicial and Corporation Electric Corporation
administrative services
Maintenance Services Appalachian Power Ohio Valley Electric $71,194 01/01/79 Yes
Company Corporation
Maintenance Services Appalachian Power Indiana-Kentucky $73,395 01/01/79 Yes
Company Electric Corporation
</TABLE>
Part III
None.
38
<PAGE>
ITEM 9. Wholesale Generators & Foreign Utility Companies
I. AYP ENERGY, INC.
Part I.
(a) AYP Energy, Inc.
One Stuart Plaza
RR 12 Box 40
Greensburg PA 15601
None. AYP Energy, Inc. gave up its EWG status in January, 1999.
II. LATIN AMERICA ENERGY AND ELECTRICITY FUND I, L.P.
Part I.
(a) Latin America Energy and Electricity Fund I, L.P.
P. O. Box 309
Ugland House
George Town, Grand Cayman
Cayman Islands, British West Indies
Latin America Energy and Electricity Fund I, L.P. (LAEEP)
is a limited partnership which invests in entities involved
in new or existing electric power projects in Latin America
and the Caribbean.
Allegheny Ventres, the nonutility subsidiary of AYE, Inc.
owns an 8.25% interest in LAEEP.
(b) Allegheny Ventures invested $4,588,420 in LAEEP as of
December 31, 1999.
39
<PAGE>
Allegheny Ventures' Equity in Undistributed Earnings of LAEEP
totaled ($390,881) as of December 31, 1999.
None.
No assets have been transferred from other system
companies to LAEEP.
(c) Not applicable.
(d) None.
Part II. LAEEP is simply an investment on the books of Allegheny Ventures,
Inc.
Part III.Total Investment in LAEEP 4,197,539
III. FONDELEC GENERAL PARTNER, LP
Part I.
(a) FondElec General Partner, LP
P. O. Box 309
Ugland House, South Church Street
George Town, Grand Cayman
Cayman Islands, British West Indies
Fondelec General Partner, LP is a limited partnership
organized for the purpose of acting as the general partner
of the Latin America Energy and Electricity Fund I, LP.
Allegheny Ventures, Inc., the nonutility subsidiary of AYE, Inc.
owns a 4.15% interest in Fondelec.
(b) Allegheny Ventures, Inc has invested $22,968 in Fondelec as of
December 31, 1999.
Allegheny Ventures's Equity in Undistributed Earnings of Fondelec
totaled ($1,387) as of December 31, 1999.
None.
No assets have been transferred from other system
companies to LAEEP.
(c) Not applicable.
(d) None.
40
<PAGE>
Part II. Fondelec is simply an investment on the books of Allegheny
Ventures, Inc.
Part III. Total Investment in Fondelec 21,581
41
<PAGE>
ITEM 10 - EXHIBIT B
CONSTITUENT INSTRUMENTS DEFINING THE RIGHTS OF HOLDERS
OF EQUITY SECURITIES OF SYSTEM COMPANIES.
ALLEGHENY ENERGY, INC.: INCORPORATED BY REFERENCE
3.1 Charter of the Company, Form 10-K of the Company
as amended, September 16, (1-267), December 31, 1997,
1997 exh. 3.1
3.1a Articles Supplementary Form 8-K of the Company
dated July 15, 1999 and (1-267), July 20, 1999, exh.
3.1
filed July 20, 1999
3.2 By-laws of the Company, Form 10-K of the Company (1-267),
as amended February 3, 2000 December 31, 1999, exh. 3.2
ALLEGHENY ENERGY SERVICE CORPORATION:
Charter, effective November 22, 1963 Form U5S, 1964, exh. B-2
By-laws, as amended November 1, 1996 Form U5S, 1983, exh. B-1
Form U5S, 1990, exh. B-2
MONONGAHELA POWER COMPANY:
3.1 Charter of the Company, Form 10-Q of the Company
as amended (1-5164), September 1995,
exh. (a)(3)(i)
3.2 Code of Regulations, Form 10-Q of the Company
as amended (1-5164), September 1995,
exh. (a)(3)(ii)
THE POTOMAC EDISON COMPANY:
3.1 Charter of the Company, Form 8-K of the Company
as amended (1-3376-2), April 26, 2000
exh. (a)(3)(i)
3.2 By-laws of the Company, Form 10-Q of the Company
as amended (1-3376-2), September 1995,
exh. (a)(3)(ii)
42
<PAGE>
WEST PENN POWER COMPANY:
3.1 Charter of the Company, Form 10-Q of the Company
as amended, July 16, 1999 (1-255-2), June 30, 1999
exh. (a)(3)(i)
3.2 By-laws of the Company, Form 10-Q of the Company
as amended (1-255-2), September 1995,
exh. (a)(3)(ii)
ALLEGHENY PITTSBURGH COAL COMPANY:
Charter, effective October 1, 1918 Form U5B, File 30-75, exh. B-2
Amendment to Charter, effective
October 5, 1918 Form U5B, File 30-75, exh. B-2
January 21, 1956 Form U5S, 1964, exh. B-7
By-laws, as amended Form U5S, 1996, exh. B-1
ALLEGHENY GENERATING COMPANY:
3.1(a) Charter of the Company, Designated exhibit to registration
as amended statement, Form 10, (0-14688)
3.1(b) Certificate of Amendment to Form 10-Q (0-14688), June 1989,
Charter, effective July 14, exh. (a)
1989
3.2 By-laws of the Company,
as amended, Form 10-K of the Company
effective December 23, 1996. (0-14688), December 31, 1996
WEST VIRGINIA POWER & TRANSMISSION COMPANY:
Charter, effective April 3, 1912 and
Amendments to March 22, 1934 Form U5B, File 30-75, exh. B-38
Amendments to Charter, effective
January 28, 1956 Form U5S, 1964, exh. B-10
February 7, 1961 Form U5S, 1964, exh. B-11
By-laws, as amended Form U5S, 1996, exh. B-2
WEST PENN WEST VIRGINIA
WATER POWER COMPANY:
Charter, effective January 25,
1924 Form U5B, File 30-75, exh. B-39
Amendment to Charter, effective
January 21, 1956 Form U5S, 1964, exh. B-12
By-laws, as amended Form U5S, 1996, exh. B-3
ALLEGHENY ENERGY UNIT 1
AND UNIT 2, LLC
Certificate of Formation dated
May 12, 1999
Limited Liability Agreement
dated May 12, 1999
43
<PAGE>
ALLEGHENY ENERGY SUPPLY COMPANY, LLC
Certificate of Formation dated
November 12, 1999
Third Amended and Restated Limited
Liability Company Agreement
dated November 18, 1999
WEST PENN FUNDING CORPORATION
Certificate of Incorporation
dated October 20, 1999
By-laws
WEST PENN FUNDING, LLC
Certificate of Formation
dated May 26, 1999
Amended and Restated Limited
Liability Company Agreement
dated November 3, 1999
ALLEGHENY ENERGY SOLUTIONS, INC.
Certificate of Incorporation
dated July 22, 1997
By-laws as amended to August 5, 1997
WEST PENN TRANSFERRING AGENT LLC
Certificate of Organization
dated November 12, 1999
First Amended and Restated
Limited Liability Company
Agreement dated November 17, 1999
ALLEGHENY COMMUNICATIONS CONNECT, INC.
Certification of Incorporation
dated April 11, 1996
By-laws, as amended to August 5, 1997
AYP ENERGY, INC.
Amendment to Certification of
Incorporation, May 14, 1996
Certification of Incorporation,
Dated January 3, 1996
By-laws, as amended to August 5, 1997
ITEM 10 - EXHIBIT C
CONSTITUENT INSTRUMENTS DEFINING THE RIGHTS OF HOLDERS
OF DEBT SECURITIES OF SYSTEM COMPANIES
44
<PAGE>
Monongahela Power Company Incorporation
Documents by Reference
4 Indenture, dated as of S 2-5819, exh. 7(f)
August 1, 1945, and S 2-8881, exh. 7(b)
certain Supplemental S 2-10548, exh. 4(b)
Indentures of the S 2-14763, exh. 2(b)(i);
Company defining rights Forms 8-K of the Company
of security holders.* (1-268-2) dated November 21,
1991, July 15, 1992,
September 1, 1992, April 29,
1993, May 23, 1995, and
November 14, 1997.
* There are omitted the Supplemental Indentures which do no
more than subject property to the lien of the above Indentures
since they are not considered constituent instruments defining the
rights of the holders of the securities. The Company agrees
to furnish the Commission on its request with copies of such
Supplemental Indentures.
The Potomac Edison Company Incorporation
Documents by Reference
4 Indenture, dated as of S 2-5473, exh. 7(b); Form
October 1, 1944, and S-3, 33-51305, exh. 4(d)
certain Supplemental Forms 8-K of the Company
Indentures of the (1-3376-2) dated
Company defining rights December 15, 1992,
of security holders* February 17, 1993, March 30,
1993, June 22, 1994, May 12,
1995, May 17, 1995 and
November 14, 1997.
* There are omitted the Supplemental Indentures which do
no more than subject property to the lien of the above Indentures
since they are not considered constituent instruments defining
the rights of the holders of the securities. The Company agrees
to furnish the Commission on its request with copies of such
Supplemental Indentures.
45
<PAGE>
ITEM 10 - EXHIBIT C (continued)
West Penn Power Company Incorporation
Documents by Reference
None
Allegheny Generating Company
Documents
4 Indenture, dated as of December 1, Incorporated by reference to
1986, and Supplemental Indenture, the designated exhibits to
dated as of December 15, 1988, of Form 10-K for the year ended
the Company defining rights of December 31, 1999.
security holders.
46
<PAGE>
ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS
FINANCIAL STATEMENTS
Financial statements are filed as listed on Page A of Appendix 1.
EXHIBITS
EXHIBIT A. Financial Statements incorporated herein by
reference are as follows:
The financial statements of Allegheny Energy, Inc. and its subsidiaries,
and of Monongahela Power Company, The Potomac Edison Company, West Penn
Power Company and its subsidiaries, and Allegheny Generating Company,
listed under ITEM 8 of their combined Annual Report on Form 10-K for the
year ended December 31, 1999, together with the reports of
PricewaterhouseCoopers LLP with respect thereto, all dated February 3,
2000, are incorporated in this Annual Report by reference to such Annual
Reports on Form 10-K.
*******************************************
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the foregoing incorporation by reference in this
Annual Report on Form U5S of our reports dated February 3, 2000, appearing
on pages 51 - 55 in the above-mentioned Annual Report on Form 10-K.
PricewaterhouseCoopers LLP
Pittsburgh, Pennsylvania
May 1, 2000
EXHIBIT B. Constituent instruments defining the
rights of holders of equity securities of system companies
are incorporated herein by reference as listed on pages F-1
and F-2 of Appendix 2.
EXHIBIT C. Constituent instruments defining the
rights of holders of debt securities of System companies are
incorporated herein by reference as listed on pages F-3 and
F-4 of Appendix 2.
47
<PAGE>
EXHIBIT D. Amendment No. 2 dated September 3, 1997,
to Tax Allocation Agreement. (Tax Allocation Agreement
dated June 13, 1963, as amended November 3, 1993 and as
further amended on December 1, 1994, incorporated by
reference to the Form U5S for 1994, Appendix 2, Exhibit D.)
EXHIBIT E. None
EXHIBIT F. None
SIGNATURE
The undersigned system company has duly caused this annual report to
be signed on its behalf by the undersigned thereunto duly authorized
pursuant to the requirements of the Public Utility Holding Company Act of
1935.
ALLEGHENY ENERGY, INC.
By /s/ Thomas K. Henderson
Thomas K. Henderson
Counsel for
Allegheny Energy, Inc.
Dated: May 1, 2000
48
<PAGE>
Appendix 1
Consolidating and other Financial Statements
(See index on page A)
<PAGE>
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
Index to Appendix 1 -- Consolidating and Other Financial Statements
<TABLE>
<CAPTION>
Consolidating Statements Other Statements
Allegheny West Penn West Penn Allegheny
Energy, Inc. Power Company Funding Ventures, Inc. Indiana- Ohio
and and Corporation and and Kentucky Valley
Subsidiary Subsidiary Subsidiary Subsidiary Electric Electric
Companies Companies Company Companies Corporation Corporation
Balance Sheets
<S> <C> <C> <C> <C> <C> <C>
December 31,1999 A - 1, 2, 3, 4 B - 1, 2 C - 1, 2 D - 1, 2 E - 1 E - 4
Statements of Income
Year ended
December 31,1999 A - 5, 6 B - 3 C - 3 D - 3 E - 2 E - 5
Statements of
Retained Earnings
and Other
Paid-in-Capital
Year ended
December 31,1999 A - 7, 8 B - 4 C - 4 D - 4 - -
Statements of
Cash Flows
Year ended
December 31,1999 A - 9, 10 B - 5 C - 5 D - 5 E - 3 E - 6
Long-term Debt
of Subsidiaries
December 31,1999 A - 11, 12, 13, 14 - - - - -
</TABLE>
<PAGE>
A - 1
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
ASSETS AYE APSC MP Subtotal
Property, plant and equipment:
<S> <C> <C> <C> <C>
At original cost 0 6,492 2,173,603 2,180,095
Accumulated depreciation 0 0 (958,867) (958,867)
Investments and other assets:
Securities of subsidiaries consolidated:
Common stock, at equity 2,209,729 0 0 2,209,729
Excess of cost over book equity at acquisition 15,077 0 26,326 41,403
Investment in APC:
Common stock, at equity 0 0 (3,325) (3,325)
Advances 0 0 3,495 3,495
AGC - common stock, at equity 0 0 41,713 41,713
Securities of associated company 1,250 0 0 1,250
Nonutility investments 0 0 0 0
Benefit plans' investments 94,168 0 0 94,168
Other 0 0 0 0
Current Assets:
Cash and temporary cash investments 15 166 3,826 4,007
Accounts receivable:
Electric service 86 0 78,976 79,062
Allowance for uncollectible accounts 0 0 (4,133) (4,133)
Affiliated and other 2,322 68,642 87,343 158,307
Notes receivable from affiliates 24,360 0 0 24,360
Materials and supplies - at average cost:
Operating and construction 0 0 22,127 22,127
Fuel 0 0 16,049 16,049
Deferred income taxes 0 0 2,261 2,261
Prepaid taxes 0 1,479 23,319 24,798
Regulatory assets 0 0 1,847 1,847
Other 124 500 603 1,227
Deferred charges:
Regulatory assets 0 0 145,176 145,176
Unamortized loss on reacquired debt 0 0 16,810 16,810
Other 1,329 39,172 16,569 57,070
Total assets 2,348,460 116,451 1,693,718 4,158,629
</TABLE>
<PAGE>
A - 1a
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Prior Page
ASSETS Subtotal PE WPP AES Subtotal
(see page A-1) (see page B-1a)
Property, plant and equipment:
<S> <C> <C> <C> <C> <C>
At original cost 2,180,095 2,322,104 1,597,484 2,060,040 8,159,723
Accumulated depreciation (958,867) (998,710) (506,416) (940,672) (3,404,665)
Investments and other assets:
Securities of subsidiaries consolidated:
Common stock, at equity 2,209,729 0 0 2,209,729
Excess of cost over book equity at acquisition 41,403 0 0 41,403
Investment in APC:
Common stock, at equity (3,325) (3,325) (6,648) 0 (13,298)
Advances 3,495 3,617 7,061 0 14,173
AGC - common stock, at equity 41,713 43,258 69,521 154,492
Securities of associated company 1,250 0 0 1,250
Nonutility investments
Benefit plans' investments 94,168 0 0 94,168
Other 0 117 112 0 229
Current Assets:
Cash and temporary cash investments 4,007 34,510 19,288 1,668 59,473
Accounts receivable: 0 0
Electric service 79,062 88,788 132,691 80,185 380,726
Allowance for uncollectible accounts (4,133) (3,534) (16,077) (1,137) (24,881)
Affiliated and other 158,307 27,494 16,299 88,986 291,086
0
0
Notes receivable from affiliates 24,360 0 80,800 0 105,160
Materials and supplies - at average cost: 0 0
Operating and construction 22,127 26,047 16,200 25,649 90,023
Fuel 16,049 15,584 0 30,647 62,280
Deferred income taxes 2,261 2,178 15,571 10,467 30,477
Prepaid taxes 24,798 15,914 1,628 9,904 52,244
Regulatory assets 1,847 0 23,957 0 25,804
Other 1,227 702 1,531 1,101 4,561
0
0
Deferred charges: 0
Regulatory assets 145,176 46,121 467,982 0 659,279
Unamortized loss on reacquired debt 16,810 14,226 3,621 0 34,657
Other 57,070 3,760 9,681 13,804 84,315
Total assets 4,158,629 1,638,851 1,864,765 1,450,163 9,112,408
</TABLE>
<PAGE>
A - 2
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Prior Page Allegheny
ASSETS Subtotal AP Coal AGC Ventures Subtotal
(see pg A-1a) (see pg D-1)
Property, plant and equipment:
<S> <C> <C> <C> <C> <C>
At original cost 8,159,723 4,040 828,894 11,711 9,004,368
Accumulated depreciation (3,404,665) (16) (227,177) (631) (3,632,489)
Investments and other assets:
Securities of subsidiaries consolidated:
Common stock, at equity 2,209,729 0 0 0 2,209,729
Excess of cost over book equity at acquisition 41,403 0 0 1,181 42,584
Investment in APC:
Common stock, at equity (13,298) 0 0 0 (13,298)
Advances 14,173 0 0 0 14,173
AGC - common stock, at equity 154,492 0 0 0 154,492
Securities of associated company 1,250 0 0 0 1,250
Nonutility investments 0 0 0 15,252 15,252
Benefit plans' investments 94,168 0 0 0 94,168
Other 229 0 0 0 229
Current Assets:
Cash and temporary cash investments 59,473 82 16 4,880 64,451
Accounts receivable:
Electric service 380,726 0 0 2,590 383,316
Allowance for uncollectible accounts (24,881) 0 0 (2,094) (26,975)
Affiliated and other 291,086 0 2 3,485 294,573
Notes receivable from affiliates 105,160 0 0 0 105,160
Materials and supplies - at average cost: 0 0
Operating and construction 90,023 0 2,117 420 92,560
Fuel 62,280 0 0 0 62,280
Deferred income taxes 30,477 0 0 0 30,477
Prepaid taxes 52,244 15 4,318 1,096 57,673
Regulatory assets 25,804 0 0 0 25,804
Other 4,561 (1) 808 33 5,401
Deferred charges:
Regulatory assets 659,279 0 4,568 0 663,847
Unamortized loss on reacquired debt 34,657 0 7,168 0 41,825
Other 84,315 0 169 3,050 87,534
Total assets 9,112,408 4,120 620,883 40,973 9,778,384
</TABLE>
<PAGE>
A - 2a
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
AYE Inc.
Prior Page Combined Eliminations, Consolidated
ASSETS Subtotal CT 1 & 2 Totals etc. Totals
(see pg A-2)
Property, plant and equipment:
<S> <C> <C> <C> <C> <C>
At original cost 9,004,368 45,348 9,049,716 (209,915)(14) 8,839,719
(82)(16)
Accumulated depreciation (3,632,489) (79) (3,632,568) 0 (3,632,568)
Investments and other assets:
Securities of subsidiaries consolidated:
Common stock, at equity 2,209,729 0 2,209,729 (2,209,729)(1) 0
Excess of cost over book equity at acquisition 42,584 0 42,584 0 42,584
Investment in APC:
Common stock, at equity (13,298) 0 (13,298) 13,298 (1) 0
Advances 14,173 0 14,173 (14,173)(2) 0
AGC - common stock, at equity 154,492 0 154,492 (154,492)(1) 0
Securities of associated company 1,250 0 1,250 0 1,250
Nonutility investments 15,252 0 15,252 0 15,252
Benefit plans' investments 94,168 0 94,168 0 94,168
Other 229 0 229 0 229
Current Assets:
Cash and temporary cash investments 64,451 1,533 65,984 0 65,984
Accounts receivable: 0
Electric service 383,316 0 383,316 0 383,316
Allowance for uncollectible accounts (26,975) 0 (26,975) 0 (26,975)
Affiliated and other 294,573 20,574 315,147 (302,874)(3) 12,273
Notes receivable from affiliates 105,160 0 105,160 (105,160)(2) 0
Materials and supplies - at average cost:
Operating and construction 92,560 0 92,560 0 92,560
Fuel 62,280 0 62,280 0 62,280
Deferred income taxes 30,477 0 30,477 0 30,477
Prepaid taxes 57,673 517 58,190 0 58,190
Regulatory assets 25,804 0 25,804 0 25,804
Other 5,401 0 5,401 0 5,401
Deferred charges:
Regulatory assets 663,847 0 663,847 0 663,847
Unamortized loss on reacquired debt 41,825 0 41,825 0 41,825
Other 87,534 (1) 87,533 (10,708)(11) 76,825
Total assets 9,778,384 67,892 9,846,276 (2,993,835) 6,852,441
</TABLE>
<PAGE>
A - 3
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Capitalization and Liabilities AYE APSC MP Subtotal
Capitalization:
<S> <C> <C> <C> <C>
Common stock of Allegheny Energy, Inc. 153,045 - - 153,045
Common stock of affiliate consolidated - - - 0
Common stock of subsidiaries consolidated - 50 294,550 294,600
Other paid-in capital 1,044,085 0 2,441 1,046,526
Retained earnings 896,602 0 281,960 1,178,562
Treasury stock (398,407) 0 0 (398,407)
Preferred stock of subsidiaries:
Not subject to mandatory redemption 0 0 74,000 74,000
Long-term debt and Quids 0 0 506,302 506,302
(see pages A-6, A-7, A-8)
Notes and advances payable to affiliates 0 0 0 0
Funds on deposit - trustees 0 0 (2,560) (2,560)
Current liabilities:
Short-term debt 641,095 0 28,650 669,745
Notes Payable to Affiliate
Long-term debt due 1 year 0 0 65,000 65,000
Accounts payable to affiliates 1,513 6,711 67,312 75,536
Accounts payable - others 2,601 11,685 40,016 54,302
Deferred income taxes 0 0 0 0
Taxes accrued:
Federal and state income 0 0 2,260 2,260
Other 0 151 24,235 24,386
Interest accrued 7,419 0 5,883 13,302
Adverse power purchase commitments 0 0 0 0
Other 62 41,781 11,647 53,490
Deferred credits and other liabilities:
Unamortized investment credit 0 0 14,007 14,007
Deferred income taxes 0 0 248,987 248,987
Regulatory liabilities 0 0 13,960 13,960
Adverse power purchase commitments 0 0 0 0
Other 445 56,073 15,068 71,586
Total capitalization and liabilities 2,348,460 116,451 1,693,718 4,158,629
</TABLE>
<PAGE>
A - 3a
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Prior Page
Capitalization and Liabilities Subtotal PE WPP AES Subtotal
(see page A - 3) (see page B-2a)
Capitalization:
<S> <C> <C> <C> <C> <C>
Common stock of Allegheny Energy, Inc. 153,045 - - - 153,045
Common stock of affiliate consolidated 0 - - - 0
Common stock of subsidiaries consolidated 294,600 447,700 70,021 582,238 1,394,559
Other paid-in capital 1,046,526 2,690 0 (75,642) 973,574
Retained earnings 1,178,562 250,032 9,637 6,103 1,444,334
Treasury stock (398,407) 0 0 0 (398,407)
Preferred stock of subsidiaries:
Not subject to mandatory redemption 74,000 0 0 0 74,000
Long-term debt and Quids 506,302 513,477 966,026 360,815 2,346,620
(see pages A-11, 12, 13, 14)
Notes and advances payable to affiliates 0 0 0 4 4
Funds on deposit - trustees (2,560) (3,133) 0 (4,580) (10,273)
Current liabilities:
Short-term debt 669,745 0 0 21,200 690,945
Notes Payable to Affiliate
Long-term debt due 1 year 65,000 75,000 49,734 0 189,734
Accounts payable to affiliates 75,536 36,433 97,847 74,657 284,473
Accounts payable - others 54,302 31,331 55,267 99,104 240,004
Deferred income taxes 0 0 0 0 0
Taxes accrued:
Federal and state income 2,260 5,861 5,276 5,475 18,872
Other 24,386 19,211 10,674 12,808 67,079
Interest accrued 13,302 7,321 10,017 4,354 34,994
Adverse power purchase commitments 0 0 24,895 24,289 49,184
Other 53,490 33,170 5,925 3,471 96,056
Deferred credits and other liabilities:
Unamortized investment credit 14,007 17,719 21,847 18,199 71,772
Deferred income taxes 248,987 159,352 211,369 128,639 748,347
Regulatory liabilities 13,960 25,319 15,126 0 54,405
Adverse power purchase commitments 0 0 303,935 185,626 489,561
Other 71,586 17,368 7,169 3,403 99,526
Total capitalization and liabilities 4,158,629 1,638,851 1,864,765 1,450,163 9,112,408
</TABLE>
<PAGE>
A - 4
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Prior Page Allegheny Sub
Capitalization and Liabilities Subtotal AP Coal AGC Ventures Total
(see pg A-3a) (see pg D-2)
<S> <C> <C> <C> <C> <C>
Capitalization:
Common stock of Allegheny Energy, Inc. 153,045 0 0 0 153,045
Common stock of affiliate consolidated 0 1 1 0 2
Common stock of subsidiaries consolidated 1,394,559 0 0 1 1,394,560
Other paid-in capital 973,574 555 154,490 77,347 1,205,966
Retained earnings 1,444,334 (13,853) 0 (38,230) 1,392,251
Treasury stock (398,407) 0 0 0 (398,407)
Preferred stock of subsidiaries:
Not subject to mandatory redemption 74,000 0 0 0 74,000
Long-term debt and Quids 2,346,620 0 148,932 0 2,495,552
(see pages A-11, 12, 13, 14)
Notes and advances payable to affiliates 4 14,173 0 0 14,177
Funds on deposit - trustees (10,273) 0 0 0 (10,273)
Current liabilities:
Short-term debt 690,945 3,160 52,150 0 746,255
Long-term debt due 1 year 189,734 0 0 0 189,734
Accounts payable to affiliates 284,473 26 8,222 386 293,107
Accounts payable - others 240,004 0 376 147 240,527
Deferred income taxes 0 0 0 0 0
Taxes accrued: 0 0
Federal and state income 18,872 59 1,000 768 20,699
Other 67,079 0 30 183 67,292
Interest accrued 34,994 0 3,229 0 38,223
Adverse power purchase commitments 49,184 0 0 0 49,184
Other 96,056 (1) 455 0 96,510
0
Deferred credits and other liabilities:
Unamortized investment credit 71,772 0 45,199 0 116,971
Deferred income taxes 748,347 0 182,461 371 931,179
Regulatory liabilities 54,405 0 24,338 0 78,743
Adverse power purchase commitments 489,561 0 0 0 489,561
Other 99,526 0 0 0 99,526
Total capitalization and liabilities 9,112,408 4,120 620,883 40,973 9,778,384
</TABLE>
<PAGE>
A - 4a
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
AYE Inc.
Prior Page Combined Eliminations, Consolidated
Capitalization and Liabilities Subtotal CT 1 & 2 Totals etc. Totals
(see pg A-4)
Capitalization:
<S> <C> <C> <C> <C> <C>
Common stock of Allegheny Energy, Inc. 153,045 0 153,045 0 153,045
Common stock of affiliate consolidated 2 0 2 (2)(1) 0
Common stock of subsidiaries consolidated 1,394,560 0 1,394,560 (1,394,560)(1) 0
Other paid-in capital 1,205,966 64,885 1,270,851 (226,766)(1) 1,044,085
Retained earnings 1,392,251 (86) 1,392,165 (495,563)(1) 896,602
Treasury stock (398,407) 0 (398,407) 0 (398,407)
Preferred stock of subsidiaries:
Not subject to mandatory redemption 74,000 0 74,000 0 74,000
Long-term debt and Quids 2,495,552 0 2,495,552 (230,816)(15) 2,264,736
(see pages A-11, 12, 13, 14)
Notes and advances payable to affiliates 14,177 0 14,177 (14,177)(2) 0
Funds on deposit - trustees (10,273) 0 (10,273) 0 (10,273)
Current liabilities:
Short-term debt 746,255 0 746,255 (105,160)(2) 641,095
Long-term debt due 1 year 189,734 0 189,734 0 189,734
Accounts payable to affiliates 293,107 286 293,393 (293,393)(3) 0
Accounts payable - others 240,527 2,336 242,863 (9,532)(3) 233,331
Deferred income taxes 0 0 0 0 0
Taxes accrued:
Federal and state income 20,699 0 20,699 0 20,699
Other 67,292 0 67,292 0 67,292
Interest accrued 38,223 0 38,223 (3,244)(12) 34,979
Adverse power purchase commitments 49,184 0 49,184 (24,289)(14) 24,895
Other 96,510 0 96,510 0 96,510
Deferred credits and other liabilities:
Unamortized investment credit 116,971 0 116,971 0 116,971
Deferred income taxes 931,179 471 931,650 (10,707)(11) 920,943
Regulatory liabilities 78,743 0 78,743 0 78,743
Adverse power purchase commitments 489,561 0 489,561 (185,626)(14) 303,935
Other 99,526 0 99,526 0 99,526
Total capitalization and liabilities 9,778,384 67,892 9,846,276 (2,993,835) 6,852,441
</TABLE>
<PAGE>
A - 5
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
AYE APSC MP Subtotal
<S> <C> <C> <C> <C>
Operating revenues:
Residential 0 0 210,757 210,757
Commercial 0 0 130,052 130,052
Industrial 0 0 217,792 217,792
Wholesale and other,
including affiliates 0 456,610 96,184 552,794
Bulk power transactions, net 0 0 18,550 18,550
Total operating revenues 0 456,610 673,335 1,129,945
Operating expenses:
Operation:
Fuel 0 0 145,235 145,235
Purchased power and exchanges, net 0 0 98,774 98,774
Deferred power costs, net 0 0 10,928 10,928
Other 24,594 436,154 90,626 551,374
Maintenance 0 4,019 63,992 68,011
Depreciation and amortization 0 0 60,904 60,904
Taxes other than income taxes 39 14,550 43,395 57,984
Federal and state income taxes 0 663 40,442 41,105
Total operating expenses 24,633 455,386 554,296 1,034,315
Operating income (24,633) 1,224 119,039 95,630
Other income and deductions:
Allowance for other than borrowed funds used
during construction 0 0 1,059 1,059
Other income, net 304,730 (928) 6,117 309,919
Total other income and deductions 304,730 (928) 7,176 310,978
Income before interest charges and
preferred dividends 280,097 296 126,215 406,608
Interest charges and preferred dividends:
Interest on long-term debt 0 0 31,964 31,964
Other interest 21,676 296 2,638 24,610
Allowance for borrowed funds used during construction
and interest capitalized 0 0 (714) (714)
Dividends on preferred stock of subsidiaries
Redemption premiums on preferred stock of subsidiaries
Total interest charges, preferred dividends, and
preferred redemption premiums: 21,676 296 33,888 55,860
Income (loss) before exraordinary charge 258,421 0 92,327 350,748
Extraordinry charge, net 0
Net Income (loss) 258,421 0 92,327 350,748
</TABLE>
<PAGE>
A - 5a
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Prior Page
Subtotal PE WPP AES Subtotal
(see pg A-5) (see page B-3a)
Operating revenues:
<S> <C> <C> <C> <C> <C>
Residential 210,757 330,299 417,600 4,943 963,599
Commercial 130,052 168,469 230,597 6,912 536,030
Industrial 217,792 212,205 359,798 9,416 799,211
Wholesale and other,
including affiliates 552,794 17,712 67,999 46,344 684,849
Bulk power transactions, net 18,550 24,572 278,209 73,259 394,590
Total operating revenues 1,129,945 753,257 1,354,203 140,874 3,378,279
Operating expenses:
Operation:
Fuel 145,235 138,194 213,626 18,081 515,136
Purchased power and exchanges, net 98,774 127,010 398,199 82,191 706,174
Deferred power costs, net 10,928 30,649 0 41,577
Other 551,374 100,299 188,613 9,866 850,152
Maintenance 68,011 57,255 93,436 4,285 222,987
Depreciation and amortization 60,904 75,916 114,268 7,975 259,063
Taxes other than income taxes 57,984 50,925 80,719 5,508 195,136
Federal and state income taxes 41,105 37,286 71,573 2,504 152,468
Total operating expenses 1,034,315 617,534 1,160,434 130,410 2,942,693
Operating income 95,630 135,723 193,769 10,464 435,586
Other income and deductions:
Allowance for other than borrowed funds used
during construction 1,059 748 33 0 1,840
Other income, net 309,919 7,769 9,621 1,159 328,468
Total other income and deductions 310,978 8,517 9,654 1,159 330,308
Income before interest charges and
preferred dividends 406,608 144,240 203,423 11,623 765,894
Interest charges and preferred dividends:
Interest on long-term debt 31,964 42,871 61,727 2,135 138,697
Other interest 24,610 2,029 6,996 168 33,803
Allowance for borrowed funds used during construction
and interest capitalized (714) (1,244) (2,900) (212) (5,070)
Dividends on preferred stock of subsidiaries
Redemption premiums on preferred stock of subsidiaries
Total interest charges, preferred dividends, and
preferred redemption premiums: 55,860 43,656 65,823 2,091 167,430
Income (loss) before exraordinary charge 350,748 100,584 137,600 9,532 598,464
Extraordinry charge, net (16,950) (10,018) (26,968)
Net Income (loss) 350,748 83,634 127,582 9,532 571,496
</TABLE>
<PAGE>
A - 6
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Prior Page Allegheny
Subtotal AP Coal AGC Ventures Subtotal
(see pg A-5a) (see pg D-3)
Operating revenues:
<S> <C> <C> <C> <C> <C>
Residential 963,599 0 0 3,014 966,613
Commercial 536,030 0 0 (82) 535,948
Industrial 799,211 0 0 (1,480) 797,731
Wholesale and other, 0
including affiliates 684,849 0 70,592 53,819 809,260
0
Bulk power transactions, net 394,590 0 0 55,085 449,675
Total operating revenues 3,378,279 0 70,592 110,356 3,559,227
Operating expenses:
Operation;
Fuel 515,136 0 0 20,378 535,514
Purchased power and exchanges, net 706,174 0 0 54,639 760,813
0
Deferred power costs, net 41,577 0 0 41,577
Other 850,152 0 3,799 12,608 866,559
0
Maintenance 222,987 0 1,224 3,341 227,552
Depreciation and amortization 259,063 0 16,980 5,884 281,927
Taxes other than income taxes 195,136 0 4,510 5,061 204,707
0
Federal and state income taxes 152,468 0 9,997 55 162,520
Total operating expenses 2,942,693 0 36,510 101,966 3,081,169
Operating income 435,586 0 34,082 8,390 478,058
Other income and deductions:
Alowance for other than borrowed funds used
during construction 1,840 0 0 1,840
Other income, net 328,468 (87) 394 (216) 328,559
Total other income and deductions 330,308 (87) 394 (216) 330,399
Income before interest charges, preferred dividends, preferred
redemption premiums, and extraordinary charge, net 765,894 (87) 34,476 8,174 808,457
Interest charges, preferred dividends, and preferred redemption premiums
Interest on long-term debt 138,697 0 9,762 8,251 156,710
Other interest 33,803 154 3,499 44 37,500
Allowance for borrowed funds used during construction
and interest capitalized (5,070) 0 0 (5,070)
Dividends on preferred stock of subsidiaries 0
Redemption premiums on preferred stock of subsidiaries 0
Total interest charges, preferred dividends, and
preferred redemption premiums 167,430 154 13,261 8,295 189,140
Income (loss) before exraordinary charge 598,464 (241) 21,215 (121) 619,317
Extraordinry charge, net (26,968) (26,968)
Net Income (loss) 571,496 (241) 21,215 (121) 592,349
</TABLE>
<PAGE>
A - 6a
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Prior Page Combined Eliminations, AYE Inc.
Subtotal CT 1 & 2 Totals etc. Consolidated
(see pg A-6) Totals
Operating revenues:
<S> <C> <C> <C> <C> <C>
Residential 966,613 0 966,613 0 966,613
Commercial 535,948 0 535,948 0 535,948
Industrial 797,731 0 797,731 0 797,731
Wholesale and other,
including affiliates 809,260 128 809,388 (294,304)(4) 58,474
(456,610)(5)
Bulk power transactions, net 449,675 0 449,675 0 449,675
Total operating revenues 3,559,227 128 3,559,355 (750,914) 2,808,441
Operating expenses:
Operation:
Fuel 535,514 160 535,674 0 535,674
Purchased power and exchanges, net 760,813 0 760,813 (253,932)(4) 531,431
24,550 (13)
Deferred power costs, net 41,577 0 41,577 0 41,577
Other 866,559 13 866,572 (41,012)(4) 389,406
(436,154)(5)
Maintenance 227,552 5 227,557 (4,019)(5) 223,538
Depreciation and amortization 281,927 79 282,006 (24,550)(13 257,456
Taxes other than income taxes 204,707 3 204,710 111 (4) 190,271
(14,550)(5)
Federal and state income taxes 162,520 (46) 162,474 2,024 (8) 164,441
82 (16)
389 (4)
135 (4)
(663)(5)
Total operating expenses 3,081,169 214 3,081,383 (747,589) 2,333,794
Operating income 478,058 (86) 477,972 (3,325) 474,647
Other income and deductions:
Alowance for other than borrowed funds used
during construction 1,840 0 1,840 0 1,840
18,502 (1)
2,024 (8)
(5,450)(7)
(142)(6)
Other income, net 328,559 0 328,559 (342,816)(9) 1,605
928 (5)
Total other income and deductions 330,399 0 330,399 (326,954) 3,445
Income before interest charges, preferred dividends, preferred
redemption premiums, and extraordinary charge, net 808,457 (86) 808,371 (330,279) 478,092
Interest charges, preferred dividends, and preferred redemption premiums:
Interest on long-term debt 156,710 0 156,710 (1,512)(12) 155,198
Other interest 37,500 0 37,500 (5,450)(7) 31,612
(142)(6)
Allowance for borrowed funds used during construction (296)(5)
and interest capitalized (5,070) 0 (5,070) 0 (5,070)
Dividends on preferred stock of subsidiaries 7,183 (10) 7,183
Redemption premiums on preferred stock of subsidiaries 3,780 (10) 3,780
Total interest charges, preferred dividends, and
preferred redemption premiums 189,140 0 189,140 3,563 192,703
Income (loss) before exraordinary charge 619,317 (86) 619,231 (333,842) 285,389
Extraordinry charge, net (26,968) (26,968) (26,968)
Net Income (loss) 592,349 (86) 592,263 (333,842) 258,421
</TABLE>
<PAGE>
A - 7
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND OTHER PAID - IN CAPITAL
FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
AYE MP PE Subtotal
RETAINED EARNINGS
<S> <C> <C> <C> <C>
Balance at January 1, 1999 836,759 273,197 312,522 1,422,478
Add:
Net income (loss) 258,421 92,327 83,634 434,382
Total 1,095,180 365,524 396,156 1,856,860
Deduct:
Dividends on common stock of Allegheny
Energy, Inc. 198,578 0 0 198,578
Dividends on capital stock of subsidiary companies:
Preferred - 5,037 545 5,582
Cumulative preferred stock redemption premiums 524 524
Common - 78,527 145,055 223,582
Decrease related to WPP transfer of assets 0 0 0 0
Total deductions 198,578 83,564 146,124 428,266
Balance at December 31, 1999 896,602 281,960 250,032 1,428,594
OTHER PAID - IN CAPITAL
Balance at January 1, 1999 1,044,085 2,441 2,690 1,049,216
Add (Deduct):
Common stock dividends paid out of
other paid - in capital - - -
Other paid - in capital from
Allegheny Energy, Inc. - - -
Premiums or redemption of preferred 0
Decrease related to WPP transfer of assets 0
Balance at December 31, 1999 1,044,085 2,441 2,690 1,049,216
</TABLE>
<PAGE>
A - 7a
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND OTHER PAID - IN CAPITAL
FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Prior Page
Subtotal WPP AES Subtotal
RETAINED EARNINGS (see page A-7) (see page B-4a)
<S> <C> <C> <C> <C>
Balance at January 1, 1999 1,422,478 210,692 0 1,633,170
Add:
Net income (loss) 434,382 127,582 9,532 571,496
Total 1,856,860 338,274 9,532 2,204,666
Deduct:
Dividends on common stock of Allegheny
Energy, Inc. 198,578 0 0 198,578
Dividends on capital stock of subsidiary companies:
Preferred 5,582 1,600 7,182
Cumulative preferred stock redemption premiums 524 3,256 3,780
Common 223,582 83,804 3,429 310,815
Decrease related to WPP transfer of assets 0 239,977 0 239,977
Total deductions 428,266 328,637 3,429 760,332
Balance at December 31, 1999 1,428,594 9,637 6,103 1,444,334
OTHER PAID - IN CAPITAL
Balance at January 1, 1999 1,049,216 55,475 0 1,104,691
Add (Deduct):
Common stock dividends paid out of
other paid - in capital - - -
Other paid - in capital from
Allegheny Energy, Inc. - - -
Premiums or redemption of preferred 0 (1,055) (1,055)
Decrease related to WPP transfer of assets 0 (54,420) (75,642) (130,062)
Balance at December 31, 1999 1,049,216 0 (75,642) 973,574
</TABLE>
<PAGE>
A - 8
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND OTHER PAID - IN CAPITAL
FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Prior Page Allegheny
Subtotal AP Coal AGC Ventures Subtotal
RETAINED EARNINGS (see pg A-7a) (see pg. D-4)
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1999 1,633,170 (13,612) 0 (38,109) 1,581,449
Add:
Net income (loss) 571,496 (241) 21,215 (121) 592,349
Total 2,204,666 (13,853) 21,215 (38,230) 2,173,798
Deduct:
Dividends on common stock of Allegheny
Energy, Inc. 198,578 0 0 0 198,578
Dividends on capital stock of subsidiary companies:
Preferred 7,182 0 0 0 7,182
Cumulative preferred stock redemption premiums 3,780 3,780
Common 310,815 0 21,215 0 332,029
Decrease related to WPP transfer of assets 239,977 0 0 0 239,977
Total deductions 760,332 0 21,215 0 781,547
Balance at December 31, 1999 1,444,334 (13,853) 0 (38,230) 1,392,251
OTHER PAID - IN CAPITAL
Balance at January 1, 1999 1,104,691 555 165,275 57,823 1,328,344
Add (Deduct):
Common stock dividends paid out of
other paid - in capital (10,785) (10,785)
Other paid - in capital from
Allegheny Energy, Inc. 19,524 19,524
Premiums or redemption of preferred (1,055) (1,055)
Decrease related to WPP transfer of assets (130,062) (130,062)
Balance at December 31, 1999 973,574 555 154,490 77,347 1,205,966
</TABLE>
<PAGE>
A - 8a
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND OTHER PAID - IN CAPITAL
FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
AYE Inc.
Prior Page Combined Eliminations, Consolidated
Subtotal CT 1 & 2 Totals etc Totals
RETAINED EARNINGS (see pg A-8)
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1999 1,581,449 0 1,581,449 (744,690) 836,759
Add:
Net income (loss) 592,349 (86) 592,263 (333,842) 258,421
Total 2,173,798 (86) 2,173,712 (1,078,532) 1,095,180
Deduct:
Dividends on common stock of Allegheny
Energy, Inc. 198,578 0 198,578 0 198,578
Dividends on capital stock of subsidiary companies:
Preferred 7,182 0 7,182 (7,182)(10) 0
Cumulative preferred stock redemption premium 3,780 3,780 (3,780)(10) 0
Common 332,029 0 332,029 (332,029) (9) 0
Decrease related to WPP transfer of assets 239,977 0 239,977 (239,977) (1) 0
Total deductions 781,547 0 781,547 (582,968) 198,578
Balance at December 31, 1999 1,392,251 (86) 1,392,165 (495,564) 896,602
OTHER PAID - IN CAPITAL
Balance at January 1, 1999 1,328,344 0 1,328,344 (284,259) 1,044,085
Add (Deduct):
Common stock dividends paid out of
other paid - in capital (10,785) (10,785) 10,785 (1) 0
Other paid - in capital from
Allegheny Energy, Inc. 19,524 64,885 84,409 (84,409) (1) 0
Premiums or redemption of preferred (1,055) (1,055) 1,055 (1) 0
Decrease related to WPP transfer of assets (130,062) (130,062) 130,062 (1) 0
Balance at December 31, 1999 1,205,966 64,885 1,270,851 (226,766) 1,044,085
</TABLE>
<PAGE>
A - 9
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
AYE APSC MP Subtotal
<S> <C> <C> <C> <C>
Cash Flows from Operations:
Net income (loss) 258,421 * 92,327 350,748
Extaordinary charge, net of taxes 0 0 0 0
Income before extraordinary charge 258,421 0 92,327 350,748
Depreciation and amortization 60,904 60,904
Amortization of adverse purchase power contract 0
Deferred revenues 0
Deferred investment credit and income taxes, net 2,572 4,701 7,273
Deferred power costs, net 10,928 10,928
Unconsolidated subsidiaries' dividends in excess of earnings 2,972 2,972
Allowance for other than borrowed funds used
during construction (AOFDC) 0 0 (1,059) (1,059)
Write-off of merger related and generation project costs 17,570 4,213 21,783
Changes in certain current assets and liabilities: 0
Cash transferred related to asset transfer 0
Accounts receivable, net 1,050 17,331 (68,344) (49,963)
Materials and supplies 354 354
Accounts payable (3,487) (22,589) 69,751 43,675
Prepayments (10,000) (10,000)
Taxes accrued (1,339) (2,974) (4,313)
Benefit plans' investments (6,700) (6,700)
Restructuring settlement refund 0
Other, net (7,195) 9,816 5,701 8,322
Total Cash Flows from Operations 259,659 5,791 169,474 434,924
Cash Flows from Investing:
Utility construction expenditures (less allowance
for other than borrowed funds used during construction) (5,725) (81,424) (87,149)
Nonutility construction expenditures and investments (124,705) (124,705)
Acquisition of businesses (96,597) (96,597)
Total Cash Flows from Investing (124,705) (5,725) (178,021) (308,451)
Cash Flows from Financing:
Repurchase of common stock (398,407) (398,407)
Retirement of preferred stock 0
Issuance of long-term debt 117,013 117,013
Retirement of long - term debt 0
Funds on deposit with trustee and restricted funds (2,561) (2,561)
Short-term debt 488,024 (49,000) 439,024
Notes receivable from affiliates (253) (253)
Notes receivable from subsidiary (21,200) (21,200)
Notes payable to affiliates 28,650 28,650
Notes payable to parents 0
Parent company contribution 0
Dividends on capital stock: 0
Preferred stock (5,037) (5,037)
Common stock (203,225) (78,527) (281,752)
Total Cash Flows from Financing (135,061) 0 10,538 (124,523)
Net Change in Cash and Temporary
Cash Investments** (107) 66 1,991 1,950
Cash and Temporary Cash Investments at January 1 122 100 1,835 2,057
Cash and Temporary Cash Investments at December 31 15 166 3,826 4,007
Supplemental cash flow information:
Cash paid during the year for:
Interest (net of amount capitalized) 14,684 101 34,076 48,861
Income taxes 0 515 42,316 42,831
</TABLE>
* Pursuant to service contracts, Allegheny Power Service Corporation's
expenses ($456,610) have been apportioned to System companies.
**Temporary cash investments with original maturities of three months or
less, generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of cash.
<PAGE>
A - 9a
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Prior Page
Subtotal PE WPP AES Subtotal
(see pg A-9) (See pg B-5a)
<S> <C> <C> <C> <C> <C>
Cash Flows from Operations:
Net income (loss) 350,748 83,634 127,582 9,532 571,496
Extaordinary charge, net of taxes 0 16,950 10,018 0 26,968
Income before extraordinary charge 350,748 100,584 137,600 9,532 598,464
Depreciation and amortization 60,904 75,916 114,268 7,975 259,063
Amortization of adverse purchase power contract 0 (27,907) (4,091) (31,998)
Deferred revenues 0 34,849 34,849
Deferred investment credit and income taxes, net 7,273 (13,702) 39,177 (2,155) 30,593
Deferred power costs, net 10,928 30,649 0 41,577
Unconsolidated subsidiaries' dividends in excess of earnings: 2,972 3,080 2,549 2,423 11,024
Allowance for other than borrowed funds used
during construction (AOFDC) (1,059) (748) (33) (1,840)
Write-off of merger related and generation project costs 21,783 5,344 6,641 33,768
Changes in certain current assets and liabilities: 0 0
Cash transferred related to asset transfer 0 13,058 13,058
Accounts receivable, net (49,963) 5,559 7,736 (122,220) (158,888)
Materials and supplies 354 2,389 (537) (748) 1,458
Accounts payable 43,675 (37,429) 65,008 111,063 182,317
Prepayments (10,000) (2,827) (6,331) (19,158)
Taxes accrued (4,313) (280) 6,475 7,244 9,126
Benefit plans' investments (6,700) (6,700)
Restructuring settlement refund 0 (25,100) (25,100)
Other, net 8,322 (2,348) (49,603) 6,630 (36,999)
Total Cash Flows from Operations 434,924 203,863 273,447 22,380 934,614
Cash Flows from Investing:
Utility construction expenditures (less allowance
for other than borrowed funds used during construction) (87,149) (90,874) (86,257) (264,280)
Nonutility construction expenditures and investments (124,705) (27,956) (50,769) (203,430)
Acquisition of businesses (96,597) (96,597)
Total Cash Flows from Investing (308,451) (90,874) (114,213) (50,769) (564,307)
Cash Flows from Financing:
Repurchase of common stock (398,407) (398,407)
Retirement of preferred stock 0 (16,902) (82,964) (99,866)
Issuance of long-term debt 117,013 9,300 697,771 824,084
Retirement of long - term debt 0 (525,000) (525,000)
Funds on deposit with trustee and restricted funds (2,561) (3,133) (3,006) (8,700)
Short-term debt 439,024 (55,766) 383,258
0
Notes receivable from affiliates (253) 9,300 (80,800) (71,753)
Notes receivable from subsidiary (21,200) 66,750 0 45,550
Notes payable to affiliates 28,650 (9,300) 19,350
Notes payable to parents 0 21,200 21,200
Parent company contribution 0 12,286 12,286
Dividends on capital stock: 0 0
Preferred stock (5,037) (545) (1,600) (7,182)
Common stock (281,752) (145,055) (83,804) (3,429) (514,040)
Total Cash Flows from Financing (124,523) (80,285) (144,469) 30,057 (319,220)
Net Change in Cash and Temporary
Cash Investments** 1,950 32,704 14,765 1,668 51,087
Cash and Temporary Cash Investments at January 1 2,057 1,806 4,523 0 8,386
Cash and Temporary Cash Investments at December 31 4,007 34,510 19,288 1,668 59,473
Supplemental cash flow information:
Cash paid during the year for:
Interest (net of amount capitalized) 48,861 41,939 64,793 99 155,692
Income taxes 42,831 54,770 23,151 117 120,869
</TABLE>
* Pursuant to service contracts, Allegheny Power Service Corporation's
expenses ($456,610) have been apportioned to System companies.
**Temporary cash investments with original maturities of three months or
less, generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of cash.
<PAGE>
A - 10
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Prior Page Allegheny
Subtotal AP Coal AGC Ventures Subtotal
(see pg A-9a) (see pg D-5)
<S> <C> <C> <C> <C> <C>
Cash Flows from Operations:
Net income (loss) 571,496 (241) 21,215 (121) 592,349
Extaordinary charge, net of taxes 26,968 0 0 26,968
Income before extraordinary charge 598,464 (241) 21,215 (121) 619,317
Depreciation and amortization 259,063 0 16,980 5,884 281,927
Amortization of adverse purchase power contract (31,998) (31,998)
Deferred revenues 34,849 34,849
Deferred investment credit and income taxes, net 30,593 0 4,981 3,946 39,520
Deferred power costs, net 41,577 41,577
Unconsolidated subsidiaries' dividends in excess of earnings 11,024 11,024
Allowance for other than borrowed funds used 0
during construction (AOFDC) (1,840) (1,840)
Write-off of merger related and generation project costs 33,768 2,094 35,862
Changes in certain current assets and liabilities: 0
Cash transferred related to asset transfer 13,058 (13,058) 0
Accounts receivable, net (158,888) (2) 8,920 (149,970)
Materials and supplies 1,458 (25) 785 2,218
Accounts payable 182,317 23 2,804 (12,534) 172,610
Prepayments (19,158) (19,158)
Taxes accrued 9,126 (22) 955 (2,260) 7,799
Benefit plans' investments (6,700) (6,700)
Restructuring settlement refund (25,100) (25,100)
Other, net (36,999) 34 (237) (3,239) (40,441)
Total Cash Flows from Operations 934,614 (206) 46,671 (9,583) 971,496
Cash Flows from Investing:
Utility construction expenditures (less allowance
for other than borrowed funds used during construction) (264,280) (85) (264,365)
Nonutility construction expenditures and investments (203,430) (16,276) (219,706)
Acquisition of businesses (96,597) (2,117) (98,714)
Total Cash Flows from Investing (564,307) 0 (85) (18,393) (582,785)
Cash Flows from Financing:
Repurchase of common stock (398,407) (398,407)
Retirement of preferred stock (99,866) (99,866)
Issuance of long-term debt 824,084 0 824,084
Retirement of long - term debt (525,000) (30,000) (555,000)
Funds on deposit with trustee and restricted funds (8,700) (8,700)
Short - term debt, net 383,258 (1,000) 382,258
Notes receivable from affiliates (71,753) 0 (71,753)
Notes receivable from subsidiary 45,550 45,550
Notes payable to affiliates 19,350 253 52,150 71,753
Notes payable to parents 21,200 (66,750) (45,550)
Parent company contribution 12,286 54,748 67,034
Dividends on capital stock: 0
Preferred stock (7,182) 0 (7,182)
Common stock (514,040) (32,000) 0 (546,040)
Total Cash Flows from Financing (319,220) 253 (46,600) 23,748 (341,819)
Net Change in Cash and Temporary
Cash Investments** 51,087 47 (14) (4,228) 46,892
Cash and Temporary Cash Investments at January 1 8,386 35 30 9,108 17,559
Cash and Temporary Cash Investments at December 31 59,473 82 16 4,880 64,451
Supplemental cash flow information:
Cash paid during the year for:
Interest (net of amount capitalized) 155,692 0 12,465 7,779 175,936
Income taxes 120,869 (99) 4,649 (1,239) 124,180
</TABLE>
*Pursuant to service contracts, Allegheny Power Service Corporation's
expenses ($456,610) have been apportioned to System companies.
**Temporary cash investments with original maturities of three months
or less, generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of cash.
<PAGE>
A - 10a
ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
AYE Inc
Prior Page Combined Eliminations, Consolidated
Subtotal CT 1 & 2 Totals etc. Totals
(see pg A-10)
<S> <C> <C> <C> <C> <C>
Cash Flows from Operations:
Net income (loss) 592,349 (86) 592,263 (333,842) 258,421
Extaordinary charge, net of taxes 26,968 0 26,968 26,968
Income before extraordinary charge 619,317 (86) 619,231 (333,842) 285,389
Depreciation and amortization 281,927 79 282,006 (24,550)(13) 257,456
Amortization of adverse purchase power contract (31,998) (31,998) 20,852 (11,146)
Deferred revenues 34,849 34,849 34,849
Deferred investment credit and income taxes, net 39,520 39,520 515 40,035
Deferred power costs, net 41,577 41,577 41,577
Unconsolidated subsidiaries' dividends in excess of earnings 11,024 11,024 (11,024) 0
Allowance for other than borrowed funds used 0
during construction (AOFDC) (1,840) (1,840) (1,840)
Write-off of merger related and generation project costs 35,862 35,862 35,862
Changes in certain current assets and liabilities: 0
Cash transferred related to asset transfer 0 0 0
Accounts receivable, net (149,970) (20,574) (170,544) 92,865 (77,679)
Materials and supplies 2,218 2,218 (9) 2,209
Accounts payable 172,610 2,622 175,232 (95,008) 80,224
Prepayments (19,158) (19,158) (19,158)
Taxes accrued 7,799 7,799 7,799
Benefit plans' investments (6,700) (6,700) (6,700)
Restructuring settlement refund (25,100) (25,100) (25,100)
Other, net (40,441) 6,767 (33,674) (3,780)(10) (25,517)
9
(59)
11,987
Total Cash Flows from Operations 971,496 (11,192) 960,304 (342,044) 618,260
Cash Flows from Investing:
Utility construction expenditures (less allowance
for other than borrowed funds used during construction) (264,365) (264,365) (264,365)
Nonutility construction expenditures and investments (219,706) (52,160) (271,866) 124,706 (147,160)
Acquisition of businesses (98,714) (98,714) (98,714)
Total Cash Flows from Investing (582,785) (52,160) (634,945) 124,706 (510,239)
Cash Flows from Financing:
Repurchase of common stock (398,407) (398,407) (398,407)
Retirement of preferred stock (99,866) (99,866) 3,780 (10) (96,086)
Issuance of long-term debt 824,084 824,084 59 824,143
Retirement of long - term debt (555,000) (555,000) (555,000)
Funds on deposit with trustee and restricted funds (8,700) (8,700) (4,579) (13,279)
Short - term debt, net 382,258 382,258 382,258
Notes receivable from affiliates (71,753) (71,753) 71,753 0
Notes receivable from subsidiary 45,550 45,550 (45,550) 0
Notes payable to affiliates 71,753 71,753 (71,753) 0
Notes payable to parents (45,550) (45,550) 45,550 0
Parent company contribution 67,034 64,885 131,919 (131,919) 0
Dividends on capital stock: 0
Preferred stock (7,182) (7,182) 7,182 (10) 0
Common stock (546,040) (546,040) 342,815 (9) (203,225)
Total Cash Flows from Financing (341,819) 64,885 (276,934) 217,338 (59,596)
Net Change in Cash and Temporary
Cash Investments** 46,892 1,533 48,425 0 48,425
Cash and Temporary Cash Investments at January 1 17,559 0 17,559 17,559
Cash and Temporary Cash Investments at December 31 64,451 1,533 65,984 0 65,984
Supplemental cash flow information:
Cash paid during the year for:
Interest (net of amount capitalized) 175,936 0 175,936 (5,438) 170,498
Income taxes 124,180 0 124,180 124,180
</TABLE>
*Pursuant to service contracts, Allegheny Power Service Corporation's
expenses ($456,610) have been apportioned to System companies.
**Temporary cash investments with original maturities of three months
or less, generally in the form of commercial paper, certificates of
deposit, and repurchase agreements, are considered to be the
equivalent of cash.
<PAGE>
A-11
ALLEGHENY ENERGY, INC.
Long-Term Debt of Subsidiaries at December 31, 1999
(000's)
Date of Principal
First mortgage bonds: Issue Amount
Monongahela Power Company:
5-5/8% Series Due 2000 1993 65,000 *
7-3/8% Series Due 2002 1992 25,000
7-1/4% Series Due 2007 1992 25,000
8-5/8% Series Due 2021 1991 50,000
8-3/8% Series Due 2022 1992 40,000
7-5/8% Series Due 2025 1995 70,000
Total 275,000
The Potomac Edison Company:
5-7/8% Series Due 2000 1993 75,000 *
8% Series Due 2006 1991 50,000
8% Series Due 2022 1992 55,000
7-3/4% Series Due 2023 1993 45,000
8% Series Due 2024 1994 75,000
7-5/8% Series Due 2025 1995 80,000
7-3/4% Series Due 2025 1995 65,000
Total 445,000
Total first mortgage bonds 720,000
*Less current maturities (140,000)
580,000
<PAGE>
A-12
ALLEGHENY ENERGY, INC.
Long-Term Debt of Subsidiaries at December 31, 1999 (Cont'd)
(000's)
<TABLE>
<CAPTION>
Liability
Date of Date of Interest Due Within
Issue Maturity Rate One Year Long-Term
Debentures:
<S> <C> <C> <C> <C>
Allegheny Generating Company 09-01-93 09-01-23 6.875% 100,000
09-01-93 09-01-03 5.625% 50,000
150,000
Quarterly Income Debt Securities:
Monongahela Power Company 06-19-95 06-30-25 8.000% 40,000
The Potomac Edison Company 06-30-95 09-30-25 8.000% 45,457
West Penn Power Company 06-12-95 06-30-25 8.000% 70,000
155,457
Secured notes:
Pleasants pollution control facilities:
Monongahela Power Company 02-01-98 11-01-07 4.700% 14,500
02-01-98 11-01-12 5.050% 3,000
05-15-95 05-01-15 6.150% 25,000
04-01-99 04-01-29 5.500% 7,700
50,200
The Potomac Edison Company 02-01-98 11-01-07 4.700% 30,000
05-15-95 05-01-15 6.150% 21,000
04-01-99 04-01-29 5.500% 9,300
60,300
West Penn Power Company 02-01-98 11-01-07 4.700% 45,000
05-15-95 05-01-15 6.150% 31,500
04-01-99 04-01-29 5.500% 13,830
90,330
Allegheny Energy Supply Company, LLC 02-01-98 11-01-07 4.700% 45,000
05-15-95 05-01-15 6.150% 31,500
04-01-99 04-01-29 5.500% 13,830
90,330
Mitchell pollution control facilities:
West Penn Power Company 03-01-93 03-01-03 4.950% 61,500
05-15-95 04-01-14 6.050% 15,400
76,900
Allegheny Energy Supply Company, LLC 03-01-93 03-01-03 4.950% 61,500
05-15-95 04-01-14 6.050% 15,400
76,900
Fort Martin pollution control facilities:
Monongahela Power Company 04-01-93 04-01-13 5.950% 7,050
The Potomac Edison Company 04-01-93 04-01-13 5.950% 8,600
West Penn Power Company 04-01-93 04-01-13 5.950% 7,750
Allegheny Energy Supply Company, LLC 04-01-93 04-01-13 5.950% 7,750
31,150
</TABLE>
<PAGE>
A-13
ALLEGHENY ENERGY, INC.
Long-Term Debt of Subsidiaries at December 31, 1999 (Cont'd)
(000's)
<TABLE>
<CAPTION>
Liability
Date of Date of Interest Due Within
Issue Maturity Rate One Year Long-Term
Harrison pollution control facilities:
<S> <C> <C> <C> <C>
Monongahela Power Company 04-15-92 04-15-22 6.875% 5,000
05-01-93 05-01-23 6.250% 10,675
07-15-94 08-01-24 6.750% 8,825
24,500
The Potomac Edison Company 04-15-92 04-15-22 6.875% 6,550
05-01-93 05-01-23 6.250% 13,990
07-15-94 08-01-24 6.750% 11,560
32,100
West Penn Power Company 04-15-92 04-15-22 6.875% 8,450
05-01-93 05-01-23 6.300% 18,040
07-15-94 08-01-24 6.750% 14,910
41,400
Allegheny Energy Supply Company, LLC 04-15-92 04-15-22 6.875% 8,450
05-01-93 05-01-23 6.300% 18,040
07-15-94 08-01-24 6.750% 14,910
41,400
Elimination for pollution control debt
recorded by Allegheny Energy Supply
Company, LLC and West Penn Power Company.
This pollution control debt was assumed
by Allegheny Energy Supply Company, LLC
but remains an obligation of West Penn
Power Company. (216,380)
Total secured notes 399,130
</TABLE>
<PAGE>
A-14
ALLEGHENY ENERGY, INC.
Long-Term Debt of Subsidiaries at December 31, 1999 (Cont'd)
(000's)
<TABLE>
<CAPTION>
Liability
Date of Date of Interest Due Within
Issue Maturity Rate One Year Long-Term
Unsecured notes:
Hatfield's Ferry pollution control
facilities:
<S> <C> <C> <C> <C>
Monongahela Power Company 03-01-98 02-01-02 4.350% 2,060
03-01-98 02-01-07 4.750% 1,000
03-01-98 02-01-12 5.100% 3,000
6,060
The Potomac Edison Company 03-01-98 02-01-02 4.350% 3,200
West Penn Power Company 03-01-98 02-01-07 4.750% 14,435
Allegheny Energy Supply Company, LLC 03-01-98 02-01-07 4.750% 14,435
Elimination for pollution control
debt recorded by Allegheny Energy
Supply Company, LLC and
West Penn Power Company. This
pollution control debt was assumed
by Allegheny Energy Supply Company,
LLC but remains an obligation of
West Penn Power Company. (14,435)
Total unsecured notes 23,695
Installment purchase obligations:
Monongahela Power Company -
Pleasants County pollution cntl facilities 03-01-98 03-01-03 4.500% 10,145
Preston County pollution cntl facilities 03-01-98 03-01-03 4.500% 5,900
Marion County pollution cntl facilities 03-01-98 03-01-03 4.500% 3,055
19,100
Medium-term notes:
Monongahela Power Company 09-24-98 09-24-03 5.660% 5,000
09-25-98 09-25-03 5.710% 1,975
09-29-98 09-29-03 5.570% 1,000
09-29-98 09-29-03 5.630% 20,500
09-30-98 09-30-03 5.560% 15,000
12-10-99 01-15-10 7.360% 110,000
153,475
West Penn Power Company 09-21-98 09-23-02 5.660% 32,050
09-22-98 09-23-02 5.560% 1,500
06-01-99 06-01-04 6.375% 84,000
117,550
Allegheny Energy Supply Company, LLC 10-31-96 10-31-01 5.563% 130,000
Total medium-term notes 401,025
Transition bonds: Expected Final
West Penn Funding LLC Payment Date
Transition Class A-1 11-16-99 06-25-01 6.320% 49,734 24,266
Transition Class A-2 11-16-99 12-26-03 6.630% 172,000
Transition Class A-3 11-16-99 09-25-06 6.810% 198,000
Transition Class A-4 11-16-99 06-25-08 6.980% 156,000
Total Transition bonds 49,734 550,266
Unamortized debt discount and premium, net:
Monongahela Power Company (4,084)
The Potomac Edison Company (6,179)
West Penn Power Company (2,605)
Allegheny Generating Company (1,069)
Total unamortized debt discount and premium, net (13,937)
Amounts on deposit with trustees:
Monongahela Power Company (2,561)
The Potomac Edison Company (3,133)
Allegheny Energy Supply Company, LLC (4,579)
Total Amounts in deposit with trustees (10,273)
</TABLE>
<PAGE>
B - 1
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
West Virginia Power
and Transmission
Company and Subsidiary
West Virginia West Penn
West Penn Power and West Virginia
Power Transmission Water Power West Penn
ASSETS Company Company Company Funding Corp. Subtotal
(See pg C-1)
<S> <C> <C> <C> <C>
Property, plant and equipment:
At original cost 1,595,160 2,314 10 1,597,484
Accumulated depreciation (506,416) 0 0 (506,416)
Investments and other assets:
Securities of subsidiaries consolidated 142,233 1 0 142,234
Equity in undistributed earnings of subsidiaries 1,495 1,495
Indebtedness of subsidiary consolidated - not current 14 14
Investment in Allegheny Pittsburgh Coal Company:
Common stock, at equity (6,648) 0 0 (6,648)
Advances 7,061 0 0 7,061
Investment in Allegheny Generating Company:
Common stock, at equity 0 0 0 0
Long-term notes receivable 0 0 0 594,941 594,941
Other 113 0 0 113
Current assets:
Cash and temporary cash investments 15,923 2,246 0 1,019 19,188
Accounts receivable:
Electric service 132,691 0 0 132,691
Allowance for uncollectible accounts (16,077) 0 0 (16,077)
Affiliated and other 16,398 5 0 7,474 23,877
Notes receivable due 1 yr. 80,800 0 0 80,800
Materials and supplies - at average cost:
Operating and construction 16,200 0 0 16,200
Fuel 0 0 0 0
Deferred income taxes 23,156 0 0 23,156
Prepaid taxes 656 0 0 656
Intangible transition property 0 0 0 52,779 52,779
Regulatory assets 1,740 0 0 1,740
Other 1,530 1 0 1,857 3,388
Deferred charges:
Regulatory assets 240,035 0 0 240,035
Unamortized loss on reacquired debt 3,621 0 0 3,621
Intangible transition property 0 0 0 539,735 539,735
Other 2,215 7 0 7,459 9,681
Total assets 1,751,886 4,588 10 1,205,264 2,961,748
</TABLE>
<PAGE>
B - 1a
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
West Penn
Prior Page Transfer Combined Eliminations, Consolidated
ASSETS Subtotal Agent Totals etc. Totals
(see pg B-1) (see pg A-1a)
<S> <C> <C> <C> <C> <C>
Property, plant and equipment:
At original cost 1,597,484 0 1,597,484 0 1,597,484
Accumulated depreciation (506,416) 0 (506,416) 0 (506,416)
Investments and other assets:
Securities of subsidiaries consolidated 142,234 0 142,234 (142,234)(1) 0
Equity in undistributed earnings of subsidiaries 1,495 1,495 (1,495)(1) 0
Indebtedness of subsidiary consolidated - not current 14 14 (14)(2) 0
Investment in Allegheny Pittsburgh Coal Company:
Common stock, at equity (6,648) 0 (6,648) 0 (6,648)
Advances 7,061 0 7,061 0 7,061
Investment in Allegheny Generating Company:
Common stock, at equity 0 0 0 0 0
Long-term notes receivable 594,941 0 594,941 (594,941)(2) 0
Other 113 0 113 (1) 112
Current assets:
Cash and temporary cash investments 19,188 100 19,288 0 19,288
Accounts receivable:
Electric service 132,691 0 132,691 0 132,691
Allowance for uncollectible accounts (16,077) 0 (16,077) 0 (16,077)
Affiliated and other 23,877 0 23,877 (7,578)(3) 16,299
Notes receivable due 1 yr. 80,800 0 80,800 0 80,800
Materials and supplies - at average cost:
Operating and construction 16,200 0 16,200 0 16,200
Fuel 0 0 0 0 0
Deferred income taxes 23,156 0 23,156 (7,585)(10) 15,571
Prepaid taxes 656 972 1,628 0 1,628
Intangible transition property 52,779 0 52,779 (52,779)(11) 0
Regulatory assets 1,740 0 1,740 22,217 (11) 23,957
Other 3,388 0 3,388 (1,857)(12) 1,531
Deferred charges:
Regulatory assets 240,035 0 240,035 227,947 (11) 467,982
Unamortized loss on reacquired debt 3,621 0 3,621 0 3,621
Intangible transition property 539,735 0 539,735 (539,735)(11) 0
Other 9,681 0 9,681 0 9,681
Total assets 2,961,748 1,072 2,962,820 (1,098,055) 1,864,765
</TABLE>
<PAGE>
B - 2
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
West Virginia Power
and Transmission
Company and Subsidiary
West Virginia West Penn
West Penn Power and West Virginia
Power Transmission Water Power West Penn
CAPITALIZATION AND LIABILITIES Company Company Company Funding Corp. Subtotal
(See pg C-2)
<S> <C> <C> <C> <C> <C>
Capitalization:
Common stock of West Penn Power Company 70,021 0 0 70,021
Common stock of subsidiaries consolidated 0 3,000 1 3,001
Other paid - in capital 0 (555) 0 137,561 137,006
Retained earnings 9,637 1,500 (6) 1,155 12,286
Preferred stock:
Not subject to mandatory redemption 0 0 0 0
Long - term debt and QUIDS 415,819 0 0 550,207 966,026
Indebtedness to affiliated consolidated - not current 594,940 0 15 0 594,955
Current liabilities:
Long-term debt due 1 year 0 0 0 49,734 49,734
Short - term debt 0 0 0 0
Accounts payable to affiliates 104,778 14 0 633 105,425
ccounts payable - others 55,267 0 0 55,267
Deferred income taxes 0 0 0 7,585 7,585
Taxes accrued:
Federal and state income 2,356 519 0 2,401 5,276
Other 10,566 108 0 10,674
Interest accrued 6,930 0 0 4,944 11,874
Adverse power purchase commitments 24,895 0 0 24,895
Deferred Gain on Sale of ITP 0 0 0 30,495 30,495
Other 5,924 2 0 0 5,926
Deferred credits and other liabilities:
Unamortized investment credit 21,847 0 0 21,847
Deferred income taxes 102,676 0 0 108,693 211,369
Regulatory liabilities 15,126 0 0 15,126
Adverse power purchase commitments 303,935 0 0 303,935
Deferred Gain on Sale of ITP 0 0 0 311,855 311,855
Other 7,169 0 0 1 7,170
Total capitalization and liabilities 1,751,886 4,588 10 1,205,264 2,961,748
</TABLE>
B - 2a
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
West Penn
Prior Page Transfer Combined Eliminations Consolidated
CAPITALIZATION AND LIABILITIES Subtotal Agent Totals etc. Totals
(see pg B-2) (see pg A-3a)
<S> <C> <C> <C> <C> <C>
Capitalization:
Common stock of West Penn Power Company 70,021 0 70,021 0 70,021
Common stock of subsidiaries consolidated 3,001 2,877 5,878 (5,878)(1) 0
Other paid - in capital 137,006 0 137,006 (137,006)(1) 0
Retained earnings 12,286 (1,805) 10,481 (844)(1) 9,637
Preferred stock
Not subject to mandatory redemption 0 0 0 0 0
Long - term debt and QUIDS 966,026 0 966,026 0 966,026
Indebtedness to affiliated consolidated - not current 594,955 0 594,955 (594,955)(2) 0
Current liabilities:
Long-term debt due 1 year 49,734 0 49,734 0 49,734
Short - term debt 0 0 0 0 0
Accounts payable to affiliates 105,425 0 105,425 (7,578)(3) 97,847
Accounts payable - others 55,267 0 55,267 0 55,267
Deferred income taxes 7,585 0 7,585 (7,585)(1) 0
Taxes accrued:
Federal and state income 5,276 0 5,276 0 5,276
Other 10,674 0 10,674 0 10,674
Interest accrued 11,874 0 11,874 (1,857)(1) 10,017
Adverse power purchase commitments 24,895 0 24,895 0 24,895
Deferred Gain on Sale of ITP 30,495 0 30,495 (30,495)(1) 0
Other 5,926 0 5,926 (1) 5,925
Deferred credits and other liabilities:
Unamortized investment credit 21,847 0 21,847 0 21,847
Deferred income taxes 211,369 0 211,369 0 211,369
Regulatory liabilities 15,126 0 15,126 0 15,126
Adverse power purchase commitments 303,935 0 303,935 0 303,935
Deferred Gain on Sale of ITP 311,855 0 311,855 (311,855)(1) 0
Other 7,170 0 7,170 (1) 7,169
Total capitalization and liabilities 2,961,748 1,072 2,962,820 (1,098,055) 1,864,765
</TABLE>
<PAGE>
B - 3
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
West Virginia Power
and Transmission
Company and Subsidiary
West Virginia West Penn
West Penn Power and West Virginia
Power Transmission Water Power West Penn
Company Company Company Funding Corp. Subtotal
Electric operating revenues: (See pg C-3)
<S> <C> <C> <C> <C> <C>
Residential 415,109 0 0 2,491 417,600
Commercial 229,018 0 0 1,579 230,597
Industrial 356,386 0 0 3,412 359,798
Wholesale and other, including affiliates 434,990 0 0 20 435,010
Bulk power transactions, net 278,209 0 0 278,209
Total operating revenues 1,713,712 0 0 7,502 1,721,214
Operating expenses:
Operation:
Fuel 213,626 0 0 213,626
Purchased power and exchanges, net 750,765 0 0 750,765
Other 202,376 37 0 114 202,527
Maintenance 93,436 0 0 93,436
Depreciation 113,742 0 0 2,426 116,168
Taxes other than income taxes 80,718 1 0 80,719
Federal and state income taxes 68,685 0 0 (36) 68,649
Total operating expenses 1,523,348 38 0 2,504 1,525,890
Operating income 190,364 (38) 0 4,998 195,324
Other income and deductions:
Allowance for other than borrowed funds used
during construction 33 0 0 33
Other, net 13,393 473 0 4,195 18,061
Total other income and deductions 13,426 473 0 4,195 18,094
Income before interest charges 203,790 435 0 9,193 213,418
Interest charges:
Interest on long - term debt 56,783 0 0 4,944 61,727
Other interest 12,307 0 0 126 12,433
Allowance for borrowed funds used during
construction and interest capitalized (2,900) 0 0 (2,900)
Total interest charges 66,190 0 0 5,070 71,260
Income (loss) before extraordinary charge 137,600 435 0 4,123 142,158
Extraordinary charge, net (10,018) 0 0 (10,018)
Net income (loss) 127,582 435 0 4,123 132,140
</TABLE>
B - 3a
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
West Penn
Prior Page Transfer Combined Eliminations, Consolidated
Subtotal Agent Totals etc. Totals
(see pg B-3) (see pg A-5a)
Electric operating revenues:
<S> <C> <C> <C> <C> <C>
Residential 417,600 0 417,600 0 417,600
Commercial 230,597 0 230,597 0 230,597
Industrial 359,798 0 359,798 0 359,798
Wholesale and other, including affiliates 435,010 0 435,010 (366,907)(4 67,999
(104)(6)
Bulk power transactions, net 278,209 0 278,209 0 278,209
Total operating revenues 1,721,214 0 1,721,214 (367,011) 1,354,203
Operating expenses:
Operation:
Fuel 213,626 0 213,626 0 213,626
Purchased power and exchanges, net 750,765 0 750,765 (353,096)(4 398,199
530 (5)
Other 202,527 0 202,527 (13,810)(4 188,613
(104)(6)
Maintenance 93,436 0 93,436 0 93,436
Depreciation 116,168 0 116,168 (1,900)(5 114,268
Taxes other than income taxes 80,719 0 80,719 0 80,719
Federal and state income taxes 68,649 (971) 67,678 3,937 (8 71,573
(42)(5)
Total operating expenses 1,525,890 (971) 1,524,919 (364,485) 1,160,434
Operating income 195,324 971 196,295 (2,526) 193,769
Other income and deductions:
Allowance for other than borrowed funds used
during construction 33 0 33 0 33
Other, net 18,061 0 18,061 (8,440) 9,621
Total other income and deductions 18,094 0 18,094 (8,440) 9,654
Income before interest charges 213,418 971 214,389 (10,966) 203,423
Interest charges:
Interest on long - term debt 61,727 0 61,727 0 61,727
Other interest 12,433 2,776 15,209 (8,223)(7 6,996
10 (5)
Allowance for borrowed funds used during
construction and interest capitalized (2,900) 0 (2,900) 0 (2,900)
Total interest charges 71,260 2,776 74,036 (8,213) 65,823
Income (loss) before extraordinary charge 142,158 (1,805) 140,353 (2,753) 137,600
Extraordinary charge, net (10,018) 0 (10,018) 0 (10,018)
Net income (loss) 132,140 (1,805) 130,335 (2,753) 127,582
</TABLE>
<PAGE>
B - 4
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND PAID - IN CAPITAL
FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
West Virginia Power
and Transmission
Company and Subsidiary
West Virgini West Penn
West Penn Power and West Virginia
Power Transmission Water Power West Penn
Company Company Company Funding Corp. Subtotal
RETAINED EARNINGS (see pg C-4)
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1999 210,692 1,065 (6) 0 211,751
Add:
Net Income (loss) 127,582 435 0 4,123 132,140
Total 338,274 1,500 (6) 4,123 343,891
Deduct:
Dividends on capital stock of West Penn Power Co.:
Preferred stock
4 - 1/2% 668 0 0 0 668
4.20% Series B 105 0 0 0 105
4.10% Series C 103 0 0 0 103
Auction 724 0 0 0 724
Common stock 83,804 0 0 2,968 86,772
Cumulative preferred stock redemption premiums 3,256 0 0 0 3,256
Decrease in retained earnings related to transfer of assets 239,977 0 0 0 239,977
Total deductions 328,637 0 0 2,968 331,605
Balance at December 31, 1999 9,637 1,500 (6) 1,155 12,286
OTHER PAID - IN CAPITAL
Balance at January 1, 1999 55,475 (555) 0 0 54,920
Add:
Capital contribution from parent 137,561 137,561
Less:
Premiums or redemption of preferred 1,055 1,055
Decrease in paid-in-capital due to transfer of assets 54,420 54,420
Balance at December 31, 1999 0 (555) 0 137,561 137,006
</TABLE>
<PAGE>
B - 4a
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND PAID - IN CAPITAL
FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
West Penn
Prior Page Transfer Combined Eliminations, Consolidated
Subtotal Agent Totals etc. Totals
RETAINED EARNINGS (see pg B-4) (see pg A-7a)
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1999 211,751 0 211,751 (1,059) 210,692
Add:
Net Income (loss) 132,140 (1,805) 130,335 (2,753) 127,582
Total 343,891 (1,805) 342,086 (3,812) 338,274
Deduct:
Dividends on capital stock of West Penn Power Co.:
Preferred stock
4 - 1/2% 668 0 668 0 668
4.20% Series B 105 0 105 0 105
4.10% Series C 103 0 103 0 103
Auction 724 0 724 0 724
Common stock 86,772 0 86,772 (2,968) 83,804
Cumulative preferred stock redemption premiums 3,256 0 3,256 0 3,256
Decrease in retained earnings related to transfer of assets 239,977 0 239,977 0 239,977
Total deductions 331,605 0 331,605 (2,968) 328,637
Balance at December 31, 1999 12,286 (1,805) 10,481 (844) 9,637
OTHER PAID - IN CAPITAL
Balance at January 1, 1999 54,920 0 54,920 555 55,475
Add:
Capital contribution from parent 137,561 137,561 (137,561) 0
Less:
Premiums or redemption of preferred 1,055 1,055 1,055
Decrease in paid-in-capital due to transfer of assets 54,420 54,420 54,420
Balance at December 31, 1999 137,006 0 137,006 (137,006) 0
</TABLE>
<PAGE>
B - 5
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
West Virginia Power
and Transmission
Company and Subsidiary
West Virginia West Penn
West Penn Power and West Virginia
Power Transmission Water Power West Penn
Company Company Company Funding Corp. Subtotal
<S> <C> <C> <C> <C> <C>
Cash Flows from Operations: (see pg C-5)
Net Income (loss) 127,582 435 0 4,123 132,140
Extraordinary charge, net of taxes 10,018 0 0 0 10,018
Net income before extraordinary charge 137,600 435 0 4,123 142,158
Depreciation and amortization 113,742 0 0 2,426 116,168
Deferred investment credit and income taxes, net 39,616 39,616
Write-off of generation project costs 6,641 6,641
Unconsolidated subsidiaries' dividends in excess of ea 2,765 2,765
Allowance for other than borrowed funds used
during construction (AOFDC) (33) 0 0 0 (33)
Amortization of adverse power purchase contracts (27,907) (27,907)
Amortization of debt issuance expenses 0
Pennsylvania CTC true-up regulatory asset (20,004) (20,004)
Changes in certain current assets and liabilities:
Accounts receivable, net 7,637 (5) 0 (7,474) 158
Materials and supplies (537) 0 0 0 (537)
Accounts payable 70,271 14 0 633 70,918
Taxes accrued 3,926 148 0 2,401 6,475
Regulatory liabilities (13,199) (13,199)
Interest accrued (8,751) 4,944 (3,807)
Contribution to subsidiary (5,927) (5,927)
Restructuring settlement refund (28,251) (28,251)
Other, net (3,859) (5) (3,532) (7,396)
Total Cash Flows from Operations 273,730 587 0 3,521 277,838
Cash Flows from Investing:
Utility Construction expenditures (less allowance for other
than borrowed funds used during construction) (86,257) (86,257)
Nonutility Construction expenditures (27,956) (27,956)
Total Cash Flows from Investing (114,213) 0 0 0 (114,213)
Cash Flows from Financing:
Retirement of preferred stock (82,964) (82,964)
Issuance of long - term debt 97,830 595,363 693,193
Retirement of long - term debt (525,000) (525,000)
Restricted funds (3,006) (3,006)
Parent company contribution 3,050 3,050
Short - term debt (55,766) (55,766)
Notes payable to affiliate (9,300) (9,300)
Notes receivable from affiliate (80,800) (80,800)
Notes receivable from parent 0 (594,941) (594,941)
Notes receivable to subsidiary 594,941 594,941
Dividends on capital stock:
Preferred stock (1,600) (1,600)
Common stock (83,804) (2,968) (86,772)
Total Cash Flows from Financing (146,463) 0 0 (2,502) (148,965)
Net Change in Cash and
Temporary Cash Investments* 13,054 587 0 1,019 14,660
Cash and Temporary Cash Investments at January 1 2,869 1,659 0 0 4,528
Cash and Temporary Cash Investments at December 31 15,923 2,246 0 1,019 19,188
Supplemental cash flow information:
Cash paid during the year for:
Interest (net of amount capitalized) 64,793 64,793
Income taxes 22,333 196 622 23,151
</TABLE>
*Temporary cash investments with original maturities of three months
or less, generally in the form of commercial paper, certificates of
deposit, and repurchase, are considered to be the equivalent of cash.
<PAGE>
B - 5a
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
West Penn
Prior Page Transfer Combined Eliminations, Consolidated
Subtotal Agent Totals etc. Totals
(see pg B-4) (see pg A-9a)
<S> <C> <C> <C> <C> <C>
Cash Flows from Operations:
Net Income (loss) 132,140 (1,805) 130,335 (2,753) 127,582
Extraordinary charge, net of taxes 10,018 0 10,018 0 10,018
Net income before extraordinary charge 142,158 (1,805) 140,353 (2,753) 137,600
Depreciation and amortization 116,168 0 116,168 (1,900) (5) 114,268
Deferred investment credit and income taxes, net 39,616 39,616 (439) 39,177
Write-off of generation project costs 6,641 6,641 6,641
Unconsolidated subsidiaries' dividends in excess of earnings 2,765 2,765 (216) 2,549
Allowance for other than borrowed funds used 0
during construction (AOFDC) (33) 0 (33) 0 (33)
Amortization of adverse power purchase contracts (27,907) (27,907) (27,907)
Amortization of debt issuance expenses 0 0 0
Pennsylvania CTC true-up regulatory asset (20,004) (20,004) (20,004)
Changes in certain current assets and liabilities:
Accounts receivable, net 158 0 158 7,578(3) 7,736
Materials and supplies (537) 0 (537) (537)
Accounts payable 70,918 0 70,918 705 (13) 65,008
963 (13)
(7,578) (3)
Taxes accrued 6,475 0 6,475 6,475
Regulatory liabilities (13,199) (13,199) (13,199)
Interest accrued (3,807) (3,807) (1,857) (5,664)
Contribution to subsidiary (5,927) (5,927) 5,927 0
Restructuring settlement refund (28,251) (28,251) 3,151 (25,100)
Other, net (7,396) (972) (8,368) (5,195) (13,563)
Total Cash Flows from Operations 277,838 (2,777) 275,061 (1,614) 273,447
Cash Flows from Investing:
Utility Construction expenditures (less allowance for other 0
than borrowed funds used during construction) (86,257) (86,257) (86,257)
Nonutility Construction expenditures (27,956) (27,956) (27,956)
Total Cash Flows from Investing (114,213) 0 (114,213) 0 (114,213)
Cash Flows from Financing:
Retirement of preferred stock (82,964) (82,964) (82,964)
Issuance of long - term debt 693,193 693,193 4,578 697,771
Retirement of long - term debt (525,000) (525,000) (525,000)
Restricted funds (3,006) (3,006) (3,006)
Parent company contribution 3,050 2,877 5,927 (5,927) 0
Short - term debt (55,766) (55,766) (55,766)
Notes payable to affiliate (9,300) (9,300) (9,300)
Notes receivable from affiliate (80,800) (80,800) 0 (80,800)
Notes receivable from parent (594,941) (594,941) 594,941 (2) 0
Notes receivable from subsidiary 594,941 594,941 (594,941) 0
Dividends on capital stock: 0 0
Preferred stock (1,600) (1,600) (1,600)
Common stock (86,772) (86,772) 2,968 (9) (83,804)
Total Cash Flows from Financing (148,965) 2,877 (146,088) 1,619 (144,469)
Net Change in Cash and
Temporary Cash Investments* 14,660 100 14,760 5 14,765
Cash and Temporary Cash Investments at January 1 4,528 0 4,528 (5) 4,523
Cash and Temporary Cash Investments at December 31 19,188 100 19,288 0 19,288
Supplemental cash flow information:
Cash paid during the year for:
Interest (net of amount capitalized) 64,793 64,793 64,793
Income taxes 23,151 23,151 23,151
</TABLE>
*Temporary cash investments with original maturities of three months
or less, generally in the form of commercial paper, certificates of
deposit, and repurchase, are considered to be the equivalent of cash.
<PAGE>
C-1
WEST PENN FUNDING CORPORATION AND SUBSIDIARY COMPANY
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Consolidated
Totals
West Penn West Penn Combined Eliminations, (Carried to
ASSETS Funding, Corp. Funding, LLC Totals etc. page B - 1)
Property, plant and equipment:
<S> <C> <C> <C> <C> <C>
At original cost 0 0 0 0 0
Accumulated depreciation 0 0 0 0 0
Investments and other assets:
Securities of subsidiaries consolidated 3,025 0 3,025 (3,025)(1) 0
Equity in undistributed earnings of subsidiary (57) (57) 57 (2) 0
Long-term notes receivable 594,941 0 594,941 0 594,941
Other 0 0 0 0 0
Current assets:
Cash and temporary cash investments 16 1,003 1,019 0 1,019
Accounts receivable:
Affiliated 0 7,474 7,474 0 7,474
Restricted funds 0 3,006 3,006 (3,006)(5) -
Deferred income taxes 0 0 0 0 0
Intangible transition property - short-term 0 52,779 52,779 0 52,779
Interest receivable 1,857 0 1,857 0 1,857
Deferred charges:
Deferred income taxes 0 0 0 0 0
Intangible transition property - long-term 0 539,838 539,838 (103)(3) 539,735
Unamortized debt issuance expense 4,453 4,453 (4,453)(6) -
Other 0 0 0 3,006 (5) 7,459
4,453(6)
Total assets 599,782 608,553 1,208,335 (3,071) 1,205,264
</TABLE>
<PAGE>
C-2
WEST PENN FUNDING CORPORATION AND SUBSIDIARY COMPANY
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Consolidated
Totals
West Penn West Penn Combined Eliminations, (Carried to
CAPITALIZATION AND LIABILITIES Funding Corp. Funding, LLC Totals etc. page B - 2)
Capitalization:
<S> <C> <C> <C> <C> <C>
Member's equity 0 3,025 3,025 (3,025)(1) 0
Other paid - in capital 137,561 0 137,561 0 137,561
Retained earnings 1,155 6 1,161 (6) 1,155
Preferred stock:
Not subject to mandatory redemption 0 0 0 0 0
Long - term debt 0 550,207 550,207 0 550,207
Current liabilities:
Long-term debt due 1 year 0 49,734 49,734 0 49,734
Short - term debt 0 0 0 0 0
Accounts payable to affiliates 0 633 633 0 633
Accounts payable - others 0 0 0 0 0
Deferred income taxes 7,669 0 7,669 (84)(4) 7,585
Taxes accrued:
Federal and state income 1,493 4 1,497 904 (7) 2,401
Other 0 0 0 0 0
Interest accrued 0 4,944 4,944 0 4,944
Deferred Gain on Sale of ITP - short-term 30,495 0 30,495 0 30,495
Other 0 0 0 0
Deferred credits and other liabilities:
Deferred income taxes 109,553 0 109,553 (944)(7) 108,693
84 (4)
Deferred Gain on Sale of ITP - long-term 311,855 0 311,855 0 311,855
Other 1 0 1 0 1
Total capitalization and liabilities 599,782 608,553 1,208,335 (3,071) 1,205,264
</TABLE>
<PAGE>
C-3
WEST PENN FUNDING CORPORATION AND SUBSIDIARY COMPANY
CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Consolidated
Totals
West Penn West Penn Combined Eliminations, (Carried to
Funding Corp. Funding, LLC Totals etc. page B - 3)
Intangible transition charge revenues:
<S> <C> <C> <C> <C> <C>
Residential 0 2,491 2,491 0 2,491
Commercial 0 1,579 1,579 0 1,579
Industrial 0 3,412 3,412 0 3,412
Wholesale and other, including affiliates 0 20 20 0 20
Total operating revenues 0 7,502 7,502 0 7,502
Operating expenses:
Administrative & General 9 105 114 0 114
Amortization of intangible transition property 0 2,323 2,323 103 (3) 2,426
Federal and state income taxes 0 4 4 (40)(7) (36)
Total operating expenses 9 2,432 2,441 63 2,504
Operating income (9) 5,070 5,061 (63) 4,998
Other income and deductions:
Other income, net 4,132 6 4,138 57 (2) 4,195
Total other income and deductions 4,132 6 4,138 57 4,195
Income before interest charges 4,123 5,076 9,199 (6) 9,193
Interest charges:
Interest on other long - term obligations 0 4,944 4,944 0 4,944
Amortization of debt issuance costs 0 126 126 0 126
Total interest charges 0 5,070 5,070 0 5,070
Net Income (loss) 4,123 6 4,129 (6) 4,123
</TABLE>
<PAGE>
C - 4
WEST PENN FUNDING CORPORATION AND SUBSIDIARY COMPANY
CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND PAID - IN CAPITAL
FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Consolidated
Totals
West Penn West Penn Combined Eliminations, (Carried to
Funding Corp. Funding, LLC Totals etc. page B - 4)
RETAINED EARNINGS
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1999 0 0 0 0 0
Add:
Net Income (loss) 4,123 6 4,129 (6) 4,123
Total 4,123 6 4,129 (6) 4,123
Deduct:
Dividends 2,968 0 2,968 0 2,968
Total deductions 2,968 0 2,968 0 2,968
Balance at December 31, 1999 1,155 6 1,161 (6) 1,155
OTHER PAID - IN CAPITAL
Balance at January 1, 1999 0 0 0 0 0
Add:
Premium on common stock 134,511 0 134,511 0 134,511
Miscellaneous paid-in capital 3,050 0 3,050 0 3,050
Balance at December 31, 1999 137,561 0 137,561 0 137,561
</TABLE>
<PAGE>
C - 5
WEST PENN FUNDING CORPORATION AND SUBSIDIARY COMPANY
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Consolidated
Totals
West Penn West Penn Combined Eliminations, (Carried to
Funding Corp. Funding, LLC Totals etc. page B-5)
Cash Flows from Operations:
<S> <C> <C> <C> <C> <C>
Net Income (loss) 4,123 6 4,129 (6) 4,123
Amortization of intangible transition property 0 2,323 2,323 103 2,426
Unconsolidated subsidiaries' dividends in excess of earnings
Amortiazation of debt issuance expenses 57 0 57 (57) 0
Changes in certain current assets and liabilities:
Accounts receivable from parent (7,474) (7,474) (7,474)
Accounts payable to parent 633 633 633
Taxes accrued 1,493 4 1,497 904 2,401
Interest accrued 4,944 4,944 4,944
Other, net (2,714) 126 (2,588) (944) (3,532)
Total Cash Flows from Operations 2,959 562 3,521 0 3,521
Cash Flows from Investing:
Investment in Subsidiary (3,025) (3,025) 3,025 0
Purchase of intangible transition property (594,941) (594,941) 594,941 0
(3,025) (594,941) (597,966) 597,966 0
Cash Flows from Financing:
Retirement of preferred stock
Issuance of long - term debt 595,363 595,363 595,363
Retirement of long - term debt
Restricted funds (3,006) (3,006) (3,006)
Equity contribution 3,050 3,025 6,075 (3,025) 3,050
Short - term debt
Notes payable to affiliate
Notes receivable from affiliate (594,941) (594,941) (594,941)
Sale of intangible transition property 594,941 594,941 (594,941) 0
Notes receivable from subsidiary
Dividends on capital stock: `
Preferred stock
Common stock (2,968) (2,968) (2,968)
Total Cash Flows from Financing 82 595,382 595,464 (597,966) (2,502)
Net Change in Cash and
Temporary Cash Investments* 16 1,003 1,019 1,019
Cash and Temporary Cash Investments at January 1 0 0 0 0 0
Cash and Temporary Cash Investments at December 31 16 1,003 1,019 0 1,019
3,041 1,003 4,044 (3,025) 1,019
Supplemental cash flow information:
Cash paid during the year for:
Interest (net of amount capitalized) 0 0 0 0 0
Income taxes 1,851 (1,229) 622 0 622
</TABLE>
*Temporary cash investments with original maturities of three months
or less, generally in the form of commercial paper, certificates of
deposit, and repurchase, are considered to be the equivalent of cash.
<PAGE>
D - 1
ALLEGHENY VENTURES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Allegheny Allegheny Totals
Allegheny Communication AYP Energy Combined Eliminations,(Carried to
ASSETS Ventures Connect Energy Solutions Totals etc. page A - 2)
Property, plant and equipment:
<S> <C> <C> <C> <C> <C> <C> <C>
At original cost 953 10,758 0 0 11,711 0 11,711
Accumulated depreciation (123) (508) 0 0 (631) 0 (631)
Investments and other assets:
Excess of cost over net assets acquired 1,181 0 0 0 1,181 0 1,181
Securities of subsidiaries consolidated 25,988 0 0 0 25,988 (25,988)(1) 0
Nonutility Investments 8,235 7,017 0 0 15,252 0 15,252
Current assets:
Cash 786 2,504 1,346 244 4,880 0 4,880
Accounts receivable:
Electric service 694 3,242 (1,346) 0 2,590 0 2,590
Allowance for uncollectible accounts 0 0 0 (2,094) (2,094) 0 (2,094)
Affiliated and other 945 441 0 2,115 3,501 (16)(3) 3,485
Materials and supplies - at average cost:
Operating and construction 420 0 0 0 420 0 420
Prepaid taxes 360 0 0 736 1,096 0 1,096
Other 33 1 0 (1) 33 0 33
Deferred charges:
Other 6 3,044 0 0 3,050 0 3,050
Total assets 39,478 26,499 0 1,000 66,977 (26,004) 40,973
</TABLE>
<PAGE>
D - 2
ALLEGHENY VENTURES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Allegheny Allegheny Totals
Allegheny Communications AYP Energy Combined Eliminations, (Carried to
CAPITALIZATION AND LIABILITIES Ventures Connect Energy Solutions Totals etc. page A-4)
Capitalization:
<S> <C> <C> <C> <C> <C> <C> <C>
Common stock owned by Allegheny Energy, Inc. 1 1 1
Common stock of subsidiaries consolidated 1 1 1 3 (3)(1) 0
Other paid - in capital 77,347 24,799 29,935 5,343 137,424 (60,077)(1) 77,347
Retained earnings (38,230) 717 (29,936) (4,873) (72,322) 34,092 (2) (38,230)
Current liabilities:
Accounts payable to affiliates 245 155 0 2 402 (16)(3) 386
Acounts payable - others 101 39 0 7 147 0 147
Taxes accrued:
Federal and state income 12 756 0 0 768 0 768
Other 2 32 0 149 183 0 183
Interest accrued 0 0 0 0 0 0 0
Deferred credits and other liabilities:
Deferred income taxes 0 0 0 371 371 0 371
Total capitalization and liabilities 39,478 26,499 0 1,000 66,977 (26,004) 40,973
</TABLE>
<PAGE>
D - 3
ALLEGHENY VENTURES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDAING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Consolidated
Allegheny Allegheny Totals
Allegheny Communication AYP Energy Combined Eliminations(carried to
Ventures Connect Energy Solutions Totals etc. page A - 6)
Operating revenues:
<S> <C> <C> <C> <C> <C> <C> <C>
Residential 0 0 0 3,014 3,014 0 3,014
Commercial 0 0 0 (82) (82) 0 (82)
Industrial 0 0 0 (1,480) (1,480) 0 (1,480)
Wholesale and other,
including affiliates 877 6,553 47,881 0 55,311 (1,492)(4 53,819
Bulk power transactions, net 0 0 55,085 0 55,085 0 55,085
Total operating revenues 877 6,553 102,966 1,452 111,848 (1,492) 110,356
Operating expenses:
Operation:
Fuel 0 0 20,378 0 20,378 0 20,378
Purchased power and exchanges, net 0 0 54,882 1,249 56,131 (1,492)(4 54,639
Other 2,660 3,182 4,081 2,685 12,608 0 12,608
Maintenance 61 (1) 3,281 0 3,341 0 3,341
Depreciation 70 496 5,318 0 5,884 0 5,884
Taxes other than income taxes 169 24 4,803 65 5,061 0 5,061
Federal and state income taxes (741) 1,119 524 (847) 55 0 55
Total operating expenses 2,219 4,820 93,267 3,152 103,458 (1,492) 101,966
Operating income (1,342) 1,733 9,699 (1,700) 8,390 0 8,390
Other income and deductions:
Other income, net 1,223 (640) 358 36 977 (1,193)(2 (216)
Total other income and
deductions 1,223 (640) 358 36 977 (1,193) (216)
Income before interest charges (119) 1,093 10,057 (1,664) 9,367 (1,193) 8,174
Interest charges:
Interest on other long-
term obligations 0 0 8,251 0 8,251 0 8,251
Other interest 2 0 14 28 44 0 44
Total interest charges 2 0 8,265 28 8,295 0 8,295
Net income (loss) (121) 1,093 1,792 (1,692) 1,072 (1,193) (121)
</TABLE>
<PAGE>
D - 4
ALLEGHENY VENTURES, INC AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND OTHER PAID - IN CAPITAL
FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Allegheny Allegheny Totals
Allegheny Communications AYP Energy Combined Eliminations, (Carried to
Ventures Connect Energy Solutions Totals etc. page A-8)
RETAINED EARNINGS
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1999 (38,109) (376) (31,728) (3,181) (73,394) 35,285 (38,109)
Add:
Net income (loss) (121) 1,093 1,792 (1,692) 1,072 (1,193)(2) (121)
Total (38,230) 717 (29,936) 4,873 72,322 34,092 (38,230)
Deduct:
Dividends on common stock of Allegheny Energy
System, Inc. 0 0 0 0 0 0 0
Dividends on capital stock of subsidiary companies:
Preferred 0 0 0 0 0 0 0
Common 0 0 0 0 0 0
Total deductions 0 0 0 0 0 0 0
Balance at December 31, 1999 (38,230) 717 (29,936) 4,873 72,322 34,092 (38,230)
OTHER PAID - IN CAPITAL
Balance at January 1, 1999 57,823 6,901 35,659 3,243 103,626 (45,803) 57,823
Add:
Capital Contributions from Parent 54,748 17,898 29,500 2,100 104,246 (49,498)(1) 54,748
Reduction of equity related to
transfer of assets (35,224) (35,224) (70,448) 35,224 (1) (35,224)
Balance at December 31, 1999 77,347 24,799 29,935 5,343 137,424 (60,077) 77,347
</TABLE>
<PAGE>
D - 5
ALLEGHENY VENTURES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 1999
(000's)
<TABLE>
<CAPTION>
Allegheny Allegheny Totals
Allegheny Communications AYP Energy Combined Eliminations, (Carried to
Ventures Connect Energy Solutions Totals etc. page A-10)
Cash Flows from Operations:
<S> <C> <C> <C> <C> <C> <C> <C>
Net (loss) income (121) 1,093 1,792 (1,692) 1,072 (1,193) (121)
Depreciation 70 496 5,318 0 5,884 0 5,884
Deferred investment credit and income
taxes, net 0 0 3,591 355 3,946 0 3,946
Cash tranferred to Allegheny Energy Supply (13,058) (13,058) (13,058)
Write-off of merger related costs 2,094 2,094 2,094
Changes in certain assets and liabilities:
Accounts receivable, net (1,143) (3,378) 7,842 5,583 8,904 16 8,920
Materials and supplies (420) 0 1,205 0 785 0 785
Accounts payable 97 (94) (9,901) (2,620) (12,518) (16) (12,534)
Taxes accrued (740) 788 (1,171) (1,137) (2,260) 0 (2,260)
Other, net (37,312) (4,976) (423) (3,631) (46,342) 43,103 (3,239)
Total Cash Flows from Operations (39,569) (6,071) (4,805) (1,048) (51,493) 41,910 (9,583)
Cash Flows from Investing:
Nonutility Investments (14,159) (9,564) (136) (5) (23,864) 7,588 (16,276)
Acquisition of businesses (2,117) (2,117) (2,117)
(16,276) (9,564) (136) (5) (25,981) 7,588 (18,393)
Cash Flows from Financing:
Issuance of long - term debt 0 0 0 0 0 0 0
Retirement of long - term debt 0 0 (30,000) (30,000) 0 (30,000)
Short - term debt 0 0 0 (1,000) (1,000) 0 (1,000)
Notes receivable from affiliates 0 0 0 0 0 0 0
Financing costs 0 0 0 0 0 0
Parent company contribution 54,748 17,898 29,500 2,100 104,246 (49,498) 54,748
Dividends on capital stock:
Preferred stock 0 0 0 0 0 0 0
Common stock 0 0 0 0 0 0 0
Total Cash Flows from Financing 54,748 17,898 (500) 1,100 73,246 (49,498) 23,748
Net Change in Cash (1,097) 2,263 (5,441) 47 (4,228) 0 (4,228)
Cash at January 1 1,883 241 6,787 197 9,108 0 9,108
Cash at December 31 786 2,504 1,346 244 4,880 0 4,880
Supplemental cash flow information: 786 2,504 1,346 244 4,880 0 4,880
Cash paid during the year for:
Interest 2 0 7,749 28 7,779 0 7,779
Income taxes 416 16 (1,810) 139 (1,239) 0 (1,239)
</TABLE>
<PAGE>
E - 1
INDIANA - KENTUCKY ELECTRIC CORPORATION
BALANCE SHEET -- DECEMBER 31, 1999
UNAUDITED
(000's)
Assets
<TABLE>
<CAPTION>
<S> <C>
Electric plant - at original cost, including $3,295
construction work in progress 415,335
Less - Accumulated provisions for depreciation and amortization 358,996
56,339
Current assets:
Cash and cash equivalents 9
Accounts receivable 9
Coal in storage, at average cost 25,642
Materials and supplies, at average cost 10,309
Prepaid expenses and other 627
36,596
Deferred charges and other:
Future federal income tax benefits 53,365
Unrecognized pension expense 3,618
Unrecognized postretirement benefits 18,444
Unrecognized postemployment benefits 838
Deferred depreciation 7,104
Deferred Fuel expense and other 4,122
87,491
TOTAL ASSETS 180,426
Capitalization and Liabilities
Capitalization:
Common stock, without par value, stated at $200
per share -
Authorized - 100,000 shares
Outstanding - 17,000 shares 3,400
Current liabilities:
Accounts payable 40,201
Accrued taxes 2,602
Accrued interest and other 2,996
45,799
Deferred credits:
Accrued pension liability 3,618
Advances from parent - construction 51,126
Postretirement benefits obligation 18,444
Postemployment benefits obligation 838
<PAGE>
E - 2
INDIANA - KENTUCKY ELECTRIC CORPORATION
STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1999
UNAUDITED
(000's)
Operating revenues:
Sale of electric energy 155,381
Other operating revenues 67
Total operating revenues 155,448
Operating expenses:
Fuel consumed in operation 107,222
Other operation 19,368
Maintenance 16,565
Depreciation 7,420
Taxes, other than federal income taxes 4,883
Total operating expenses 155,458
Operating income (Loss) (10)
Interest income and other 13
Income before interest charges 3
Interest charges
Interest expense, net 3
Total interest charges 3
Net income 0
<PAGE>
E - 3
INDIANA - KENTUCKY ELECTRIC CORPORATION
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999
UNAUDITED
(000's)
Cash From Operations:
Net Income 0
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 7,420
Changes in assets and liabilities:
Accounts receivable 674
Interest receivable 1
Coal in storage (3,590)
Materials and supplies (1,588)
Prepaid expenses and other 473
Accounts payable 18,298
Accrued taxes 8
Accrued interest and other 473
Other (4,862)
Net cash provided by operations 17,307
Investing Activities:
Reimbursement for plant replacements and
additional facilities 7,956
Net electric plant additions (14,369)
Advances from parent (6,896)
Net cash provided by (used in) investing activities (13,309)
Financing Activities:
Coal purchase obligation (4,000)
Net cash provided by (used in) financing activities (4,000)
Net decrease in cash and cash equivalents (2)
Cash and cash equivalents, beginning of year 11
Cash and cash equivalents, end of year 9
Supplemental Disclosures
Interest paid during the year 436
Federal income taxes paid during the year 0
For purposes of this statement, the company considers temporary
cash investments to be cash equivalents since they are readily
convertible into cash and have maturities of less than three months.
<PAGE>
E - 4
OHIO VALLEY ELECTRIC CORPORATION
BALANCE SHEET -- DECEMBER 31, 1999
UNAUDITED
(000's)
Assets
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Electric plant - at original cost, including $8,146
construction work in progress 303,691
Less - Accumulated provisions for depreciation and amortization 289,816
13,875
Investments and other:
Investment in subsidiary company 3,400
Advances to subsidiary - construction 51,126
54,526
Current assets:
Cash and cash equivalents 2,762
Accounts receivable 50,573
Coal in storage, at average cost 6,375
Materials and supplies, at average cost 10,676
SO2 Allowances 1,507
Property taxes applicable to subsequent years 4,092
Prepaid expenses and other 490
76,475
Deferred charges and Other:
Unamortized debt expense 237
Future federal income tax benefits 21,921
Unrecognized pension expense 4,159
Unrecognized postretirement benefits expense 20,081
Unrecognized postemployment benefits expense 438
SO2 Allowances 4,291
Prepaids and other 292
51,419
TOTAL ASSETS 196,295
Capitalization and Liabilities
Capitalization:
Common stock, $100 par value -
Authorized - 300,000 shares
Outstanding - 100,000 shares 10,000
Senior secured notes 43,949
Retained earnings 1,995
55,944
Currents liabilities:
Current portion - long term debt 7,356
Line-of-credit borrowings 50,000
Note payable maturing in one year 6,600
Accounts payable 7,619
Accrued taxes 5,979
Accrued Federal income taxes 2,859
Accrued interest and other 2,316
82,729
Deferred credits:
Investment tax credits 10,610
Accrued pension liability 4,159
Postretirement benefits obligation 20,081
Postemployment benefits obligation 438
Antitrust settlement 1,517
Accumulated deferred income taxes 19,649
Deferred credit - other 1,168
57,622
TOTAL CAPITALIZATION AND LIABILITIES 196,295
</TABLE>
E - 5
OHIO VALLEY ELECTRIC CORPORATION
STATEMENT OF INCOME
FOR YEAR ENDED DECEMBER 31, 1999
UNAUDITED
(000's)
Operating revenues:
Sale of electric energy 344,745
Other operating revenues 743
Total operating revenues 345,488
Operating expenses:
Fuel consumed in operation 92,793
Purchased power 160,639
Other power expenses 33,713
Other operation 23,605
Maintenance 19,386
Depreciation 481
Taxes, other than federal income taxes 5,465
Federal income taxes 2,076
Total operating expenses 338,158
Operating income 7,330
Interest income and other 420
Income before interest charges 7,750
Interest charges
Interest expense, net 5,581
Amortization of debt expense 40
Total interest charges 5,621
Net Income 2,129
Retained earnings, beginning of year 2,041
Cash dividends on common stock 2,175
Retained earnings, end of year 1,995
<PAGE>
E - 6
OHIO VALLEY ELECTRIC CORPORATION
STATEMENT OF CASH FLOWS
FOR YEAR ENDED DECEMBER 31, 1999
UNAUDITED
(000's)
Cash From Operations:
Net Income 2,129
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation 481
Debt expense Amortization 40
Future income tax benefits 1,090
Changes in assets and liabilities:
Accounts receivable (21,252)
Coal in storage 3,710
Materials and supplies (34)
SO2 allowances 867
Property taxes applicable to subsequent years (92)
Prepaid expenses and other 381
Accounts payable (219)
Accrued taxes (1,852)
Accrued interest and other 228
Other 3,352
Net cash provided by (used in) operations (11,171)
Investing Activities:
Reimbursement for plant replacements and
additional facilities 1,400
Net electric plant additions (7,837)
Advances in subsidiary 6,896
Net cash provided by investing activities 459
Financing Activities:
Notes payable maturing in one year (500)
Senior secured notes (6,896)
Coal purchase obligation (8,000)
Line-of-Credit borrowings 30,000
Dividends-common stock (2,175)
Net cash provided by financing activities 12,429
Net increase in cash and cash equivalents 1,717
Cash and cash equivalents, beginning of year 1,045
Cash and cash equivalents, end of year 2,762
Supplemental Disclosures
Interest paid during the year 5,841
Federal income taxes paid during the year 3,000
For purposes of this statement, the company considers
temporary cash investments to be cash equivalents since
they are readily convertible into cash and have
maturities of less than three months.
<PAGE>
EXHIBIT 3.1
CERTIFICATE OF FORMATION
OF
ALLEGHENY ENERGY UNIT 1 AND UNIT 2, L.L.C.
1. The name of the limited liability company is
ALLEGHENY ENERGY UNIT 1 AND UNIT 2, L.L.C.
2. The address of its registered office in the State
of Delaware is The Corporation Trust Company, 1209 Orange
Street, in the City of Wilmington, County of New Castle. The
name of its registered agent at such address is The
Corporation Trust Company.
IN WITNESS WHEREOF, the undersigned has executed
this Certificate of Formation of ALLEGHENY ENERGY UNIT 1 AND
UNIT 2, L.L.C. this 12th day of May, 1999.
Member:
ALLEGHENY ENERGY, INC., a
Maryland corporation
By: /s/ PETER J. SKRGIC
Name: Peter J. Skrgic
Title: Senior Vice President
EXHIBIT 3.2
LIMITED LIABILITY COMPANY
AGREEMENT
OF
ALLEGHENY ENERGY UNIT 1 AND UNIT 2, L.L.C.
This Limited Liability Company Agreement (this
"Agreement") entered into as of this 12th day of May, 1999 by
Allegheny Energy, Inc. ("Allegheny"), a Maryland corporation,
as member (the "Member"), which Member does hereby form a
limited liability company pursuant to the Delaware Limited
Liability Company Act (the "Act") upon the following terms
and conditions.
1. Name. The name of the limited liability
company formed hereby is Allegheny Energy Unit 1 and Unit 2,
L.L.C. (the "Company").
2. Purpose. The Company is formed for the object
and purpose of, and the nature of the business to be
conducted and promoted by the Company is, engaging in any
lawful act or activity for which limited liability companies
may be formed under the Act, including, but not limited to,
generating electrical power.
3. Registered Office. The address of the
registered office of the Company in the State of Delaware is
The Corporation Trust Company, 1209 Orange Street,
Wilmington, New Castle County, Delaware 19801.
4. Registered Agent. The name and address of the
registered agent of the Company for service of process on the
Company in the State of Delaware is The Corporation Trust
Company, 1209 Orange Street, Wilmington, New Castle County,
Delaware 19801.
5. Members. The name of the Member is as set
forth above in the preamble to this Agreement.
6. Powers. The business and affairs of the
Company shall be managed by the Member. The Member shall
have the power to do any and all acts necessary or convenient
to or for the furtherance of the purposes described herein.
Allegheny is hereby designated as an authorized person,
within the meaning of the Act, to execute, deliver and file
the certificate of formation of the Company (and any
amendments and/or restatements thereof) and any other
certificates (and any amendments and/or restatements thereof)
necessary for the Company to qualify to do business in a
jurisdiction in which the Company may wish to conduct
business.
<PAGE>
7. Dissolution. The Company shall dissolve, and
its affairs shall be wound up upon the first to occur of the
following: (a) the written consent of the Member, (b) the
death, retirement, resignation, expulsion, bankruptcy or
dissolution of the Member or the occurrence of any other
event which terminates the continued membership of the Member
in the Company or (c) the entry of a decree of judicial
dissolution under Section 18-802 of the Act.
8. Capital Contributions. The Member has
contributed amounts in cash, and no other property, to the
Company according to the Percentage Interests set forth on
Annex I hereto.
9. Additional Contributions. The Member is not
required to make any additional capital contribution to the
Company. However, the Member may make additional capital
contributions to the Company.
10. Distributions. Distributions shall be made to
the Member at the times and in the aggregate amounts
determined by the Member.
11. Assignments. The Member may transfer or
assign in whole or in part its limited liability company
interest.
12. Admission of Additional Members. One or more
additional members of the Company may be admitted to the
Company with the consent of the Member.
13. Liability of Members. The Member shall not
have any liability for the obligations or liabilities of the
Company except to the extent provided in the Act.
14. Governing Law. This Agreement shall be
governed by, and construed under, the laws of the State of
Delaware, all rights and remedies being governed by said
laws.
IN WITNESS WHEREOF, the undersigned, intending to
be legally bound hereby, has duly executed this Limited
Liability Company Agreement as of the date first above
written.
Member:
ALLEGHENY ENERGY, INC., a
Maryland corporation
By: /S/ PETER J. SKRGIC
Name: Peter J. Skrgic
Title: Senior Vice President
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ANNEX I
Percentage Interests of the Member
Allegheny Energy, Inc. 100%
EXHIBIT 3.1
CERTIFICATE OF FORMATION
OF
ALLEGHENY ENERGY SUPPLY COMPANY, LLC
This Certificate of Formation of Allegheny Energy
Supply Company, LLC (the "Company"), dated as of November 12,
1999, is being duly executed and filed by West Penn Transferring
Agent LLC, as sole member and an authorized person, to form a
limited liability company under the Delaware Limited Liability
Company Act (6 Del.C. 18-101, et seq.).
FIRST. The name of the Company formed hereby is Allegheny
Energy Supply Company, LLC.
SECOND. The address of the registered office of the Company
in the State of Delaware is The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington,
Delaware 19801. The Company's registered agent for service of
process at that address is The Corporation Trust Company.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate of Formation as of the date first above written.
ALLEGHENY ENERGY SUPPLY COMPANY, LLC
By: WEST PENN TRANSFERRING AGENT LLC,
Sole Member
By: WEST PENN POWER COMPANY, Sole Member
By: /s/ Ronald A. Magnuson
Name: Ronald A. Magnuson
Title: Vice President
EXHIBIT 3.2
THIRD AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
ALLEGHENY ENERGY SUPPLY COMPANY, LLC
This Limited Liability Company Agreement (together with the
schedules attached hereto, this "Agreement") of Allegheny Energy
Supply Company, LLC (the "Company"), is entered into by ALLEGHENY
ENERGY, INC., a Maryland corporation, as the sole member (the
"Member"). Capitalized terms used and not otherwise defined
herein have the meanings set forth on Schedule A hereto.
The Member, by execution of this Agreement, (i) hereby
establishes the Company as a limited liability company pursuant
to and in accordance with the Delaware Limited Liability Company
Act (6 Del. C. 18-101 et seq.), as amended from time to time
(the "Act").
Section 1. Name.
The name of the limited liability company formed hereby is
Allegheny Energy Supply Company, LLC.
Section 2. Principal Business Office.
The principal business office of the Company shall be
located at RD 12, P.O. Box 1000, Roseytown Road, Greensburg,
Pennsylvania 15601.
Section 3. Registered Office and Agent.
The address of the registered office of the Company for
service of process in the State of Delaware is c/o The
Corporation Trust Company, Corporation Trust Center, 1209 Orange
Street, in the City of Wilmington, County of New Castle, Delaware
19801. The name of the registered agent of the Company at the
foregoing address is The Corporation Trust Company.
Section 4. Members.
(a) The mailing address of the Member is set forth on
Schedule B attached hereto.
(b) The Member may act by written consent.
(c) Upon the occurrence of any event that causes the Member
to cease to be a member of the Company (other than (i) upon an
assignment by the Member of all of its limited liability company
interest in the Company and the admission of the transferee
pursuant to Section 20, or (ii) the resignation of the Member and
<PAGE>
the admission of an additional member of the Company pursuant to
Section 20), each person acting as a Director pursuant to Section
8 shall, without any action of any Person and simultaneously with
the Member ceasing to be a member of the Company, automatically
be admitted to the Company as a Member and shall continue the
Company without dissolution.
Section 5. Existence. The existence of the Company as a
separate legal entity shall continue until the Member dissolves
the Company.
Section 6. Purposes.
(a) The Company is formed for the object and purpose of,
and the nature of the business to be conducted and promoted by
the Company is, engaging in any lawful act or activity for which
limited liability companies may be formed under the Act,
including, but not limited to, generating electrical power.
(b) The Company hereby agrees that: (1) any Officer of the
Company be, and they hereby are, authorized for and on behalf of
the Company to designate that a bank account be established to
act as depository for the funds of the Company for and during
such period as they may from time to time deem necessary or
desirable in the interests of the Company and to open or close
out from time to time such account so selected or reselected;
(2) any Officer of the Company be, and they hereby are,
authorized and directed, in the name and on behalf of the
Company, to take any and all action that they may deem necessary
or advisable in order to establish such bank account from time to
time for the efficient conduct of the Company's business;
(3) such bank account be used to initiate funds transfers and
that any Officer of the Company be, and they hereby are,
authorized to sign on such bank account any wire transfer
documents necessary, including those that will designate those
Officers of the Company who may be authorized to initiate wire
transfers by phone from such bank account to Allegheny Energy,
Inc.'s bank account at PNC Bank and from such bank account to the
Company's bank account; (4) any Officer of the Company be, and
they hereby are, authorized and directed, in the name and on
behalf of the Company, to take any and all action that they may
deem necessary or advisable in order to establish such account
from time to time for the efficient conduct of the Company's
business; and (5) any Officer of the Company be, and they hereby
are, authorized to designate those Officers of the Company who
may be authorized from time to time to sign checks on such bank
account.
Section 7. Powers.
Subject to Section 8, the Company, and the Board of
Directors and the Officers of the Company on behalf of the
Company, (i) shall have and exercise all powers necessary,
convenient or incidental to accomplish its purposes as set forth
in Section 6, and (ii) shall have and exercise all of the powers
and rights conferred upon limited liability companies formed
pursuant to the Act.
Section 8. Management.
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(a) Board of Directors. The business and affairs of the
Company shall be managed by or under the direction of a Board of
one or more Directors designated by the Member. The Member may
determine at any time in its sole and absolute discretion the
number of Directors to constitute the Board. The authorized
number of Directors may be increased or decreased by the Member
at any time in its sole and absolute discretion, upon notice to
all Directors. The initial number of Directors shall be five.
Each Director elected, designated or appointed by the Member
shall hold office until a successor is elected and qualified or
until such Director's earlier death, resignation, expulsion or
removal. Directors need not be a Member. The initial Directors
designated by the Member are listed on Schedule C hereto.
(b) Powers. The Board of Directors shall have the power to
do any and all acts necessary, convenient or incidental to or for
the furtherance of the purposes described herein, including all
powers, statutory or otherwise. Subject to Section 6, the Board
of Directors has the authority to bind the Company.
(c) Meeting of the Board of Directors. The Board of
Directors of the Company may hold meetings, both regular and
special, within or outside the Commonwealth of Pennsylvania.
Regular meetings of the Board may be held without notice at such
time and at such place as shall from time to time be determined
by the Board. Special meetings of the Board may be called by the
Chief Executive Officer or President on not less than one day's
notice to each Director by telephone, facsimile, mail, telegram
or any other means of communication, and special meetings shall
be called by the Chief Executive Officer, President or Secretary
in like manner and with like notice upon the written request of
any one or more of the Directors.
(d) Quorum: Acts of the Board. At all meetings of the
Board, a majority of the Directors shall constitute a quorum for
the transaction of business and, except as otherwise provided in
any other provision of this Agreement, the act of a majority of
the Directors present at any meeting at which there is a quorum
shall be the act of the Board. If a quorum shall not be present
at any meeting of the Board, the Directors present at such
meeting may adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be
present. Any action required or permitted to be taken at any
meeting of the Board or of any committee thereof may be taken
without a meeting if all members of the Board or committee, as
the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board
or committee, as the case may be.
(e) Electronic Communications. Members of the Board, or
any committee designated by the Board, may participate in
meetings of the Board, or any committee, by means of telephone
conference or similar communications equipment that allows all
Persons participating in the meeting to hear each other, and such
participation in a meeting shall constitute presence in Person at
the meeting. If all the participants are participating by
telephone conference or similar communications equipment, the
meeting shall be deemed to be held at the principal place of
business of the Company.
(f) Committees of Directors.
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(i) The Board may, by resolution passed by a majority
of the whole Board, designate one or more
committees, each committee to consist of one or
more of the Directors of the Company. The Board
may designate one or more Directors as alternate
members of any committee, who may replace any
absent or disqualified member at any meeting of
the committee.
(ii) In the absence or disqualification of a member of
a committee, the member or members thereof present
at any meeting and not disqualified from voting,
whether or not such members constitute a quorum,
may unanimously appoint another member of the
Board to act at the meeting in the place of any
such absent or disqualified member.
(iii) Any such committee, to the extent provided in
the resolution of the Board, shall have and may
exercise all the powers and authority of the Board
in the management of the business and affairs of
the Company. Such committee or committees shall
have such name or names as may be determined from
time to time by resolution adopted by the Board.
Each committee shall keep regular minutes of its
meetings and report the same to the Board when
required.
(g) Compensation of Directors; Expenses. The Board shall
have the authority to fix the compensation of Directors. The
Directors may be paid their expenses, if any, of attendance at
meetings of the Board, which may be a fixed sum for attendance at
each meeting of the Board or a stated salary as Director. No
such payment shall preclude any Director from serving the Company
in any other capacity and receiving compensation therefor.
Members of special or standing committees may be allowed like
compensation for attending committee meetings.
(h) Removal of Directors. Unless otherwise restricted by
law, any Director or the entire Board of Directors may be removed
or expelled, with or without cause, at any time by the Member,
and any vacancy caused by any such removal or expulsion may be
filled by action of the Member.
(i) Directors as Agents. To the extent of their powers set
forth in this Agreement and subject to Section 8, the Directors
are agents of the Company for the purpose of the Company's
business, and the actions of the Directors taken in accordance
with such powers set forth in this Agreement shall bind the
Company. Except as provided in this Agreement or in a resolution
of the Directors, a Director may not bind the Company.
Section 9. Officers.
(a) Officers. The initial Officers of the Company shall be
designated by the Member. The additional or successor Officers
of the Company shall be chosen by the Board and shall consist of
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<PAGE>
at least a Chief Executive Officer, a President, a Secretary and
a Treasurer. The Board of Directors may also choose one or more
Vice Presidents, Assistant Secretaries and Assistant Treasurers.
Any number of offices may be held by the same person. The Board
shall choose a Chief Executive Officer, a President, a Secretary
and a Treasurer. The Board may appoint such other Officers and
agents as it shall deem necessary or advisable who shall hold
their offices for such terms and shall exercise such powers and
perform such duties as shall be determined from time to time by
the Board. The salaries of all Officers and agents of the
Company shall be fixed by or in the manner prescribed by the
Board. The Officers of the Company shall hold office until their
successors are chosen and qualified. Any Officer may be removed
at any time, with or without cause, by the affirmative vote of a
majority of the Board. Any vacancy occurring in any office of
the Company shall be filled by the Board. Upon the effectiveness
of this Agreement, the Officers of the Company designated by the
Member are listed on Schedule D hereto and any persons formerly
appointed as Officers of the Company shall automatically cease to
be Officers of the Company.
(b) Chief Executive Officer. The Chief Executive Officer
of the Company shall preside at all meetings of the Board, shall
be responsible for the general and active management of the
business of the Company, shall see that all orders and
resolutions of the Board are carried into effect and shall have
and perform such other duties as from time to time may be
assigned to him by the Board.
(c) President. The President shall be the chief operating
officer of the Company, shall preside, in the absence of the
Chief Executive Officer, at all meetings of the Board, shall have
general and active management of the business of the Company and
shall see that all orders and resolutions of the Board are
carried into effect. The President or any other Officer
authorized by the President or the Board shall execute all bonds,
mortgages and other contracts, except: (i) where required or
permitted by law or this Agreement to be otherwise signed and
executed, including Section 7; (ii) where signing and execution
thereof shall be expressly delegated by the Board to some other
Officer or agent of the Company, and (iii) as otherwise permitted
in Section 10.
(d) Vice President. In the absence of the President or in
the event of the President's inability to act, the Vice
President, if any (or in the event there be more than one Vice
President, the Vice Presidents in the order designated by the
Directors, or in the absence of any designation, then in the
order of their election), shall perform the duties of the
President, and when so acting, shall have all the powers of and
be subject to all the restrictions upon the President. The Vice
Presidents, if any, shall perform such other duties and have such
other powers as the Board may from time to time prescribe.
(e) Secretary and Assistant Secretary. The Secretary shall
be responsible for filing legal documents and maintaining records
for the Company. The Secretary shall attend all meetings of the
Board and record all the proceedings of the meetings of the
Company and of the Board in a book to be kept for that purpose
and shall perform like duties for the standing committees when
required. The Secretary shall give, or shall cause to be given,
notice of all meetings of the Member, if any, and special
meetings of the Board, and shall perform such other duties as may
5
<PAGE>
be prescribed by the Board or the President, under whose
supervision the Secretary shall serve. The Assistant Secretary,
or if there be more than one, the Assistant Secretaries in the
order determined by the Board (or if there be no such
determination, then in order of their election), shall, in the
absence of the Secretary or in the event of the Secretary's
inability to act, perform the duties and exercise the powers of
the Secretary and shall perform such other duties and have such
other powers as the Board may from time to time prescribe.
(f) Treasurer and Assistant Treasurer. The Treasurer shall
have the custody of the Company funds and securities and shall
keep full and accurate accounts of receipts and disbursements in
books belonging to the Company and shall deposit all moneys and
other valuable effects in the name and to the credit of the
Company in such depositories as may be designated by the Board.
The Treasurer shall disburse the funds of the Company as may be
ordered by the Board, taking proper vouchers for such
disbursements, and shall render to the President and to the
Board, at its regular meetings or when the Board so requires, an
account of all of the Treasurer's transactions and of the
financial condition of the Company. The Assistant Treasurer, or
if there shall be more than one, the Assistant Treasurers in the
order determined by the Board (or if there be no such
determination, then in the order of their election), shall, in
the absence of the Treasurer or in the event of the Treasurer's
inability to act, perform the duties and exercise the powers of
the Treasurer and shall perform such other duties and have such
other powers as the Board may from time to time prescribe.
(g) Officers as Agents. The Officers, to the extent of
their powers set forth in this Agreement or otherwise vested in
them by action of the Board not inconsistent with this Agreement,
are agents of the Company for the purpose of the Company's
business and, subject to Section 8, the actions of the Officers
taken in accordance with such powers shall bind the Company.
(h) Duties of Board and Officers. Except to the extent
otherwise provided herein, each Director and Officer shall have a
fiduciary duty of loyalty and care similar to that of directors
and officers of business corporations organized under the General
Corporation Law of the State of Delaware.
Section 10. Limited Liability.
Except as otherwise expressly provided by the Act, the
debts, obligations and liabilities of the Company, whether
arising in contract, tort or otherwise, shall be the debts,
obligations and liabilities solely of the Company, and neither
the Member nor any Director shall be obligated personally for any
such debt, obligation or liability of the Company solely by
reason of being a Member or Director of the Company.
Section 11. Capital Contributions.
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Schedule B attached hereto sets forth, among other things,
the initial and subsequent capital contributions of property the
Member has made to the Company and the agreed value of such
property.
Section 12. Additional Contributions.
The Member is not required to make any additional capital
contribution to the Company. However, the Member may make
additional capital contributions to the Company at any time upon
the written consent of such Member. To the extent that the
Member makes an additional capital contribution to the Company,
the Member shall revise Schedule B of this Agreement. The
provisions of this Agreement, including this Section 12, are
intended to benefit the Member and the Special Members and, to
the fullest extent permitted by law, shall not be construed as
conferring any benefit upon any creditor of the Company (and no
such creditor of the Company shall be a third-party beneficiary
of this Agreement) and the Member and the Special Members shall
not have any duty or obligation to any creditor of the Company to
make any contribution to the Company or to issue any call for
capital pursuant to this Agreement.
Section 13. Allocation of Profits and Losses.
The Company's profits and losses shall be allocated to the
Member.
Section 14. Distributions.
Distributions shall be made to the Member at the times and
in the aggregate amounts determined by the Board.
Notwithstanding any provision to the contrary contained in this
Agreement, the Company shall not be required to make a
distribution to the Member on account of its interest in the
Company if such distribution would violate the Act or any other
applicable law or any agreement of the Company.
Section 15. Books and Records.
The Board shall keep or cause to be kept complete and
accurate books of account and records with respect to the
Company's business. The books of the Company shall at all times
be maintained by the Board. The Member and its duly authorized
representatives shall have the right to examine the Company
books, records and documents during normal business hours. The
Company, and the Board on behalf of the Company, shall not have
the right to keep confidential from the Member any information.
The Company's books of account shall be kept using the method of
accounting determined by the Member. The Company's independent
auditor, if any, shall be an independent public accounting firm
selected by the Member.
Section 16. Reports.
(a) Within 60 days after the end of each fiscal quarter,
the Board shall cause to be prepared an unaudited report setting
forth as of the end of such fiscal quarter:
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(i) unless such quarter is the last fiscal quarter, a
balance sheet of the Company; and
(ii) unless such quarter is the last fiscal quarter, an
income statement of the Company for such fiscal
quarter.
(b) The Board shall use diligent efforts to cause to be
prepared and mailed to the Member, within 90 days after the end
of each fiscal year, an audited or unaudited report setting forth
as of the end of such fiscal year:
(i) a balance sheet of the Company;
(ii) an income statement of the Company for such fiscal
year; and
(iii) a statement of the Member's capital account.
(c) The Board shall, after the end of each fiscal year, use
reasonable efforts to cause the Company's independent
accountants, if any, to prepare and transmit to the Member as
promptly as possible any such tax information as may be
reasonably necessary to enable the Member to prepare its federal,
state and local income tax returns relating to such fiscal year.
Section 17. Other Business.
The Member and any Affiliate of the Member may engage in or
possess an interest in other business ventures (unconnected with
the Company) of every kind and description, independently or with
others. The Company shall not have any rights in or to such
independent ventures or the income or profits therefrom by virtue
of this Agreement.
Section 18. Exculpation and Indemnification.
(a) Neither the Member nor any Officer, Director, employee
or agent of the Company nor any employee, representative, agent
or Affiliate of the Member (collectively, the "Covered Persons")
shall be liable to the Company or any other Person who has an
interest in or claim against the Company for any loss, damage or
claim incurred by reason of any act or omission performed or
omitted by such Covered Person in good faith on behalf of the
Company and in a manner reasonably believed to be within the
scope of the authority conferred on such Covered Person by this
Agreement, except that a Covered Person shall be liable for any
such loss, damage or claim incurred by reason of such Covered
Person's gross negligence or willful misconduct.
(b) To the fullest extent permitted by applicable law, a
Covered Person shall be entitled to indemnification from the
Company for any loss, damage or claim incurred by such Covered
Person by reason of any act or omission performed or omitted by
such Covered Person in good faith on behalf of the Company and in
a manner reasonably believed to be within the scope of the
authority conferred on such Covered Person by this Agreement,
8
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except that no Covered Person shall be entitled to be indemnified
in respect of any loss, damage or claim incurred by such Covered
Person by reason of such Covered Person's gross negligence or
willful misconduct with respect to such acts or omissions;
provided, however, that any indemnity under this Section 18 by
the Company shall be provided out of and to the extent of Company
assets only, and the Member shall not have personal liability on
account thereof; and provided further, that so long as any
Obligation is outstanding, no indemnity payment from funds of the
Company (as distinct from funds from other sources, such as
insurance) of any indemnity under this Section 18 shall be
payable from amounts allocable to any other Person and, so long
as any Obligation is outstanding, all such indemnity payments
under this Section 18 shall be subordinated to any amounts
payable to any other Person.
(c) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by a Covered Person
defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Company prior to the final
disposition of such claim, demand, action, suit or proceeding
upon receipt by the Company of an undertaking by or on behalf of
the Covered Person to repay such amount if it shall be determined
that the Covered Person is not entitled to be indemnified as
authorized in this Section 18; provided, however, that any such
advance shall be subordinated to any amounts payable to any other
Person.
(d) A Covered Person shall be fully protected in relying in
good faith upon the records of the Company and upon such
information, opinions, reports or statements presented to the
Company by any Person as to matters the Covered Person reasonably
believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or
on behalf of the Company, including information, opinions,
reports or statements as to the value and amount of the assets,
liabilities, or any other facts pertinent to the existence and
amount of assets from which distributions to the Member might
properly be paid.
(e) To the extent that, at law or in equity, a Covered
Person has duties (including fiduciary duties) and liabilities
relating thereto to the Company or to any other Covered Person, a
Covered Person acting under this Agreement shall not be liable to
the Company or to any other Covered Person for its good faith
reliance on the provisions of this Agreement or any approval or
authorization granted by the Company or any other Covered Person.
The provisions of this Agreement, to the extent that they
restrict the duties and liabilities of a Covered Person otherwise
existing at law or in equity, are agreed by the Member and the
Special Members to replace such other duties and liabilities of
such Covered Person.
(f) The foregoing provisions of this Section 18 shall
survive any termination of this Agreement.
Section 19. Assignments.
Subject to Section 20, the Member may assign in whole or in
part its limited liability company interest in the Company. If
the Member transfers all of its limited liability company
interest in the Company pursuant to this Section 19, the
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transferee shall be admitted to the Company as a member of the
Company upon its execution of an instrument signifying its
agreement to be bound by the terms and conditions of this
Agreement, which instrument may be a counterpart signature page
to this Agreement. Such admission shall be deemed effective
immediately prior to the transfer and, immediately following such
admission, the transferor Member shall cease to be a member of
the Company. Notwithstanding anything in this Agreement to the
contrary, any successor to the Member by merger or consolidation
shall, without further act, be the Member hereunder, and such
merger or consolidation shall not constitute an assignment for
purposes of this Agreement and the Company shall continue without
dissolution.
Section 20. Admission of Additional Members.
One or more additional members of the Company may be
admitted to the Company with the written consent of the Member.
Section 21. Dissolution.
(a) Subject to Section 8, the Company shall be dissolved,
and its affairs shall be wound up upon the first to occur of the
following: (i) the termination of the legal existence of the last
remaining member of the Company or the occurrence of any other
event which terminates the continued membership of the last
remaining member of the Company in the Company unless the
business of the Company is continued in a manner permitted by
this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under the Act. Upon the occurrence of any
event that causes the last remaining member of the Company to
cease to be a member of the Company, to the fullest extent
permitted by law, the personal representative of such member is
hereby authorized to, and shall, within 90 days after the
occurrence of the event that terminated the continued membership
of such member in the Company, agree in writing (i) to continue
the Company and (ii) to the admission of the personal
representative or its nominee or designee, as the case may be, as
a substitute member of the Company, effective as of the
occurrence of the event that terminated the continued membership
of the last remaining member of the Company in the Company.
(b) Notwithstanding any other provision of this Agreement,
the Bankruptcy of the Member shall not cause the Member to cease
to be a member of the Company and upon the occurrence of such an
event, the business of the Company shall continue without
dissolution.
(c) In the event of dissolution, the Company shall conduct
only such activities as are necessary to wind up its affairs
(including the sale of the assets of the Company in an orderly
manner), and the assets of the Company shall be applied in the
manner, and in the order of priority, set forth in Section 18-804
of the Act.
(d) The Company shall terminate when (i) all of the assets
of the Company, after payment of or due provision for all debts,
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liabilities and obligations of the Company shall have been
distributed to the Member in the manner provided for in this
Agreement and (ii) the Certificate of Formation shall have been
canceled in the manner required by the Act.
Section 22. Waiver of Partition; Nature of Interest.
Except as otherwise expressly provided in this Agreement, to
the fullest extent permitted by law, each of the Member hereby
irrevocably waives any right or power that such Person might have
to cause the Company or any of its assets to be partitioned, to
cause the appointment of a receiver for all or any portion of the
assets of the Company, to compel any sale of all or any portion
of the assets of the Company pursuant to any applicable law or to
file a complaint or to institute any proceeding at law or in
equity to cause the dissolution, liquidation, winding up or
termination of the Company. The Member shall not have any
interest in any specific assets of the Company, and the Member
shall not have the status of a creditor with respect to any
distribution pursuant to Section 13 hereof. The interest of the
Member in the Company is personal property.
Section 23. Benefits of Agreement; No Third-Party Rights.
None of the provisions of this Agreement shall be for the
benefit of or enforceable by any creditor of the Company or by
any creditor of the Member. Nothing in this Agreement shall be
deemed to create any right in any Person (other than Covered
Persons) not a party hereto, and this Agreement shall not be
construed in any respect to be a contract in whole or in part for
the benefit of any third Person (except as provided in Section
26).
Section 24. Severability of Provisions.
Each provision of this Agreement shall be considered
severable and if for any reason any provision or provisions
herein are determined to be invalid, unenforceable or illegal
under any existing or future law, such invalidity,
unenforceability or illegality shall not impair the operation of
or affect those portions of this Agreement which are valid,
enforceable and legal.
Section 25. Entire Agreement.
This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof.
Section 26. Binding Agreement.
Notwithstanding any other provision of this Agreement, the
Member agrees that this Agreement constitutes a legal, valid and
binding agreement of the Member, and is enforceable against the
Member by the Directors, in accordance with its terms. In
addition, the Directors shall be intended beneficiaries of this
Agreement.
Section 27. Governing Law.
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This Agreement shall be governed by and construed under the
laws of the State of Delaware (without regard to conflict of laws
principles), all rights and remedies being governed by said laws.
Section 28. Amendments.
Subject to Section 8, this Agreement may be modified,
altered, supplemented or amended pursuant to a written agreement
executed and delivered by the Member. Notwithstanding anything
to the contrary in this Agreement, so long as any Obligation is
outstanding, this Agreement may not be modified, altered,
supplemented or amended unless the Rating Agency Condition is
satisfied by all Rating Agencies other than Moody's (and prior
written notice of such action shall be provided to Moody's)
except: (i) to cure any ambiguity or (ii) to convert or
supplement any provision in a manner consistent with the intent
of this Agreement and the other Basic Documents.
Section 29. Counterparts.
This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original of this
Agreement and all of which together shall constitute one and the
same instrument.
Section 30. Notices.
Any notices required to be delivered hereunder shall be in
writing and personally delivered, mailed or sent by telecopy,
electronic mail or other similar form of rapid transmission, and
shall be deemed to have been duly given upon receipt (a) in the
case of the Company, to the Company at its address in Section 2,
(b) in the case of the Member, to the Member at its address as
listed on Schedule B attached hereto and (c) in the case of
either of the foregoing, at such other address as may be
designated by written notice to the other party.
Section 31. Effectiveness.
This Agreement shall be effective as of November 18, 1999.
12
<PAGE>
IN WITNESS WHEREOF, the undersigned, intending to be legally
bound hereby, has duly executed this Limited Liability Company
Agreement as of the 18th day of November, 1999.
MEMBER:
ALLEGHENY ENERGY, INC.
By: /s/ Peter J. Skrgic
Name: Peter J. Skrgic
Title: Vice President
13
<PAGE>
SCHEDULE A
Definitions
A. Definitions
When used in this Agreement, the following terms not
otherwise defined herein have the following meanings:
"Act" has the meaning set forth in the preamble to this
Agreement.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly Controlling or Controlled by or
under direct or indirect common Control with such Person.
"Agreement" means this Amended and Restated Limited
Liability Company Agreement of the Company, together with the
schedules attached hereto, as amended, restated or supplemented
or otherwise modified from time to time.
"Bankruptcy" means, with respect to any Person, if such
Person (i) makes an assignment for the benefit of creditors,
(ii) files a voluntary petition in bankruptcy, (iii) is adjudged
a bankrupt or insolvent, or has entered against it an order for
relief, in any bankruptcy or insolvency proceedings, (iv) files a
petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation or similar
relief under any statute, law or regulation, (v) files an answer
or other pleading admitting or failing to contest the material
allegations of a petition filed against it in any proceeding of
this nature, (vi) seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of the Person or
of all or any substantial part of its properties, or (vii) if 120
days after the commencement of any proceeding against the Person
seeking reorganization, arrangement, composition, readjustment,
liquidation or similar relief under any statute, law or
regulation, if the proceeding has not been dismissed, or if
within 90 days after the appointment without such Person's
consent or acquiescence of a trustee, receiver or liquidator of
such Person or of all or any substantial part of its properties,
the appointment is not vacated or stayed, or within 90 days after
the expiration of any such stay, the appointment is not vacated.
The foregoing definition of "Bankruptcy" is intended to replace
and shall supersede and replace the definition of 'Bankruptcy"
set forth in Sections 18-101(10 and 18-304 of the Act.
"Board" or "Board of Directors" means the Board of Directors
of the Company.
"Certificate of Formation" means the Certificate of
Formation of the Company filed with the Secretary of State of the
State of Delaware on November 12, 1999, as amended or amended and
restated from time to time.
"Company" means Allegheny Energy Supply Company, LLC, a
Delaware limited liability company.
A-1
<PAGE>
"Control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting
securities or general partnership or managing member interests,
by contract or otherwise. "Controlling" and "Controlled" shall
have correlative meanings. Without limiting the generality of
the foregoing, a Person shall be deemed to Control any other
Person in which it owns, directly or indirectly, a majority of
the ownership interests.
"Covered Persons" has the meaning set forth in Section
18(a).
"Directors" means the Persons elected to the Board of
Directors from time to time by the Member, including the
Independent Directors, in their capacity as managers of the
Company. A Director is hereby designated as a "manager" of the
Company within the meaning of Section 18-101(10) of the Act.
"Material Action" means to consolidate or merge the Company
with or into any Person, or sell all or substantially all of the
assets of the Company, or to institute proceedings to have the
Company be adjudicated bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against the
Company or file a petition seeking, or consent to, reorganization
or relief with respect to the Company under any applicable
federal or state law relating to bankruptcy, or consent to the
appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Company or a
substantial part of its property, or make any assignment for the
benefit of creditors of the Company, or admit in writing the
Company's inability to pay its debts generally as they become
due, or, to the fullest extent permitted by law, take action in
furtherance of any such action, or dissolve or liquidate the
Company.
"Member" means Allegheny Energy, Inc., as the member of the
Company, and includes any Person admitted as an additional member
of the Company or a substitute member of the Company pursuant to
the provisions of this Agreement, each in its capacity as a
member of the Company.
"Obligations" shall mean the indebtedness, liabilities and
obligations of the Company under or in connection with this
Agreement or any related document in effect as of any date of
determination.
"Officer" means an officer of the Company described in
Section 9.
"Officer's Certificate" means a certificate signed by any
Officer of the Company who is authorized to act for the Company
in matters relating to the Company.
"Person" means any individual, corporation, partnership,
joint venture, limited liability company, limited liability
partnership, association, joint stock company, trust,
unincorporated organization, or other organization, whether or
not a legal entity, and any governmental authority.
A-2
<PAGE>
B. Rules of Construction
Definitions in this Agreement apply equally to both the
singular and plural forms of the defined terms. The words
"include" and "including" shall be deemed to be followed by the
phrase "without limitation." The terms "herein," "hereof" and
"hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular Section, paragraph
or subdivision. The Section titles appear as a matter of
convenience only and shall not affect the interpretation of this
Agreement. All Section, paragraph, clause, Exhibit or Schedule
references not attributed to a particular document shall be
references to such parts of this Agreement.
A-3
<PAGE>
SCHEDULE B
Member
Name Mailing Address Membership
Interest
Allegheny Energy, 10435 Downsville Pike 100%
Inc. Hagerstown, MD 21740
Agreed Value of
Initial Capital Contribution: $100,000
Agreed Value of
Subsequent Capital Contribution: See following pages
to this Schedule B.
B-1
<PAGE>
SCHEDULE C
DIRECTORS
Alan J. Noia, Chairman
Peter J. Skrgic
Thomas K. Henderson
Michael P. Morrell
Richard J. Gagliardi
C-1
<PAGE>
SCHEDULE D
OFFICERS TITLE
Alan J. Noia Chairman of the Board &
Chief Executive Officer
Peter J. Skrgic President and COO
David C. Benson Vice President
Donald R. Feenstra Vice President
Michael P. Morrell Vice President
Thomas K. Henderson Vice President
Eileen M. Beck Secretary
Carole R. Chamberlain Assistant Secretary
Patricia J. Clark Assistant Secretary
David J. Bevilacqua Assistant Secretary
Regis F. Binder Treasurer
Keith L. Warchol Assistant Treasurer
D-1
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
WEST PENN FUNDING CORPORATION
FIRST: The name of the Corporation is West Penn
Funding Corporation.
SECOND: The Corporation=s registered office in
the State of Delaware is located at Suite 200, 103 Foulk
Road, Wilmington, County of New Castle, Delaware 19803. The
registered agent at that address is Entity Services Group,
LLC.
THIRD: The purpose of the Corporation is to
engage in any lawful act or activity in which a corporation
organized under the Delaware General Corporation Law may
engage.
FOURTH: The Corporation shall have the authority
to issue One Thousand (1,000) shares of common stock, having
a par value of One Cent ($0.01) per share.
FIFTH: To the fullest extent permitted by
Delaware General Corporation Law, as currently in effect or
as hereafter enacted, each director of the Corporation shall
incur no personal liability to the Corporation or its
stockholders for monetary damages for any breach of
fiduciary duty as a director.
SIXTH: The business and affairs of the
Corporation shall be managed by and under the direction of
the Board of Directors, the number of members of which shall
be as set forth in, or in the manner provided by, the bylaws
of the Corporation. Unless required by the bylaws of the
Corporation, the directors need not be elected by ballot.
SEVENTH: Each meeting of the stockholders and
directors of the Corporation shall be held within the State
of Nevada.
EIGHTH: The books of the Corporation physically
shall be maintained in the State of Nevada.
NINTH: In furtherance, and not in limitation, of
the objects, purposes and powers set forth in this
certificate of incorporation and in the Delaware General
Corporation Law, the Board of Directors may amend and repeal
the bylaws of the Corporation.
TENTH: The Corporation reserves the right to
amend and repeal any provision of this certificate of
incorporation in the manner now or thereafter provided under
the Delaware General Corporation Law.
<PAGE>
ELEVENTH: The name and mailing address of the
incorporator is Carol Russ, Esquire, 800 Cabin Hill Drive,
Greensburg, Pennsylvania, 15601.
TWELFTH: The powers of the incorporator shall
terminate upon the appointment of directors of the
Corporation.
The undersigned, the sole incorporator of the
Corporation, for the purpose of forming a corporation under
the laws of the State of Delaware hereby files this
certificate of incorporation, and accordingly sets her hand
and seal hereunto this 20th day of October, 1999.
/S/ CAROL RUSS
Carol Russ, Esquire
Sole Incorporator
EXHIBIT 3.2
B Y L A W S
OF
WEST PENN FUNDING CORPORATION
ARTICLE I
OFFICES
Section 1. The registered office in the State of
Delaware shall be as stated in the Certificate of
Incorporation or at such other location in the State of
Delaware to which the registered office shall be changed by
action of the Board of Directors.
Section 2. The Corporation shall maintain its
corporate headquarters and commercial domicile at such place
within the State of Nevada as the Board of Directors may
from time to time determine or the business of the
Corporation may require and the Corporation shall not
establish a presence or conduct any activities in any State
other than the State of Nevada.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for
the election of directors shall be held at such place within
the State of Nevada as shall be designated from time to time
by the Board of Directors and stated in the notice of the
meeting. Meetings of stockholders for any other purpose may
be held at such time and place, within the State of Nevada,
as shall be stated in the notice of the meeting or in a duly
executed waiver of notice thereof.
Section 2. Annual meetings of stockholders shall
be held at such date and time as shall be designated from
time to time by the Board of Directors and stated in the
notice of the meeting, at which they shall elect by a
plurality vote a Board of Directors and transact such other
business as may properly be brought before the meeting.
<PAGE>
2
Section 3. Written notice of the annual meeting
stating the place, date and hour of the meeting shall be
given to each stockholder entitled to vote at such meeting
not less than ten nor more than sixty days before the date
of the meeting.
Section 4. The officer who has charge of the
stock ledger of the Corporation shall prepare and make, at
least ten days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the
address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall
be open to the examination of any stockholder, for any
purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting
is to be held, which place shall be specified in the notice
of the meeting, or, if not so specified, at the place where
the meeting is to be held. The list shall also be produced
and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder
who is present.
Section 5. Special meetings of the stockholders,
for any purpose or purposes, unless otherwise prescribed by
statute or by the Certificate of Incorporation, may be
called by the President and shall be called by the President
or Secretary at the request in writing of a majority of the
Board of Directors, or at the request in writing of
stockholders owning a majority of the stock of the
Corporation issued and outstanding and entitled to vote.
Such request shall state the purpose or purposes of the
proposed meeting.
Section 6. Written notice of a special meeting
stating the place, date and hour of the meeting and the
purpose or purposes for which the meeting is called, shall
be given not less than ten nor more than sixty days before
the date of the meeting, to each stockholder entitled to
vote at such meeting.
Section 7. Business transacted at any special
meeting of stockholders shall be limited to the purposes
stated in the notice.
Section 8. The holders of a majority of the stock
issued and outstanding and entitled to vote, present in
person or represented by proxy, shall constitute a quorum at
all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the
Certificate of Incorporation. If, however, such quorum
shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote, present in
person or represented by proxy, shall have power to adjourn
the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present
or represented. At such adjourned meeting at which a quorum
shall be present or represented any business may be
transacted which might have been transacted at the meeting
as originally notified. If the adjournment is for more than
<PAGE>
3
thirty days, or if after the adjournment a new record date
is fixed for the adjourned meeting, a notice of the
adjourned meeting shall be given to each stockholder of
record entitled to vote at the meeting.
Section 9. When a quorum is present at any
meeting, the vote of the holders of a majority of the stock
having voting power present in person or represented by
proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision
of the statutes or of the Certificate of Incorporation a
different vote is required, in which case such express
provision shall govern and control the decision of such
question.
Section 10. Unless otherwise provided in the
Certificate of Incorporation each stockholder shall at every
meeting of the stockholders be entitled to one vote in
person or by proxy for each share of the capital stock
having voting power held by such stockholder, but no proxy
shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period.
Section 11. Unless otherwise provided in the
Certificate of Incorporation, any action required to be
taken at any annual or special meeting of stockholders of
the Corporation, or any action which may be taken at any
annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote,
if a consent or consents in writing, setting forth the
action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote
thereon were present and voted. Prompt notice of the taking
of the corporate action without a meeting by less than
unanimous written consent shall be given to those
stockholders who have not consented in writing and who, if
the action had been taken at a meeting, would have been
entitled to notice of the meeting if the record date for
such meeting had been the date that the written consents
signed by a sufficient number of holders to take the action
were delivered to the Corporation as provided by applicable
Delaware law.
ARTICLE III
DIRECTORS
Section 1. The business and affairs of the
Corporation shall be managed by or under the direction of
its Board of Directors which may exercise all such powers of
the Corporation and do all such lawful acts and things as
are not by statute or by the Certificate of Incorporation or
by these Bylaws directed or required to be exercised or done
by the stockholders.
<PAGE>
4
Section 2. The number of directors which shall
constitute the Board of Directors shall be three, unless the
then existing members of the Board of Directors shall
determine by unanimous vote such other number. The
directors shall be elected at the annual meeting of the
stockholders, except as provided in Section 3 of this
Article, and each director elected shall hold office until
his successor is elected and qualified or until his earlier
resignation or removal. Directors need not be stockholders.
Section 3. Vacancies and newly created
directorships resulting from any increases in the authorized
number of directors may be filled by a majority of the
directors then in office, though less than a quorum, or by a
sole remaining director, and the directors so chosen shall
hold office until the next annual election and until their
successors are duly elected and shall qualify, unless sooner
displaced. If there are no directors in office, then an
election of directors may be held in the manner provided by
statute. If, at the time of filling any vacancy or any
newly created directorship, the directors then in office
shall constitute less than a majority of the whole Board (as
constituted immediately prior to any such increase), the
Court of Chancery may, upon application of any stockholder
or stockholders holding at least ten percent of the total
number of the shares at the time outstanding having the
right to vote for such directors, summarily order an
election to be held to fill any such vacancies or newly
created directorships, or to replace the directors chosen by
the directors then in office.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The Board of Directors of the
Corporation shall hold meetings, both regular and special,
within the State of Nevada.
Section 5. The first meeting of each newly
elected Board of Directors shall be held at such time and
place as shall be fixed by the Board of Directors. The
meeting may be held at such time and place as shall be
specified in a notice given as hereinafter provided for
special meetings of the Board of Directors, or as shall be
specified in a written waiver signed by all of the
directors.
Section 6. Regular meetings of the Board of
Directors may be held without notice at such time and at
such place as shall from time to time be determined by the
Board.
Section 7. Special meetings of the Board may be
called by the President on one day's notice to each
director, either personally or by mail, telephone, telex,
telecopier, telegram or other lawful means; special meetings
shall be called by the President or Secretary in like manner
and on like notice on the written request of two directors
unless the Board consists of only one director, in which
case special meetings shall be called by the President or
<PAGE>
5
Secretary in like manner and on like notice on the written
request of the sole director.
Section 8. At all meetings of the Board a
majority of the directors shall constitute a quorum for the
transaction of business and the act of a majority of the
directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors, except as may be
otherwise specifically provided by statute or by the
Certificate of Incorporation. If a quorum shall not be
present at any meeting of the Board of Directors the
directors present thereat may adjourn the meeting from time
to time, without notice other than announcement at the
meeting, until a quorum shall be present.
Section 9. Unless otherwise restricted by the
Certificate of Incorporation or these Bylaws, any action
required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken
without a meeting, if all members of the Board or committee,
as the case may be, consent thereto in writing, and the
writing or writings are filed with the minutes of
proceedings of the Board or committee.
Section 10. Unless otherwise restricted by the
Certificate of Incorporation or these By-laws, members of
the Board of Directors, or any committee designated by the
Board of Directors, may participate in a meeting of the
Board of Directors, or any committee, by means of conference
telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each
other.
COMMITTEES OF DIRECTORS
Section 11. The Board of Directors may designate
one or more committees, each committee to consist of one or
more of the directors of the Corporation. The Board may
designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member
at any meeting of the committee.
In the absence or disqualification of a member of
a committee, the member or members thereof present at any
meeting and not disqualified from voting, whether or not he
or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in
the place of any such absent or disqualified member.
Any such committee, to the extent provided in the
resolution of the Board of Directors, shall have and may
exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of
the Corporation, and may authorize the seal of the
Corporation to be affixed to all papers which may require
it; but no such committee shall have the power or authority
in reference to (i) approving or adopting, or recommending
to the stockholders, any action or matter expressly required
<PAGE>
6
by law to be submitted to the stockholders for approval, or
(ii) adopting, amending or repealing any bylaw. Such
committee or committees shall have such name or names as may
be determined from time to time by resolution adopted by the
Board of Directors.
Section 12. Each committee shall keep regular
minutes of its meetings and report the same to the Board of
Directors when required.
COMPENSATION OF DIRECTORS
Section 13. Unless otherwise restricted by the
Certificate of Incorporation or these Bylaws, the Board of
Directors shall have the authority to fix the compensation
of directors. The directors may be paid their expenses, if
any, of attendance at each meeting of the Board of Directors
and may be paid a fixed sum for attendance at each meeting
of the Board of Directors or a stated salary as director.
No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be
allowed like compensation for attending committee meetings.
REMOVAL OF DIRECTORS
Section 14. Unless otherwise restricted by the
Certificate of Incorporation or by law, any director or the
entire Board of Directors may be removed, with or without
cause, by the holders of a majority of shares then entitled
to vote at an election of directors.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the
statutes or of the Certificate of Incorporation or of these
Bylaws, notice is required to be given to any director or
stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail,
addressed to such director or stockholder, at his address as
it appears on the records of the Corporation, with postage
thereon prepaid, and such notice shall be deemed to be given
at the time when the same shall be deposited in the United
States mail. Notice to directors may also be given by
telephone, telex, telecopier or telegram.
Section 2. Whenever any notice is required to be
given under the provisions of the statutes or of the
Certificate of Incorporation or of these Bylaws, a waiver
thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto.
<PAGE>
7
ARTICLE V
OFFICERS
Section 1. The officers of the Corporation shall
be a President, a Secretary and a Treasurer or persons who
shall act as such, regardless of the name or title by which
they may be designated, elected or appointed. The
Corporation may also have one or more Vice Presidents and
such other officers and assistant officers as the Board of
Directors may choose. Any number of offices may be held by
the same person, unless the Certificate of Incorporation or
these Bylaws otherwise provide.
Section 2. The officers and assistant officers
shall be chosen by the Board of Directors at its first
meeting after each annual meeting of stockholders and shall
hold office until their successors are elected and qualified
or until their earlier resignation or removal.
Section 3. The Board of Directors may appoint
such other officers and agents as it shall deem necessary
who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be
determined from time to time by the board.
Section 4. Any officer elected or appointed by
the Board of Directors may be removed at any time by the
affirmative vote of a majority of the Board of Directors.
Any vacancy occurring in any office of the Corporation shall
be filled by the Board of Directors.
Section 5. The salaries of all officers and
agents of the Corporation shall be fixed by the Board of
Directors.
THE PRESIDENT
Section 6. The President shall be the chief
executive officer of the Corporation, shall preside at all
meetings of the stockholders and the Board of Directors,
shall have general and active management of the business of
the Corporation and shall see that all orders and
resolutions of the Board of Directors are carried into
effect.
Section 7. The President shall execute bonds,
mortgages and other contracts requiring a seal, under the
seal of the Corporation, except where required or permitted
by law to be otherwise signed and executed and except where
<PAGE>
8
the signing and execution thereof shall be expressly
delegated by the Board of Directors to some other officer or
agent of the Corporation.
THE VICE PRESIDENTS
Section 8. In the absence of the President or in
the event of his inability or refusal to act, and if a Vice
President has been appointed by the Board of Directors, the
Vice President (or in the event there be more than one Vice
President, the Vice Presidents in the order designated by
the directors, or in the absence of any designation, then in
the order of their election) shall perform the duties of the
President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President.
The Vice Presidents shall perform such other duties and have
such other powers as the Board of Directors may from time to
time prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 9. The Secretary shall attend all
meetings of the Board of Directors and all meetings of the
stockholders and record all the proceedings of the meetings
of the Corporation and of the Board of Directors in a book
to be kept for that purpose and shall perform like duties
for the standing committees when required. He shall give,
or cause to be given, notice of all meetings of the
stockholders and special meetings of the Board of Directors,
and shall perform such other duties as may be prescribed by
the Board of Directors or President, under whose supervision
he shall be. He shall have custody of the corporate seal of
the Corporation and he, or an assistant Secretary, shall
have authority to affix the same to any instrument requiring
it and when so affixed, it may be attested by his signature
or by the signature of such assistant Secretary. The Board
of Directors may give general authority to any other officer
to affix the seal of the Corporation and to attest the
affixing by his signature.
Section 10. The Assistant Secretary, or if there
be more than one, the Assistant Secretaries in the order
determined by the Board of Directors (or if there be no such
determination, then in the order of their election) shall,
in the absence of the Secretary or in the event of his
inability or refusal to act, perform the duties and exercise
the powers of the Secretary and shall perform such other
duties and have such other powers as the Board of Directors
may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The Treasurer shall have the custody
of the corporate funds and securities and shall keep full
and accurate accounts of receipts and disbursements in books
belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of
<PAGE>
9
the Corporation in such depositories as may be designated by
the Board of Directors.
Section 12. He shall disburse the funds of the
Corporation as may be ordered by the Board of Directors,
taking proper vouchers for such disbursements, and shall
render to the President and the Board of Directors, at its
regular meetings, or when the Board of Directors so
requires, an account of all his transactions as Treasurer
and of the financial condition of the Corporation.
Section 13. If required by the Board of
Directors, he shall give the Corporation a bond (which shall
be renewed every six years) in such sum and with such surety
or sureties as shall be satisfactory to the Board of
Directors for the faithful performance of the duties of this
office and for the restoration to the Corporation, in case
of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other
property of whatever kind in his possession or under his
control belonging to the Corporation.
Section 14. The Assistant Treasurer, or if there
shall be more than one, the Assistant Treasurers in the
order determined by the Board of Directors (or if there be
no such determination, then in the order of their election)
shall, in the absence of the Treasurer or in the event of
his inability or refusal to act, perform the duties and
exercise the powers of the Treasurer and shall perform such
other duties and have such other powers as the Board of
Directors may from time to time prescribe.
ARTICLE VI
CERTIFICATES FOR SHARES
Section 1. The shares of the Corporation shall be
represented by a certificate. Certificates shall be signed
by, or in the name of the Corporation by, the chairman or
vice-chairman of the Board of Directors, or the President or
a Vice President, and the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the
Corporation.
Section 2. Any of or all the signatures on a
certificate may be facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
<PAGE>
10
LOST CERTIFICATES
Section 3. The Board of Directors may direct a
new certificate or certificates or uncertificated shares to
be issued in place of any certificate or certificates
theretofore issued by the Corporation alleged to have been
lost, stolen or destroyed, upon the making of an affidavit
of that fact by the person claiming the certificate of stock
to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates or uncertificated
shares, the Board of Directors may, in its discretion and as
a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the
same in such manner as it shall require and/or to give the
Corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the Corporation
with respect to the certificate alleged to have been lost,
stolen or destroyed.
TRANSFER OF STOCK
Section 4. Upon surrender to the Corporation or
the transfer agent of the Corporation of a certificate for
shares duly endorsed or accompanied by proper evidence of
succession, assignation or authority to transfer, it shall
be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and
record the transaction upon its books. Upon receipt of
proper transfer instructions from the registered owner of
uncertificated shares, such uncertificated shares shall be
canceled and issuance of new equivalent uncertificated
shares or certificated shares shall be made to the person
entitled thereto and the transaction shall be recorded upon
the books of the Corporation.
REGISTERED STOCKHOLDERS
Section 5. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its
books as the owner of shares to receive dividends, and to
vote as such owner, and shall not be bound to recognize any
equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it
shall have express or other notice thereof, except as
otherwise provided by the laws of Delaware.
<PAGE>
11
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of
the Corporation, subject to the provisions of the
Certificate of Incorporation, if any, may be declared by the
Board of Directors at any regular or special meeting,
pursuant to law. Dividends may be paid in cash, in
property, or in shares of the capital stock, subject to the
provisions of the Certificate of Incorporation.
Section 2. Before payment of any dividend, there
may be set aside out of any funds of the Corporation
available for dividends such sum or sums as the directors
from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or
for equalizing dividends, or for repairing or maintaining
any property of the Corporation, or for such other purpose
as the directors shall think conducive to the interest of
the Corporation, and the directors may modify or abolish any
such reserve in the manner in which it was created.
CHECKS
Section 3. All checks or demands for money and
notes of the Corporation shall be signed by such officer or
officers or such other person or persons as the Board of
Directors may from time to time designate.
FISCAL YEAR
Section 4. The fiscal year of the Corporation
shall be fixed by resolution of the Board of Directors.
SEAL
Section 5. The corporate seal shall have
inscribed thereon the name of the Corporation, the year of
its organization and the words "Corporate Seal, Delaware."
The seal may be used by causing it or a facsimile thereof to
be impressed or affixed or reproduced or otherwise.
INDEMNIFICATION
Section 6.1. Right to Indemnification. The
Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently
exists or may hereafter be amended, any person (a "Covered
Person") who was or is made or is threatened to be made a
<PAGE>
11
party or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or
investigative (a "proceeding"), by reason of the fact that
he, or a person for whom he is the legal representative, is
or was a director or officer of the Corporation or, while a
director or officer of the Corporation, is or was serving at
the request of the Corporation as a director, officer,
employee or agent of another corporation or of a
partnership, joint venture, trust, enterprise or nonprofit
entity, including service with respect to employee benefit
plans, against all liability and loss suffered and expenses
(including attorneys' fees) reasonably incurred by such
Covered Person. Notwithstanding the preceding sentence,
except as otherwise provided in Section 6.3, the Corporation
shall be required to indemnify a Covered Person in
connection with a proceeding (or part thereof) commenced by
such Covered Person only if the commencement of such
proceeding (or part thereof) by the Covered Person was
authorized by the Board of Directors of the Corporation.
Section 6.2. Prepayment of Expenses. The
Corporation shall pay the expenses (including attorneys'
fees) incurred by a Covered Person in defending any
proceeding in advance of its final disposition; provided,
however, that, to the extent required by law, such payment
of expenses in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking
by the Covered Person to repay all amounts advanced if it
should be ultimately determined that the Covered Person is
not entitled to be indemnified under this Section 6 or
otherwise.
Section 6.3. Claims. If a claim for
indemnification or advancement of expenses under this
Section 6 is not paid in full within thirty days after a
written claim therefor by the Covered Person has been
received by the Corporation, the Covered Person may file
suit to recover the unpaid amount of such claim and, if
successful in whole or in part, shall be entitled to be paid
the expense of prosecuting such claim. In any such action
the Corporation shall have the burden of proving that the
Covered Person is not entitled to the requested
indemnification or advancement of expenses under applicable
law.
Section 6.4. Nonexclusivity of Rights. The
rights conferred on any Covered Person by this Section 6
shall not be exclusive of any other rights which such
Covered Person may have or hereafter acquire under any
statute, provision of the certificate of incorporation,
these by-laws, agreement, vote of stockholders or
disinterested directors or otherwise.
Section 6.5. Other Sources. The Corporation's
obligation, if any, to indemnify or to advance expenses to
any Covered Person who was or is serving at its request as a
<PAGE>
13
director, officer, employee or agent of another corporation,
partnership, joint venture, trust, enterprise or nonprofit
entity shall be reduced by any amount such Covered Person
may collect as indemnification or advancement of expenses
from such other corporation, partnership, joint venture,
trust, enterprise or non-profit enterprise.
Section 6.6. Amendment or Repeal. Any repeal or
modification of the foregoing provisions of this Section 6
shall not adversely affect any right or protection hereunder
of any Covered Person in respect of any act or omission
occurring prior to the time of such repeal or modification.
Section 6.7. Other Indemnification and Prepayment
of Expenses. This Section 6 shall not limit the right of
the Corporation, to the extent and in the manner permitted
by law, to indemnify and to advance expenses to persons
other than Covered Persons when and as authorized by
appropriate corporate action.
ARTICLE VIII
AMENDMENTS
Section 1. These Bylaws may be altered, amended
or repealed or new bylaws may be adopted by the stockholders
or by the Board of Directors, when such power is conferred
upon the Board of Directors by the Certificate of
Incorporation, at any regular meeting of the stockholders or
of the Board of Directors or at any special meeting of the
stockholders or of the Board of Directors if notice of such
alteration, amendment, repeal or adoption of new bylaws be
contained in the notice of such special meeting. If the
power to adopt, amend or repeal bylaws is conferred upon the
Board of Directors by the Certificate of Incorporation it
shall not divest or limit the power of the stockholders to
adopt, amend or repeal bylaws.
EXHIBIT 3.1
CERTIFICATE OF FORMATION
OF
WEST PENN FUNDING LLC
This Certificate of Formation of West Penn Funding
LLC (the "LLC"), dated as of May 26, 1999, is being duly
executed and filed by Howard L. Siegel, as an authorized
person, to form a limited liability company under the
Delaware Limited Liability Company Act (6 Del C. '18-101,
et. seq.).
FIRST. The name of the limited liability company
formed hereby is West Penn Funding LLC.
SECOND. The address of the registered office of
the LLC in the State of Delaware is c/o The Corporation
Trust Company, Corporation Trust Center, 1209 Orange Street,
Wilmington, DE 19801.
THIRD. The name and address of the registered
agent for service of process on the LLC in the State of
Delaware are The Corporation Trust Company, Corporation
Trust Center, 1209 Orange Street, Wilmington, DE 19801.
IN WITNESS WHEREOF, the undersigned has executed
this Certificate of Formation as of the date first above
written.
/s/ HOWARD L. SIEGEL
Name: Howard L. Siegel
Authorized Person
EXHIBIT 3.2
EXECUTION COPY
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF
WEST PENN FUNDING LLC
This Amended and Restated Limited Liability Company
Agreement (together with the schedules attached hereto, this
"Agreement") of West Penn Funding LLC (the "Company"), is entered
into by WEST PENN FUNDING CORPORATION, a Delaware corporation, as
the sole equity member (the "Member"), and Mark A. Ferrucci and
Kim E. Lutthans, as the Special Members (as defined on Schedule A
hereto). Capitalized terms used and not otherwise defined herein
have the meanings set forth on Schedule A hereto.
The Member, by execution of this Agreement, (i) hereby
continues the Company as a limited liability company pursuant to
and in accordance with the Delaware Limited Liability Company Act
(6 Del. C. ' 18-101 et seq.), as amended from time to time (the
"Act"), and this Agreement, (ii) hereby amends and restates in
its entirety the Limited Liability Company Agreement of the
Company, dated as of May 26, 1999 (the "Initial LLC Agreement"),
as amended by the Assignment of Limited Liability Company
Interest and Amendment to Limited Liability Company Agreement
dated as of October 20, 1999 (the "Assignment Agreement"), and,
together with Mark A. Ferrucci and Kim E. Lutthans, hereby agrees
as follows:
Section 1. Name.
The name of the limited liability company formed hereby is
West Penn Funding LLC.
Section 2. Principal Business Office.
The principal business office of the Company shall be
located at 2325B-2 Renaissance Drive, Las Vegas, Nevada 89119 or
such other location as may hereafter be determined by the Member.
Section 3. Registered Office.
The address of the registered office of the Company in the
State of Delaware is c/o The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle, Delaware 19801.
Section 4. Registered Agent.
The name and address of the registered agent of the Company
for service of process on the Company in the State of Delaware is
The Corporation Trust Company, Corporation Trust Center, 1209
Orange Street, in the City of Wilmington, County of New Castle,
Delaware 19801.
<PAGE>
Section 5. Members.
(a) The mailing address of the Member is set forth on
Schedule B attached hereto. The Member was admitted to the
Company as a member of the Company upon its execution of the
Assignment Agreement heretofore.
(b) Subject to Section 9(j), the Member may act by written
consent.
(c) Upon the occurrence of any event that causes the Member
to cease to be a member of the Company (other than (i) upon an
assignment by the Member of all of its limited liability company
interest in the Company and the admission of the transferee
pursuant to Sections 21 and 23, or (ii) the resignation of the
Member and the admission of an additional member of the Company
pursuant to Sections 22 and 23), each person acting as an
Independent Director pursuant to Section 10 shall, without any
action of any Person and simultaneously with the Member ceasing
to be a member of the Company, automatically be admitted to the
Company as a Special Member and shall continue the Company
without dissolution. No Special Member may resign from the
Company or transfer its rights as Special Member unless (i) a
successor Special Member has been admitted to the Company as
Special Member by executing a counterpart to this Agreement, and
(ii) such successor has also accepted its appointment as
Independent Director pursuant to Section 10; provided, however,
the Special Members shall automatically cease to be members of
the Company upon the admission to the Company of a substitute
Member. Each Special Member shall be a member of the Company
that has no interest in the profits, losses and capital of the
Company and has no right to receive any distributions of Company
assets. Pursuant to Section 18-301 of the Act, a Special Member
shall not be required to make any capital contributions to the
Company and shall not receive a limited liability company
interest in the Company. A Special Member, in its capacity as
Special Member, may not bind the Company. Except as required by
any mandatory provision of the Act, each Special Member, in its
capacity as Special Member, shall have no right to vote on,
approve or otherwise consent to any action by, or matter relating
to, the Company, including, without limitation, the merger,
consolidation or conversion of the Company. In order to
implement the admission to the Company of each Special Member,
each person acting as an Independent Director pursuant to
Section 10 shall execute a counterpart to this Agreement. Prior
to its admission to the Company as Special Member, each person
acting as an Independent Director pursuant to Section 10 shall
not be a member of the Company.
Section 6. Certificates.
Howard L. Siegel, is hereby designated as an "authorized
person" within the meaning of the Act, and has executed,
delivered and filed the Certificate of Formation of the Company
with the Secretary of State of the State of Delaware. Upon the
filing of the Certificate of Formation with the Secretary of
State of the State of Delaware, his powers as an "authorized
person" ceased, and Carol Russ, as the initial member under the
Initial LLC Agreement thereupon became the designated "authorized
person" and after Carol Russ's assignment of her membership
interest in the Company to the Member pursuant to the Assignment
Agreement, the Member became and shall continue as the designated
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<PAGE>
"authorized person" within the meaning of the Act. The Member or
an Officer shall execute, deliver and file any other certificates
(and any amendments and/or restatements thereof) necessary for
the Company to qualify to do business in Nevada, New York and in
any other jurisdiction in which the Company may wish to conduct
business.
The existence of the Company as a separate legal entity
shall continue until cancelation of the Certificate of Formation
as provided in the Act.
Section 7. Purposes. The purpose to be conducted or promoted
by the Company is to engage in the following activities:
(a)
(i) to acquire, own, hold, administer, service, or
enter into agreements for the servicing of,
finance, manage, sell, assign, pledge, collect
amounts due on and otherwise deal with the
Intangible Transition Property and other assets to
be acquired pursuant to the Basic Documents and
any proceeds or rights associated therewith;
(ii) to issue, sell, authorize and deliver the
Transition Bonds and to enter into any agreement
or document providing for the authorization,
issuance, sale and delivery of the Transition
Bonds;
(iii) to sell, exchange, pledge, encumber or
otherwise dispose of all or any part of the
Intangible Transition Property and its other
assets and property and, in connection therewith,
to accept, collect, hold, sell, exchange or
otherwise dispose of evidences of indebtedness or
other property received pursuant thereto,
including the encumbrance of all of the Intangible
Transition Property and its other assets and
property as collateral security for the Transition
Bonds;
(iv) to execute, deliver and perform the Basic
Documents;
(v) to invest proceeds from the Intangible Transition
Property and its other assets and any capital and
income of the Company in accordance with the Basic
Documents or as otherwise determined by the Board
and not inconsistent with this Section 7 or the
Basic Documents;
(vi) to acquire, own, hold, sell, transfer,
service, convey, safekeep, dispose of, pledge,
assign, borrow money against, finance, refinance
or otherwise deal with, publicly or privately and
whether with unrelated third parties or with
affiliated entities; and
(vii) to engage in any lawful act or activity and
to exercise any powers permitted to limited
liability companies organized under the laws of
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<PAGE>
the State of Delaware that are related or
incidental to and necessary, convenient or
advisable for the accomplishment of the
above-mentioned purposes (including the entering
into of interest rate or basis swap, cap, floor or
collar agreements, currency exchange agreements or
similar hedging transactions and referral,
management, servicing and administration
agreements).
(b) The Company hereby authorizes and approves the issuance
and sale, from time to time, of the Transition Bonds and the
registration of such Transition Bonds under the Securities Act of
1933, as amended, and the filing by Officers of the Company of
any Registration Statement or other document as the Officers may
in their discretion deem necessary or advisable to accomplish
such registration. The Company, by or through the Member, or any
Director or Officer on behalf of the Company, may negotiate the
terms of, enter into and perform the Basic Documents (including
negotiating and approving the price at which the Transition Bonds
are sold) and all documents, agreements, certificates, or
financing statements contemplated thereby or related thereto, all
without any further act, vote or approval of any other Person
notwithstanding any other provision of this Agreement, the Act or
applicable law, rule or regulation. The foregoing authorizations
shall not be deemed a restriction on the powers of the Member or
any Director or Officer to enter into other agreements on behalf
of the Company.
(c) The Company hereby ratifies and approves all actions
taken by Carol G. Russ, in her prior capacities as sole member,
principal and chief executive officer, chief financial officer
and chief accounting officer of the Company, on behalf of the
Company in connection with the execution, delivery and filing
with the Securities and Exchange Commission of the Registration
Statement on Form S-3 and Amendment No. 1 and Amendment No. 2
thereto.
(d) The Company hereby agrees that: (1) any Officer of the
Company acting in the State of Nevada be, and they hereby are,
authorized for and on behalf of the Company to designate that a
bank account be established at PNC Bank to act as depository for
the funds of the Company for and during such period as they may
from time to time deem necessary or desirable in the interests of
the Company and to open or close out from time to time such
account so selected or reselected; (2) any Officer of the Company
be, and they hereby are, authorized and directed, in the name and
on behalf of the Company, to take any and all action that they
may deem necessary or advisable in order to establish such bank
account from time to time for the efficient conduct of the
Company's business; (3) such bank account be used to initiate
funds transfers and that any Officer of the Company be, and they
hereby are, authorized to sign on such bank account any wire
transfer documents necessary, including those that will designate
those Officers of the Company who may be authorized to initiate
wire transfers by phone from such bank account to West Penn Power
Company's bank account at PNC Bank and from such bank account to
West Penn Funding Corporation's bank account at PNC Bank,
provided that the Officer initiates said wire transfers in the
State of Nevada; (4) any Officer of the Company be, and they
hereby are, authorized for and on behalf of the Company to
designate that a bank account be established at Nevada State Bank
to act as depository for the funds of the Company for and during
such period as they may from time to time deem necessary or
desirable in the interests of the Company and to open or close
out from time to time such account so selected or reselected; (5)
4
<PAGE>
any Officer of the Company be, and they hereby are, authorized
and directed, in the name and on behalf of the Company, to take
any and all action that they may deem necessary or advisable in
order to establish such account from time to time for the
efficient conduct of the Company's business; and (6) any Officer
of the Company be, and they hereby are, authorized to designate
those Officers of the Company who may be authorized from time to
time to sign checks on such bank account.
Section 8. Powers.
Subject to Section 9(j), the Company, and the Board of
Directors and the Officers of the Company on behalf of the
Company, (i) shall have and exercise all powers necessary,
convenient or incidental to accomplish its purposes as set forth
in Section 7 and (ii) shall have and exercise all of the powers
and rights conferred upon limited liability companies formed
pursuant to the Act.
Section 9. Management.
(a) Board of Directors. Subject to Section 9(j), the
business and affairs of the Company shall be managed by or under
the direction of a Board of one or more Directors designated by
the Member. Subject to Section 10, the Member may determine at
any time in its sole and absolute discretion the number of
Directors to constitute the Board. The authorized number of
Directors may be increased or decreased by the Member at any time
in its sole and absolute discretion, upon notice to all
Directors, and subject in all cases to Section 10. The initial
number of Directors shall be five, two of which shall be
Independent Directors pursuant to Section 10. Each Director
elected, designated or appointed by the Member shall hold office
until a successor is elected and qualified or until such
Director's earlier death, resignation, expulsion or removal.
Each Director shall execute and deliver the Management Agreement.
Directors need not be a Member. The initial Directors designated
by the Member are listed on Schedule D hereto.
(b) Powers. Subject to Section 9(j), the Board of
Directors shall have the power to do any and all acts necessary,
convenient or incidental to or for the furtherance of the
purposes described herein, including all powers, statutory or
otherwise. Subject to Section 7, the Board of Directors has the
authority to bind the Company.
(c) Meeting of the Board of Directors. The Board of
Directors of the Company may hold meetings, both regular and
special, within or outside the State of Delaware. Regular
meetings of the Board may be held without notice at such time and
at such place as shall from time to time be determined by the
Board. Special meetings of the Board may be called by the
President on not less than one day's notice to each Director by
telephone, facsimile, mail, telegram or any other means of
communication, and special meetings shall be called by the
President or Secretary in like manner and with like notice upon
the written request of any one or more of the Directors.
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(d) Quorum: Acts of the Board. At all meetings of the
Board, a majority of the Directors shall constitute a quorum for
the transaction of business and, except as otherwise provided in
any other provision of this Agreement, the act of a majority of
the Directors present at any meeting at which there is a quorum
shall be the act of the Board. If a quorum shall not be present
at any meeting of the Board, the Directors present at such
meeting may adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be
present. Any action required or permitted to be taken at any
meeting of the Board or of any committee thereof may be taken
without a meeting if all members of the Board or committee, as
the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board
or committee, as the case may be.
(e) Electronic Communications. Members of the Board, or
any committee designated by the Board, may participate in
meetings of the Board, or any committee, by means of telephone
conference or similar communications equipment that allows all
Persons participating in the meeting to hear each other, and such
participation in a meeting shall constitute presence in Person at
the meeting. If all the participants are participating by
telephone conference or similar communications equipment, the
meeting shall be deemed to be held at the principal place of
business of the Company.
(f) Committees of Directors.
(i) The Board may, by resolution passed by a majority
of the whole Board, designate one or more
committees, each committee to consist of one or
more of the Directors of the Company. The Board
may designate one or more Directors as alternate
members of any committee, who may replace any
absent or disqualified member at any meeting of
the committee.
(ii) In the absence or disqualification of a
member of a committee, the member or members
thereof present at any meeting and not
disqualified from voting, whether or not such
members constitute a quorum, may unanimously
appoint another member of the Board to act at the
meeting in the place of any such absent or
disqualified member.
(iii) Any such committee, to the extent provided in
the resolution of the Board, shall have and may
exercise all the powers and authority of the Board
in the management of the business and affairs of
the Company. Such committee or committees shall
have such name or names as may be determined from
time to time by resolution adopted by the Board.
Each committee shall keep regular minutes of its
meetings and report the same to the Board when
required.
(g) Compensation of Directors; Expenses. The Board shall
have the authority to fix the compensation of Directors. The
Directors may be paid their expenses, if any, of attendance at
meetings of the Board, which may be a fixed sum for attendance at
each meeting of the Board or a stated salary as Director. No
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such payment shall preclude any Director from serving the Company
in any other capacity and receiving compensation therefor.
Members of special or standing committees may be allowed like
compensation for attending committee meetings.
(h) Removal of Directors. Unless otherwise restricted by
law, any Director or the entire Board of Directors may be removed
or expelled, with or without cause, at any time by the Member,
and, subject to Section 10, any vacancy caused by any such
removal or expulsion may be filled by action of the Member.
(i) Directors as Agents. To the extent of their powers set
forth in this Agreement and subject to Section 9(j), the
Directors are agents of the Company for the purpose of the
Company's business, and the actions of the Directors taken in
accordance with such powers set forth in this Agreement shall
bind the Company. Notwithstanding the last sentence of Section
18-402 of the Act, except as provided in this Agreement or in a
resolution of the Directors, a Director may not bind the Company.
(j) Limitations on the Company's Activities.
(i) This Section 9(j) is being adopted in order to
comply with certain provisions required in order
to qualify the Company as a "special purpose"
entity.
(ii) The Member shall not, so long as any
Obligation is outstanding, amend, alter, change or
repeal the definition of "Independent Director" or
Sections 7, 8, 9, 10, 16, 20, 21, 22, 23, 24, 25,
26 or 31 or Schedule A of this Agreement without
the unanimous written consent of the Board
(including all Independent Directors). Subject to
this Section 9(j), the Member reserves the right
to amend, alter, change or repeal any provisions
contained in this Agreement in accordance with
Section 31.
(iii) Notwithstanding any other provision of this
Agreement and any provision of law that otherwise
so empowers the Company, the Member, the Board,
any Officer or any other Person, neither the
Member nor the Board nor any Officer nor any other
Person shall be authorized or empowered, nor shall
they permit the Company, without the prior
unanimous written consent of the Member and the
Board (including all Independent Directors), to
take any Material Action.
(iv) The Board and the Member shall cause the
Company to do or cause to be done all things
necessary to preserve and keep in full force and
effect its existence, rights (charter and
statutory) and franchises; provided, however, that
the Company shall not be required to preserve any
such right or franchise if: (1) the Board shall
determine that the preservation thereof is no
longer desirable for the conduct of its business
and that the loss thereof is not disadvantageous
in any material respect to the Company and (2) the
Rating Agency Condition is satisfied by all Rating
Agencies other than Moody's (and prior written
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notice shall be provided to Moody's). The Board
also shall cause the Company to:
(A) maintain its own separate books and records
and bank accounts;
(B) at all times hold itself out to the public
and all other Persons as a legal entity
separate from the Member and any other
Person;
(C) have a Board of Directors separate from that
of the Member and any other Person;
(D) file its own tax returns, if any, as may be
required under applicable law, to the extent
(1) not part of a consolidated or combined
group filing a consolidated or combined
return or returns or (2) not treated as a
division for tax purposes of another
taxpayer, and pay any taxes so required to be
paid under applicable law;
(E) except as contemplated by the Basic
Documents, not commingle its assets with
assets of any other Person;
(F) conduct its business in its own name and
strictly comply with all organizational
formalities to maintain its separate
existence;
(G) maintain separate financial statements;
(H) pay its own liabilities only out of its own
funds;
(I) maintain an arm's length relationship with
its Affiliates and the Member;
(J) pay the salaries of its own employees, if
any;
(K) not hold out its credit or assets as being
available to satisfy the obligations of
others;
(L) allocate fairly and reasonably any overhead
for shared office space;
(M) use separate stationery, invoices and checks;
(N) except as contemplated by the Basic
Documents, not pledge its assets for the
benefit of any other Person;
(O) correct any known misunderstanding regarding
its separate identity;
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(P) maintain adequate capital in light of its
contemplated business purpose, transactions
and liabilities;
(Q) cause its Board of Directors to meet at least
annually or act pursuant to written consent
and keep minutes of such meetings and actions
and observe all other Delaware limited
liability company formalities;
(R) not acquire any securities of the Member; and
(S) cause the Directors, Officers, agents and
other representatives of the Company to act
at all times with respect to the Company
consistently and in furtherance of the
foregoing and in the best interests of the
Company.
Failure of the Company, or the Member or
Board on behalf of the Company, to comply
with any of the foregoing covenants or any
other covenants contained in this Agreement
shall not affect the status of the Company as
a separate legal entity or the limited
liability of the Member or the Directors.
(v) So long as any Obligation is outstanding, the
Board shall not cause or permit the Company to:
(A) except as contemplated by the Basic
Documents, guarantee any obligation of any
Person, including any Affiliate;
(B) engage, directly or indirectly, in any
business other than the actions required or
permitted to be performed under Section 7,
the Basic Documents or this Section 9(j);
(C) incur, create or assume any indebtedness
other than as expressly permitted under the
Basic Documents;
(D) make or permit to remain outstanding any loan
or advance to, or own or acquire any stock or
securities of, any Person, except that the
Company may invest in those investments
permitted under the Basic Documents and may
make any advance required or expressly
permitted to be made pursuant to any
provisions of the Basic Documents and permit
the same to remain outstanding in accordance
with such provisions;
(E) to the fullest extent permitted by law,
engage in any dissolution, liquidation,
consolidation, merger, asset sale or transfer
of ownership interests other than such
activities as are expressly permitted
pursuant to any provision of the Basic
Documents; or
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(F) form, acquire or hold any subsidiary (whether
corporate, partnership, limited liability
company or other).
Section 10. Independent Director.
As long as any Obligation is outstanding, the Member shall
cause the Company at all times to have at least two Independent
Directors who will be appointed by the Member. To the fullest
extent permitted by law, including Section 18-1101(c) of the Act,
the Independent Directors shall consider only the interests of
the Company, including its respective creditors, in acting or
otherwise voting on the matters referred to in Section 9(j)(iii).
No resignation or removal of an Independent Director, and no
appointment of a successor Independent Director, shall be
effective until such successor (i) shall have accepted his or her
appointment as an Independent Director by a written instrument,
which may be a counterpart signature page to the Management
Agreement, and (ii) shall have executed a counterpart to this
Agreement as required by Section 5(c). In the event of a vacancy
in the position of Independent Director, the Member shall, as
soon as practicable, appoint a successor Independent Director.
All right, power and authority of the Independent Directors shall
be limited to the extent necessary to exercise those rights and
perform those duties specifically set forth in this Agreement.
Except as provided in the second sentence of this Section 10, in
exercising their rights and performing their duties under this
Agreement, any Independent Director shall have a fiduciary duty
of loyalty and care similar to that of a director of a business
corporation organized under the General Corporation Law of the
State of Delaware. No Independent Director shall at any time
serve as trustee in bankruptcy for any Affiliate of the Company.
Section 11. Officers.
(a) Officers. The initial Officers of the Company shall be
designated by the Member. The additional or successor Officers of
the Company shall be chosen by the Board and shall consist of at
least a President, a Secretary and a Treasurer. The Board of
Directors may also choose one or more Vice Presidents, Assistant
Secretaries and Assistant Treasurers. Any number of offices may
be held by the same person. The Board shall choose a President,
a Secretary and a Treasurer. The Board may appoint such other
Officers and agents as it shall deem necessary or advisable who
shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time
to time by the Board. The salaries of all Officers and agents of
the Company shall be fixed by or in the manner prescribed by the
Board. The Officers of the Company shall hold office until their
successors are chosen and qualified. Any Officer may be removed
at any time, with or without cause, by the affirmative vote of a
majority of the Board. Any vacancy occurring in any office of
the Company shall be filled by the Board. Upon the effectiveness
of this Agreement, the Officers of the Company designated by the
Member are listed on Schedule E hereto and any persons formerly
appointed as Officers of the Company shall automatically cease to
be Officers of the Company.
(b) President. The President shall be the chief executive
officer of the Company, shall preside at all meetings of the
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Board, shall be responsible for the general and active management
of the business of the Company and shall see that all orders and
resolutions of the Board are carried into effect. The President
or any other Officer authorized by the President or the Board
shall execute all bonds, mortgages and other contracts, except:
(i) where required or permitted by law or this Agreement to be
otherwise signed and executed, including Section 7(b); (ii) where
signing and execution thereof shall be expressly delegated by the
Board to some other Officer or agent of the Company, and (iii) as
otherwise permitted in Section 11(c).
(c) Vice President. In the absence of the President or in
the event of the President's inability to act, the Vice
President, if any (or in the event there be more than one Vice
President, the Vice Presidents in the order designated by the
Directors, or in the absence of any designation, then in the
order of their election), shall perform the duties of the
President, and when so acting, shall have all the powers of and
be subject to all the restrictions upon the President. The Vice
Presidents, if any, shall perform such other duties and have such
other powers as the Board may from time to time prescribe.
(d) Secretary and Assistant Secretary. The Secretary shall
be responsible for filing legal documents and maintaining records
for the Company. The Secretary shall attend all meetings of the
Board and record all the proceedings of the meetings of the
Company and of the Board in a book to be kept for that purpose
and shall perform like duties for the standing committees when
required. The Secretary shall give, or shall cause to be given,
notice of all meetings of the Member, if any, and special
meetings of the Board, and shall perform such other duties as may
be prescribed by the Board or the President, under whose
supervision the Secretary shall serve. The Assistant Secretary,
or if there be more than one, the Assistant Secretaries in the
order determined by the Board (or if there be no such
determination, then in order of their election), shall, in the
absence of the Secretary or in the event of the Secretary's
inability to act, perform the duties and exercise the powers of
the Secretary and shall perform such other duties and have such
other powers as the Board may from time to time prescribe.
(e) Treasurer and Assistant Treasurer. The Treasurer shall
have the custody of the Company funds and securities and shall
keep full and accurate accounts of receipts and disbursements in
books belonging to the Company and shall deposit all moneys and
other valuable effects in the name and to the credit of the
Company in such depositories as may be designated by the Board.
The Treasurer shall disburse the funds of the Company as may be
ordered by the Board, taking proper vouchers for such
disbursements, and shall render to the President and to the
Board, at its regular meetings or when the Board so requires, an
account of all of the Treasurer's transactions and of the
financial condition of the Company. The Assistant Treasurer, or
if there shall be more than one, the Assistant Treasurers in the
order determined by the Board (or if there be no such
determination, then in the order of their election), shall, in
the absence of the Treasurer or in the event of the Treasurer's
inability to act, perform the duties and exercise the powers of
the Treasurer and shall perform such other duties and have such
other powers as the Board may from time to time prescribe.
(f) Officers as Agents. The Officers, to the extent of
their powers set forth in this Agreement or otherwise vested in
them by action of the Board not inconsistent with this Agreement,
are agents of the Company for the purpose of the Company's
business and, subject to Section 9(j), the actions of the
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Officers taken in accordance with such powers shall bind the
Company.
(g) Duties of Board and Officers. Except to the extent
otherwise provided herein, each Director and Officer shall have a
fiduciary duty of loyalty and care similar to that of directors
and officers of business corporations organized under the General
Corporation Law of the State of Delaware.
Section 12. Limited Liability.
Except as otherwise expressly provided by the Act, the
debts, obligations and liabilities of the Company, whether
arising in contract, tort or otherwise, shall be the debts,
obligations and liabilities solely of the Company, and neither
the Member nor the Special Members nor any Director shall be
obligated personally for any such debt, obligation or liability
of the Company solely by reason of being a Member, Special Member
or Director of the Company.
Section 13. Capital Contributions.
The Member has contributed to the Company property of an
agreed value as listed on Schedule B attached hereto. In
accordance with Section 5(c), the Special Members shall not be
required to make any capital contributions to the Company.
Section 14. Additional Contributions.
The Member is not required to make any additional capital
contribution to the Company. However, the Member may make
additional capital contributions to the Company at any time upon
the written consent of such Member. To the extent that the
Member makes an additional capital contribution to the Company,
the Member shall revise Schedule B of this Agreement. The
provisions of this Agreement, including this Section 14, are
intended to benefit the Member and the Special Members and, to
the fullest extent permitted by law, shall not be construed as
conferring any benefit upon any creditor of the Company (and no
such creditor of the Company shall be a third-party beneficiary
of this Agreement) and the Member and the Special Members shall
not have any duty or obligation to any creditor of the Company to
make any contribution to the Company or to issue any call for
capital pursuant to this Agreement.
Section 15. Allocation of Profits and Losses.
The Company's profits and losses shall be allocated to the
Member.
Section 16. Distributions.
Distributions shall be made to the Member at the times and
in the aggregate amounts determined by the Board.
Notwithstanding any provision to the contrary contained in this
Agreement, the Company shall not be required to make a
distribution to the Member on account of its interest in the
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Company if such distribution would violate Section 18-607 of the
Act or any other applicable law or any Basic Document.
Section 17. Books and Records.
The Board shall keep or cause to be kept complete and
accurate books of account and records with respect to the
Company's business. The books of the Company shall at all times
be maintained by the Board. The Member and its duly authorized
representatives shall have the right to examine the Company
books, records and documents during normal business hours. The
Company, and the Board on behalf of the Company, shall not have
the right to keep confidential from the Member any information
that the Board would otherwise be permitted to keep confidential
from the Member pursuant to Section 18-305(c) of the Act. The
Company's books of account shall be kept using the method of
accounting determined by the Member. The Company's independent
auditor, if any, shall be an independent public accounting firm
selected by the Member.
Section 18. Reports.
(a) Within 60 days after the end of each fiscal quarter,
the Board shall cause to be prepared an unaudited report setting
forth as of the end of such fiscal quarter:
(i) unless such quarter is the last fiscal quarter, a
balance sheet of the Company; and
(ii) unless such quarter is the last fiscal
quarter, an income statement of the Company for
such fiscal quarter.
(b) The Board shall use diligent efforts to cause to be
prepared and mailed to the Member, within 90 days after the end
of each fiscal year, an audited or unaudited report setting forth
as of the end of such fiscal year:
(i) a balance sheet of the Company;
(ii) an income statement of the Company for such
fiscal year; and
(iii) a statement of the Member's capital account.
(c) The Board shall, after the end of each fiscal year, use
reasonable efforts to cause the Company's independent
accountants, if any, to prepare and transmit to the Member as
promptly as possible any such tax information as may be
reasonably necessary to enable the Member to prepare its federal,
state and local income tax returns relating to such fiscal year.
Section 19. Other Business.
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The Member, the Special Members and any Affiliate of the
Member or the Special Members may engage in or possess an
interest in other business ventures (unconnected with the
Company) of every kind and description, independently or with
others. The Company shall not have any rights in or to such
independent ventures or the income or profits therefrom by virtue
of this Agreement.
Section 20. Exculpation and Indemnification.
(a) Neither the Member nor the Special Members nor any
Officer, Director, employee or agent of the Company nor any
employee, representative, agent or Affiliate of the Member or the
Special Members (collectively, the "Covered Persons") shall be
liable to the Company or any other Person who has an interest in
or claim against the Company for any loss, damage or claim
incurred by reason of any act or omission performed or omitted by
such Covered Person in good faith on behalf of the Company and in
a manner reasonably believed to be within the scope of the
authority conferred on such Covered Person by this Agreement,
except that a Covered Person shall be liable for any such loss,
damage or claim incurred by reason of such Covered Person's gross
negligence or willful misconduct.
(b) To the fullest extent permitted by applicable law, a
Covered Person shall be entitled to indemnification from the
Company for any loss, damage or claim incurred by such Covered
Person by reason of any act or omission performed or omitted by
such Covered Person in good faith on behalf of the Company and in
a manner reasonably believed to be within the scope of the
authority conferred on such Covered Person by this Agreement,
except that no Covered Person shall be entitled to be indemnified
in respect of any loss, damage or claim incurred by such Covered
Person by reason of such Covered Person's gross negligence or
willful misconduct with respect to such acts or omissions;
provided, however, that any indemnity under this Section 20 by
the Company shall be provided out of and to the extent of Company
assets only, and the Member and the Special Members shall not
have personal liability on account thereof; and provided further,
that so long as any Obligation is outstanding, no indemnity
payment from funds of the Company (as distinct from funds from
other sources, such as insurance) of any indemnity under this
Section 20 shall be payable from amounts allocable to any other
Person pursuant to the Basic Documents, and, so long as any
Obligation is outstanding, all such indemnity payments under this
Section 20 shall be subordinated to any amounts payable to any
other Person under the Basic Documents.
(c) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by a Covered Person
defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Company prior to the final
disposition of such claim, demand, action, suit or proceeding
upon receipt by the Company of an undertaking by or on behalf of
the Covered Person to repay such amount if it shall be determined
that the Covered Person is not entitled to be indemnified as
authorized in this Section 20; provided, however, that any such
advance shall be subordinated to any amounts payable to any other
Person under the Basic Documents.
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(d) A Covered Person shall be fully protected in relying in
good faith upon the records of the Company and upon such
information, opinions, reports or statements presented to the
Company by any Person as to matters the Covered Person reasonably
believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or
on behalf of the Company, including information, opinions,
reports or statements as to the value and amount of the assets,
liabilities, or any other facts pertinent to the existence and
amount of assets from which distributions to the Member might
properly be paid.
(e) To the extent that, at law or in equity, a Covered
Person has duties (including fiduciary duties) and liabilities
relating thereto to the Company or to any other Covered Person, a
Covered Person acting under this Agreement shall not be liable to
the Company or to any other Covered Person for its good faith
reliance on the provisions of this Agreement or any approval or
authorization granted by the Company or any other Covered Person.
The provisions of this Agreement, to the extent that they
restrict the duties and liabilities of a Covered Person otherwise
existing at law or in equity, are agreed by the Member and the
Special Members to replace such other duties and liabilities of
such Covered Person.
(f) The foregoing provisions of this Section 20 shall
survive any termination of this Agreement.
Section 21. Assignments.
Subject to Section 23, the Member may assign in whole or in
part its limited liability company interest in the Company. If
the Member transfers all of its limited liability company
interest in the Company pursuant to this Section 21, the
transferee shall be admitted to the Company as a member of the
Company upon its execution of an instrument signifying its
agreement to be bound by the terms and conditions of this
Agreement, which instrument may be a counterpart signature page
to this Agreement. Such admission shall be deemed effective
immediately prior to the transfer and, immediately following such
admission, the transferor Member shall cease to be a member of
the Company. Notwithstanding anything in this Agreement to the
contrary, any successor to the Member by merger or consolidation
in compliance with the Basic Documents shall, without further
act, be the Member hereunder, and such merger or consolidation
shall not constitute an assignment for purposes of this Agreement
and the Company shall continue without dissolution.
Section 22. Resignation.
So long as any Obligation is outstanding, the Member may not
resign, except as permitted under the Basic Documents and if the
Rating Agency Condition is satisfied by all Rating Agencies other
than Moody's (and prior written notice of such action shall be
provided to Moody's). If the Member is permitted to resign
pursuant to this Section 22, an additional member of the Company
shall be admitted to the Company, subject to Section 23, upon its
execution of an instrument signifying its agreement to be bound
by the terms and conditions of this Agreement, which instrument
15
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may be a counterpart signature page to this Agreement. Such
admission shall be deemed effective immediately prior to the
resignation and, immediately following such admission, the
resigning Member shall cease to be a member of the Company.
Section 23. Admission of Additional Members.
One or more additional members of the Company may be
admitted to the Company with the written consent of the Member;
provided, however, that, notwithstanding the foregoing, so long
as any Obligation remains outstanding, no additional Member may
be admitted to the Company unless the Rating Agency Condition is
satisfied by all Rating Agencies other than Moody's (and prior
written notice of such action shall be provided to Moody's).
Section 24. Dissolution.
(a) Subject to Section 9(j), the Company shall be
dissolved, and its affairs shall be wound up upon the first to
occur of the following: (i) the termination of the legal
existence of the last remaining member of the Company or the
occurrence of any other event which terminates the continued
membership of the last remaining member of the Company in the
Company unless the business of the Company is continued in a
manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the
Act. Upon the occurrence of any event that causes the last
remaining member of the Company to cease to be a member of the
Company, to the fullest extent permitted by law, the personal
representative of such member is hereby authorized to, and shall,
within 90 days after the occurrence of the event that terminated
the continued membership of such member in the Company, agree in
writing (i) to continue the Company and (ii) to the admission of
the personal representative or its nominee or designee, as the
case may be, as a substitute member of the Company, effective as
of the occurrence of the event that terminated the continued
membership of the last remaining member of the Company in the
Company.
(b) Notwithstanding any other provision of this Agreement,
the Bankruptcy of the Member or a Special Member shall not cause
the Member or Special Member, respectively, to cease to be a
member of the Company and upon the occurrence of such an event,
the business of the Company shall continue without dissolution.
(c) In the event of dissolution, the Company shall conduct
only such activities as are necessary to wind up its affairs
(including the sale of the assets of the Company in an orderly
manner), and the assets of the Company shall be applied in the
manner, and in the order of priority, set forth in Section 18-804
of the Act.
(d) The Company shall terminate when (i) all of the assets
of the Company, after payment of or due provision for all debts,
liabilities and obligations of the Company shall have been
distributed to the Member in the manner provided for in this
Agreement and (ii) the Certificate of Formation shall have been
canceled in the manner required by the Act.
Section 25. Waiver of Partition; Nature of Interest.
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Except as otherwise expressly provided in this Agreement, to
the fullest extent permitted by law, each of the Member and the
Special Members hereby irrevocably waives any right or power that
such Person might have to cause the Company or any of its assets
to be partitioned, to cause the appointment of a receiver for all
or any portion of the assets of the Company, to compel any sale
of all or any portion of the assets of the Company pursuant to
any applicable law or to file a complaint or to institute any
proceeding at law or in equity to cause the dissolution,
liquidation, winding up or termination of the Company. The
Member shall not have any interest in any specific assets of the
Company, and the Member shall not have the status of a creditor
with respect to any distribution pursuant to Section 16 hereof.
The interest of the Member in the Company is personal property.
Section 26. Benefits of Agreement; No Third-Party Rights.
None of the provisions of this Agreement shall be for the
benefit of or enforceable by any creditor of the Company or by
any creditor of the Member or a Special Member. Nothing in this
Agreement shall be deemed to create any right in any Person
(other than Covered Persons) not a party hereto, and this
Agreement shall not be construed in any respect to be a contract
in whole or in part for the benefit of any third Person (except
as provided in Section 29).
Section 27. Severability of Provisions.
Each provision of this Agreement shall be considered
severable and if for any reason any provision or provisions
herein are determined to be invalid, unenforceable or illegal
under any existing or future law, such invalidity,
unenforceability or illegality shall not impair the operation of
or affect those portions of this Agreement which are valid,
enforceable and legal.
Section 28. Entire Agreement.
This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof.
Section 29. Binding Agreement.
Notwithstanding any other provision of this Agreement, the
Member agrees that this Agreement, including, without limitation,
Sections 7, 8, 9, 10, 20, 21, 22, 23, 24, 26, 29 and 31,
constitutes a legal, valid and binding agreement of the Member,
and is enforceable against the Member by the Independent
Directors, in accordance with its terms. In addition, the
Independent Directors shall be intended beneficiaries of this
Agreement.
Section 30. Governing Law.
This Agreement shall be governed by and construed under the
laws of the State of Delaware (without regard to conflict of laws
principles), all rights and remedies being governed by said laws.
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Section 31. Amendments.
Subject to Section 9(j), this Agreement may be modified,
altered, supplemented or amended pursuant to a written agreement
executed and delivered by the Member. Notwithstanding anything
to the contrary in this Agreement, so long as any Obligation is
outstanding, this Agreement may not be modified, altered,
supplemented or amended unless the Rating Agency Condition is
satisfied by all Rating Agencies other than Moody's (and prior
written notice of such action shall be provided to Moody's)
except: (i) to cure any ambiguity or (ii) to convert or
supplement any provision in a manner consistent with the intent
of this Agreement and the other Basic Documents.
Section 32. Counterparts.
This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original of this
Agreement and all of which together shall constitute one and the
same instrument.
Section 33. Notices.
Any notices required to be delivered hereunder shall be in
writing and personally delivered, mailed or sent by telecopy,
electronic mail or other similar form of rapid transmission, and
shall be deemed to have been duly given upon receipt (a) in the
case of the Company, to the Company at its address in Section 2,
(b) in the case of the Member, to the Member at its address as
listed on Schedule B attached hereto and (c) in the case of
either of the foregoing, at such other address as may be
designated by written notice to the other party.
Section 34. Effectiveness.
Pursuant to Section 18-201 (d) of the Act, this Agreement
shall be effective as of November 3, 1999.
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IN WITNESS WHEREOF, the undersigned, intending to be legally
bound hereby, has duly executed this Amended and Restated Limited
Liability Company Agreement as of the 3rd day of November, 1999.
MEMBER:
WEST PENN FUNDING CORPORATION
By: /S/ KRISTINE EPPES
Name: Kristine Eppes
Title:
SPECIAL MEMBERS:
/S/ MARK A. FERRUCCI
Name: Mark A. Ferrucci
/S/ KIM E. LUTTHANS
Name: Kim E. Lutthans
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SCHEDULE A
Definitions
A. Definitions
When used in this Agreement, the following terms not
otherwise defined herein have the following meanings:
"Act" has the meaning set forth in the preamble to this
Agreement.
"Administrative Services Agreement" means the Service
Agreement to be dated as of November 16, 1999, between the
Company and Allegheny Energy Service Corporation, as
administrative agent, as the same may be amended or supplemented
from time to time.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly Controlling or Controlled by or
under direct or indirect common Control with such Person.
"Agreement" means this Amended and Restated Limited
Liability Company Agreement of the Company, together with the
schedules attached hereto, as amended, restated or supplemented
or otherwise modified from time to time.
"Bankruptcy" means, with respect to any Person, if such
Person (i) makes an assignment for the benefit of creditors, (ii)
files a voluntary petition in bankruptcy, (iii) is adjudged a
bankrupt or insolvent, or has entered against it an order for
relief, in any bankruptcy or insolvency proceedings, (iv) files a
petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation or similar
relief under any statute, law or regulation, (v) files an answer
or other pleading admitting or failing to contest the material
allegations of a petition filed against it in any proceeding of
this nature, (vi) seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of the Person or
of all or any substantial part of its properties, or (vii) if 120
days after the commencement of any proceeding against the Person
seeking reorganization, arrangement, composition, readjustment,
liquidation or similar relief under any statute, law or
regulation, if the proceeding has not been dismissed, or if
within 90 days after the appointment without such Person's
consent or acquiescence of a trustee, receiver or liquidator of
such Person or of all or any substantial part of its properties,
the appointment is not vacated or stayed, or within 90 days after
the expiration of any such stay, the appointment is not vacated.
The foregoing definition of "Bankruptcy" is intended to replace
and shall supersede and replace the definition of"Bankruptcy" set
forth in Sections 18-101(1) and 18-304 of the Act.
"Basic Documents" means this Agreement, the Certificate of
Formation, the Management Agreement, the Sale Agreement, the Bill
of Sale, the Servicing Agreement, the Indenture (including any
Series Supplement), the Administrative Services Agreement, the
Transition Bonds, the Underwriting Agreement and all documents
and certificates contemplated thereby or delivered in connection
therewith.
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"Bill of Sale" means the Bill of Sale to be dated as of
November 16, 1999, between the Company and the Seller relating to
the sale of the Intangible Transition Property from the Seller to
the Company.
"Board" or "Board of Directors" means the Board of Directors
of the Company.
"Bond Trustee" means Bankers Trust Company, a New York
banking corporation, as bond trustee under the Indenture, or any
successors to the foregoing.
"Certificate of Formation" means the Certificate of
Formation of the Company filed with the Secretary of State of the
State of Delaware on May 26, 1999, as amended or amended and
restated from time to time.
"Class" means, with respect to any Series, any one of the
classes of Transition Bonds of that Series.
"Company" means West Penn Funding LLC, a Delaware limited
liability company.
"Control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting
securities or general partnership or managing member interests,
by contract or otherwise. "Controlling" and "Controlled" shall
have correlative meanings. Without limiting the generality of
the foregoing, a Person shall be deemed to Control any other
Person in which it owns, directly or indirectly, a majority of
the ownership interests.
"Covered Persons" has the meaning set forth in Section
20(a).
"Customers" means each person that (i) was a customer of
West Penn located within West Penn's retail electric service
territory on January 1, 1997 or that became a customer of
electric services within such territory after January 1, 1997,
(ii) is still located within such territory, and (iii) is in a
Rate Schedule that has been assigned stranded cost
responsibility.
"Directors" means the Persons elected to the Board of
Directors from time to time by the Member, including the
Independent Directors, in their capacity as managers of the
Company. A Director is hereby designated as a "manager" of the
Company within the meaning of Section 18-101(10) of the Act.
"Indenture" means the indenture to be dated as of
November 16, 1999, between the Company and the Bond Trustee, as
the same may be amended and supplemented from time to time,
including by any Series Supplement.
"Independent Director" means a natural person who, for the
five-year period prior to his or her appointment as Independent
Director has not been, and during the continuation of his or her
service as Independent Director is not: (i) an employee,
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director, stockholder, partner or officer of the Company or any
of its Affiliates (other than his or her service as an
Independent Director of the Company); (ii) a customer or supplier
of the Company or any of its Affiliates; or (iii) any member of
the immediate family of a person described in (i) or (ii).
"Intangible Transition Charges" means the amounts authorized
by the PUC to be imposed on all Customer bills with respect to
the Intangible Transition Property and collected, through a non-
bypassable mechanism, by West Penn or its successor or by any
other entity which provides electric service to Customers, to
recover Qualified Transition Expenses pursuant to the Qualified
Rate Order.
"Intangible Transition Property" means the irrevocable right
of West Penn or its successor or assignee to collect Intangible
Transition Charges from Customers to recover the Qualified
Transition Expenses described in the Qualified Rate Order,
including all right, title and interest of West Penn or its
successor or assignee in such order and in all revenues,
collections, claims, payments, money or proceeds of or arising
from Intangible Transition Charges pursuant to such order, and
all proceeds of any of the foregoing.
"Management Agreement" means the agreement of the Directors
in the form attached hereto as Schedule C. The Management
Agreement shall be deemed incorporated into, and a part of, this
Agreement.
"Material Action" means to consolidate or merge the Company
with or into any Person, or sell all or substantially all of the
assets of the Company, or to institute proceedings to have the
Company be adjudicated bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against the
Company or file a petition seeking, or consent to, reorganization
or relief with respect to the Company under any applicable
federal or state law relating to bankruptcy, or consent to the
appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Company or a
substantial part of its property, or make any assignment for the
benefit of creditors of the Company, or admit in writing the
Company's inability to pay its debts generally as they become
due, or, to the fullest extent permitted by law, take action in
furtherance of any such action, or dissolve or liquidate the
Company.
"Member" means West Penn Funding Corporation, as the member
of the Company, and includes any Person admitted as an additional
member of the Company or a substitute member of the Company
pursuant to the provisions of this Agreement, each in its
capacity as a member of the Company; provided, however, the term
"Member" shall not include the Special Members.
"Obligations" shall mean the indebtedness, liabilities and
obligations of the Company under or in connection with this
Agreement, the other Basic Documents or any related document in
effect as of any date of determination.
"Officer" means an officer of the Company described in
Section 11.
A-3
<PAGE>
"Officer's Certificate" means a certificate signed by any
Officer of the Company who is authorized to act for the Company
in matters relating to the Company.
"Person" means any individual, corporation, partnership,
joint venture, limited liability company, limited liability
partnership, association, joint stock company, trust,
unincorporated organization, or other organization, whether or
not a legal entity, and any governmental authority.
"PUC" means the Pennsylvania Public Utility Commission or
any successor.
"Qualified Rate Order" means the order of the PUC issued on
November 19, 1998, as supplemented by a supplemental qualified
rate order of the PUC issued on August 12, 1999, adopted in
accordance with the Statute, which, among other things, creates
the Intangible Transition Property and authorizes the imposition
and collection of the Intangible Transition Charges by West Penn
or its assignee.
"Qualified Transition Expenses" has the meaning assigned to
that term in the Qualified Rate Order.
"Rate Schedule" means each of the rate schedules into which
Customers are divided as of the date hereof, as such rate
schedules may be reconfigured from time to time.
"Rating Agency" means any rating agency rating the
Transition Bonds of any Class or Series at the time of issuance
thereof at the request of the Company. If no such organization
or successor is any longer in existence, "Rating Agency" shall be
a nationally recognized statistical rating organization or other
comparable Person designated by the Company, notice of which
designation shall be given to the Bond Trustee under the
Indenture and the Servicer.
"Rating Agency Condition" means, with respect to any action,
the notification in writing by each Rating Agency to West Penn,
the Seller, the Servicer, the Bond Trustee and the Company that
such action will not result in a reduction or withdrawal of the
then current rating by such Rating Agency of any outstanding
Series or Class of Transition Bonds issued by the Company.
"Sale Agreement" means the Intangible Transition Property
Sale Agreement to be dated as of November 16, 1999, between the
Seller and the Company, relating to the sale of Intangible
Transition Property to the Company, as the same may be amended or
supplemented from time to time.
"Seller" means West Penn Funding Corporation and its
successors in interest to the extent permitted under the Sale
Agreement.
"Series" means any series of Transition Bonds issued by the
Company.
A-4
<PAGE>
"Series Supplement" means an indenture supplemental to the
Indenture that authorizes a particular Series of Transition
Bonds.
"Servicer" means West Penn, as the servicer of the
Intangible Transition Property, and each successor to West Penn
(in the same capacity) pursuant to Section 5.03 or 6.04 of the
Servicing Agreement.
"Servicing Agreement" means the Servicing Agreement to be
dated as of November 16, 1999, between the Company and the
Servicer, as the same may be amended and supplemented from time
to time.
"Special Member" means, upon such person's admission to the
Company as a member of the Company pursuant to Section 5(c), a
person acting as Independent Director, in such person's capacity
as a member of the Company. A Special Member shall only have the
rights and duties expressly set forth in this Agreement.
"Statute" means the Pennsylvania Electricity Generation
Customer Choice and Competition Act, Chapter 28 of Title 66 of
the Pennsylvania Consolidated Statutes, 66 Pa. C.S., '2801, et
seq.
"Transition Bonds" means "transition bonds" (as defined in
the Statute) issued by the Company.
"Underwriting Agreement" means the Underwriting Agreement to
be dated as of November 3, 1999, among West Penn, the Seller, the
Company and the underwriters named therein.
"West Penn" means West Penn Power Company, a Pennsylvania
corporation.
B. Rules of Construction
Definitions in this Agreement apply equally to both the
singular and plural forms of the defined terms. The words
"include" and "including" shall be deemed to be followed by the
phrase "without limitation." The terms "herein," "hereof" and
"hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular Section, paragraph
or subdivision. The Section titles appear as a matter of
convenience only and shall not affect the interpretation of this
Agreement. All Section, paragraph, clause, Exhibit or Schedule
references not attributed to a particular document shall be
references to such parts of this Agreement.
A-5
<PAGE>
SCHEDULE B
Member
Agreed Value Membership
Name Mailing Address of Capital Interest
Contribution
West Penn 2325B Renaissance Dr.
Funding Las Vegas, Nevada $3,000,000 100%
Corporation 89119
B-1
<PAGE>
SCHEDULE C
Management Agreement
November 3, 1999
Management Agreement --West Penn Funding LLC
For good and valuable consideration, each of the undersigned
Persons, who have been designated as directors of West Penn
Funding LLC, a Delaware limited liability company (the
"Company"), in accordance with the Amended and Restated Limited
Liability Company Agreement of the Company, dated as of
November 3, 1999, as it may be amended or restated from time to
time (the "LLC Agreement"), hereby agree as follows:
1. Each of the undersigned accepts such Person's rights
and authority as a Director under the LLC Agreement and agrees to
perform and discharge such Person's duties and obligations as a
Director under the LLC Agreement, and further agrees that such
rights, authorities, duties and obligations under the LLC
Agreement shall continue until such Person's successor as a
Director is designated or until such Person's resignation or
removal as a Director in accordance with the LLC Agreement. Each
of the undersigned agrees and acknowledges that it has been
designated as a "manager" of the Company within the meaning of
the Delaware Limited Liability Company Act.
2. So long as any Obligation is outstanding, each of the
undersigned agrees, solely in its capacity as a creditor of the
Company on account of any indemnification or other payment owing
to the undersigned by the Company, not to acquiesce, petition or
otherwise invoke or cause the Company to invoke the process of
any court or governmental authority for the purpose of commencing
or sustaining a case against the Company under any federal or
state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of the Company or any substantial part
of the property of the Company, or ordering the winding up or
liquidation of the affairs of the Company.
3. THIS MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
Initially capitalized terms used and not otherwise defined
herein have the meanings set forth in the LLC Agreement.
This Management Agreement may be executed in any number of
counterparts, each of which shall be deemed an original of this
Management Agreement and all of which together shall constitute
one and the same instrument.
C-1
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Management Agreement as of the day and year first above written.
/S/ BRUCE M. SEDLOCK
Bruce M. Sedlock
/S/ TERENCE A. BURKE
Terence A. Burke
/S/ THOMAS C. SHEPPARD, JR.
Thomas C. Sheppard, Jr.
/S/ MARK A. FERRUCCI
Mark A. Ferrucci
/S/ KIM E. LUTTHANS
Kim E. Lutthans
C-2
<PAGE>
SCHEDULE D
DIRECTORS
1. Bruce M. Sedlock
2. Terence A. Burke
3. Thomas C. Sheppard, Jr.
4. Mark A. Ferrucci
5. Kim E. Lutthans
C-3
<PAGE>
SCHEDULE E
OFFICERS TITLE
Michael P. Morrell President
Anthony Wilson Vice President
Keith L. Warchol Treasurer
Eileen Beck Secretary
Robert W. Grier Vice President and
Assistant Treasurer
Kristine W. Eppes Vice President and
Assistant Secretary
Thomas C. Sheppard, Jr. Assistant Secretary
C-4
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
ALLEGHENY ENERGY SOLUTIONS, INC.
The undersigned, a natural person, for the purpose of
organizing a corporation for conducting the business and
promoting the purposes hereinafter stated, under the provisions
and subject to the requirements of the laws of the State of
Delaware (particularly Chapter 1, Title 8 of the Delaware Code
and the acts amendatory thereof and supplemental thereto, and
known, identified, and referred to as the "General Corporation
Law of the State of Delaware"), hereby certifies that:
FIRST: The name of this Corporation shall be:
ALLEGHENY ENERGY SOLUTIONS, INC.
SECOND: Its registered office in the State of Delaware
is to be located at 1013 Centre Road, in the City of Wilmington,
in the County of New Castle and its Registered Agent at such
address is The Prentice-Hall Corporation System, Inc.
THIRD: The nature of the business and the objects and
purposes proposed to be transacted, promoted and carried on are
to do any or all things herein mentioned, as fully and to the
same extent as natural persons might or could do, and in any part
of the world, viz:
The purpose of the corporation is to engage in any
lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware as
presently enacted and as may hereafter be amended.
FOURTH: The total number of share of stock which this
corporation is authorized to issue is:
1,000 Share of common stock at No Par Value
<PAGE>
FIFTH: The name and address of the incorporator is as
follows:
Carol G. Russ
C/o Allegheny Power Service Corporation
800 Cabin Hill Drive
Greensburg, PA 15601
SIXTH: The Directors shall have power to make and to
alter or amend the By-Laws: to fix the amount to be reserved as
working capital, and to authorize and cause to be executed,
mortgages and liens without limit as to the amount, upon the
property and franchise of this Corporation.
With the consent in writing, and pursuant to a majority
vote of the holder of the capital stock issued and outstanding,
the Directors shall have authority to dispose, in any manner, of
the whole property of this Corporation.
The By-Laws shall determine whether and to what extent
the account and books of this corporation, or any of them, shall
be open to the inspection of the stockholders: no stockholder
shall have any right of inspecting any account, or book, or
document of this Corporation, except as conferred b the law or
the By-Laws, or by resolution of the stockholders.
The stockholders and directors shall have power to hold
their meetings and keep the books, documents and papers of the
corporation outside of the State of Delaware, at such places as
my be, from time to time, designated b the By-Laws or by
resolution of the stockholder or directors, except as otherwise
required b the laws of Delaware.
It is the intention that the object, purposes and
powers specified in the THIRD paragraph hereof shall, except
where otherwise specified in said paragraph, be nowise limited or
restricted by reference to or inference from the terms of any
other clause or paragraph in this certificate of incorporation,
but that the object, purposes and powers specified in the THIRD
paragraph and in each of the clauses or paragraphs of this
charter shall be regarded as independent objects, purposes and
powers.
<PAGE>
SEVENTH: No director of the Corporation shall be
liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to
the Corporation or its stockholders. (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a
knowing violation of law. (iii) under section 174 of the General
Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal
benefit.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 22nd day of July, A.D. 1997.
/s/ Carol G. Russ
Carol G. Russ
EXHIBIT 3.2
BY-LAWS
of
ALLEGHENY ENERGY SOLUTIONS, INC.
As Amended to August 5, 1997
ARTICLE I - OFFICES
SECTION 1. REGISTERED OFFICE. The registered office shall
be established and maintained at 1013 Centre Road, City of
Wilmington, County of New Castle, in the State of Delaware, and
its Registered Agent at such address is Corporation Service
Company.
SECTION 2. OTHER OFFICES. The corporation may have other
offices, either within or without the State of Delaware, at such
place or places as the Board of Directors may from time to time
appoint or the business of the corporation may require.
ARTICLE II - MEETING OF STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. Annual meetings of
stockholders for the election of directors and for such other
business as may be stated in the notice of the meeting, shall be
held at such place, either within or without the State of
Delaware, and at such time and date as the Board of Directors, by
resolution, shall determine and as set forth in the notice of the
meeting. In the event the Board of Directors fails to so
determine the time, date and place of meeting, the annual meeting
of stockholders shall be held at the offices of Allegheny Power
System, Inc., 10435 Downsville Pike, Hagerstown, Maryland, on the
last Tuesday in February of each year.
If the date of the annual meeting shall fall upon a legal
holiday, the meeting shall be held on the next succeeding
business day. At each annual meeting, the stockholders entitled
to vote shall elect a Board of Directors and may transact such
other corporate business as shall be stated in the notice of the
meeting.
SECTION 2. OTHER MEETINGS. Meetings of stockholders for
any purpose other than the election of directors may be held at
such time and place, within or without the State of Delaware, as
shall be stated in the notice of the meeting.
SECTION 3. VOTING. Each stockholder entitled to vote in
accordance with the terms and provisions of the Certificate of
Incorporation and these By-Laws shall be entitled to one vote, in
person or by proxy, for each share of stock entitled to vote held
by such stockholder, but no proxy shall be voted after three
years from its date unless such proxy provides for a
<PAGE>
longer period. Upon the demand of any stockholder, the vote for
directors and upon any question before the meeting shall be by
ballot. All elections for directors shall be decided by
plurality vote; all other questions shall be decided by majority
vote except as otherwise provided by the Certificate of
Incorporation or the laws of the State of Delaware.
SECTION 4. STOCKHOLDER LIST. The officer who has charge of
the stock ledger of the corporation shall at least ten days
before each meeting of stockholders prepare a complete
alphabetical addressed list of the stockholders entitled to vote
at the ensuing election, with the number of shares held by each.
Said list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting,
either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting
is to be held. The list shall be available for inspection at the
meeting.
SECTION 5. QUORUM. Except as otherwise required by law, by
the Certificate of Incorporation or by these By-Laws, the
presence, in person or by proxy, of stockholders holding a
majority of the stock of the corporation entitled to vote shall
constitute a quorum at all meetings of the stockholders. In case
a quorum shall not be present at any meeting, a majority in
interest of the stockholders entitled to vote thereat, present in
person or by proxy, shall have power to adjourn the meeting from
time to time, without notice other than announcement at the
meeting, until the requisite amount of stock entitled to vote
shall be present. At any such adjourned meeting at which the
requisite amount of stock entitled to vote shall be represented,
any business may be transacted which might have been transacted
at the meeting as originally noticed; but only those stockholders
entitled to vote at the meeting as originally noticed shall be
entitled to vote at any adjournment or adjournments thereof.
SECTION 6. SPECIAL MEETINGS. Special meetings of the
stockholders, for any purpose, unless otherwise prescribed by
statute or by the Certificate of Incorporation, may be called by
the president and shall be called by the president or secretary
at the request in writing of a majority of the directors or
stockholders entitled to vote. Such request shall state the
purpose of the proposed meeting.
SECTION 7. NOTICE OF MEETINGS. Written notice, stating the
place, date and time of the meeting, and the general nature of
the business to be considered, shall be given to each stockholder
entitled to vote thereat at his address at it appears on the
records of the corporation, not less than ten nor more than fifty
days before the date of the meeting.
SECTION 8. BUSINESS TRANSACTED. No business other than
that stated in the notice shall be transacted at any meeting
without the unanimous consent of all the stockholders entitled to
vote thereat.
SECTION 9. ACTION WITHOUT MEETING. Except as otherwise
provided by the Certificate of Incorporation, whenever the vote
of stockholders at a meeting thereof is required or permitted to
be taken in connection with any corporate action by any
provisions of the statutes or the Certificate of Incorporation or
<PAGE>
of these By-Laws, the meeting and vote of stockholders may be
dispensed with, if all the stockholders who would have been
entitled by vote upon the action if such meeting were held, shall
consent in writing to such corporate action being taken.
ARTICLE III - DIRECTORS
SECTION 1. NUMBER, ELECTION AND TERM OF OFFICE. The Board
of Directors shall consist initially of three directors, and
thereafter shall consist of such number of directors, not less
than three nor more than nine, as the Board of Directors shall
determine from time to time. The directors shall be elected at
the annual meeting of the stockholders and each director shall be
elected to serve until his or her successor shall be elected and
shall qualify.
SECTION 2. RESIGNATIONS. Any director, member of a
committee or other officer may resign at any time. Such
resignation shall be made in writing, and shall take effect at
the time specified therein, and if no time be specified, at the
time of its receipt by the President or Secretary. The
acceptance of a resignation shall not be necessary to make it
effective.
SECTION 3. VACANCIES. If the office of any director,
member of a committee or other officer becomes vacant, the
remaining directors in office, though less than a quorum by a
majority vote, may appoint any qualified person to fill such
vacancy, who shall hold office for the unexpired term and until
his or her successor shall be duly chosen.
SECTION 4. REMOVAL. Any director or directors may be
removed either for or without cause at any time by the
affirmative vote of the holders of a majority of all the shares
of stock outstanding and entitled to vote, at a special meeting
of the stockholders called for the purpose and the vacancies thus
created may be filled, at the meeting held for the purpose of
removal, by the affirmative vote of a majority in interest of the
stockholders entitled to vote.
SECTION 5. INCREASE OF NUMBER. The number of directors may
be increased by amendment of these By-Laws by the affirmative
vote of a majority of the directors, though less than a quorum,
or, by the affirmative vote of a majority in interest of the
stockholders, at the annual meeting or at a special meeting
called for that purpose, and by like vote the additional
directors may be chosen at such meeting to hold office until the
next annual election and until their successors are elected and
qualify.
SECTION 6. COMPENSATION. Directors shall not receive any
stated salary for their services as directors or as members of
committees, but by resolution of the board a fixed fee and
expenses of attendance may be allowed for attendance at each
meeting. Nothing herein contained shall be construed to preclude
any director from serving the corporation in any other capacity
as an officer, agent or otherwise, and receiving compensation
therefor.
SECTION 7. TELEPHONE PARTICIPATION. One or more directors
may participate in a meeting of the Board of Directors by means
of conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear
<PAGE>
each other. Participation in a meeting pursuant to this section
shall constitute presence in person at the meeting.
SECTION 8. ACTION WITHOUT MEETING. Any action required or
permitted to be taken at any meeting of the Board of Directors,
or of any committee thereof, may be taken without a meeting, if
prior to or subsequent to such action a written consent thereto
is signed by all members of the board, or of such committee as
the case may be, and such written consent is filed with the
minutes of the board or committee.
SECTION 9. EXECUTIVE AND OTHER COMMITTEES. The Board may
create an Executive Committee and one or more other committees
each consisting of not less than three directors. Each other
Committee shall have such authority as the Board shall give it.
The Board may appoint one or more directors as alternate members
of the Executive Committee or any other Committee to take the
place of any absent member or members at any meeting thereof.
The Executive Committee and each other Committee may act by a
writing or writings signed by all its members or by means of
conference telephone or similar communications equipment by which
all persons participating can simultaneously hear each other.
Participation in a meeting by these communications means
constitutes presence in person at the meeting. The Executive
Committee, except when the Board of Directors is in session,
shall possess and exercise all of the authority and powers of the
Board of Directors however conferred, other than that of filling
vacancies among the directors or in any committee of the
directors.
ARTICLE IV - OFFICERS
SECTION 1. OFFICERS. The officers of the corporation shall
consist of a President and a Secretary, and shall be elected by
the Board of Directors and shall hold office until their
successors are elected and qualified. In addition, the Board of
Directors may elect a Chairman, Treasurer, one or more Vice
Presidents, a Comptroller and such Assistant Secretaries and
Assistant Treasurers as it may deem proper. None of the officers
of the corporation need be directors. The officers shall be
elected at the first meeting of the Board of Directors after each
annual meeting. More than two offices may be held by the same
person.
SECTION 2. OTHER OFFICERS AND AGENTS. The Board of
Directors may appoint such officers and agents as it may deem
advisable, who shall hold their offices for such terms and shall
exercise such power and perform such duties as shall be
determined from time to time by the Board of Directors.
SECTION 3. CHAIRMAN. The Chairman of the Board of
Directors if one be elected, shall preside at all meetings of the
Board of Directors and he shall have and perform such other
duties as from time to time may be assigned to him by the Board
of Directors.
SECTION 4. PRESIDENT. The President shall be the chief
executive officer of the corporation and shall have the general
powers and duties of supervision and management usually vested in
<PAGE>
the office of President of a corporation. He shall preside at
all meetings of the stockholders if present there at, and in the
absence or non-election of the Chairman of the Board of
Directors, at all meetings of the Board of Directors, and shall
have general supervision, direction and control of the business
of the corporation except as the Board of Directors shall
authorize the execution thereof in some other manner, he shall
execute bonds, mortgages, and other contracts in behalf of the
corporation, and shall cause the seal to be affixed to any
instrument requiring it and when so affixed the seal shall be
attested by the signature of the Secretary or the Treasurer or an
Assistant Secretary or an Assistant Treasurer.
SECTION 5. VICE PRESIDENT. Each Vice President shall have
such powers and shall perform such duties as shall be assigned to
him by the directors.
SECTION 6. TREASURER. The Treasurer shall have the custody
of the corporate funds and securities and shall keep full and
accurate account of receipts and disbursements in books belonging
to the corporation. He shall deposit all moneys and other
valuables in the name and to the credit of the corporation in
such depositories as may be designated by the Board of Directors.
The Treasurer shall disburse the funds of the corporation as
may be ordered by the Board of Directors, or the President,
taking proper vouchers for such disbursements. He shall render
to the President and Board of Directors at the regular meetings
of the Board of Directors, or whenever they may request it, an
account of all his transactions as Treasurer and of the financial
condition of the corporation. If required by the Board of
Directors, he shall give the corporation a bond for the faithful
discharge of this duties in such amount and with such surety as
the board shall prescribe.
SECTION 7. SECRETARY. The Secretary shall give, or cause
to be given, notice of all meetings of stockholders and
directors, and all other notices required by law or by these By-
Laws, and in case of his or her absence or refusal or neglect so
to do, any such notice may be given by any person thereunto
directed by the President, or by the directors, or stockholders,
upon whose requisition the meeting is called as provided in these
By-Laws. The Secretary shall record all the proceedings of the
meetings of the corporation and of directors in a book to be kept
for that purpose. The Secretary shall keep in safe custody the
seal of the corporation, and when authorized by the Board of
Directors, affix the same to any instrument requiring it, and
when so affixed, it shall be attested by his or her signature or
by the signature of any assistant secretary.
SECTION 8. ASSISTANT TREASURERS & ASSISTANT SECRETARIES.
Assistant Treasurers and Assistant Secretaries, if any, shall be
elected and shall have such powers and shall perform such duties
as shall be assigned to them, respectively, by the directors.
ARTICLE V - INDEMNIFICATION OF DIRECTORS AND OFFICERS
SECTION 6.1 . The Corporation shall indemnify any person
who was or is a party or is threatened with being made a party to
any threatened, pending or completed action, suit or proceeding,
<PAGE>
whether civil, criminal, administrative or investigative,
including all appeals (other than an action, suit or proceeding
by or in the right of the Corporation) by reason of the fact that
he is or was a director, officer or employee of the Corporation,
or is or was serving at the request of the Corporation as a
director, officer or employee of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, decrees, fines,
penalties and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not of itself create a
presumption that the person did not act in good faith or in a
manner which he reasonably believed to be in or not opposed to
the best interests of the Corporation or, with respect to any
criminal action, suit or proceeding, that he had reasonable cause
to believe that his conduct was unlawful.
SECTION 6.2. The Corporation shall indemnify any person who
was or is a party or is threatened with being made a party to any
threatened, pending or completed action, suit or proceeding,
including all appeals, by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he is
or was a director, officer or employee of the Corporation, or is
or was serving at the request of the Corporation as a director,
officer or employee of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including
attorneys' fees, judgments, decrees, fines, penalties and amounts
paid in settlement) actually and reasonably incurred by him in
connection with the defense or settlement of such action, suit or
proceeding. However, indemnification under this Section shall be
made only if the person to be indemnified acted in good faith and
in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation; and no such indemnification
shall be made in respect of any claim, issue or matter as to
which such person shall have been finally adjudged to be liable
for negligence or misconduct in the performance of his duty to
the Corporation unless, and only to the extent that, the court or
body in or before which such action, suit or proceeding was
finally determined, or any court of competent jurisdiction, shall
determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnify for such
expenses or other amounts paid as such court or body shall deem
proper.
SECTION 6.3. Without limiting the right of any director,
officer or employee of the Corporation to indemnification under
any other Section hereof, if such person has been substantially
and finally successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in Sections 6.1. and
6.2. or in defense of any claim, issue, or matter therein, he
shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
SECTION 6.4. Any indemnification under Sections 6.1. and
6.2. (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer or employee is proper in
<PAGE>
the circumstances because he has met the applicable standard of
conduct set forth in Sections 6.1. and 6.2. Such determination
shall be made (1) by the Board of Directors by a majority vote of
a quorum consisting of directors who are or were not parties to
or threatened with such action, suit or proceeding, or (2) if
such a quorum is not obtainable, or even if obtainable, if a
majority of a quorum of disinterested directors so directs, by
independent legal counsel (compensated by the Corporation) in a
written opinion, or (3) if there be no disinterested directors,
or if a majority of the disinterested directors, whether or not a
quorum, so directs, by the holders of a majority of the shares
entitled to vote in the election of directors without reference
to default or contingency which would permit the holders of one
or more classes of shares to vote for the election of one or more
directors.
SECTION 6.4.1. Indemnification may be granted for any
action taken or for any failure to take any action giving rise to
the claim for indemnification, and may be made whether or not the
Corporation would have the power to indemnify the person under
any other provision except as provided by this Section, and
whether or not the indemnified liability arises or arose from any
threatened, pending, or completed action by or in the right of
the Corporation. However, such indemnification shall not be made
in any case where the act or failure to act giving rise to the
claim for indemnification is finally determined by a court to
have constituted willful misconduct or recklessness.
SECTION 6.5. Expenses of each person indemnified hereunder
incurred in defending a civil, criminal, administrative or
investigative action, suit, or proceeding (including all appeals)
or threat thereof, may be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding as
authorized by the Board of Directors, whether a disinterested
quorum exists or not, upon receipt of an undertaking by or on
behalf of the director, officer or employee to repay such
expenses unless it shall ultimately be determined that he is
entitled to be indemnified by the Corporation.
SECTION 6.6. The indemnification provided by this Article
shall not be deemed exclusive of or in any way limit any other
rights to which any person indemnified may be or may become
entitled as a matter of law, by the articles, regulations,
agreements, insurance, vote of shareholders or otherwise, with
respect to action in his official capacity and with respect to
action in another capacity while holding such office and shall
continue as to a person who has ceased to be a director, officer,
or employee and shall inure to the benefit of the heirs,
executors, administrators and other legal representatives of such
person.
SECTION 6.7. Sections 6.1. through 6.6. of this Article
shall also apply to such other agents of the Corporation as are
designated for such purpose at any time by the Board of
Directors.
SECTION 6.8. If any part of this Article shall be found, in
any action, suit or proceeding, to be invalid or ineffective, the
validity and the effect of the remaining parts shall not be
effected.
<PAGE>
SECTION 6.9. The provisions of this Article shall be
applicable to claims, actions, suits or proceedings made or
commenced after the adoption hereof, whether arising from acts or
omissions to act occurring before or after the adoption hereof.
ARTICLE VI
SECTION 1. CERTIFICATES OF STOCK. Every holder of stock in
the corporation shall be entitled to have a certificate, signed
by, or in the name of the corporation by, the chairman, or vice
chairman of the board of directors, or the president or a vice
president and the treasurer or an assistant treasurer, or the
secretary of the corporation, certifying the number of shares
owned by him in the corporation. If the corporation shall be
authorized to issue more than one class of stock or more than one
series of any class, the designations, preferences and relative,
participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations, or
restrictions of such preferences and/or rights shall be set forth
in full or summarized on the face or back of the certificate
which the corporation shall issue to represent such class of
series of stock, provided that, except as otherwise provided in
Section 202 of the General Corporation Law of Delaware, in lieu
of the foregoing requirements, there may be set forth on the face
or back of the certificate which the corporation shall issue to
represent such class or series of stock, a statement that the
corporation will furnish without charge to each stockholder who
so requests the powers, designations, preferences and relative,
participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Where a
certificate is countersigned (1) by a transfer agent other than
the corporation or its employee, or (2) by a registrar other than
the corporation or its employee, the signatures of such officers
may be facsimiles.
SECTION 2. LOST CERTIFICATES. New certificates of stock
may be issued in the place of any certificate therefore issued by
the corporation, alleged to have been lost or destroyed, and the
directors may, at their discretion, require the owner of the lost
or destroyed certificate or his legal representatives, to give
the corporation a bond, in such sum as they may direct, not
exceeding double the value of the stock, to indemnify the
corporation against it on account of the alleged loss of any such
new certificate.
SECTION 3. TRANSFER OF SHARES. The shares of stock of the
corporation shall be transferable only upon its books by the
holders thereof in person or by their duly authorized attorneys
or legal representatives, and upon such transfer the old
certificates shall be surrendered to the corporation by the
delivery thereof to the person in charge of the stock and
transfer books and ledgers, or to such other persons as the
directors may designate, by who they shall be canceled, and new
certificates shall thereupon be issued. A record shall be made
of each transfer and whenever a transfer shall be made for
collateral security, and not absolutely, it shall be so expressed
in the entry of the transfer.
SECTION 4. STOCKHOLDERS RECORD DATE. In order that the
corporation may determine the stockholders entitled to notice of
<PAGE>
or to vote at any meeting of stockholders or any adjournment
thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend
or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or
exchange of stock or for the purpose of any other lawful action,
the Board of Directors may fix, in advance, a record date, which
shall not be more than sixty nor less than ten days before the
day of such meeting, nor more than sixty days prior to any other
action. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board
of Directors may fix a new record for the adjourned meeting.
SECTION 5. DIVIDENDS. Subject to the provisions of the
Certificate of Incorporation the Board of Directors may, out of
funds legally available therefor at any regular or special
meeting, declare dividends upon the capital stock of the
corporation as and when they deem expedient. Before declaring
any dividends there may be set apart out of any funds of the
corporation available for dividends, such sum or sums as the
directors from time to time at their discretion deem proper
working capital or as a reserve fund to meet contingencies or for
equalizing dividends or for such other purposes as the directors
shall deem conducive to the interests of the corporation.
SECTION 6. SEAL. The corporate seal shall be circular in
form and shall contain the name of the corporation, the year of
its creation and the words "CORPORATE SEAL DELAWARE." Said seal
may be used by causing it or a facsimile thereof to be impressed
or affixed or otherwise reproduced.
SECTION 7. FISCAL YEAR. The fiscal year of the corporation
shall be determined by resolution of the Board of Directors.
SECTION 8. CHECKS. All checks, drafts, or other orders for
the payment of money, notes or other evidences of indebtedness
issued in the name of the corporation shall be signed by the
officer or officers, agent or agents of the corporation, and in
such manner as shall be determined from time to time by
resolution of the Board of Directors.
SECTION 9. NOTICE AND WAIVER OF NOTICE. Whenever any
notice is required by these By-Laws to be given, personal notice
is not meant unless expressly stated, and any notice so required
shall be deemed to be sufficient if given by depositing the same
in the United States mail, postage prepaid, addressed to the
person entitled thereto at his address as it appears on the
records of the corporation, and such notice shall be deemed to
have been given on the day of such mailing. Stockholders not
entitled to vote shall not be entitled to receive notice of any
meetings except as otherwise provided by statute.
Whenever any notice whatever is required to be given under
the provisions of any law, or under the provisions of the
Certificate of Incorporation of the corporation or these By-Laws,
a waiver thereof in writing signed by the person or persons
entitled to said notice, whether before or after the time stated
therein, shall be deemed proper notice.
<PAGE>
ARTICLE VII - AMENDMENTS
These By-Laws may be altered and repealed and By-Laws may be
made at any annual meeting of the stockholders or at any special
meeting thereof if notice thereof is contained in the notice of
such special meeting by the affirmative vote of a majority of
the stock issued and outstanding or entitled to vote thereat, or
by the Directors, at any regular meeting of the Board of
Directors, or at any special meeting of the Board of Directors,
if notice thereof is contained in the notice of such special
meeting.
EXHIBIT 3.1
Microfilm Number Filed with the Department of State on
Entity Number 2907853
Secretary of the Commonwealth
CERTIFICATE OF ORGANIZATION-DOMESTIC LIMITED LIABILITY COMPANY
DSCB:15-8913 (Rev 95)
In compliance with the requirements of 15 Pa.C.S. 8913 (relating to
certificate of organization), the undersigned, desiring to organize a
limited liability company, hereby state(s) that:
1. The name of the limited liability company is:
West Penn Transferring Agent LLC
2. The (a) address of this limited liability company's initial registered
office in this Commonwealth or (b) name of its commercial registered
office provider and the county of venue is:
(a) RD 12, P.O. Box 1000, Roseytown Road, Greensburg,
Number and Street City
Pennsylvania 15601 Westmoreland
State Zip County
(b)c/o:
Name of Commercial Registered Office Provider
County
For a limited liability company represented by a commercial registered
office provider, the county in (b) shall be deemed the county in which
the limited liability company is located for venue and official
publication purposes.
3. The name and address, including street and number, if any, of each
organizer are:
NAME ADDRESS
Ronald A. Magnuson, RD 12, P.O. Box 1000, Roseytown Road, Greensburg, PA
15601
4. Intentionally omitted.
5. (Strike out if inapplicable): Management of the company is vested in
a manager or managers.
6. The specified effective date, if any is:
month day year
hour, if any
7. Intentionally omitted.
8. For additional provisions of the certificate, if any, attach
an 8 1/2 x 11 sheet.
<PAGE>
IN TESTIMONY WHEREOF, the organizer(s) has (have) signed this
Certificate of Organization this 12th day of November, 1999.
WEST PENN TRANSFERRING AGENT LLC, by
WEST PENN POWER COMPANY, sole member
/s/ Ronald A. Magnuson
By: Ronald A. Magnuson
(Signature)
Vice President
(Signature)
EXHIBIT 3.2
FIRST AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
WEST PENN TRANSFERRING AGENT LLC
This Limited Liability Company Agreement (together with the
schedules attached hereto, this "Agreement") of West Penn
Transferring Agent LLC (the "Company"), is entered into by WEST
PENN POWER COMPANY, a Pennsylvania corporation, as the sole
member (the "Member"). Capitalized terms used and not otherwise
defined herein have the meanings set forth on Schedule A hereto.
The Member, by execution of this Agreement, (i) hereby
establishes the Company as a limited liability company pursuant
to and in accordance with the Pennsylvania Limited Liability
Company Act (15 Pa. C.S. 8901 et seq.), as amended from time to
time (the "Act").
Section 1. Name.
The name of the limited liability company formed hereby is
West Penn Transferring Agent LLC.
Section 2. Principal Business Office.
The principal business office of the Company shall be
located at RD 12, P.O. Box 1000, Roseytown Road, Greensburg,
Pennsylvania 15601.
Section 3. Registered Agent.
The name of the registered agent of the Company for service
of process in the Commonwealth of Pennsylvania is Ronald A.
Magnuson, RD 12, P.O. Box 1000, Roseytown Road, Greensburg,
Pennsylvania 15601.
Section 4. Members.
(a) The mailing address of the Member is set forth on
Schedule B attached hereto.
(b) The Member may act by written consent.
(c) Upon the occurrence of any event that causes the Member
to cease to be a member of the Company (other than (i) upon an
assignment by the Member of all of its limited liability company
interest in the Company and the admission of the transferee
pursuant to Section 20, or (ii) the resignation of the Member and
the admission of an additional member of the Company pursuant to
Section 20), each person acting as a Director pursuant to Section
8 shall, without any action of any Person and simultaneously with
<PAGE>
the Member ceasing to be a member of the Company, automatically
be admitted to the Company as a Member and shall continue the
Company without dissolution.
Section 5. Existence. The existence of the Company as a
separate legal entity shall continue until the Member dissolves
the Company.
Section 6. Purposes.
(a) The Company is formed for the object and purpose of,
and the nature of the business to be conducted and promoted by
the Company is, engaging in any lawful act or activity for which
limited liability companies may be formed under the Act,
including, but not limited to, generating electrical power.
(b) The Company is also formed for the purpose of acting as
sole Member of Allegheny Energy Supply Company, LLC, a Delaware
limited liability company. West Penn Power Company is hereby
authorized, as Member of the Company, to execute any and all
documents necessary to form Allegheny Energy Supply Company, LLC,
as a Delaware limited liability company.
(c) The Company hereby agrees that: (1) any Officer of the
Company be, and they hereby are, authorized for and on behalf of
the Company to designate that a bank account be established to
act as depository for the funds of the Company for and during
such period as they may from time to time deem necessary or
desirable in the interests of the Company and to open or close
out from time to time such account so selected or reselected;
(2) any Officer of the Company be, and they hereby are,
authorized and directed, in the name and on behalf of the
Company, to take any and all action that they may deem necessary
or advisable in order to establish such bank account from time to
time for the efficient conduct of the Company's business;
(3) such bank account be used to initiate funds transfers and
that any Officer of the Company be, and they hereby are,
authorized to sign on such bank account any wire transfer
documents necessary, including those that will designate those
Officers of the Company who may be authorized to initiate wire
transfers by phone from such bank account to West Penn Power
Company's bank account at PNC Bank and from such bank account to
the Company's bank account; (4) any Officer of the Company be,
and they hereby are, authorized and directed, in the name and on
behalf of the Company, to take any and all action that they may
deem necessary or advisable in order to establish such account
from time to time for the efficient conduct of the Company's
business; and (5) any Officer of the Company be, and they hereby
are, authorized to designate those Officers of the Company who
may be authorized from time to time to sign checks on such bank
account.
Section 7. Powers.
Subject to Section 8, the Company, and the Board of
Directors and the Officers of the Company on behalf of the
Company, (i) shall have and exercise all powers necessary,
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convenient or incidental to accomplish its purposes as set forth
in Section 6, and (ii) shall have and exercise all of the powers
and rights conferred upon limited liability companies formed
pursuant to the Act.
Section 8. Management.
(a) Board of Directors. The business and affairs of the
Company shall be managed by or under the direction of a Board of
one or more Directors designated by the Member. The Member may
determine at any time in its sole and absolute discretion the
number of Directors to constitute the Board. The authorized
number of Directors may be increased or decreased by the Member
at any time in its sole and absolute discretion, upon notice to
all Directors. The initial number of Directors shall be three.
Each Director elected, designated or appointed by the Member
shall hold office until a successor is elected and qualified or
until such Director's earlier death, resignation, expulsion or
removal. Directors need not be a Member. The initial Directors
designated by the Member are listed on Schedule C hereto.
(b) Powers. The Board of Directors shall have the power to
do any and all acts necessary, convenient or incidental to or for
the furtherance of the purposes described herein, including all
powers, statutory or otherwise. Subject to Section 6, the Board
of Directors has the authority to bind the Company.
(c) Meeting of the Board of Directors. The Board of
Directors of the Company may hold meetings, both regular and
special, within or outside the Commonwealth of Pennsylvania.
Regular meetings of the Board may be held without notice at such
time and at such place as shall from time to time be determined
by the Board. Special meetings of the Board may be called by the
Chief Executive Officer or President on not less than one day's
notice to each Director by telephone, facsimile, mail, telegram
or any other means of communication, and special meetings shall
be called by the Chief Executive Officer, President or Secretary
in like manner and with like notice upon the written request of
any one or more of the Directors.
(d) Quorum: Acts of the Board. At all meetings of the
Board, a majority of the Directors shall constitute a quorum for
the transaction of business and, except as otherwise provided in
any other provision of this Agreement, the act of a majority of
the Directors present at any meeting at which there is a quorum
shall be the act of the Board. If a quorum shall not be present
at any meeting of the Board, the Directors present at such
meeting may adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be
present. Any action required or permitted to be taken at any
meeting of the Board or of any committee thereof may be taken
without a meeting if all members of the Board or committee, as
the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board
or committee, as the case may be.
(e) Electronic Communications. Members of the Board, or
any committee designated by the Board, may participate in
meetings of the Board, or any committee, by means of telephone
conference or similar communications equipment that allows all
Persons participating in the meeting to hear each other, and such
participation in a meeting shall constitute presence in Person at
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<PAGE>
the meeting. If all the participants are participating by
telephone conference or similar communications equipment, the
meeting shall be deemed to be held at the principal place of
business of the Company.
(f) Committees of Directors.
(i) The Board may, by resolution passed by a majority
of the whole Board, designate one or more
committees, each committee to consist of one or
more of the Directors of the Company. The Board
may designate one or more Directors as alternate
members of any committee, who may replace any
absent or disqualified member at any meeting of
the committee.
(ii) In the absence or disqualification of a member of
a committee, the member or members thereof present
at any meeting and not disqualified from voting,
whether or not such members constitute a quorum,
may unanimously appoint another member of the
Board to act at the meeting in the place of any
such absent or disqualified member.
(iii) Any such committee, to the extent provided in
the resolution of the Board, shall have and may
exercise all the powers and authority of the Board
in the management of the business and affairs of
the Company. Such committee or committees shall
have such name or names as may be determined from
time to time by resolution adopted by the Board.
Each committee shall keep regular minutes of its
meetings and report the same to the Board when
required.
(g) Compensation of Directors; Expenses. The Board shall
have the authority to fix the compensation of Directors. The
Directors may be paid their expenses, if any, of attendance at
meetings of the Board, which may be a fixed sum for attendance at
each meeting of the Board or a stated salary as Director. No
such payment shall preclude any Director from serving the Company
in any other capacity and receiving compensation therefor.
Members of special or standing committees may be allowed like
compensation for attending committee meetings.
(h) Removal of Directors. Unless otherwise restricted by
law, any Director or the entire Board of Directors may be removed
or expelled, with or without cause, at any time by the Member,
and any vacancy caused by any such removal or expulsion may be
filled by action of the Member.
(i) Directors as Agents. To the extent of their powers set
forth in this Agreement and subject to Section 8, the Directors
are agents of the Company for the purpose of the Company's
business, and the actions of the Directors taken in accordance
with such powers set forth in this Agreement shall bind the
Company. Except as provided in this Agreement or in a resolution
of the Directors, a Director may not bind the Company.
4
<PAGE>
Section 9. Officers.
(a) Officers. The initial Officers of the Company shall be
designated by the Member. The additional or successor Officers
of the Company shall be chosen by the Board and shall consist of
at least a Chief Executive Officer, a President, a Secretary and
a Treasurer. The Board of Directors may also choose one or more
Vice Presidents, Assistant Secretaries and Assistant Treasurers.
Any number of offices may be held by the same person. The Board
shall choose a Chief Executive Officer, a President, a Secretary
and a Treasurer. The Board may appoint such other Officers and
agents as it shall deem necessary or advisable who shall hold
their offices for such terms and shall exercise such powers and
perform such duties as shall be determined from time to time by
the Board. The salaries of all Officers and agents of the
Company shall be fixed by or in the manner prescribed by the
Board. The Officers of the Company shall hold office until their
successors are chosen and qualified. Any Officer may be removed
at any time, with or without cause, by the affirmative vote of a
majority of the Board. Any vacancy occurring in any office of
the Company shall be filled by the Board. Upon the effectiveness
of this Agreement, the Officers of the Company designated by the
Member are listed on Schedule D hereto and any persons formerly
appointed as Officers of the Company shall automatically cease to
be Officers of the Company.
(b) Chief Executive Officer. The Chief Executive Officer
of the Company shall preside at all meetings of the Board, shall
be responsible for the general and active management of the
business of the Company, shall see that all orders and
resolutions of the Board are carried into effect and shall have
and perform such other duties as from time to time may be
assigned to him by the Board.
(c) President. The President shall be the chief operating
officer of the Company, shall preside, in the absence of the
Chief Executive Officer, at all meetings of the Board, shall have
general and active management of the business of the Company and
shall see that all orders and resolutions of the Board are
carried into effect. The President or any other Officer
authorized by the President or the Board shall execute all bonds,
mortgages and other contracts, except: (i) where required or
permitted by law or this Agreement to be otherwise signed and
executed, including Section 7; (ii) where signing and execution
thereof shall be expressly delegated by the Board to some other
Officer or agent of the Company, and (iii) as otherwise permitted
in Section 10.
(d) Vice President. In the absence of the President or in
the event of the President's inability to act, the Vice
President, if any (or in the event there be more than one Vice
President, the Vice Presidents in the order designated by the
Directors, or in the absence of any designation, then in the
order of their election), shall perform the duties of the
President, and when so acting, shall have all the powers of and
be subject to all the restrictions upon the President. The Vice
Presidents, if any, shall perform such other duties and have such
other powers as the Board may from time to time prescribe.
5
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(e) Secretary and Assistant Secretary. The Secretary shall
be responsible for filing legal documents and maintaining records
for the Company. The Secretary shall attend all meetings of the
Board and record all the proceedings of the meetings of the
Company and of the Board in a book to be kept for that purpose
and shall perform like duties for the standing committees when
required. The Secretary shall give, or shall cause to be given,
notice of all meetings of the Member, if any, and special
meetings of the Board, and shall perform such other duties as may
be prescribed by the Board or the President, under whose
supervision the Secretary shall serve. The Assistant Secretary,
or if there be more than one, the Assistant Secretaries in the
order determined by the Board (or if there be no such
determination, then in order of their election), shall, in the
absence of the Secretary or in the event of the Secretary's
inability to act, perform the duties and exercise the powers of
the Secretary and shall perform such other duties and have such
other powers as the Board may from time to time prescribe.
(f) Treasurer and Assistant Treasurer. The Treasurer shall
have the custody of the Company funds and securities and shall
keep full and accurate accounts of receipts and disbursements in
books belonging to the Company and shall deposit all moneys and
other valuable effects in the name and to the credit of the
Company in such depositories as may be designated by the Board.
The Treasurer shall disburse the funds of the Company as may be
ordered by the Board, taking proper vouchers for such
disbursements, and shall render to the President and to the
Board, at its regular meetings or when the Board so requires, an
account of all of the Treasurer's transactions and of the
financial condition of the Company. The Assistant Treasurer, or
if there shall be more than one, the Assistant Treasurers in the
order determined by the Board (or if there be no such
determination, then in the order of their election), shall, in
the absence of the Treasurer or in the event of the Treasurer's
inability to act, perform the duties and exercise the powers of
the Treasurer and shall perform such other duties and have such
other powers as the Board may from time to time prescribe.
(g) Officers as Agents. The Officers, to the extent of
their powers set forth in this Agreement or otherwise vested in
them by action of the Board not inconsistent with this Agreement,
are agents of the Company for the purpose of the Company's
business and, subject to Section 8, the actions of the Officers
taken in accordance with such powers shall bind the Company.
(h) Duties of Board and Officers. Except to the extent
otherwise provided herein, each Director and Officer shall have a
fiduciary duty of loyalty and care similar to that of directors
and officers of business corporations organized under the General
Corporation Law of the Commonwealth of Pennsylvania.
Section 10. Limited Liability.
Except as otherwise expressly provided by the Act, the
debts, obligations and liabilities of the Company, whether
arising in contract, tort or otherwise, shall be the debts,
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obligations and liabilities solely of the Company, and neither
the Member nor any Director shall be obligated personally for any
such debt, obligation or liability of the Company solely by
reason of being a Member or Director of the Company.
Section 11. Capital Contributions.
Schedule B attached hereto sets forth, among other things,
the initial and subsequent capital contributions of property the
Member has made to the Company and the agreed value of such
property.
Section 12. Additional Contributions.
The Member is not required to make any additional capital
contribution to the Company. However, the Member may make
additional capital contributions to the Company at any time upon
the written consent of such Member. To the extent that the
Member makes an additional capital contribution to the Company,
the Member shall revise Schedule B of this Agreement. The
provisions of this Agreement, including this Section 12, are
intended to benefit the Member and the Special Members and, to
the fullest extent permitted by law, shall not be construed as
conferring any benefit upon any creditor of the Company (and no
such creditor of the Company shall be a third-party beneficiary
of this Agreement) and the Member and the Special Members shall
not have any duty or obligation to any creditor of the Company to
make any contribution to the Company or to issue any call for
capital pursuant to this Agreement.
Section 13. Allocation of Profits and Losses.
The Company's profits and losses shall be allocated to the
Member.
Section 14. Distributions.
Distributions shall be made to the Member at the times and
in the aggregate amounts determined by the Board.
Notwithstanding any provision to the contrary contained in this
Agreement, the Company shall not be required to make a
distribution to the Member on account of its interest in the
Company if such distribution would violate the Act or any other
applicable law or any agreement of the Company.
Section 15. Books and Records.
The Board shall keep or cause to be kept complete and
accurate books of account and records with respect to the
Company's business. The books of the Company shall at all times
be maintained by the Board. The Member and its duly authorized
representatives shall have the right to examine the Company
books, records and documents during normal business hours. The
Company, and the Board on behalf of the Company, shall not have
the right to keep confidential from the Member any information.
The Company's books of account shall be kept using the method of
accounting determined by the Member. The Company's independent
auditor, if any, shall be an independent public accounting firm
selected by the Member.
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Section 16. Reports.
(a) Within 60 days after the end of each fiscal quarter,
the Board shall cause to be prepared an unaudited report setting
forth as of the end of such fiscal quarter:
(i) unless such quarter is the last fiscal quarter, a
balance sheet of the Company; and
(ii) unless such quarter is the last fiscal quarter, an
income statement of the Company for such fiscal
quarter.
(b) The Board shall use diligent efforts to cause to be
prepared and mailed to the Member, within 90 days after the end
of each fiscal year, an audited or unaudited report setting forth
as of the end of such fiscal year:
(i) a balance sheet of the Company;
(ii) an income statement of the Company for such fiscal
year; and
(iii) a statement of the Member's capital account.
(c) The Board shall, after the end of each fiscal year, use
reasonable efforts to cause the Company's independent
accountants, if any, to prepare and transmit to the Member as
promptly as possible any such tax information as may be
reasonably necessary to enable the Member to prepare its federal,
state and local income tax returns relating to such fiscal year.
Section 17. Other Business.
The Member and any Affiliate of the Member may engage in or
possess an interest in other business ventures (unconnected with
the Company) of every kind and description, independently or with
others. The Company shall not have any rights in or to such
independent ventures or the income or profits therefrom by virtue
of this Agreement.
Section 18. Exculpation and Indemnification.
(a) Neither the Member nor any Officer, Director, employee
or agent of the Company nor any employee, representative, agent
or Affiliate of the Member (collectively, the "Covered Persons")
shall be liable to the Company or any other Person who has an
interest in or claim against the Company for any loss, damage or
claim incurred by reason of any act or omission performed or
omitted by such Covered Person in good faith on behalf of the
Company and in a manner reasonably believed to be within the
scope of the authority conferred on such Covered Person by this
Agreement, except that a Covered Person shall be liable for any
such loss, damage or claim incurred by reason of such Covered
Person's gross negligence or willful misconduct.
8
<PAGE>
(b) To the fullest extent permitted by applicable law, a
Covered Person shall be entitled to indemnification from the
Company for any loss, damage or claim incurred by such Covered
Person by reason of any act or omission performed or omitted by
such Covered Person in good faith on behalf of the Company and in
a manner reasonably believed to be within the scope of the
authority conferred on such Covered Person by this Agreement,
except that no Covered Person shall be entitled to be indemnified
in respect of any loss, damage or claim incurred by such Covered
Person by reason of such Covered Person's gross negligence or
willful misconduct with respect to such acts or omissions;
provided, however, that any indemnity under this Section 18 by
the Company shall be provided out of and to the extent of Company
assets only, and the Member shall not have personal liability on
account thereof; and provided further, that so long as any
Obligation is outstanding, no indemnity payment from funds of the
Company (as distinct from funds from other sources, such as
insurance) of any indemnity under this Section 18 shall be
payable from amounts allocable to any other Person and, so long
as any Obligation is outstanding, all such indemnity payments
under this Section 18 shall be subordinated to any amounts
payable to any other Person.
(c) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by a Covered Person
defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Company prior to the final
disposition of such claim, demand, action, suit or proceeding
upon receipt by the Company of an undertaking by or on behalf of
the Covered Person to repay such amount if it shall be determined
that the Covered Person is not entitled to be indemnified as
authorized in this Section 18; provided, however, that any such
advance shall be subordinated to any amounts payable to any other
Person.
(d) A Covered Person shall be fully protected in relying in
good faith upon the records of the Company and upon such
information, opinions, reports or statements presented to the
Company by any Person as to matters the Covered Person reasonably
believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or
on behalf of the Company, including information, opinions,
reports or statements as to the value and amount of the assets,
liabilities, or any other facts pertinent to the existence and
amount of assets from which distributions to the Member might
properly be paid.
(e) To the extent that, at law or in equity, a Covered
Person has duties (including fiduciary duties) and liabilities
relating thereto to the Company or to any other Covered Person, a
Covered Person acting under this Agreement shall not be liable to
the Company or to any other Covered Person for its good faith
reliance on the provisions of this Agreement or any approval or
authorization granted by the Company or any other Covered Person.
The provisions of this Agreement, to the extent that they
restrict the duties and liabilities of a Covered Person otherwise
existing at law or in equity, are agreed by the Member and the
Special Members to replace such other duties and liabilities of
such Covered Person.
(f) The foregoing provisions of this Section 18 shall
survive any termination of this Agreement.
9
<PAGE>
Section 19. Assignments.
Subject to Section 20, the Member may assign in whole or in
part its limited liability company interest in the Company. If
the Member transfers all of its limited liability company
interest in the Company pursuant to this Section 19, the
transferee shall be admitted to the Company as a member of the
Company upon its execution of an instrument signifying its
agreement to be bound by the terms and conditions of this
Agreement, which instrument may be a counterpart signature page
to this Agreement. Such admission shall be deemed effective
immediately prior to the transfer and, immediately following such
admission, the transferor Member shall cease to be a member of
the Company. Notwithstanding anything in this Agreement to the
contrary, any successor to the Member by merger or consolidation
shall, without further act, be the Member hereunder, and such
merger or consolidation shall not constitute an assignment for
purposes of this Agreement and the Company shall continue without
dissolution.
Section 20. Admission of Additional Members.
One or more additional members of the Company may be
admitted to the Company with the written consent of the Member.
Section 21. Dissolution.
(a) Subject to Section 8, the Company shall be dissolved,
and its affairs shall be wound up upon the first to occur of the
following: (i) the termination of the legal existence of the last
remaining member of the Company or the occurrence of any other
event which terminates the continued membership of the last
remaining member of the Company in the Company unless the
business of the Company is continued in a manner permitted by
this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under the Act. Upon the occurrence of any
event that causes the last remaining member of the Company to
cease to be a member of the Company, to the fullest extent
permitted by law, the personal representative of such member is
hereby authorized to, and shall, within 90 days after the
occurrence of the event that terminated the continued membership
of such member in the Company, agree in writing (i) to continue
the Company and (ii) to the admission of the personal
representative or its nominee or designee, as the case may be, as
a substitute member of the Company, effective as of the
occurrence of the event that terminated the continued membership
of the last remaining member of the Company in the Company.
(b) Notwithstanding any other provision of this Agreement,
the Bankruptcy of the Member shall not cause the Member to cease
to be a member of the Company and upon the occurrence of such an
event, the business of the Company shall continue without
dissolution.
(c) In the event of dissolution, the Company shall conduct
only such activities as are necessary to wind up its affairs
(including the sale of the assets of the Company in an orderly
10
<PAGE>
manner), and the assets of the Company shall be applied in the
manner, and in the order of priority, set forth in Section 8974
of the Act.
(d) The Company shall terminate when (i) all of the assets
of the Company, after payment of or due provision for all debts,
liabilities and obligations of the Company shall have been
distributed to the Member in the manner provided for in this
Agreement and (ii) the Certificate of Formation shall have been
canceled in the manner required by the Act.
Section 22. Waiver of Partition; Nature of Interest.
Except as otherwise expressly provided in this Agreement, to
the fullest extent permitted by law, each of the Member hereby
irrevocably waives any right or power that such Person might have
to cause the Company or any of its assets to be partitioned, to
cause the appointment of a receiver for all or any portion of the
assets of the Company, to compel any sale of all or any portion
of the assets of the Company pursuant to any applicable law or to
file a complaint or to institute any proceeding at law or in
equity to cause the dissolution, liquidation, winding up or
termination of the Company. The Member shall not have any
interest in any specific assets of the Company, and the Member
shall not have the status of a creditor with respect to any
distribution pursuant to Section 13 hereof. The interest of the
Member in the Company is personal property.
Section 23. Benefits of Agreement; No Third-Party Rights.
None of the provisions of this Agreement shall be for the
benefit of or enforceable by any creditor of the Company or by
any creditor of the Member. Nothing in this Agreement shall be
deemed to create any right in any Person (other than Covered
Persons) not a party hereto, and this Agreement shall not be
construed in any respect to be a contract in whole or in part for
the benefit of any third Person (except as provided in Section
26).
Section 24. Severability of Provisions.
Each provision of this Agreement shall be considered
severable and if for any reason any provision or provisions
herein are determined to be invalid, unenforceable or illegal
under any existing or future law, such invalidity,
unenforceability or illegality shall not impair the operation of
or affect those portions of this Agreement which are valid,
enforceable and legal.
Section 25. Entire Agreement.
This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof.
Section 26. Binding Agreement.
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Notwithstanding any other provision of this Agreement, the
Member agrees that this Agreement constitutes a legal, valid and
binding agreement of the Member, and is enforceable against the
Member by the Directors, in accordance with its terms. In
addition, the Directors shall be intended beneficiaries of this
Agreement.
Section 27. Governing Law.
This Agreement shall be governed by and construed under the
laws of the Commonwealth of Pennsylvania (without regard to
conflict of laws principles), all rights and remedies being
governed by said laws.
Section 28. Amendments.
Subject to Section 8, this Agreement may be modified,
altered, supplemented or amended pursuant to a written agreement
executed and delivered by the Member. Notwithstanding anything
to the contrary in this Agreement, so long as any Obligation is
outstanding, this Agreement may not be modified, altered,
supplemented or amended unless the Rating Agency Condition is
satisfied by all Rating Agencies other than Moody's (and prior
written notice of such action shall be provided to Moody's)
except: (i) to cure any ambiguity or (ii) to convert or
supplement any provision in a manner consistent with the intent
of this Agreement and the other Basic Documents.
Section 29. Counterparts.
This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original of this
Agreement and all of which together shall constitute one and the
same instrument.
Section 30. Notices.
Any notices required to be delivered hereunder shall be in
writing and personally delivered, mailed or sent by telecopy,
electronic mail or other similar form of rapid transmission, and
shall be deemed to have been duly given upon receipt (a) in the
case of the Company, to the Company at its address in Section 2,
(b) in the case of the Member, to the Member at its address as
listed on Schedule B attached hereto and (c) in the case of
either of the foregoing, at such other address as may be
designated by written notice to the other party.
Section 31. Effectiveness.
This Agreement shall be effective as of November 18, 1999.
12
<PAGE>
IN WITNESS WHEREOF, the undersigned, intending to be legally
bound hereby, has duly executed this Limited Liability Company
Agreement as of the 17th day of November, 1999.
MEMBER:
WEST PENN POWER COMPANY
By: /s/ Peter J. Skrgic
Name: Peter J. Skrgic
Title: Vice President
13
<PAGE>
SCHEDULE A
Definitions
A. Definitions
When used in this Agreement, the following terms not
otherwise defined herein have the following meanings:
"Act" has the meaning set forth in the preamble to this
Agreement.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly Controlling or Controlled by or
under direct or indirect common Control with such Person.
"Agreement" means this Amended and Restated Limited
Liability Company Agreement of the Company, together with the
schedules attached hereto, as amended, restated or supplemented
or otherwise modified from time to time.
"Bankruptcy" means, with respect to any Person, if such
Person (i) makes an assignment for the benefit of creditors,
(ii) files a voluntary petition in bankruptcy, (iii) is adjudged
a bankrupt or insolvent, or has entered against it an order for
relief, in any bankruptcy or insolvency proceedings, (iv) files a
petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation or similar
relief under any statute, law or regulation, (v) files an answer
or other pleading admitting or failing to contest the material
allegations of a petition filed against it in any proceeding of
this nature, (vi) seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of the Person or
of all or any substantial part of its properties, or (vii) if 120
days after the commencement of any proceeding against the Person
seeking reorganization, arrangement, composition, readjustment,
liquidation or similar relief under any statute, law or
regulation, if the proceeding has not been dismissed, or if
within 90 days after the appointment without such Person's
consent or acquiescence of a trustee, receiver or liquidator of
such Person or of all or any substantial part of its properties,
the appointment is not vacated or stayed, or within 90 days after
the expiration of any such stay, the appointment is not vacated.
The foregoing definition of "Bankruptcy" is intended to replace
and shall supersede and replace the definition of 'Bankruptcy"
set forth in Section 8903 of the Act.
"Board" or "Board of Directors" means the Board of Directors
of the Company.
"Certificate of Formation" means the Certificate of
Formation of the Company filed with the Secretary of State of the
Commonwealth of Pennsylvania on November 12, 1999, as amended or
amended and restated from time to time.
"Company" means West Penn Transferring Agent LLC, a
Pennsylvania limited liability company.
A-1
<PAGE>
"Control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting
securities or general partnership or managing member interests,
by contract or otherwise. "Controlling" and "Controlled" shall
have correlative meanings. Without limiting the generality of
the foregoing, a Person shall be deemed to Control any other
Person in which it owns, directly or indirectly, a majority of
the ownership interests.
"Covered Persons" has the meaning set forth in Section
18(a).
"Directors" means the Persons elected to the Board of
Directors from time to time by the Member, including the
Independent Directors, in their capacity as managers of the
Company. A Director is hereby designated as a "manager" of the
Company within the meaning of Section 1841(b) of the Act.
"Material Action" means to consolidate or merge the Company
with or into any Person, or sell all or substantially all of the
assets of the Company, or to institute proceedings to have the
Company be adjudicated bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against the
Company or file a petition seeking, or consent to, reorganization
or relief with respect to the Company under any applicable
federal or state law relating to bankruptcy, or consent to the
appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Company or a
substantial part of its property, or make any assignment for the
benefit of creditors of the Company, or admit in writing the
Company's inability to pay its debts generally as they become
due, or, to the fullest extent permitted by law, take action in
furtherance of any such action, or dissolve or liquidate the
Company.
"Member" means West Penn Power Company, as the member of the
Company, and includes any Person admitted as an additional member
of the Company or a substitute member of the Company pursuant to
the provisions of this Agreement, each in its capacity as a
member of the Company.
"Obligations" shall mean the indebtedness, liabilities and
obligations of the Company under or in connection with this
Agreement or any related document in effect as of any date of
determination.
"Officer" means an officer of the Company described in
Section 9.
"Officer's Certificate" means a certificate signed by any
Officer of the Company who is authorized to act for the Company
in matters relating to the Company.
"Person" means any individual, corporation, partnership,
joint venture, limited liability company, limited liability
partnership, association, joint stock company, trust,
unincorporated organization, or other organization, whether or
not a legal entity, and any governmental authority.
A-2
<PAGE>
B. Rules of Construction
Definitions in this Agreement apply equally to both the
singular and plural forms of the defined terms. The words
"include" and "including" shall be deemed to be followed by the
phrase "without limitation." The terms "herein," "hereof" and
"hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular Section, paragraph
or subdivision. The Section titles appear as a matter of
convenience only and shall not affect the interpretation of this
Agreement. All Section, paragraph, clause, Exhibit or Schedule
references not attributed to a particular document shall be
references to such parts of this Agreement.
A-3
<PAGE>
SCHEDULE B
Member
Name Mailing Address Membership
Interest
West Penn Power 800 Cabin Hill Drive 100%
Company Greensburg, PA 15601
Agreed Value of
Initial Capital Contribution: $200,000
Agreed Value of
Subsequent Capital Contribution: See following
pages to this Schedule B.
C-1
<PAGE>
SCHEDULE C
DIRECTORS
Alan J. Noia, Chairman
Michael P. Morrell
Peter J. Skrgic
C-1
SCHEDULE D
OFFICERS TITLE
Alan J. Noia Chairman of the Board &
Chief Executive Officer
Peter J. Skrgic President
Michael P. Morrell Vice President
Eileen M. Beck Secretary
Carole R. Chamberlain Assistant Secretary
Regis F. Binder Treasurer
Keith L. Warchol Assistant Treasurer
D-1
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
ALLEGHENY COMMUNICATIONS CONNECT, INC.
The undersigned, a natural person, for the purpose of
organizing a corporation for conducting the business and
promoting the purposes hereinafter stated, under the provisions
and subject to the requirements of the laws of the State of
Delaware (particularly Chapter 1, Title 8 of the Delaware Code
and the acts amendatory thereof and supplemental thereto, and
known, identified, and referred to as the "General Corporation
Law of the State of Delaware"), hereby certifies that:
FIRST: The name of this Corporation shall be:
ALLEGHENY COMMUNICATIONS CONNECT, INC.
SECOND: Its registered office in the State of Delaware
is to be located at 1013 Centre Road, in the City of Wilmington,
in the County of New Castle and its Registered Agent at such
address is The Prentice-Hall Corporation System, Inc.
THIRD: The nature of the business and the objects and
purposes proposed to be transacted, promoted and carried on are
to do any or all things herein mentioned, as fully and to the
same extent as natural persons might or could do, and in any part
of the world, viz:
The purpose of the corporation is to engage in any
lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware as
presently enacted and as may hereafter be amended.
FOURTH: The total number of share of stock which this
corporation is authorized to issue is:
1,000 Share of common stock at No Par Value
<PAGE>
FIFTH: The name and address of the incorporator is as
follows:
Theresa J. Colecchia
C/o Allegheny Power Service Corporation
800 Cabin Hill Drive
Greensburg, PA 15601
SIXTH: The Directors shall have power to make and to
alter or amend the By-Laws: to fix the amount to be reserved as
working capital, and to authorize and cause to be executed,
mortgages and liens without limit as to the amount, upon the
property and franchise of this Corporation.
With the consent in writing, and pursuant to a majority
vote of the holder of the capital stock issued and outstanding,
the Directors shall have authority to dispose, in any manner, of
the whole property of this Corporation.
The By-Laws shall determine whether and to what extent
the account and books of this corporation, or any of them, shall
be open to the inspection of the stockholders: no stockholder
shall have any right of inspecting any account, or book, or
document of this Corporation, except as conferred b the law or
the By-Laws, or by resolution of the stockholders.
The stockholders and directors shall have power to hold
their meetings and keep the books, documents and papers of the
corporation outside of the State of Delaware, at such places as
my be, from time to time, designated b the By-Laws or by
resolution of the stockholder or directors, except as otherwise
required b the laws of Delaware.
It is the intention that the object, purposes and
powers specified in the THIRD paragraph hereof shall, except
where otherwise specified in said paragraph, be nowise limited or
restricted by reference to or inference from the terms of any
other clause or paragraph in this certificate of incorporation,
but that the object, purposes and powers specified in the THIRD
paragraph and in each of the clauses or paragraphs of this
charter shall be regarded as independent objects, purposes and
powers.
3
<PAGE>
SEVENTH: No director of the Corporation shall be
liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to
the Corporation or its stockholders. (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a
knowing violation of law. (iii) under section 174 of the General
Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal
benefit.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 11th day of April, A.D. 1996.
/s/ Theresa J. Colecchia
Theresa J. Colecchia
4
EXHIBIT 3.2
BY-LAWS
of
ALLEGHENY COMMUNICATIONS CONNECT, INC.
As Amended to August 5, 1997
ARTICLE I - OFFICES
SECTION 1. REGISTERED OFFICE. The registered office shall
be established and maintained at 1013 Centre Road, in the City of
Wilmington, County of New Castle in the State of Delaware, and
its Registered Agent at such address is Corporation Service
Company.
SECTION 2. OTHER OFFICES. The corporation may have other
offices, either within or without the State of Delaware, at such
place or places as the Board of Directors may from time to time
appoint or the business of the corporation may require.
ARTICLE II - MEETING OF STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. Annual meetings of
stockholders for the election of directors and for such other
business as may be stated in the notice of the meeting, shall be
held at such place, either within or without the State of
Delaware, and at such time and date as the Board of Directors, by
resolution, shall determine and as set forth in the notice of the
meeting. In the event the Board of Directors fails to so
determine the time, date and place of meeting, the annual meeting
of stockholders shall be held at the offices of Allegheny Power
System, Inc., 10435 Downsville Pike, Hagerstown, Maryland, on the
last Tuesday in February of each year.
If the date of the annual meeting shall fall upon a legal
holiday, the meeting shall be held on the next succeeding
business day. At each annual meeting, the stockholders entitled
to vote shall elect a Board of Directors and may transact such
other corporate business as shall be stated in the notice of the
meeting.
SECTION 2. OTHER MEETINGS. Meetings of stockholders for
any purpose other than the election of directors may be held at
such time and place, within or without the State of Delaware, as
shall be stated in the notice of the meeting.
<PAGE>
2
SECTION 3. VOTING. Each stockholder entitled to vote in
accordance with the terms and provisions of the Certificate of
Incorporation and these By-Laws shall be entitled to one vote, in
person or by proxy, for each share of stock entitled to vote held
by such stockholder, but no proxy shall be voted after three
years from its date unless such proxy provides for a longer
period. Upon the demand of any stockholder, the vote for
directors and upon any question before the meeting shall be by
ballot. All elections for directors shall be decided by
plurality vote; all other questions shall be decided by majority
vote except as otherwise provided by the Certificate of
Incorporation or the laws of the State of Delaware.
SECTION 4. STOCKHOLDER LIST. The officer who has charge of
the stock ledger of the corporation shall at least ten days
before each meeting of stockholders prepare a complete
alphabetical addressed list of the stockholders entitled to vote
at the ensuing election, with the number of shares held by each.
Said list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting,
either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting
is to be held. The list shall be available for inspection at the
meeting.
SECTION 5. QUORUM. Except as otherwise required by law, by
the Certificate of Incorporation or by these By-Laws, the
presence, in person or by proxy, of stockholders holding a
majority of the stock of the corporation entitled to vote shall
constitute a quorum at all meetings of the stockholders. In case
a quorum shall not be present at any meeting, a majority in
interest of the stockholders entitled to vote thereat, present in
person or by proxy, shall have power to adjourn the meeting from
time to time, without notice other than announcement at the
meeting, until the requisite amount of stock entitled to vote
shall be present. At any such adjourned meeting at which the
requisite amount of stock entitled to vote shall be represented,
any business may be transacted which might have been transacted
at the meeting as originally noticed; but only those stockholders
entitled to vote at the meeting as originally noticed shall be
entitled to vote at any adjournment or adjournments thereof.
SECTION 6. SPECIAL MEETINGS. Special meetings of the
stockholders, for any purpose, unless otherwise prescribed by
statute or by the Certificate of Incorporation, may be called by
the president and shall be called by the president or secretary
<PAGE>
3
at the request in writing of a majority of the directors or
stockholders entitled to vote. Such request shall state the
purpose of the proposed meeting.
SECTION 7. NOTICE OF MEETINGS. Written notice, stating the
place, date and time of the meeting, and the general nature of
the business to be considered, shall be given to each stockholder
entitled to vote thereat at his address at it appears on the
records of the corporation, not less than ten nor more than fifty
days before the date of the meeting.
SECTION 8. BUSINESS TRANSACTED. No business other than
that stated in the notice shall be transacted at any meeting
without the unanimous consent of all the stockholders entitled to
vote thereat.
SECTION 9. ACTION WITHOUT MEETING. Except as otherwise
provided by the Certificate of Incorporation, whenever the vote
of stockholders at a meeting thereof is required or permitted to
be taken in connection with any corporate action by any
provisions of the statutes or the Certificate of Incorporation or
of these By-Laws, the meeting and vote of stockholders may be
dispensed with, if all the stockholders who would have been
entitled by vote upon the action if such meeting were held, shall
consent in writing to such corporate action being taken.
ARTICLE III - DIRECTORS
SECTION 1. NUMBER, ELECTION AND TERM OF OFFICE. The Board
of Directors shall consist initially of three directors, and
thereafter shall consist of such number of directors, not less
than three nor more than nine, as the Board of Directors shall
determine from time to time. The directors shall be elected at
the annual meeting of the stockholders and each director shall be
elected to serve until his or her successor shall be elected and
shall qualify.
SECTION 2. RESIGNATIONS. Any director, member of a
committee or other officer may resign at any time. Such
resignation shall be made in writing, and shall take effect at
the time specified therein, and if no time be specified, at the
time of its receipt by the President or Secretary. The
acceptance of a resignation shall not be necessary to make it
effective.
SECTION 3. VACANCIES. If the office of any director,
member of a committee or other officer becomes vacant, the
remaining directors in office, though less than a quorum by a
majority vote, may appoint any qualified person to fill such
<PAGE>
4
vacancy, who shall hold office for the unexpired term and until
his or her successor shall be duly chosen.
SECTION 4. REMOVAL. Any director or directors may be
removed either for or without cause at any time by the
affirmative vote of the holders of a majority of all the shares
of stock outstanding and entitled to vote, at a special meeting
of the stockholders called for the purpose and the vacancies thus
created may be filled, at the meeting held for the purpose of
removal, by the affirmative vote of a majority in interest of the
stockholders entitled to vote.
SECTION 5. INCREASE OF NUMBER. The number of directors may
be increased by amendment of these By-Laws by the affirmative
vote of a majority of the directors, though less than a quorum,
or, by the affirmative vote of a majority in interest of the
stockholders, at the annual meeting or at a special meeting
called for that purpose, and by like vote the additional
directors may be chosen at such meeting to hold office until the
next annual election and until their successors are elected and
qualify.
SECTION 6. COMPENSATION. Directors shall not receive any
stated salary for their services as directors or as members of
committees, but by resolution of the board a fixed fee and
expenses of attendance may be allowed for attendance at each
meeting. Nothing herein contained shall be construed to preclude
any director from serving the corporation in any other capacity
as an officer, agent or otherwise, and receiving compensation
therefor.
SECTION 7. TELEPHONE PARTICIPATION. One or more directors
may participate in a meeting of the Board of Directors by means
of conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear
each other. Participation in a meeting pursuant to this section
shall constitute presence in person at the meeting.
SECTION 8. ACTION WITHOUT MEETING. Any action required or
permitted to be taken at any meeting of the Board of Directors,
or of any committee thereof, may be taken without a meeting, if
prior to or subsequent to such action a written consent thereto
is signed by all members of the board, or of such committee as
the case may be, and such written consent is filed with the
minutes of the board or committee.
SECTION 9. EXECUTIVE AND OTHER COMMITTEES. The Board may
create an Executive Committee and one or more other committees
each consisting of not less than three directors. Each other
Committee shall have such authority as the Board shall give it.
<PAGE>
5
The Board may appoint one or more directors as alternate members
of the Executive Committee or any other Committee to take the
place of any absent member or members at any meeting thereof.
The Executive Committee and each other Committee may act by a
writing or writings signed by all its members or by means of
conference telephone or similar communications equipment by which
all persons participating can simultaneously hear each other.
Participation in a meeting by these communications means
constitutes presence in person at the meeting. The Executive
Committee, except when the Board of Directors is in session,
shall possess and exercise all of the authority and powers of the
Board of Directors however conferred, other than that of filling
vacancies among the directors or in any committee of the
directors.
ARTICLE IV - OFFICERS
SECTION 1. OFFICERS. The officers of the corporation shall
consist of a President and a Secretary, and shall be elected by
the Board of Directors and shall hold office until their
successors are elected and qualified. In addition, the Board of
Directors may elect a Chairman, Treasurer, one or more Vice
Presidents, a Comptroller and such Assistant Secretaries and
Assistant Treasurers as it may deem proper. None of the officers
of the corporation need be directors. The officers shall be
elected at the first meeting of the Board of Directors after each
annual meeting. More than two offices may be held by the same
person.
SECTION 2. OTHER OFFICERS AND AGENTS. The Board of
Directors may appoint such officers and agents as it may deem
advisable, who shall hold their offices for such terms and shall
exercise such power and perform such duties as shall be
determined from time to time by the Board of Directors.
SECTION 3. CHAIRMAN. The Chairman of the Board of
Directors if one be elected, shall preside at all meetings of the
Board of Directors and he shall have and perform such other
duties as from time to time may be assigned to him by the Board
of Directors.
SECTION 4. PRESIDENT. The President shall be the chief
executive officer of the corporation and shall have the general
powers and duties of supervision and management usually vested in
the office of President of a corporation. He shall preside at
all meetings of the stockholders if present there at, and in the
absence or non-election of the Chairman of the Board of
Directors, at all meetings of the Board of Directors, and shall
have general supervision, direction and control of the business
<PAGE>
6
of the corporation except as the Board of Directors shall
authorize the execution thereof in some other manner, he shall
execute bonds, mortgages, and other contracts in behalf of the
corporation, and shall cause the seal to be affixed to any
instrument requiring it and when so affixed the seal shall be
attested by the signature of the Secretary or the Treasurer or an
Assistant Secretary or an Assistant Treasurer.
SECTION 5. VICE PRESIDENT. Each Vice President shall have
such powers and shall perform such duties as shall be assigned to
him by the directors.
SECTION 6. TREASURER. The Treasurer shall have the custody
of the corporate funds and securities and shall keep full and
accurate account of receipts and disbursements in books belonging
to the corporation. He shall deposit all moneys and other
valuables in the name and to the credit of the corporation in
such depositories as may be designated by the Board of Directors.
The Treasurer shall disburse the funds of the corporation as
may be ordered by the Board of Directors, or the President,
taking proper vouchers for such disbursements. He shall render
to the President and Board of Directors at the regular meetings
of the Board of Directors, or whenever they may request it, an
account of all his transactions as Treasurer and of the financial
condition of the corporation. If required by the Board of
Directors, he shall give the corporation a bond for the faithful
discharge of this duties in such amount and with such surety as
the board shall prescribe.
SECTION 7. SECRETARY. The Secretary shall give, or cause
to be given, notice of all meetings of stockholders and
directors, and all other notices required by law or by these By-
Laws, and in case of his or her absence or refusal or neglect so
to do, any such notice may be given by any person thereunto
directed by the President, or by the directors, or stockholders,
upon whose requisition the meeting is called as provided in these
By-Laws. The Secretary shall record all the proceedings of the
meetings of the corporation and of directors in a book to be kept
for that purpose. The Secretary shall keep in safe custody the
seal of the corporation, and when authorized by the Board of
Directors, affix the same to any instrument requiring it, and
when so affixed, it shall be attested by his or her signature or
by the signature of any assistant secretary.
SECTION 8. ASSISTANT TREASURERS & ASSISTANT SECRETARIES.
Assistant Treasurers and Assistant Secretaries, if any, shall be
<PAGE>
7
elected and shall have such powers and shall perform such duties
as shall be assigned to them, respectively, by the directors.
ARTICLE V - INDEMNIFICATION OF DIRECTORS AND OFFICERS
SECTION 6.1 . The Corporation shall indemnify any person
who was or is a party or is threatened with being made a party to
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative,
including all appeals (other than an action, suit or proceeding
by or in the right of the Corporation) by reason of the fact that
he is or was a director, officer or employee of the Corporation,
or is or was serving at the request of the Corporation as a
director, officer or employee of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, decrees, fines,
penalties and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not of itself create a
presumption that the person did not act in good faith or in a
manner which he reasonably believed to be in or not opposed to
the best interests of the Corporation or, with respect to any
criminal action, suit or proceeding, that he had reasonable cause
to believe that his conduct was unlawful.
SECTION 6.2. The Corporation shall indemnify any person who
was or is a party or is threatened with being made a party to any
threatened, pending or completed action, suit or proceeding,
including all appeals, by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he is
or was a director, officer or employee of the Corporation, or is
or was serving at the request of the Corporation as a director,
officer or employee of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including
attorneys' fees, judgments, decrees, fines, penalties and amounts
paid in settlement) actually and reasonably incurred by him in
connection with the defense or settlement of such action, suit or
proceeding. However, indemnification under this Section shall be
made only if the person to be indemnified acted in good faith and
in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation; and no such indemnification
shall be made in respect of any claim, issue or matter as to
<PAGE>
8
which such person shall have been finally adjudged to be liable
for negligence or misconduct in the performance of his duty to
the Corporation unless, and only to the extent that, the court or
body in or before which such action, suit or proceeding was
finally determined, or any court of competent jurisdiction, shall
determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnify for such
expenses or other amounts paid as such court or body shall deem
proper.
SECTION 6.3. Without limiting the right of any director,
officer or employee of the Corporation to indemnification under
any other Section hereof, if such person has been substantially
and finally successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in Sections 6.1. and
6.2. or in defense of any claim, issue, or matter therein, he
shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
SECTION 6.4. Any indemnification under Sections 6.1. and
6.2. (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer or employee is proper in
the circumstances because he has met the applicable standard of
conduct set forth in Sections 6.1. and 6.2. Such determination
shall be made (1) by the Board of Directors by a majority vote of
a quorum consisting of directors who are or were not parties to
or threatened with such action, suit or proceeding, or (2) if
such a quorum is not obtainable, or even if obtainable, if a
majority of a quorum of disinterested directors so directs, by
independent legal counsel (compensated by the Corporation) in a
written opinion, or (3) if there be no disinterested directors,
or if a majority of the disinterested directors, whether or not a
quorum, so directs, by the holders of a majority of the shares
entitled to vote in the election of directors without reference
to default or contingency which would permit the holders of one
or more classes of shares to vote for the election of one or more
directors.
SECTION 6.4.1. Indemnification may be granted for any
action taken or for any failure to take any action giving rise to
the claim for indemnification, and may be made whether or not the
Corporation would have the power to indemnify the person under
any other provision except as provided by this Section, and
whether or not the indemnified liability arises or arose from any
threatened, pending, or completed action by or in the right of
the Corporation. However, such indemnification shall not be made
in any case where the act or failure to act giving rise to the
claim for indemnification is finally determined by a court to
<PAGE>
10
have constituted willful misconduct or recklessness.
SECTION 6.5. Expenses of each person indemnified hereunder
incurred in defending a civil, criminal, administrative or
investigative action, suit, or proceeding (including all appeals)
or threat thereof, may be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding as
authorized by the Board of Directors, whether a disinterested
quorum exists or not, upon receipt of an undertaking by or on
behalf of the director, officer or employee to repay such
expenses unless it shall ultimately be determined that he is
entitled to be indemnified by the Corporation.
SECTION 6.6. The indemnification provided by this Article
shall not be deemed exclusive of or in any way limit any other
rights to which any person indemnified may be or may become
entitled as a matter of law, by the articles, regulations,
agreements, insurance, vote of shareholders or otherwise, with
respect to action in his official capacity and with respect to
action in another capacity while holding such office and shall
continue as to a person who has ceased to be a director, officer,
or employee and shall inure to the benefit of the heirs,
executors, administrators and other legal representatives of such
person.
SECTION 6.7. Sections 6.1. through 6.6. of this Article
shall also apply to such other agents of the Corporation as are
designated for such purpose at any time by the Board of
Directors.
SECTION 6.8. If any part of this Article shall be found, in
any action, suit or proceeding, to be invalid or ineffective, the
validity and the effect of the remaining parts shall not be
effected.
SECTION 6.9. The provisions of this Article shall be
applicable to claims, actions, suits or proceedings made or
commenced after the adoption hereof, whether arising from acts or
omissions to act occurring before or after the adoption hereof.
ARTICLE VI
SECTION 1. CERTIFICATES OF STOCK. Every holder of stock in
the corporation shall be entitled to have a certificate, signed
by, or in the name of the corporation by, the chairman, or vice
chairman of the board of directors, or the president or a vice
president and the treasurer or an assistant treasurer, or the
secretary of the corporation, certifying the number of shares
owned by him in the corporation. If the corporation shall be
authorized to issue more than one class of stock or more than one
series of any class, the designations, preferences and relative,
participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations, or
restrictions of such preferences and/or rights shall be set forth
in full or summarized on the face or back of the certificate
which the corporation shall issue to represent such class of
series of stock, provided that, except as otherwise provided in
Section 202 of the General Corporation Law of Delaware, in lieu
of the foregoing requirements, there may be set forth on the face
or back of the certificate which the corporation shall issue to
represent such class or series of stock, a statement that the
corporation will furnish without charge to each stockholder who
so requests the powers, designations, preferences and relative,
participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Where a
certificate is countersigned (1) by a transfer agent other than
the corporation or its employee, or (2) by a registrar other than
the corporation or its employee, the signatures of such officers
may be facsimiles.
SECTION 2. LOST CERTIFICATES. New certificates of stock
may be issued in the place of any certificate therefore issued by
the corporation, alleged to have been lost or destroyed, and the
directors may, at their discretion, require the owner of the lost
or destroyed certificate or his legal representatives, to give
the corporation a bond, in such sum as they may direct, not
exceeding double the value of the stock, to indemnify the
corporation against it on account of the alleged loss of any such
new certificate.
SECTION 3. TRANSFER OF SHARES. The shares of stock of the
corporation shall be transferable only upon its books by the
holders thereof in person or by their duly authorized attorneys
or legal representatives, and upon such transfer the old
certificates shall be surrendered to the corporation by the
delivery thereof to the person in charge of the stock and
transfer books and ledgers, or to such other persons as the
directors may designate, by who they shall be canceled, and new
certificates shall thereupon be issued. A record shall be made
of each transfer and whenever a transfer shall be made for
collateral security, and not absolutely, it shall be so expressed
in the entry of the transfer.
<PAGE>
11
SECTION 4. STOCKHOLDERS RECORD DATE. In order that the
corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment
thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend
or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or
exchange of stock or for the purpose of any other lawful action,
the Board of Directors may fix, in advance, a record date, which
shall not be more than sixty nor less than ten days before the
day of such meeting, nor more than sixty days prior to any other
action. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board
of Directors may fix a new record for the adjourned meeting.
SECTION 5. DIVIDENDS. Subject to the provisions of the
Certificate of Incorporation the Board of Directors may, out of
funds legally available therefor at any regular or special
meeting, declare dividends upon the capital stock of the
corporation as and when they deem expedient. Before declaring
any dividends there may be set apart out of any funds of the
corporation available for dividends, such sum or sums as the
directors from time to time at their discretion deem proper
working capital or as a reserve fund to meet contingencies or for
equalizing dividends or for such other purposes as the directors
shall deem conducive to the interests of the corporation.
SECTION 6. SEAL. The corporate seal shall be circular in
form and shall contain the name of the corporation, the year of
its creation and the words "CORPORATE SEAL DELAWARE." Said seal
may be used by causing it or a facsimile thereof to be impressed
or affixed or otherwise reproduced.
SECTION 7. FISCAL YEAR. The fiscal year of the corporation
shall be determined by resolution of the Board of Directors.
SECTION 8. CHECKS. All checks, drafts, or other orders for
the payment of money, notes or other evidences of indebtedness
issued in the name of the corporation shall be signed by the
officer or officers, agent or agents of the corporation, and in
such manner as shall be determined from time to time by
resolution of the Board of Directors.
SECTION 9. NOTICE AND WAIVER OF NOTICE. Whenever any
notice is required by these By-Laws to be given, personal notice
is not meant unless expressly stated, and any notice so required
shall be deemed to be sufficient if given by depositing the same
in the United States mail, postage prepaid, addressed to the
<PAGE>
12
person entitled thereto at his address as it appears on the
records of the corporation, and such notice shall be deemed to
have been given on the day of such mailing. Stockholders not
entitled to vote shall not be entitled to receive notice of any
meetings except as otherwise provided by statute.
Whenever any notice whatever is required to be given under
the provisions of any law, or under the provisions of the
Certificate of Incorporation of the corporation or these By-Laws,
a waiver thereof in writing signed by the person or persons
entitled to said notice, whether before or after the time stated
therein, shall be deemed proper notice.
ARTICLE VII - AMENDMENTS
These By-Laws may be altered and repealed and By-Laws may be
made at any annual meeting of the stockholders or at any special
meeting thereof if notice thereof is contained in the notice of
such special meeting by the affirmative vote of a majority of
the stock issued and outstanding or entitled to vote thereat, or
by the Directors, at any regular meeting of the Board of
Directors, or at any special meeting of the Board of Directors,
if notice thereof is contained in the notice of such special
meeting.
EXHIBIT 3.1
AMENDMENT TO CERTIFICATE OF INCORPORATION
OF
FTM ENERGY, INC.
RESOLVED, by unanimous consent of the directors, in
accordance with section 241 of the General Corporation Law of the
State of Delaware, that the Certificate of Incorporation of FTM
Energy, Inc., filed on February 1, 1996, by and hereby is amended
as follows:
By striking out the first article and replacing it with
the following article:
FIRST: The name of this Corporation shall be:
AYP ENERGY, INC.
The undersigned hereby certify that the corporation has
not yet received any payment for any of its stock and that this
amendment was adopted in accordance with the provisions of
section 241 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 14th day of May, A.D. 1996.
/s/ Alan J. Noia
Alan J. Noia, President
Attest:
/s/ Eileen M. Beck
Eileen M. Beck
Secretary
<PAGE>
CERTIFICATE OF INCORPORATION
OF
FTM ENERGY, INC.
The undersigned, a natural person, for the purpose of
organizing a corporation for conducting the business and
promoting the purposes hereinafter stated, under the provisions
and subject to the requirements of the laws of the State of
Delaware (particularly Chapter 1, Title 8 of the Delaware Code
and the acts amendatory thereof and supplemental thereto, and
known, identified, and referred to as the "General Corporation
Law of the State of Delaware"), hereby certifies that:
FIRST: The name of this Corporation shall be:
FTM ENERGY, INC.
SECOND: Its registered office in the State of Delaware
is to be located at 1013 Centre Road, in the City of Wilmington,
in the County of New Castle and its Registered Agent at such
address is The Prentice-Hall Corporation System, Inc.
THIRD: The nature of the business and the objects and
purposes proposed to be transacted, promoted and carried on are
to do any or all things herein mentioned, as fully and to the
same extent as natural persons might or could do, and in any part
of the world, viz:
The purpose of the corporation is to engage in any
lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware as
presently enacted and as may hereafter be amended.
FOURTH: The total number of share of stock which this
corporation is authorized to issue is:
1,000 Share of common stock at No Par Value
<PAGE>
FIFTH: The name and address of the incorporator is as
follows:
Theresa J. Colecchia
C/o Allegheny Power Service Corporation
800 Cabin Hill Drive
Greensburg, PA 15601
SIXTH: The Directors shall have power to make and to
alter or amend the By-Laws: to fix the amount to be reserved as
working capital, and to authorize and cause to be executed,
mortgages and liens without limit as to the amount, upon the
property and franchise of this Corporation.
With the consent in writing, and pursuant to a majority
vote of the holder of the capital stock issued and outstanding,
the Directors shall have authority to dispose, in any manner, of
the whole property of this Corporation.
The By-Laws shall determine whether and to what extent
the account and books of this corporation, or any of them, shall
be open to the inspection of the stockholders: no stockholder
shall have any right of inspecting any account, or book, or
document of this Corporation, except as conferred b the law or
the By-Laws, or by resolution of the stockholders.
The stockholders and directors shall have power to hold
their meetings and keep the books, documents and papers of the
corporation outside of the State of Delaware, at such places as
my be, from time to time, designated b the By-Laws or by
resolution of the stockholder or directors, except as otherwise
required b the laws of Delaware.
It is the intention that the object, purposes and
powers specified in the THIRD paragraph hereof shall, except
where otherwise specified in said paragraph, be nowise limited or
restricted by reference to or inference from the terms of any
other clause or paragraph in this certificate of incorporation,
but that the object, purposes and powers specified in the THIRD
2
<PAGE>
paragraph and in each of the clauses or paragraphs of this
charter shall be regarded as independent objects, purposes and
powers.
SEVENTH: No director of the Corporation shall be
liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to
the Corporation or its stockholders. (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a
knowing violation of law. (iii) under section 174 of the General
Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal
benefit.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 3rd day of January, A.D. 1996.
/s/ Theresa J. Colecchia
Theresa J. Colecchia
EXHIBIT 3.2
BY-LAWS
of
AYP ENERGY, INC.
As Amended to August 5, 1997
ARTICLE I - OFFICES
SECTION 1. REGISTERED OFFICE. The registered office shall
be established and maintained at 1013 Centre Road, in the City of
Wilmington, County of New Castle in the State of Delaware, and
its Registered Agent at such address is Corporation Service
Company.
SECTION 2. OTHER OFFICES. The corporation may have other
offices, either within or without the State of Delaware, at such
place or places as the Board of Directors may from time to time
appoint or the business of the corporation may require.
ARTICLE II - MEETING OF STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. Annual meetings of
stockholders for the election of directors and for such other
business as may be stated in the notice of the meeting, shall be
held at such place, either within or without the State of
Delaware, and at such time and date as the Board of Directors, by
resolution, shall determine and as set forth in the notice of the
meeting. In the event the Board of Directors fails to so
determine the time, date and place of meeting, the annual meeting
of stockholders shall be held at the offices of Allegheny Power
System, Inc., 10435 Downsville Pike, Hagerstown, Maryland, on the
last Tuesday in February of each year.
If the date of the annual meeting shall fall upon a legal
holiday, the meeting shall be held on the next succeeding
business day. At each annual meeting, the stockholders entitled
to vote shall elect a Board of Directors and may transact such
other corporate business as shall be stated in the notice of the
meeting.
SECTION 2. OTHER MEETINGS. Meetings of stockholders for
any purpose other than the election of directors may be held at
such time and place, within or without the State of Delaware, as
shall be stated in the notice of the meeting.
<PAGE>
2
SECTION 3. VOTING. Each stockholder entitled to vote in
accordance with the terms and provisions of the Certificate of
Incorporation and these By-Laws shall be entitled to one vote, in
person or by proxy, for each share of stock entitled to vote held
by such stockholder, but no proxy shall be voted after three
years from its date unless such proxy provides for a longer
period. Upon the demand of any stockholder, the vote for
directors and upon any question before the meeting shall be by
ballot. All elections for directors shall be decided by
plurality vote; all other questions shall be decided by majority
vote except as otherwise provided by the Certificate of
Incorporation or the laws of the State of Delaware.
SECTION 4. STOCKHOLDER LIST. The officer who has charge of
the stock ledger of the corporation shall at least ten days
before each meeting of stockholders prepare a complete
alphabetical addressed list of the stockholders entitled to vote
at the ensuing election, with the number of shares held by each.
Said list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting,
either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting
is to be held. The list shall be available for inspection at the
meeting.
SECTION 5. QUORUM. Except as otherwise required by law, by
the Certificate of Incorporation or by these By-Laws, the
presence, in person or by proxy, of stockholders holding a
majority of the stock of the corporation entitled to vote shall
constitute a quorum at all meetings of the stockholders. In case
a quorum shall not be present at any meeting, a majority in
interest of the stockholders entitled to vote thereat, present in
person or by proxy, shall have power to adjourn the meeting from
time to time, without notice other than announcement at the
meeting, until the requisite amount of stock entitled to vote
shall be present. At any such adjourned meeting at which the
requisite amount of stock entitled to vote shall be represented,
any business may be transacted which might have been transacted
at the meeting as originally noticed; but only those stockholders
entitled to vote at the meeting as originally noticed shall be
entitled to vote at any adjournment or adjournments thereof.
SECTION 6. SPECIAL MEETINGS. Special meetings of the
stockholders, for any purpose, unless otherwise prescribed by
statute or by the Certificate of Incorporation, may be called by
the president and shall be called by the president or secretary
at the request in writing of a majority of the directors or
<PAGE>
3
stockholders entitled to vote. Such request shall state the
purpose of the proposed meeting.
SECTION 7. NOTICE OF MEETINGS. Written notice, stating the
place, date and time of the meeting, and the general nature of
the business to be considered, shall be given to each stockholder
entitled to vote thereat at his address at it appears on the
records of the corporation, not less than ten nor more than fifty
days before the date of the meeting.
SECTION 8. BUSINESS TRANSACTED. No business other than
that stated in the notice shall be transacted at any meeting
without the unanimous consent of all the stockholders entitled to
vote thereat.
SECTION 9. ACTION WITHOUT MEETING. Except as otherwise
provided by the Certificate of Incorporation, whenever the vote
of stockholders at a meeting thereof is required or permitted to
be taken in connection with any corporate action by any
provisions of the statutes or the Certificate of Incorporation or
of these By-Laws, the meeting and vote of stockholders may be
dispensed with, if all the stockholders who would have been
entitled by vote upon the action if such meeting were held, shall
consent in writing to such corporate action being taken.
ARTICLE III - DIRECTORS
SECTION 1. NUMBER, ELECTION AND TERM OF OFFICE. The Board
of Directors shall consist initially of three directors, and
thereafter shall consist of such number of directors, not less
than three nor more than nine, as the Board of Directors shall
determine from time to time. The directors shall be elected at
the annual meeting of the stockholders and each director shall be
elected to serve until his or her successor shall be elected and
shall qualify.
SECTION 2. RESIGNATIONS. Any director, member of a
committee or other officer may resign at any time. Such
resignation shall be made in writing, and shall take effect at
the time specified therein, and if no time be specified, at the
time of its receipt by the President or Secretary. The
acceptance of a resignation shall not be necessary to make it
effective.
SECTION 3. VACANCIES. If the office of any director,
member of a committee or other officer becomes vacant, the
remaining directors in office, though less than a quorum by a
majority vote, may appoint any qualified person to fill such
<PAGE>
4
vacancy, who shall hold office for the unexpired term and until
his or her successor shall be duly chosen.
SECTION 4. REMOVAL. Any director or directors may be
removed either for or without cause at any time by the
affirmative vote of the holders of a majority of all the shares
of stock outstanding and entitled to vote, at a special meeting
of the stockholders called for the purpose and the vacancies thus
created may be filled, at the meeting held for the purpose of
removal, by the affirmative vote of a majority in interest of the
stockholders entitled to vote.
SECTION 5. INCREASE OF NUMBER. The number of directors may
be increased by amendment of these By-Laws by the affirmative
vote of a majority of the directors, though less than a quorum,
or, by the affirmative vote of a majority in interest of the
stockholders, at the annual meeting or at a special meeting
called for that purpose, and by like vote the additional
directors may be chosen at such meeting to hold office until the
next annual election and until their successors are elected and
qualify.
SECTION 6. COMPENSATION. Directors shall not receive any
stated salary for their services as directors or as members of
committees, but by resolution of the board a fixed fee and
expenses of attendance may be allowed for attendance at each
meeting. Nothing herein contained shall be construed to preclude
any director from serving the corporation in any other capacity
as an officer, agent or otherwise, and receiving compensation
therefor.
SECTION 7. TELEPHONE PARTICIPATION. One or more directors
may participate in a meeting of the Board of Directors by means
of conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear
each other. Participation in a meeting pursuant to this section
shall constitute presence in person at the meeting.
SECTION 8. ACTION WITHOUT MEETING. Any action required or
permitted to be taken at any meeting of the Board of Directors,
or of any committee thereof, may be taken without a meeting, if
prior to or subsequent to such action a written consent thereto
is signed by all members of the board, or of such committee as
the case may be, and such written consent is filed with the
minutes of the board or committee.
SECTION 9. EXECUTIVE AND OTHER COMMITTEES. The Board may
create an Executive Committee and one or more other committees
each consisting of not less than three directors. Each other
Committee shall have such authority as the Board shall give it.
<PAGE>
5
The Board may appoint one or more directors as alternate members
of the Executive Committee or any other Committee to take the
place of any absent member or members at any meeting thereof.
The Executive Committee and each other Committee may act by a
writing or writings signed by all its members or by means of
conference telephone or similar communications equipment by which
all persons participating can simultaneously hear each other.
Participation in a meeting by these communications means
constitutes presence in person at the meeting. The Executive
Committee, except when the Board of Directors is in session,
shall possess and exercise all of the authority and powers of the
Board of Directors however conferred, other than that of filling
vacancies among the directors or in any committee of the
directors.
ARTICLE IV - OFFICERS
SECTION 1. OFFICERS. The officers of the corporation shall
consist of a President and a Secretary, and shall be elected by
the Board of Directors and shall hold office until their
successors are elected and qualified. In addition, the Board of
Directors may elect a Chairman, Treasurer, one or more Vice
Presidents, a Comptroller and such Assistant Secretaries and
Assistant Treasurers as it may deem proper. None of the officers
of the corporation need be directors. The officers shall be
elected at the first meeting of the Board of Directors after each
annual meeting. More than two offices may be held by the same
person.
SECTION 2. OTHER OFFICERS AND AGENTS. The Board of
Directors may appoint such officers and agents as it may deem
advisable, who shall hold their offices for such terms and shall
exercise such power and perform such duties as shall be
determined from time to time by the Board of Directors.
SECTION 3. CHAIRMAN. The Chairman of the Board of
Directors if one be elected, shall preside at all meetings of the
Board of Directors and he shall have and perform such other
duties as from time to time may be assigned to him by the Board
of Directors.
SECTION 4. PRESIDENT. The President shall be the chief
executive officer of the corporation and shall have the general
powers and duties of supervision and management usually vested in
the office of President of a corporation. He shall preside at
all meetings of the stockholders if present there at, and in the
absence or non-election of the Chairman of the Board of
Directors, at all meetings of the Board of Directors, and shall
<PAGE>
6
have general supervision, direction and control of the business
of the corporation except as the Board of Directors shall
authorize the execution thereof in some other manner, he shall
execute bonds, mortgages, and other contracts in behalf of the
corporation, and shall cause the seal to be affixed to any
instrument requiring it and when so affixed the seal shall be
attested by the signature of the Secretary or the Treasurer or an
Assistant Secretary or an Assistant Treasurer.
SECTION 5. VICE PRESIDENT. Each Vice President shall have
such powers and shall perform such duties as shall be assigned to
him by the directors.
SECTION 6. TREASURER. The Treasurer shall have the custody
of the corporate funds and securities and shall keep full and
accurate account of receipts and disbursements in books belonging
to the corporation. He shall deposit all moneys and other
valuables in the name and to the credit of the corporation in
such depositories as may be designated by the Board of Directors.
The Treasurer shall disburse the funds of the corporation as
may be ordered by the Board of Directors, or the President,
taking proper vouchers for such disbursements. He shall render
to the President and Board of Directors at the regular meetings
of the Board of Directors, or whenever they may request it, an
account of all his transactions as Treasurer and of the financial
condition of the corporation. If required by the Board of
Directors, he shall give the corporation a bond for the faithful
discharge of this duties in such amount and with such surety as
the board shall prescribe.
SECTION 7. SECRETARY. The Secretary shall give, or cause
to be given, notice of all meetings of stockholders and
directors, and all other notices required by law or by these By-
Laws, and in case of his or her absence or refusal or neglect so
to do, any such notice may be given by any person thereunto
directed by the President, or by the directors, or stockholders,
upon whose requisition the meeting is called as provided in these
By-Laws. The Secretary shall record all the proceedings of the
meetings of the corporation and of directors in a book to be kept
for that purpose. The Secretary shall keep in safe custody the
seal of the corporation, and when authorized by the Board of
Directors, affix the same to any instrument requiring it, and
when so affixed, it shall be attested by his or her signature or
by the signature of any assistant secretary.
SECTION 8. ASSISTANT TREASURERS & ASSISTANT SECRETARIES.
Assistant Treasurers and Assistant Secretaries, if any, shall be
<PAGE>
7
elected and shall have such powers and shall perform such duties
as shall be assigned to them, respectively, by the directors.
ARTICLE V - INDEMNIFICATION OF DIRECTORS AND OFFICERS
SECTION 6.1 . The Corporation shall indemnify any person
who was or is a party or is threatened with being made a party to
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative,
including all appeals (other than an action, suit or proceeding
by or in the right of the Corporation) by reason of the fact that
he is or was a director, officer or employee of the Corporation,
or is or was serving at the request of the Corporation as a
director, officer or employee of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, decrees, fines,
penalties and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not of itself create a
presumption that the person did not act in good faith or in a
manner which he reasonably believed to be in or not opposed to
the best interests of the Corporation or, with respect to any
criminal action, suit or proceeding, that he had reasonable cause
to believe that his conduct was unlawful.
SECTION 6.2. The Corporation shall indemnify any person who
was or is a party or is threatened with being made a party to any
threatened, pending or completed action, suit or proceeding,
including all appeals, by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he is
or was a director, officer or employee of the Corporation, or is
or was serving at the request of the Corporation as a director,
officer or employee of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including
attorneys' fees, judgments, decrees, fines, penalties and amounts
paid in settlement) actually and reasonably incurred by him in
connection with the defense or settlement of such action, suit or
proceeding. However, indemnification under this Section shall be
made only if the person to be indemnified acted in good faith and
in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation; and no such indemnification
<PAGE>
8
shall be made in respect of any claim, issue or matter as to
which such person shall have been finally adjudged to be liable
for negligence or misconduct in the performance of his duty to
the Corporation unless, and only to the extent that, the court or
body in or before which such action, suit or proceeding was
finally determined, or any court of competent jurisdiction, shall
determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnify for such
expenses or other amounts paid as such court or body shall deem
proper.
SECTION 6.3. Without limiting the right of any director,
officer or employee of the Corporation to indemnification under
any other Section hereof, if such person has been substantially
and finally successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in Sections 6.1. and
6.2. or in defense of any claim, issue, or matter therein, he
shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
SECTION 6.4. Any indemnification under Sections 6.1. and
6.2. (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer or employee is proper in
the circumstances because he has met the applicable standard of
conduct set forth in Sections 6.1. and 6.2. Such determination
shall be made (1) by the Board of Directors by a majority vote of
a quorum consisting of directors who are or were not parties to
or threatened with such action, suit or proceeding, or (2) if
such a quorum is not obtainable, or even if obtainable, if a
majority of a quorum of disinterested directors so directs, by
independent legal counsel (compensated by the Corporation) in a
written opinion, or (3) if there be no disinterested directors,
or if a majority of the disinterested directors, whether or not a
quorum, so directs, by the holders of a majority of the shares
entitled to vote in the election of directors without reference
to default or contingency which would permit the holders of one
or more classes of shares to vote for the election of one or more
directors.
SECTION 6.4.1. Indemnification may be granted for any
action taken or for any failure to take any action giving rise to
the claim for indemnification, and may be made whether or not the
Corporation would have the power to indemnify the person under
any other provision except as provided by this Section, and
whether or not the indemnified liability arises or arose from any
threatened, pending, or completed action by or in the right of
the Corporation. However, such indemnification shall not be made
in any case where the act or failure to act giving rise to the
<PAGE>
9
claim for indemnification is finally determined by a court to
have constituted willful misconduct or recklessness.
SECTION 6.5. Expenses of each person indemnified hereunder
incurred in defending a civil, criminal, administrative or
investigative action, suit, or proceeding (including all appeals)
or threat thereof, may be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding as
authorized by the Board of Directors, whether a disinterested
quorum exists or not, upon receipt of an undertaking by or on
behalf of the director, officer or employee to repay such
expenses unless it shall ultimately be determined that he is
entitled to be indemnified by the Corporation.
SECTION 6.6. The indemnification provided by this Article
shall not be deemed exclusive of or in any way limit any other
rights to which any person indemnified may be or may become
entitled as a matter of law, by the articles, regulations,
agreements, insurance, vote of shareholders or otherwise, with
respect to action in his official capacity and with respect to
action in another capacity while holding such office and shall
continue as to a person who has ceased to be a director, officer,
or employee and shall inure to the benefit of the heirs,
executors, administrators and other legal representatives of such
person.
SECTION 6.7. Sections 6.1. through 6.6. of this Article
shall also apply to such other agents of the Corporation as are
designated for such purpose at any time by the Board of
Directors.
SECTION 6.8. If any part of this Article shall be found, in
any action, suit or proceeding, to be invalid or ineffective, the
validity and the effect of the remaining parts shall not be
effected.
SECTION 6.9. The provisions of this Article shall be
applicable to claims, actions, suits or proceedings made or
commenced after the adoption hereof, whether arising from acts or
omissions to act occurring before or after the adoption hereof.
ARTICLE VI
SECTION 1. CERTIFICATES OF STOCK. Every holder of stock in
the corporation shall be entitled to have a certificate, signed
by, or in the name of the corporation by, the chairman, or vice
<PAGE>
10
chairman of the board of directors, or the president or a vice
president and the treasurer or an assistant treasurer, or the
secretary of the corporation, certifying the number of shares
owned by him in the corporation. If the corporation shall be
authorized to issue more than one class of stock or more than one
series of any class, the designations, preferences and relative,
participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations, or
restrictions of such preferences and/or rights shall be set forth
in full or summarized on the face or back of the certificate
which the corporation shall issue to represent such class of
series of stock, provided that, except as otherwise provided in
Section 202 of the General Corporation Law of Delaware, in lieu
of the foregoing requirements, there may be set forth on the face
or back of the certificate which the corporation shall issue to
represent such class or series of stock, a statement that the
corporation will furnish without charge to each stockholder who
so requests the powers, designations, preferences and relative,
participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Where a
certificate is countersigned (1) by a transfer agent other than
the corporation or its employee, or (2) by a registrar other than
the corporation or its employee, the signatures of such officers
may be facsimiles.
SECTION 2. LOST CERTIFICATES. New certificates of stock
may be issued in the place of any certificate therefore issued by
the corporation, alleged to have been lost or destroyed, and the
directors may, at their discretion, require the owner of the lost
or destroyed certificate or his legal representatives, to give
the corporation a bond, in such sum as they may direct, not
exceeding double the value of the stock, to indemnify the
corporation against it on account of the alleged loss of any such
new certificate.
SECTION 3. TRANSFER OF SHARES. The shares of stock of the
corporation shall be transferable only upon its books by the
holders thereof in person or by their duly authorized attorneys
or legal representatives, and upon such transfer the old
certificates shall be surrendered to the corporation by the
delivery thereof to the person in charge of the stock and
transfer books and ledgers, or to such other persons as the
directors may designate, by who they shall be canceled, and new
certificates shall thereupon be issued. A record shall be made
of each transfer and whenever a transfer shall be made for
collateral security, and not absolutely, it shall be so expressed
in the entry of the transfer.
<PAGE>
11
SECTION 4. STOCKHOLDERS RECORD DATE. In order that the
corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment
thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend
or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or
exchange of stock or for the purpose of any other lawful action,
the Board of Directors may fix, in advance, a record date, which
shall not be more than sixty nor less than ten days before the
day of such meeting, nor more than sixty days prior to any other
action. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board
of Directors may fix a new record for the adjourned meeting.
SECTION 5. DIVIDENDS. Subject to the provisions of the
Certificate of Incorporation the Board of Directors may, out of
funds legally available therefor at any regular or special
meeting, declare dividends upon the capital stock of the
corporation as and when they deem expedient. Before declaring
any dividends there may be set apart out of any funds of the
corporation available for dividends, such sum or sums as the
directors from time to time at their discretion deem proper
working capital or as a reserve fund to meet contingencies or for
equalizing dividends or for such other purposes as the directors
shall deem conducive to the interests of the corporation.
SECTION 6. SEAL. The corporate seal shall be circular in
form and shall contain the name of the corporation, the year of
its creation and the words "CORPORATE SEAL DELAWARE." Said seal
may be used by causing it or a facsimile thereof to be impressed
or affixed or otherwise reproduced.
SECTION 7. FISCAL YEAR. The fiscal year of the corporation
shall be determined by resolution of the Board of Directors.
SECTION 8. CHECKS. All checks, drafts, or other orders for
the payment of money, notes or other evidences of indebtedness
issued in the name of the corporation shall be signed by the
officer or officers, agent or agents of the corporation, and in
such manner as shall be determined from time to time by
resolution of the Board of Directors.
SECTION 9. NOTICE AND WAIVER OF NOTICE. Whenever any
notice is required by these By-Laws to be given, personal notice
is not meant unless expressly stated, and any notice so required
shall be deemed to be sufficient if given by depositing the same
<PAGE>
12
in the United States mail, postage prepaid, addressed to the
person entitled thereto at his address as it appears on the
records of the corporation, and such notice shall be deemed to
have been given on the day of such mailing. Stockholders not
entitled to vote shall not be entitled to receive notice of any
meetings except as otherwise provided by statute.
Whenever any notice whatever is required to be given under
the provisions of any law, or under the provisions of the
Certificate of Incorporation of the corporation or these By-Laws,
a waiver thereof in writing signed by the person or persons
entitled to said notice, whether before or after the time stated
therein, shall be deemed proper notice.
ARTICLE VII - AMENDMENTS
These By-Laws may be altered and repealed and By-Laws may be
made at any annual meeting of the stockholders or at any special
meeting thereof if notice thereof is contained in the notice of
such special meeting by the affirmative vote of a majority of
the stock issued and outstanding or entitled to vote thereat, or
by the Directors, at any regular meeting of the Board of
Directors, or at any special meeting of the Board of Directors,
if notice thereof is contained in the notice of such special
meeting.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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0
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0
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<TOTAL-OPERATING-EXPENSES> 24,633
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0
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<F1>*All common stock is owned by parent, no EPS required.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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0
74,000
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0
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<OTHER-OPERATING-EXPENSES> 2,169,353
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<OTHER-INCOME-NET> 3,445
<INCOME-BEFORE-INTEREST-EXPEN> 478,092
<TOTAL-INTEREST-EXPENSE> 192,703
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<EARNINGS-AVAILABLE-FOR-COMM> 258,421<F1>
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<F1>**Includes an extraordinary charge of $26,968.
<F2>***Includes an extraordinary charge of $0.23.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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0
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<F1>*All common stock is owned by parent no EPS required.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<LEGEND>
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MON POWER
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0
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5,037
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<F1>*All common stock is owned by parent, no EPS required.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
ACTUAL
POTOMAC EDISON
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,323,394
<OTHER-PROPERTY-AND-INVEST> 43,550
<TOTAL-CURRENT-ASSETS> 207,683
<TOTAL-DEFERRED-CHARGES> 64,107
<OTHER-ASSETS> 117
<TOTAL-ASSETS> 1,638,851
<COMMON> 447,700
<CAPITAL-SURPLUS-PAID-IN> 2,690
<RETAINED-EARNINGS> 250,032
<TOTAL-COMMON-STOCKHOLDERS-EQ> 700,422
0
0
<LONG-TERM-DEBT-NET> 510,344
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 75,000
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 353,085
<TOT-CAPITALIZATION-AND-LIAB> 1,638,851
<GROSS-OPERATING-REVENUE> 753,257
<INCOME-TAX-EXPENSE> 37,286
<OTHER-OPERATING-EXPENSES> 580,248
<TOTAL-OPERATING-EXPENSES> 617,534
<OPERATING-INCOME-LOSS> 135,723
<OTHER-INCOME-NET> 8,517
<INCOME-BEFORE-INTEREST-EXPEN> 144,240
<TOTAL-INTEREST-EXPENSE> 43,656
<NET-INCOME> 83,634<F2>
1,071
<EARNINGS-AVAILABLE-FOR-COMM> 82,563
<COMMON-STOCK-DIVIDENDS> 145,055
<TOTAL-INTEREST-ON-BONDS> 42,871
<CASH-FLOW-OPERATIONS> 203,863
<EPS-BASIC> 0.00<F1>
<EPS-DILUTED> 0.00<F1>
<FN>
<F2>**Includes an extraordinary charge of $16,950.
<F1>*All common stock is owned by parent, no EPS required.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
ACTUAL
WEST PENN and subsidiary
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,091,068
<OTHER-PROPERTY-AND-INVEST> 413
<TOTAL-CURRENT-ASSETS> 291,888
<TOTAL-DEFERRED-CHARGES> 481,284
<OTHER-ASSETS> 112
<TOTAL-ASSETS> 1,864,765
<COMMON> 70,021
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 9,637
<TOTAL-COMMON-STOCKHOLDERS-EQ> 79,658
0
0
<LONG-TERM-DEBT-NET> 966,026
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 49,734
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 769,347
<TOT-CAPITALIZATION-AND-LIAB> 1,864,765
<GROSS-OPERATING-REVENUE> 1,354,203
<INCOME-TAX-EXPENSE> 71,573
<OTHER-OPERATING-EXPENSES> 1,088,861
<TOTAL-OPERATING-EXPENSES> 1,160,434
<OPERATING-INCOME-LOSS> 193,769
<OTHER-INCOME-NET> 9,654
<INCOME-BEFORE-INTEREST-EXPEN> 203,423
<TOTAL-INTEREST-EXPENSE> 65,823
<NET-INCOME> 127,582<F1>
4,856
<EARNINGS-AVAILABLE-FOR-COMM> 122,726
<COMMON-STOCK-DIVIDENDS> 83,804
<TOTAL-INTEREST-ON-BONDS> 61,727
<CASH-FLOW-OPERATIONS> 273,447
<EPS-BASIC> 0.00<F2>
<EPS-DILUTED> 0.00<F2>
<FN>
<F1>*Includes an extraordinary charge of $10,018.
<F2>**All common stock is owned by parent, no EPS required.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
ACTUAL
AP COAL
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 4,024
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 96
<TOTAL-DEFERRED-CHARGES> 0
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,120
<COMMON> 1
<CAPITAL-SURPLUS-PAID-IN> 555
<RETAINED-EARNINGS> (13,853)
<TOTAL-COMMON-STOCKHOLDERS-EQ> (13,297)
0
0
<LONG-TERM-DEBT-NET> 14,173
<SHORT-TERM-NOTES> 3,160
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 84
<TOT-CAPITALIZATION-AND-LIAB> 4,120
<GROSS-OPERATING-REVENUE> 0
<INCOME-TAX-EXPENSE> 0
<OTHER-OPERATING-EXPENSES> 0
<TOTAL-OPERATING-EXPENSES> 0
<OPERATING-INCOME-LOSS> 0
<OTHER-INCOME-NET> (87)
<INCOME-BEFORE-INTEREST-EXPEN> (87)
<TOTAL-INTEREST-EXPENSE> 154
<NET-INCOME> (241)
0
<EARNINGS-AVAILABLE-FOR-COMM> 0
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> (206)
<EPS-BASIC> 0.00<F1>
<EPS-DILUTED> 0.00<F1>
<FN>
<F1>*All common stock is owned by parent, no EPS required.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
ACTUAL
ALLEGHENY GENERATING COMPANY
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 601,717
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 7,261
<TOTAL-DEFERRED-CHARGES> 11,905
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 620,883
<COMMON> 1
<CAPITAL-SURPLUS-PAID-IN> 154,490
<RETAINED-EARNINGS> 0
<TOTAL-COMMON-STOCKHOLDERS-EQ> 154,491
0
0
<LONG-TERM-DEBT-NET> 148,932
<SHORT-TERM-NOTES> 52,150
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 265,310
<TOT-CAPITALIZATION-AND-LIAB> 620,883
<GROSS-OPERATING-REVENUE> 70,592
<INCOME-TAX-EXPENSE> 9,997
<OTHER-OPERATING-EXPENSES> 26,513
<TOTAL-OPERATING-EXPENSES> 36,510
<OPERATING-INCOME-LOSS> 34,082
<OTHER-INCOME-NET> 394
<INCOME-BEFORE-INTEREST-EXPEN> 34,476
<TOTAL-INTEREST-EXPENSE> 13,261
<NET-INCOME> 21,215
0
<EARNINGS-AVAILABLE-FOR-COMM> 21,215
<COMMON-STOCK-DIVIDENDS> 32,000
<TOTAL-INTEREST-ON-BONDS> 9,762
<CASH-FLOW-OPERATIONS> 46,671
<EPS-BASIC> 0.00<F1>
<EPS-DILUTED> 0.00<F1>
<FN>
<F1>*All common stock is owned by parent, no EPS required.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
ACTUAL
CT 1&2
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 45,269
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 22,624
<TOTAL-DEFERRED-CHARGES> (1)
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 67,892
<COMMON> 0
<CAPITAL-SURPLUS-PAID-IN> 64,885
<RETAINED-EARNINGS> (86)
<TOTAL-COMMON-STOCKHOLDERS-EQ> 64,799
0
0
<LONG-TERM-DEBT-NET> 0
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 3,093
<TOT-CAPITALIZATION-AND-LIAB> 67,892
<GROSS-OPERATING-REVENUE> 128
<INCOME-TAX-EXPENSE> (46)
<OTHER-OPERATING-EXPENSES> 260
<TOTAL-OPERATING-EXPENSES> 214
<OPERATING-INCOME-LOSS> (86)
<OTHER-INCOME-NET> 0
<INCOME-BEFORE-INTEREST-EXPEN> (86)
<TOTAL-INTEREST-EXPENSE> 0
<NET-INCOME> (86)
0
<EARNINGS-AVAILABLE-FOR-COMM> 0
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> (11,192)
<EPS-BASIC> 0.00<F1>
<EPS-DILUTED> 0.00<F1>
<FN>
<F1>*All common stock is owned by parent, no EPS required.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
ACTUAL
ALLEGHENY ENERGY SUPPLY
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,119,368
<OTHER-PROPERTY-AND-INVEST> 69,521
<TOTAL-CURRENT-ASSETS> 247,470
<TOTAL-DEFERRED-CHARGES> 13,804
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,450,163
<COMMON> 582,238
<CAPITAL-SURPLUS-PAID-IN> (75,642)
<RETAINED-EARNINGS> 6,103
<TOTAL-COMMON-STOCKHOLDERS-EQ> 512,699
0
0
<LONG-TERM-DEBT-NET> 356,239
<SHORT-TERM-NOTES> 21,200
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 560,025
<TOT-CAPITALIZATION-AND-LIAB> 1,450,163
<GROSS-OPERATING-REVENUE> 140,874
<INCOME-TAX-EXPENSE> 2,504
<OTHER-OPERATING-EXPENSES> 127,906
<TOTAL-OPERATING-EXPENSES> 130,410
<OPERATING-INCOME-LOSS> 10,464
<OTHER-INCOME-NET> 1,159
<INCOME-BEFORE-INTEREST-EXPEN> 11,623
<TOTAL-INTEREST-EXPENSE> 2,091
<NET-INCOME> 9,532
0
<EARNINGS-AVAILABLE-FOR-COMM> 9,532
<COMMON-STOCK-DIVIDENDS> 3,430
<TOTAL-INTEREST-ON-BONDS> 2,135
<CASH-FLOW-OPERATIONS> 22,380
<EPS-BASIC> 0.00<F1>
<EPS-DILUTED> 0.00<F1>
<FN>
<F1>*All common stock is owned by parent, no EPS required.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
ACTUAL
ALLEGHENY VENTURES and subsidiary
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 11,080
<OTHER-PROPERTY-AND-INVEST> 16,433
<TOTAL-CURRENT-ASSETS> 10,410
<TOTAL-DEFERRED-CHARGES> 3,050
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 40,973
<COMMON> 1
<CAPITAL-SURPLUS-PAID-IN> 77,347
<RETAINED-EARNINGS> (38,230)
<TOTAL-COMMON-STOCKHOLDERS-EQ> 39,118
0
0
<LONG-TERM-DEBT-NET> 0
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,855
<TOT-CAPITALIZATION-AND-LIAB> 40,973
<GROSS-OPERATING-REVENUE> 110,356
<INCOME-TAX-EXPENSE> 55
<OTHER-OPERATING-EXPENSES> 101,911
<TOTAL-OPERATING-EXPENSES> 101,966
<OPERATING-INCOME-LOSS> 8,390
<OTHER-INCOME-NET> (216)
<INCOME-BEFORE-INTEREST-EXPEN> 8,174
<TOTAL-INTEREST-EXPENSE> 8,295
<NET-INCOME> (121)
0
<EARNINGS-AVAILABLE-FOR-COMM> (121)
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 8,251
<CASH-FLOW-OPERATIONS> (9,583)
<EPS-BASIC> 0.00<F1>
<EPS-DILUTED> 0.00<F1>
<FN>
<F1>*All common stock is owned by parent, no EPS required.
</FN>
</TABLE>
