Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
GTE CALIFORNIA INCORPORATED
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-0510200
(State of Incorporation) (I.R.S. Employer
Identification No.)
600 Hidden Ridge, Irving, Texas 75038
(214) 718-5600
(Address and telephone number of principal executive offices)
_________
DAVID S. KAUFFMAN, ESQ. CHARLES J. SOMES,
ESQ.
GTE Service Corporation GTE California
Incorporated
One Stamford Forum 600 Hidden Ridge
Stamford, Connecticut 06904 Irving, Texas 75038
(203) 965-2986 (214) 718-5600
(Names, addresses and telephone numbers of agents for
service)
_________
Copies to: Robert W. Mullen, Jr., Esq., Milbank, Tweed,
Hadley & McCloy,
1 Chase Manhattan Plaza, New York, New York
10005.
Approximate date of commencement of proposed sale to the
public: From time to time after the effective date of the
Registration Statement.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box. [ ]
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, check the following box. [X]
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier registration
statement for the same offering. [ ] 33-
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [
] 33-
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box. [ ]
_________
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Title of Each Class Amount Offering Aggregate
Amount of
of Securities To Be Price Per Offering
Registration
To Be Registered Registered Unit
Price Fee*
Debentures $400,000,000 101% $404,000,000
$139,310.35**
* Registration fee is calculated pursuant to Rule 457(a) under
the Securities
Act of 1933.
** As permitted by Rule 429 under the Securities Act of 1933, as
amended, the prospectus contained in this Registration
Statement also covers $100,000,000 of Debentures previously
registered and unissued (Registration Statement No. 33-51541).
The Registrant previously paid a filing fee of $313,448.28 with
such registration statement ($34,827.59 of which is associated
with the $100,000,000 of Debentures covered by the prospectus
contained in this Registration Statement).
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration
Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
SUBJECT TO COMPLETION, DATED FEBRUARY 16, 1996
GTE CALIFORNIA INCORPORATED
DEBENTURES
________________
GTE California Incorporated (the "Company") intends to offer
from time to time up to $500,000,000 aggregate principal amount
of its debentures (the "New Debentures") in one or more series at
prices and on terms to be determined at the time or times of
sale. The aggregate principal amount, rate and time of payment
of interest, maturity, initial public offering price, if any,
redemption provisions and other specific terms of each series of
New Debentures will be set forth in an accompanying prospectus
supplement ("Prospectus Supplement").
________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
________________
The Company may sell the New Debentures through underwriters
or agents, or directly to one or more institutional purchasers.
A Prospectus Supplement will set forth the names of underwriters,
if any, any applicable commissions or discounts, the price of the
New Debentures and the net proceeds to the Company from any such
sale or sales.
________________
The date of this Prospectus is , 1996.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE
ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY
SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
STATEMENT OF AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, in accordance therewith, files reports and other
information with the Securities and Exchange Commission (the
"SEC"). These reports and other information can be inspected and
copied at the public reference facilities maintained by the SEC
at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, as
well as at the following Regional Offices: Seven World Trade
Center, New York, New York 10048 and 500 West Madison Street,
Chicago, Illinois 60661. Copies of such material can be obtained
from the public reference section of the SEC at its prescribed
rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated herein by
reference:
1. The Annual Report on Form 10-K of the Company for the
year ended December 31, 1994;
2. The Quarterly Reports on Form 10-Q of the Company for
the quarters ended March 31, 1995, June 30, 1995 and
September 30, 1995;
3. The Current Reports on Form 8-K of the Company dated
September 28, 1995 and November 9, 1995;
4. The Annual Report on Form 10-K of Contel of
California, Inc. ("Contel California") for the year ended
December 31, 1994;
5. The Quarterly Reports on Form 10-Q of Contel
California for the quarters ended March 31, 1995, June 30,
1995 and September 30, 1995; and
6. The Current Reports on Form 8-K of Contel California
dated September 28, 1995 and November 9, 1995.
All documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to the termination of the offering of
the New Debentures hereunder shall be deemed to be incorporated
by reference in this Prospectus and to be part hereof from the
date of filing of such documents.
The Company hereby undertakes to provide without charge to
each person to whom a copy of this Prospectus has been delivered,
on the written or oral request of any such person, including any
beneficial owner, a copy of any or all of the documents referred
to above which have been or may be incorporated in this
Prospectus by reference, other than exhibits to such documents
unless such exhibits are specifically incorporated by reference
into the information that the Prospectus incorporates. Requests
for such copies should be directed to David S. Kauffman, Esq.,
Assistant Secretary of the Company, at One Stamford Forum,
Stamford, Connecticut 06904. Mr. Kauffman's telephone number is
(203) 965-2986.
THE COMPANY
The Company was incorporated under the laws of the state of
California in 1929 and provides telecommunications services in
southern and central California. All of the common stock of the
Company, constituting approximately 99.6% of the total voting
stock, is owned by GTE Corporation ("GTE"). The Company's
principal executive offices are located at 600 Hidden Ridge,
Irving, Texas 75038, telephone number (214) 718-5600.
-2-
The Company has a wholly-owned subsidiary, GTEL, which
contains the majority of the Company's non-regulated operations.
These operations include the sale, lease and maintenance of
telecommunications equipment and other deregulated products and
services.
THE MERGER
In March 1991, the merger of the Company's parent, GTE, and
Contel Corporation ("Contel") was consummated (the "Parent
Merger"). In an interim decision issued on March 13, 1991, the
California Public Utilities Commission (the "CPUC") approved a
stipulation agreement which conditionally approved the Parent
Merger. The interim decision also established a second phase of
the proceeding in which GTE was directed to file documentation
showing that the Parent Merger meets certain California statutory
requirements. GTE was also ordered by the CPUC to submit a plan
for the merger of any of the Contel and GTE regulated California
subsidiaries. On September 14, 1992, the Company and Contel
California joined with GTE and Contel in filing a comprehensive
plan with the CPUC to merge Contel California into the Company
with the Company to be the surviving corporation in the Merger
(the "Merger"). The filing also contained detailed information
to demonstrate that the Parent Merger should receive final
approval.
On April 20, 1994, the CPUC issued a decision giving final
approval of the Parent Merger and approving the Merger. In its
decision, the CPUC, based on its interpretation of California
statutory requirements, determined that all of the estimated
savings of the Merger had to be returned to ratepayers. The
CPUC, however, provided GTE, Contel, the Company and Contel
California (the "Applicants") the opportunity to supplement the
evidentiary record to show why the estimated merger savings
should be apportioned between the ratepayers and shareholders.
The Applicants submitted the additional evidence requested by the
CPUC on April 29, 1994. By making this filing, the effective
date of the decision approving the Merger was delayed.
While the CPUC was considering the new evidence, the
California legislature enacted legislation that amended the
Public Utilities Code to clearly authorize the CPUC to equitably
apportion merger savings between ratepayers and shareholders;
provided that at least 50 percent of those savings are returned
to ratepayers. The new law became effective January 1, 1996. A
decision approving the Merger under the terms of the amended
legislation is expected during the first quarter of 1996.
Contel California provides telecommunications services in
the states of California, Nevada and Arizona. All of the common
stock of Contel California is indirectly owned by GTE. Contel
California is significantly smaller in terms of operating
revenues, net income and total assets than the Company. It is
currently anticipated, subject to receipt of final approval from
the CPUC, that the Merger will be consummated in the second half
of 1996.
RECENT DEVELOPMENTS
On November 9, 1995, the Company and Contel California
announced through GTE that in response to recently enacted and
pending legislation and the increasingly competitive environment
in which the Company and Contel California expect to operate,
effective January 1, 1996, the Company and Contel California are
discontinuing the use of accounting practices appropriate to
regulated enterprises.
The Company and Contel California have traditionally
followed the accounting for regulated enterprises prescribed by
Statement of Financial Accounting Standards No. 71, "Accounting
for the Effects of Certain Types of Regulation" ("FAS 71"). In
general, FAS 71 required the Company and Contel
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California to depreciate their plant and equipment over regulator
approved lives which may extend beyond the assets' actual
economic lives. FAS 71 also required the deferral of certain
costs based upon approvals received from regulators to recover
such costs in the future. As a result of these requirements, the
recorded net book value of certain assets and liabilities,
primarily telephone plant and equipment, was higher than that
which would otherwise have been recorded.
As a result of this decision, the Company and Contel
California have recorded a non-cash, extraordinary charge of
approximately $711,000,000 after taxes during the fourth quarter
of 1995. This charge, which is based on the results of a
comprehensive study of the economic lives of the Company's and
Contel California's telephone plant and equipment, will have no
effect on their customers or its liquidity and capital resources.
The charge primarily represents an adjustment to the net
book value of the fixed assets of the Company and Contel
California, through an increase in accumulated depreciation, and
is not expected to have a significant effect on depreciation
expense of existing plant and equipment or earnings over the next
several years (this adjustment, together with the adjustment to
"Other Assets" referenced in the footnotes to the Pro Forma
Condensed Consolidating Financial Statements included in this
Prospectus, is hereinafter referred to as the "FAS 71
Adjustments"). The income statement effect of this change in
accounting will be reflected in the statements of income as an
extraordinary charge, net of tax, under the provisions of
Statement of Financial Accounting Standards No. 101, "Regulated
Enterprises-Accounting for the Discontinuation of Application of
FASB Statement No. 71."
In February 1996, federal telecommunications reform
legislation was signed into law--addressing a wide range of
competitive and regulatory issues that will affect the future
development of local and long-distance services, cable television
and information services.
The Telecommunications Act of 1996 overhauls 62 years of
telecommun-ications law, replacing government regulation with
competition as the chief way of assuring that telecommunications
services are delivered to customers. The bill removes many of
the statutory and court-ordered barriers to competition between
segments of the industry, enabling local-exchange, long-distance
and cable companies to go head-to-head in offering voice, video
and information services.
The new law also sets guidelines to open local-exchange
markets, loosens restrictions barring local telephone companies
from entering the cable market, preserves universal service while
equalizing the responsibility for contribution among all
carriers, and lifts controls on cable prices.
A key provision of the law also eliminates the legal
restraints of the GTE Consent Decree which has kept the Company
from providing interLATA services. This action will simplify the
Company's ability to market local and interLATA service to
customers as bundled service. GTE plans to offer interLATA
services early in 1996.
Another key aspect of the federal legislation requires local
telephone companies to allow customers to pre-subscribe to a
specific carrier to handle their intraLATA calls. Pre-subscribed
customers will simply dial "1" before the telephone number in
order to complete the intraLATA calls. This action will
significantly increase competition in that market.
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USE OF PROCEEDS
The net proceeds from the offering and sale of the New
Debentures, exclusive of accrued interest, will be applied (A)
toward the repayment of short-term borrowings incurred (i) in
connection with the redemption on December 15, 1995 of the
following series of the Company's first mortgage bonds:
<TABLE>
<CAPTION>
Original Outstanding Total
Principal
Interest Maturity Principal Amount Premium Paid
and Premium
Series Rate Date at Redemption at
Redemption at Redemption
<S> <C> <C> <C> <C> <C>
RR 7.75%12/01/98 $75,000,000 0 $ 75,000,000
</TABLE>
and (ii) for the purpose of financing the Company's construction
program, and (B) for general corporate purposes. At December 31,
1995, the Company had short-term borrowings exclusive of current
maturities of $176,000,000 at an annual average interest rate of
5.67%. The Company's construction budget is currently estimated
at approximately $521,000,000 for 1996. Contel California
finances part of its construction program through the use of
short term borrowings. At December 31, 1995, Contel California
had short-term borrowings exclusive of current maturities of
$51,800,000 at an annual average interest rate of 5.60%. Contel
California's construction budget is currently estimated at
approximately $44,000,000 for 1996. The balance of the funds for
the completion of the 1996 construction program will be obtained
primarily from internal sources and short-term loans.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE> Nine
<CAPTION> Months
Ended
September 30, Years Ended December
31,
1995 1994 1993 1992 1991
1990
_______ _____ _______ ______ ____
____
<S> <C> <C> <C> <C> <C>
<C>
Consolidated Ratios of
Earnings to Fixed Charges
(Unaudited) (a)............. 5.67 7.31 2.25(b) 5.55
5.45 5.53
Pro Forma Combined Consolidated
Ratios of Earnings to Fixed
Charges (Unaudited) (a)(c).. 5.69 7.53 2.77(d) 6.11
5.93 5.89
</TABLE>
___________
(a) Computed as follows: (1) "earnings" have been calculated by
adding income taxes and fixed charges to income before
extraordinary charge; (2) "fixed charges" include interest
expense and the portion of rentals representing interest.
(b) Results for 1993 include an after-tax restructuring charge of
approximately $274,000,000 for the implementation of a re-
engineering plan and a one-time, after-tax charge of
approximately $21,000,000 related to the enhanced early
retirement and voluntary separation programs offered to
eligible employees in 1993. Excluding these items, the
consolidated ratio of earnings to fixed charges for the year
ended December 31, 1993 would have been 5.90.
-5-
(c) The pro forma combined consolidated ratios of earnings to
fixed charges represent the ratios of the Company as if the
Merger had been consummated at the beginning of each period
presented.
(d) Results for 1993 include an after-tax restructuring charge of
approximately $304,000,000 for the implementation of a re-
engineering plan and a one-time, after-tax charge of
approximately $23,000,000 related to the enhanced early
retirement and voluntary separation programs offered to
eligible employees in 1993. Excluding these items, the pro
forma combined consolidated ratio of earnings to fixed charges
for the year ended December 31, 1993 would have been 6.45.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
The following Unaudited Pro Forma Condensed Consolidating
Balance Sheet as of September 30, 1995, gives effect to the
proposed Merger as if it had occurred as of the balance sheet
date. The following Unaudited Pro Forma Condensed Consolidating
Statements of Income for the nine month periods ended September
30, 1995 and 1994 and for the years ended December 31, 1994-1992
give effect to the proposed Merger as if it had occurred at the
beginning of each of the respective periods presented. The pro
forma condensed consolidating financial statements give effect to
the Merger as a "pooling of interests" for accounting purposes
and should be read in conjunction with the historical financial
statements and the related notes thereto contained in the
Company's Annual Report on Form 10-K for the year ended December
31, 1994 and subsequent filings with the SEC. All material
intercompany transactions have been eliminated in the pro forma
statements. The corporation that will result from the Merger,
currently scheduled to occur (subject to receipt of final
approval from the CPUC) in the second half of 1996, is
hereinafter referred to as the "Surviving Corporation."
The pro forma data are presented for informational purposes
only and are not necessarily indicative of the operating results
or financial position that would have occurred had the Merger
been consummated at the dates indicated, nor are they necessarily
indicative of future operating results or financial position.
Organizational and other costs to be incurred in connection with
the Merger are not expected to be material.
-6-
<TABLE>
<CAPTION>
Pro Forma Condensed Consolidating Balance Sheet (Unaudited)
As of September 30, 1995
(Thousands of Dollars)
Contel
Sub-
Company California
Eliminations total
___ _____
_____
<S> <C> <C> <C>
<C>
ASSETS
Current Assets:
Cash $ 35,035$ 1,774 $ $ 36,809
Accounts and notes receivable,
less allowances of $49,973
and $2,519 for the Company and
Contel California, respectively511,07454,496(496)(1)565,074
Materials and supplies 35,806 18 35,824
Deferred income tax benefits73,122 5,490 78,612
Prepayments and other 25,009 1,113 26,122
Total current assets 680,046 62,891 (496) 742,441
Property, plant and equipment:
Original cost 8,598,499 914,857 9,513,356
Accumulated depreciation(3,911,731)(408,567) (4,320,298)
Net property, plant and equipment4,686,768506,290
5,193,058
Prepaid pension costs406,463 - 406,463
Other assets 147,700 14,985 162,685
Total assets $5,920,977 $584,166 $(496) $6,504,647
FAS 71 Surviving
Adjustments Corporation
____________ ______
Current Assets:
Cash $ $36,809
Accounts and notes receivable,
less allowances of $49,973
and $2,519 for the Company and
Contel California, respectively 565,074
Materials and supplies 35,824
Deferred income tax benefits 78,612
Prepayments and other 26,122
Total current assets 742,441
Property, plant and equipment:
Original cost 9,513,356
Accumulated depreciation(1,078,302)(4)(5,398,600)
Net property, plant and equipment(1,078,302)(4) 4,114,756
Prepaid pension costs 406,463
Other assets (126,827)(5) 35,858
Total assets $(1,205,129) $5,299,518
______________
See Notes to Pro Forma Condensed Consolidating Financial
Statements.
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Pro Forma Condensed Consolidating Balance Sheet (Unaudited)
(continued)
As of September 30, 1995
(Thousands of Dollars)
Contel
Sub-
Company California
Eliminations total
___ _____
_____
<S> <C> <C> <C>
<C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt, including current
maturities $ 198,173 $ - $ $198,173
Notes payable to affiliates - 40,042 40,042
Accounts payable 170,156 3,746(496)(1) 173,406
Accrued taxes 140,804 5,083 145,887
Accrued interest 22,804 - 22,804
Accrued payroll and vacations95,614 9,189 104,803
Accrued dividends 82,726 10,663 93,389
Accrued restructuring costs and other266,016 47,276
313,292
Total current liabilities976,293115,999 (496) 1,091,796
Long-term debt 1,280,541 90,000 1,370,541
Reserves and deferred credits:
Deferred income taxes 728,370 90,626 818,996
Employee benefit obligations 97,147 64,004 161,151
Restructuring costs and other487,494 9,710 497,204
Total reserves and deferred credits1,313,011164,340
1,477,351
Shareholders' equity:
Preferred stock 81,866 - 81,866
Common stock 1,388,764 12,518 1,401,282
Other capital 2,040 78,917 80,957
Reinvested earnings 878,462 122,392 1,000,854
Total shareholders' equity2,351,132213,827 2,564,959
Total liabilities and shareholders' equity$5,920,977 $584,166
$ (496) $6,504,647
FAS 71 Surviving
Adjustments Corporation
___ ______
Current liabilities:
Short-term debt, including current
maturities $ $ 198,173
Notes payable to affiliates 40,042
Accounts payable 173,406
Accrued taxes 145,887
Accrued interest 22,804
Accrued payroll and vacations 104,803
Accrued dividends 93,389
Accrued restructuring costs and other 313,292
Total current liabilities 1,091,796
Long-term debt 1,370,541
Reserves and deferred credits:
Deferred income taxes (494,081)(6) 324,915
Employee benefit obligations 161,151
Restructuring costs and other 497,204
Total reserves and deferred credits(494,081) 983,270
Shareholders' equity:
Preferred stock 81,866
Common stock 1,401,282
Other capital 80,957
Reinvested earnings (711,048)(3) 289,806
Total shareholders' equity(711,048)1,853,911
Total liabilities and shareholders' equity$(1,205,129) $5,299,518
</TABLE>
______________
See Notes to Pro Forma Condensed Consolidating Financial
Statements.
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<TABLE>
<CAPTION>
Pro Forma Condensed Consolidating Statement Of Income (Unaudited)
Nine Months Ended September 30, 1995
(Thousands of Dollars)
Contel FAS 71
Surviving
Company California Adjustments
Corporation
_______ __________ ___________
___________
<S> <C> <C> <C> <C>
OPERATING REVENUES:$2,016,978 $230,702$56,888(2) $2,304,568
OPERATING EXPENSES:
Cost of sales & services779,399 86,240 865,639
Depreciation & amortization 448,035 52,448
500,483
Selling, general &
administrative 304,640 34,410 56,888(2) 395,938
Total operating expenses1,532,074173,098 56,888 1,762,060
OPERATING INCOME 484,904 57,604 542,508
OTHER DEDUCTIONS 75,159 8,266 83,425
Income before income taxes409,745 49,338
Income taxes 171,030 21,587 192,617
Income before extraordinary
charge 238,715 27,751 266,466
EXTRAORDINARY CHARGE - - (711,048)(3) (711,048)
Net income (loss)$ 238,715 $ 27,751$ (711,048) $ (444,582)
</TABLE>
__________
See Notes to Pro Forma Condensed Consolidating Financial
Statements.
CA:S-3:12
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<TABLE>
<CAPTION>
Pro Forma Condensed Consolidating Statement Of Income (Unaudited)
Nine Months Ended September 30, 1994
(Thousands of Dollars)
Contel Surviving
Company California
Corporation
_______ __________
___________
<S> <C> <C> <C>
OPERATING REVENUES: $2,167,879 $270,945 $2,438,824
OPERATING EXPENSES:
Cost of sales & services 783,770 95,298 879,068
Depreciation & amortization432,578 48,363 480,941
Selling, general &
administrative 344,370 30,358 374,728
Total operating expenses1,560,718 174,019 1,734,737
OPERATING INCOME 607,161 96,926 704,087
OTHER DEDUCTIONS 68,845 8,499 77,344
Income before income taxes 538,316 88,427 626,743
Income taxes 220,606 36,341 256,947
Net income $ 317,710 $ 52,086 $ 369,796
</TABLE>
__________
See Notes to Pro Forma Condensed Consolidating Financial
Statements.
CA:S-3:13
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<TABLE>
<CAPTION>
Pro Forma Condensed Consolidating Statement Of Income (Unaudited)
Year Ended December 31, 1994
(Thousands of Dollars)
Contel FAS 71
Surviving
Company California Adjustments
Corporation
_______ __________ ___________
___________
<S> <C> <C> <C> <C>
OPERATING REVENUES:$2,881,730 $367,253$70,889(2) $3,319,872
OPERATING EXPENSES:
Cost of sales & services1,061,059123,777 1,184,836
Depreciation & amortization 579,867 64,637
644,504
Selling, general &
administrative 418,319 55,652 70,889(2) 544,860
_________ ________ ________ _______
Total Operating Expenses2,059,496244,070 70,889 2,374,200
_________ ________ ________ ________
OPERATING INCOME 822,485 123,187 945,672
OTHER DEDUCTIONS 94,480 11,321 105,801
_________ ________ _______
________
Income before income taxes728,005111,866 839,871
Income taxes 293,465 46,120 339,585
_________ ________ _______ ________
Income before extraordinary
charge 434,540 65,746 500,286
EXTRAORDINARY CHARGE - - (711,048)(3) (711,048)
_________ ________ _______ _________
Net income (loss) $ 434,540 $ 65,746$ (711,048) $ (210,762)
</TABLE>
__________
See Notes to Pro Forma Condensed Consolidating Financial
Statements.
CA:S-3:14
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<TABLE>
<CAPTION>
Pro Forma Condensed Consolidating Statement Of Income (Unaudited)
Year Ended December 31, 1993
(Thousands of Dollars)
Contel Surviving
Company California
Corporation
_______ __________
___________
<S> <C> <C> <C>
OPERATING REVENUES: $2,874,778 $384,637 $3,259,415
OPERATING EXPENSES:
Cost of sales & services 1,092,559 121,927 1,214,486
Depreciation & amortization583,066 58,431 641,497
Selling, general &
administrative 480,677 52,118 532,795
Restructuring costs 445,175 48,987 494,162
Total operating expenses2,601,477 281,463 2,882,940
OPERATING INCOME 273,301 103,174 376,475
OTHER DEDUCTIONS 109,147 10,708 119,855
Income before income taxes 164,154 92,466 256,620
Income taxes 70,535 37,397 107,932
Income before extraordinary
charge 93,619 55,069 148,688
EXTRAORDINARY CHARGE(7) 20,214 19,751 39,965
________ _______ ________
Net income $ 73,405 $ 35,318 $ 108,723
</TABLE>
_________
See Notes to Pro Forma Condensed Consolidating Financial
Statements.
CA:S-3:15
-12-
<TABLE>
<CAPTION>
Pro Forma Condensed Consolidating Statement Of Income (Unaudited)
Year Ended December 31, 1992
(Thousands of Dollars)
Contel
Surviving
Company California
Corporation
_______ __________
___________
<S> <C> <C> <C>
OPERATING REVENUES: $2,921,018 $413,962 $3,334,980
OPERATING EXPENSES:
Cost of sales & services 1,105,991 132,466 1,238,457
Depreciation & amortization563,540 53,440 616,980
Selling, general &
administrative 481,937 61,579 543,516
Total operating expenses2,151,468 247,485 2,398,953
OPERATING INCOME 769,550 166,477 936,027
OTHER DEDUCTIONS 117,019 12,046 129,065
Income before income taxes 652,459 154,431 806,890
Income taxes 237,089 60,733 297,822
Net income $ 415,370 $ 93,698 $ 509,068
</TABLE>
_________
See Notes to Pro Forma Condensed Consolidating Financial
Statements.
-13-
Notes to Pro Forma Condensed Consolidating Financial Statements
(Unaudited)
1.Represents the elimination of intercompany receivables and
payables.
2.Represents the reclassification of the provision for
uncollectible accounts to selling, general, and administrative
expenses, consistent with non-regulated accounting practices.
3.Represents the after-tax effect of the adjustments described in
notes 4 - 5 below.
4.Represents the write-down of property, plant, equipment, net
due to an impairment of such assets resulting from depreciation
lives set by regulators that are longer than the assets'
economic lives.
5.Represents the write-off of net regulatory assets and the write-
off of the original debt issuance costs associated with the
refinancing of $75 million of long-term debt described under
"Use of Proceeds" in this Prospectus.
6.Represents the tax effect of the adjustments described in notes
4 - 5.
7.Represents the costs associated with early retirement of debt.
8.Reclassifications of prior year data have been made in the pro
forma condensed consolidating financial statements where
appropriate to conform to the third quarter 1995 presentation.
CA:S-3:17
-14-
THE NEW DEBENTURES
The New Debentures are to be issued as one or more series of
the Company's debentures (the "Debentures") under an Indenture,
dated as of December 1, 1993 (the "Indenture"), between the
Company and First Trust of California, National Association, as
successor trustee to Bank of America National Trust and Savings
Association (the "Trustee"). By resolution of the Board of
Directors of the Company specifically authorizing each new series
of Debentures (a "Board Resolution"), the Company will designate
the title of each series, aggregate principal amount, date or
dates of maturity, dates for payment and rate of interest,
redemption dates, prices, obligations and restrictions, if any,
and any other terms with respect to each such series. The
following summary does not purport to be complete and is subject
in all respects to the provisions of, and is qualified in its
entirety by express reference to, the cited Articles and Sections
of the Indenture and the form of Board Resolution, which are
filed as exhibits to the Registration Statement.
Form and Exchange
The New Debentures are to be issued in registered form only
in denominations of $1,000 and integral multiples thereof and
will be exchangeable for New Debentures of the same series of
other denominations of a like aggregate principal amount without
charge except for reimbursement of taxes, if any. (ARTICLE TWO)
Maturity, Interest and Payment
Information concerning the maturity, interest rate and
payment dates of each series of the New Debentures will be
contained in a Prospectus Supplement relating to that series of
New Debentures.
Redemption Provisions, Sinking Fund and Defeasance
Each series of the New Debentures may be redeemed upon not
less than 30 days' notice at the redemption prices and subject to
the conditions that will be set forth in a Board Resolution and
in a Prospectus Supplement relating to that series of New
Debentures. (ARTICLE THREE) If a sinking fund is established
with respect to any series of the New Debentures, a description
of the terms of such sinking fund will be set forth in a Board
Resolution and in a Prospectus Supplement relating to that series
of New Debentures. The Indenture provides that each series of
the New Debentures is subject to defeasance. (SECTION 11.02)
Restrictions
The New Debentures will not be secured. The Indenture
provides, however, that if the Company shall at any time mortgage
or pledge any of its property, the Company will secure the New
Debentures, equally and ratably with the other indebtedness or
obligations secured by such mortgage or pledge, so long as such
other indebtedness or obligations shall be so secured. There are
certain exceptions to the foregoing, among them that the
Debentures need not be secured:
(i) in the case of (a) purchase money mortgages, (b) conditional
sales agreements or (c) mortgages existing at the time of
purchase, on property acquired after the date of the Indenture;
(ii) with respect to certain deposits or pledges to secure the
performance of bids, tenders, contracts or leases or in
connection with worker's compensation and similar matters;
-15-
(iii) with respect to mechanics' and similar liens in the
ordinary course of business;
(iv) with respect to the Company's first mortgage bonds
outstanding on the date of the Indenture, issued and secured by
the Company and its predecessors in interest under various
security instruments, all of which have been assumed by the
Company (collectively, the "First Mortgage Bonds"), and any
replacement or renewal (without increase in principal amount or
extension of final maturity date) of such outstanding First
Mortgage Bonds;
(v) with respect to First Mortgage Bonds which may be issued by
the Company in connection with the consolidation or merger of the
Company with or into certain affiliates of the Company in
exchange for or otherwise in substitution for long-term senior
indebtedness of any such affiliate ("Affiliate Debt") which by
its terms (x) is secured by a mortgage on all or a portion of the
property of such affiliate, (y) prohibits long- term senior
secured indebtedness from being incurred by such affiliate, or a
successor thereto, unless the Affiliate Debt shall be secured
equally and ratably with such long-term senior secured
indebtedness or (z) prohibits long-term senior secured
indebtedness from being incurred by such affiliate; or
(vi) with respect to indebtedness required to be assumed by the
Company in connection with the merger or consolidation of certain
affiliates of the Company with or into the Company. (SECTION
4.05)
The Indenture does not limit the amount of debt securities
which may be issued or the amount of debt which may be incurred
by the Company. (SECTION 2.01) However, while the restriction
in the Indenture described above would not afford holders of the
New Debentures protection in the event of a highly leveraged
transaction in which unsecured indebtedness was incurred, the
issuance of most debt securities by the Company, including the
New Debentures, does require state regulatory approval (which may
or may not be granted). In addition, in the event of a highly
leveraged transaction in which secured indebtedness was incurred,
the above restriction would require the New Debentures to be
secured equally and ratably with such secured indebtedness,
subject to the exceptions described above. It is unlikely that a
leveraged buyout initiated or supported by the Company, the
management of the Company or an affiliate of either party would
occur, because all of the common stock of the Company,
constituting approximately 99.6% of the total voting stock, is
owned by GTE, which has no current intention of selling its
ownership in the Company.
Modifications of Indenture
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a
majority in aggregate principal amount of the Debentures of any
series at the time outstanding and affected by such modification,
to modify the Indenture or any supplemental indenture affecting
that series of the Debentures or the rights of the holders of
that series of Debentures. However, no such modification shall
(i) extend the fixed maturity of any Debenture, or reduce the
principal amount thereof, or reduce the rate or extend the time
of payment of interest thereon, or reduce any premium payable
upon the redemption thereof, without the consent of the holder of
each Debenture so affected, or (ii) reduce the aforesaid
percentage of Debentures, the holders of which are required to
consent to any such supplemental indenture, without the consent
of each holder of Debentures then outstanding and affected
thereby. (SECTION 9.02)
-16-
The Company and the Trustee may execute, without the consent
of any holder of Debentures, any supplemental indenture for
certain other usual purposes including the creation of any new
series of Debentures. (SECTIONS 2.01, 9.01 and 10.01)
Events of Default
The Indenture provides that the following described events
constitute "Events of Default" with respect to each series of the
Debentures thereunder: (a) failure for 30 business days to pay
interest on the Debentures of that series when due; (b) failure
to pay principal or premium, if any, on the Debentures of that
series when due, whether at maturity, upon redemption, by
declaration or otherwise, or to make any sinking fund payment
with respect to that series; (c) failure to observe or perform
any other covenant (other than those specifically relating to
another series) in the Indenture for 90 days after notice with
respect thereto; or (d) certain events in bankruptcy, insolvency
or reorganization. (SECTION 6.01)
The holders of a majority in aggregate outstanding principal
amount of any series of the Debentures have the right to direct
the time, method and place of conducting any proceeding for any
remedy available to the Trustee for that series. (SECTION 6.06)
The Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of any particular series of the
Debentures may declare the principal due and payable immediately
upon an Event of Default with respect to such series, but the
holders of a majority in aggregate outstanding principal amount
of such series may rescind and annul such declaration and waive
the default if the default has been cured and a sum sufficient to
pay all matured installments of interest and principal and any
premium has been deposited with the Trustee. (SECTION 6.01)
The holders of a majority in aggregate outstanding principal
amount of any series of the Debentures may, on behalf of the
holders of all the Debentures of such series, waive any past
default except a default in the payment of principal, premium, if
any, or interest. (SECTION 6.06) The Company is required to
file annually with the Trustee a certificate as to whether or not
the Company is in compliance with all the conditions and
covenants under the Indenture. (SECTION 5.03)
Concerning the Trustee
The Trustee, prior to an Event of Default, undertakes to
perform only such duties as are specifically set forth in the
Indenture and, after the occurrence of an Event of Default, shall
exercise the same degree of care as a prudent individual would
exercise in the conduct of his own affairs. (SECTION 7.01)
Subject to such provision, the Trustee is under no obligation to
exercise any of the powers vested in it by the Indenture at the
request of any holders of Debentures, unless offered reasonable
security or indemnity by such security holders against the costs,
expenses and liabilities which might be incurred thereby.
(SECTION 7.02) The Trustee is not required to expend or risk its
own funds or incur personal financial liability in the
performance of its duties if the Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
(SECTION 7.01)
-17-
EXPERTS
The financial statements and schedules included or
incorporated by reference in the Company's Annual Report on Form
10-K for the year ended December 31, 1994 and Contel California's
Annual Report on Form 10-K for the year ended December 31, 1994,
which are incorporated by reference in this Prospectus, have been
audited by Arthur Andersen LLP, independent public accountants,
as indicated in their reports with respect thereto, and are
incorporated herein in reliance upon the authority of said firm
as experts in giving said reports. Reference is made to said
reports on financial statements of the Company and Contel
California, which include explanatory paragraphs with respect to
the change in the method of accounting for postretirement
benefits other than pensions and for income taxes as discussed in
Note 1 to each of the financial statements.
CERTAIN LEGAL MATTERS
The validity of the New Debentures will be passed upon for
the Company by Richard M. Cahill, Esq., Vice President - General
Counsel of the Company. Certain legal matters in connection with
the New Debentures will be passed upon for the underwriters,
agents, or institutional purchasers by Milbank, Tweed, Hadley &
McCloy of New York, New York.
PLAN OF DISTRIBUTION
The Company may sell any series of the New Debentures in one
or more of the following ways: (i) to underwriters for resale to
the public or to institutional purchasers; (ii) directly to
institutional purchasers; or (iii) through Company agents to the
public or to institutional purchasers. The Prospectus Supplement
with respect to each series of New Debentures will set forth the
terms of the offering of such New Debentures, including the name
or names of any underwriters or agents, the purchase price of
such New Debentures and the proceeds to the Company from such
sale, any underwriting discounts or agency fees and other items
constituting underwriters' or agents' compensation, any initial
public offering price, any discounts or concessions allowed or
reallowed or paid to dealers and any securities exchanges on
which such New Debentures may be listed.
If underwriters are used in the sale, such New Debentures
will be acquired by the underwriters for their own account and
may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale.
Unless otherwise set forth in the Prospectus Supplement, the
obligations of the underwriters to purchase any series of New
Debentures will be subject to certain conditions precedent and
the underwriters will be obligated to purchase all such New
Debentures if any are purchased. In the event of a default of
one or more of the underwriters involving not more than 10% of
the aggregate principal amount of the New Debentures offered for
sale, the non-defaulting underwriters would be required to
purchase the New Debentures agreed to be purchased by such
defaulting underwriter or underwriters. In the event of a
default in excess of 10% of the aggregate principal amount of the
New Debentures, the Company may, at its option, sell less than
all the New Debentures offered.
-18-
Underwriters and agents may be entitled under agreements
entered into with the Company to indemnification by the Company
against certain civil liabilities, including liabilities under
the Securities Act of 1933, as amended, or to contribution with
respect to payments which the underwriters or agents may be
required to make in respect thereof. Underwriters and agents may
be customers of, engage in transactions with, or perform services
for, the Company in the ordinary course of business.
-19-
____________________________________________
_____________________________
No dealer, salesman or any other person has
been authorized to give any information or
to make any representations other than those GTE California
Incorporated
contained in this Prospectus in connection
with the offer contained in this Prospectus, ____________
and, if given or made, such information or
representations must not be relied upon. PROSPECTUS
This Prospectus does not constitute an offer-
____________
ing by the Company or any dealer in any
jurisdiction in which such offering may not
be lawfully made.
TABLE OF CONTENTS
Page
Statement of Available Information... 2
Incorporation of Certain Documents
by Reference........................ 2
The Company.......................... 2
The Merger........................... 3
Recent Developments.................. 3
Use of Proceeds...................... 5
Consolidated Ratios of Earnings to
Fixed Charges....................... 5
Unaudited Pro Forma Condensed
Consolidating Financial Statements.. 6
The New Debentures................... 15
Experts.............................. 18
Certain Legal Matters................ 18
Plan of Distribution................. 18
____________
, 1996
____________________________________________
_____________________________
CA:S-3:23
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is a statement of estimated expenses in
connection with the issuance and distribution of the securities
being registered, other than underwriting discounts and
commission.
1. Registration fee......................... $139,310.35
2. Trustee's fees .......................... 7,500.00
3. Cost of printing and engraving........... 25,000.00
4. Accounting fees.......................... 13,000.00
5. Rating agencies' fees.................... 186,500.00
6. Miscellaneous............................ 8,689.65
$380,000.00
Item 15. Indemnification of Directors and Officers.
Pursuant to Section 317 of the California Corporations Code
(the "CCC"), a corporation may indemnify its directors and
officers by reason of service in such capacities against
expenses, judgments, fines, settlements and other amounts
actually and reasonably incurred in connection with any
proceeding to which the director or officer was or is a party or
is threatened to be made a party; provided, however, the director
or officer has acted in good faith and in a manner reasonably
believed to be in the best interests of the corporation. With
respect to any criminal proceedings, the director or officer must
have had no reasonable cause to believe that his or her conduct
was unlawful. In actions by, or in the right of, a corporation,
no indemnification is available for expenses incurred with
respect to a pending action settled or disposed of without court
approval or with respect to any claim, issue or matter as to
which such director or officer is adjudged liable unless, and
only to the extent that, it is determined upon application in the
court adjudicating the proceeding that, in view of all of the
circumstances in the case, such person is fairly and reasonably
entitled to indemnity for such expenses. Indemnification against
reasonable expenses incurred is mandatory to the extent the
director or officer is successful in defense of the proceeding or
any claim, issue or matter therein. In cases where the director
or officer is not successful, indemnification must be approved by
the court adjudicating the proceeding or by the corporation
acting through its shareholders, disinterested directors or
independent legal counsel.
The indemnification provided as set forth above is not
exclusive and a corporation may, under the CCC, grant additional
rights to indemnification; provided, however, that in cases where
directors or officers breach their duty to the corporation or its
stockholders such indemnification may not limit the liability of
directors or officers (i) for acts or omissions that involve
intentional misconduct or a knowing and culpable violation of
law, (ii) for acts or omissions believed to be contrary to the
best interests of the corporation or its shareholders or that
involve the absence of good faith,
(iii) for any transaction from which the director or officer
derived an improper personal benefit, (iv) for acts or omissions
that show a reckless
II-1
disregard for the duty to the corporation or its shareholders in
circumstances in which the director or officer was aware, or
should have been aware, in the ordinary course of performing his
or her duties, of a risk of serious injury to the corporation or
its shareholders, (v) for acts or omissions that constitute an
unexcused pattern of inattention that amounts to an abdication of
the duty to the corporation or its shareholders, (vi) in actions
arising out of contracts in which the director or officer has a
material financial interest or (vii) for claims arising from
corporate actions which subject directors to joint and several
liability under Section 316 of the CCC.
As permitted by the CCC, the Company's By-laws provide for
indemnification of directors and officers in accordance with the
foregoing standards, provided such persons have acted in
accordance with such standards. The Company also has insurance
policies, as permitted by the CCC, on behalf of its directors and
officers against certain liabilities which might be incurred by
them in such capacities.
Item 16. Exhibits.
See Exhibit Index on Page E-1.
Item 17. Undertakings.
The Company hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, as
amended (the "Act"), each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the
Act may be permitted to officers, directors and controlling
persons of the Company pursuant to any charter provision, by-law
or otherwise, the Company has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than payment by the Company of
expenses incurred or paid by an officer, director or controlling
person of the Company in the successful defense of any action,
suit or proceeding) is asserted by such officer, director or
controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Act;
II-2
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
provided, however, that paragraphs (i) and (ii) shall not apply
if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed by the Company pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability
under the Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
II-3
SIGNATURES
Pursuant to the requirements of the Act, the Registrant
certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by
the undersigned thereunto duly authorized, in the City of Irving,
State of Texas, on the 14th day of February, 1996
GTE CALIFORNIA INCORPORATED
(Registrant)
By: M.L. KEITH, JR.
M.L. Keith, Jr.
President
Pursuant to the requirements of the Act, this Registration
Statement is signed below by the following persons in the
capacities and on the dates indicated.
M.L. KEITH, JR. )
)
M.L. Keith, Jr. President )
(Principal Executive )
Officer) )
)
)
GERALD K. DINSMORE )
)
Gerald K. Dinsmore Senior Vice President )
-Finance and )
Planning and )
Director ) February 14,
1996
(Principal Financial )
Officer) )
)
)
)
WILLIAM M. EDWARDS, III )
)
William M. Edwards, III Controller )
(Principal Accounting )
Officer) )
)
)
)
MICHAEL B. ESSTMAN )
)
Michael B. Esstman Director )
II-4
THOMAS W. WHITE )
)
Thomas W. White Director )
)
)February 14, 1996
)
RICHARD M. CAHILL )
)
Richard M. Cahill Director )
II-5
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form
S-3 of our reports, dated January 25, 1995, included in the GTE
California Incorporated Form 10-K for the year ended December 31,
1994, and the Contel of California, Inc. Form 10-K for the year
ended December 31, 1994, and to all references to our Firm
included in this Registration Statement.
ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Dallas, Texas
February 15, 1996
II-6
EXHIBIT INDEX
Exhibit
Number
1.1 - Form of Purchase Agreement, including Standard Purchase
Agreement Provisions (February 1996 Edition).
2.1 - Agreement of Merger, dated September 10, 1992, between GTE
California Incorporated and Contel of California
(incorporated by reference from GTE California
Incorporated's Registration Statement Form S-3, No.
33-51541, filed with the Securities and Exchange Commission
on December 17, 1993).
4.1 - Form of Indenture between GTE California Incorporated and
Bank of America National Trust and Savings Association, as
Trustee, dated as of December 1, 1993 (incorporated by
reference from GTE California Incorporated's Registration
Statement on Form S-3, No. 33-51541, filed with the
Securities and Exchange Commission on December 17, 1993).
4.2 - Form of the Board Resolution under which the Debentures
being registered are to be issued.
5 - Opinion and consent of Richard M. Cahill, Esq.
12.1 - Statement of the consolidated ratios of earnings to fixed
charges.
12.2 - Pro forma combined statement of the consolidated ratios of
earnings to fixed charges.
23.1 - Consent of Arthur Andersen LLP is included elsewhere in
this Registration Statement.
23.2 - Consent of Richard M. Cahill, Esq. (contained in opinion
filed as Exhibit 5).
25 - Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939, as amended, of First Trust of
California, National Association, as successor trustee to
Bank of America National Trust and Savings Association under
the Indenture incorporated by reference in Exhibit 4.1.
26 - Form of Invitation for Bids.
E-1
CA:S-3:30
Exhibit
1.1
GTE CALIFORNIA INCORPORATED
PURCHASE AGREEMENT
GTE California Incorporated, a California corporation (the
"Company"), proposes to issue and sell $___,000,000 aggregate
principal amount of its ___% Debentures, Series _, Due ____ (the
"New Debentures"). Subject to the terms and conditions set forth
or incorporated by reference herein, the Company agrees to sell
and the purchasers named in Schedule A attached hereto (the
"Purchasers") agree to purchase the New Debentures at __% of
their principal amount, plus accrued interest from ______________
to the date of payment for the New Debentures and delivery
thereof. Interest on the New Debentures will be payable semi-
annually on ___________ and ___________, commencing _________.
The New Debentures will be reoffered to the public at ____% of
their principal amount.
All the provisions contained in the Company's Standard
Purchase Agreement Provisions (February 1996 Edition) (the
"Standard Purchase Agreement Provisions") annexed hereto shall be
deemed to be a part of this Purchase Agreement to the same extent
as if such provisions had been set forth in full herein.
REDEMPTION PROVISIONS:
[The New Debentures will not be redeemable prior to
maturity.]
OR
[The New Debentures will not be redeemable prior to _____.
Thereafter, the New Debentures will be redeemable on not less 30
nor more than 60 days' notice given as provided in the Indenture,
as a whole or in part, at the option of the Company at the
redemption price set forth below. The "initial regular
redemption price" will be the initial public offering price as
defined below plus the rate of interest on the New Debentures.
The redemption price during the twelve month period beginning
________ and during the twelve month periods beginning on each
____________ thereafter through the twelve month period ended
____________ will be determined by reducing the initial regular
redemption price by an amount determined by multiplying (a) 1/_
of the amount by which such initial regular redemption price
exceeds 100% by (b) the number of such full twelve month periods
which shall have elapsed between ___________ and the date fixed
for redemption; and thereafter the redemption prices during the
twelve month periods beginning ____________ shall be 100%;
provided, however, that all such prices will be specified to the
nearest 0.01% or if there is no nearest 0.01%, then to the next
higher 0.01%.
For the purpose of determining the redemption prices of the
New Debentures, the initial public offering price of the New
Debentures shall be the price, expressed in percentage of
principal amount (exclusive of accrued interest), at which the
New Debentures are to be initially offered for sale to the
public; if there is not a public offering of the New Debentures,
the initial public offering price of the New Debentures shall be
deemed to be the price, expressed in percentage of principal
amount (exclusive of accrued interest), to be paid to the Company
by the Purchasers.]
CLOSING:
The Purchasers agree to pay for the New Debentures, at the
option of the Company, by certified or official bank check or
checks or by wire transfer in each case in same day funds, upon
delivery of such New Debentures at 10:00 A.M. (New York City
time) on _____________ (the "Closing Date") or at such
-2-
other time, not later than the seventh full business day
thereafter, as shall be agreed upon by the Company and the
Purchasers or the firm or firms designated as the representative
or representatives, as the case may be, of the Purchasers (the
"Representative"). The Company shall advise the Representative
not later than the business day immediately preceding the Closing
Date of its decision whether to accept payment for the New
Debentures by certified bank check or by wire transfer and, if
the Company chooses to accept payment by wire transfer, the
Company shall provide the Representative on such date immediately
preceding the Closing Date with the appropriate wire transfer
instructions.
RESALE:
[The Purchasers represent that they intend to resell the New
Debentures, and therefore the provisions applicable to Reselling
Purchasers in the Standard Purchase Agreement Provisions will be
applicable.]
OR
[The Purchasers represent that they do not intend to resell
the New Debentures, and therefore the provisions applicable to
Reselling Purchasers in the Standard Purchase Agreement
Provisions will not be applicable.]
In witness whereof, the parties have executed this Purchase
Agreement this _____ day of __________, _____.
[Names of Purchasers or
Representative]
By: ___________________________
Title:
GTE CALIFORNIA INCORPORATED
By: ___________________________
Vice President
-3-
SCHEDULE A
The names of the Purchasers and the principal amount of
New Debentures which each respectively offers to purchase are as
follows:
Principal
Amount
of New
Name Debentures
______________
$___,000,000
______________
Total........................ $___,000,000
GTE CALIFORNIA INCORPORATED
STANDARD PURCHASE AGREEMENT PROVISIONS
(February 1996 Edition)
GTE California Incorporated, a California corporation (the
"Company"), may enter into one or more purchase agreements
providing for the sale of debentures to the purchaser or
purchasers named therein (the "Purchasers"). The standard
provisions set forth herein will be incorporated by reference in
any such purchase agreement ("Purchase Agreement"). The Purchase
Agreement, including these Standard Purchase Agreement Provisions
incorporated therein by reference, is hereinafter referred to as
"this Agreement". Unless otherwise defined herein, terms used in
this Agreement that are defined in the Purchase Agreement have
the meanings set forth therein.
I. SALE OF THE DEBENTURES
The Company proposes to issue one or more series of
debentures pursuant to the provisions of an Indenture dated as of
December 1, 1993 (the "Indenture"), between the Company and First
Trust of California, National Association, as successor trustee
to Bank of America National Trust and Savings Association (the
"Trustee"). By resolution of the Board of Directors of the
Company specifically authorizing each new series of debentures (a
"Board Resolution"), the Company will designate the title of each
series, aggregate principal amount, date or dates of maturity,
dates for payment and rate of interest, redemption dates, prices,
obligations and restrictions, if any, and any other terms with
respect to each such series.
The Company has filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933,
as amended (the "Act"), registration statement No. 333-_____
relating to $400,000,000 of the Company's debentures registered
thereunder and $100,000,000 of the Company's debentures
registered under Registration Statement No. 33-51541 (the amount
remaining unsold thereunder, from time to time, is hereinafter
referred to as the "Debentures"), including a prospectus which,
pursuant to Rule 429 of the Act, relates to the Debentures, and
has filed with, or transmitted for filing to, the Commission (or
will promptly after the sale so file or transmit for filing) a
prospectus supplement specifically relating to a particular
series of Debentures (such particular series being hereinafter
referred to as the "New Debentures") pursuant to Rule 424(b)
under the Act ("Rule 424(b)"). The term "Registration Statement"
means the registration statements referred to herein, as amended
to the date of the Purchase Agreement. The term "Basic
Prospectus" means the prospectus relating to the Debentures
included in the Registration Statement. The term "Prospectus"
means the Basic Prospectus together with the prospectus
supplement specifically relating to the New Debentures, as filed
with, or transmitted for filing to, the Commission pursuant to
Rule 424(b). As used herein, the terms "Registration Statement",
"Basic Prospectus" and "Prospectus" shall include in each case
the material, if any, incorporated by reference therein.
II. PURCHASERS' REPRESENTATIONS AND RESALE
Each Purchaser represents and warrants that information
furnished in writing to the Company expressly for use with
respect to the New Debentures will not contain any untrue
statement of a material fact and will not omit any material fact
in connection with such information necessary to make such
information not misleading.
If the Purchasers advise the Company in the Purchase
Agreement that they intend to resell the New Debentures, the
Company will assist the Purchasers as hereinafter provided. The
terms of any such resale will be set forth in the Prospectus.
The provisions of Paragraphs C and D of Article VI and Articles
VIII, IX and X of this Agreement apply only to Purchasers that
have advised the Company of their intention to resell the New
Debentures ("Reselling Purchasers"). All other provisions apply
to any Purchaser including a Reselling Purchaser.
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III. CLOSING
The closing will be held at the office of GTE Service
Corporation, 4th Floor, One Stamford Forum, Stamford, Connecticut
06904 on the Closing Date. Concurrent with the delivery of the
New Debentures to the Purchasers or to the Representative for the
account of each Purchaser, payment of the full purchase price of
the New Debentures shall be made, at the option of the Company,
by certified or official bank check or checks in same day funds,
payable to the Company or its order, at The Bank of New York,
Attention: Corporate Trust Department, or by wire transfer in
same day funds to The Bank of New York for the account of the
Company. Upon receipt of such check or wire transfer by The Bank
of New York, such check or wire transfer shall be deemed to be
delivered at the closing. The New Debentures shall be in the
form of temporary or definitive fully-registered New Debentures
in denominations of One Thousand Dollars ($1,000) or any integral
multiple thereof, registered in such names as the Purchasers or
the Representative shall request not less than two business days
before the Closing Date. The Company agrees to make the New
Debentures available to the Purchasers or the Representative for
inspection at the office of First Trust of California, National
Association, Los Angeles, California, or The Depository Trust
Company, New York, New York, at least twenty-four hours prior to
the time fixed for the delivery of the New Debentures on the
Closing Date.
IV. CONDITIONS TO PURCHASERS' OBLIGATIONS
The respective obligations of the Purchasers hereunder are
subject to the following conditions:
(A) The Registration Statement shall have become effective
and no stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceedings for
such purpose shall be pending before or threatened by the
Commission; since the latest date as of which information is
given in the Registration Statement, there shall have been no
material adverse change in the business, business prospects,
properties, financial condition or results of operations of the
Company; and the Purchasers or the Representative shall have
received on the Closing Date the customary form of compliance
certificate, dated the Closing Date and signed by the President
or a Vice President of the Company, including the foregoing. The
officer executing such certificate may rely upon the best of his
or her knowledge as to proceedings pending or threatened.
(B) At the Closing Date, there shall be in full force and
effect an order or orders, satisfactory to counsel for the
Purchasers, of the California Public Utility Commission and of
such other regulatory authorities, if any, as may have
jurisdiction over the issue and sale of the New Debentures by the
Company to the Purchasers, authorizing such issue and sale as
herein and in the Registration Statement provided, and none of
such orders shall contain any conditions inconsistent with the
provisions of this Agreement or of the Registration Statement.
(C) The Purchasers or the Representative shall have
received on the Closing Date an opinion of Richard M. Cahill,
Esq., Vice President-General Counsel of the Company, or other
counsel to the Company satisfactory to the Purchasers and counsel
to the Purchasers, dated the Closing Date, substantially in the
form set forth in Exhibit A hereto.
(D) The Purchasers or the Representative shall have
received on the Closing Date an opinion of Milbank, Tweed, Hadley
& McCloy, counsel for the Purchasers, dated the Closing Date,
substantially in the form set forth in Exhibit B hereto.
(E) The Purchasers or the Representative shall have
received on the Closing Date a letter from Arthur Andersen LLP,
independent public accountants
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for the Company, dated as of the Closing Date, to the effect set
forth in Exhibit C hereto.
V. CONDITIONS TO COMPANY'S OBLIGATIONS
The obligations of the Company hereunder are subject to the
following conditions:
(A) The Registration Statement shall have become effective
and no stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceedings for
such purpose shall be pending before or threatened by the
Commission.
(B) At the Closing Date, there shall be in full force and
effect an order or orders, satisfactory to the Company, of the
California Public Utility Commission and of such other regulatory
authorities, if any, as may have jurisdiction over the issue and
sale of the New Debentures by the Company to the Purchasers.
(C) The Company shall have received on the Closing Date the
full purchase price of the New Debentures purchased hereunder.
VI. COVENANTS OF THE COMPANY
In further consideration of the agreements contained herein
of the Purchasers, the Company covenants to the several
Purchasers as follows:
(A) To furnish to the Purchasers or the Representative a
copy of the Registration Statement including materials, if any,
incorporated by reference therein and, during the period
mentioned in (C) below, to supply as many copies of the
Prospectus, any documents incorporated by reference therein and
any supplements and amendments thereto as the Purchasers or the
Representative may reasonably request. The terms "supplement"
and "amendment" or "amend" as used in this Agreement shall
include all documents filed by the Company with the Commission
subsequent to the effective date of the Registration Statement,
or the date of the Basic Prospectus, as the case may be, pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), which are deemed to be incorporated by reference therein.
(B) Before amending or supplementing the Registration
Statement or the Prospectus with respect to the New Debentures,
to furnish to any Purchaser or the Representative, and to counsel
for the Purchasers, a copy of each such proposed amendment or
supplement.
The covenants in Paragraphs (C) and (D) apply only to
Reselling Purchasers:
(C) If in the period after the first date of resale of the
New Debentures during which, in the opinion of counsel for the
Reselling Purchasers, the Prospectus is required by law to be
delivered, any event shall occur as a result of which it is
necessary to amend or supplement the Prospectus in order to make
a statement therein, in light of the circumstances when the
Prospectus is delivered to a subsequent purchaser, not materially
misleading, or if it is otherwise necessary to amend or
supplement the Prospectus to comply with law, forthwith to
prepare and furnish, at its own expense (unless such amendment
shall relate to information furnished by the Purchasers or the
Representative by or on behalf of the Purchasers in writing
expressly for use in the Prospectus), to the Reselling
Purchasers, the number of copies requested by the Reselling
Purchasers or the Representative of either amendments or
supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in light of
the circumstances when the Prospectus is delivered to a
subsequent purchaser, be misleading or so that the Prospectus
will comply with law.
-4-
(D) To use its best efforts to qualify the New Debentures
for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Purchasers or the Representative shall
reasonably request and to pay all expenses (including fees and
disbursements of counsel) in connection therewith; provided,
however, that the Company, in complying with the foregoing
provisions of this paragraph, shall not be required to qualify as
a foreign company or to register or qualify as a broker or dealer
in securities in any jurisdiction or to consent to service of
process in any jurisdiction other than with respect to claims
arising out of the offering or sale of the New Debentures, and
provided further that the Company shall not be required to
continue the qualification of the New Debentures beyond one year
from the date of the sale of the New Debentures.
VII. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the several
Purchasers that (i) each document, if any, filed or to be filed
pursuant to the Exchange Act and incorporated by reference in the
Basic Prospectus or the Prospectus complied or will comply when
so filed in all material respects with the Exchange Act and the
rules and regulations thereunder, (ii) each part of the
Registration Statement filed with the Commission pursuant to the
Act relating to the New Debentures, when such part became
effective, did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, (iii) on the effective date of the Registration
Statement, the date the Prospectus is filed pursuant to Rule
424(b) and at all times subsequent to and including the Closing
Date, the Registration Statement and the Prospectus, as amended
or supplemented, if applicable, complied or will comply in all
material respects with the Act and the applicable rules and
regulations thereunder, (iv) on the effective date of the
Registration Statement, the Registration Statement did not
contain, and as amended or supplemented, if applicable, will not
contain, any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein
not misleading, and on the date the Prospectus, or any amendment
or supplement thereto, is filed pursuant to Rule 424(b) and on
the Closing Date, the Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
except that these representations and warranties do not apply to
statements or omissions in the Registration Statement or the
Prospectus based upon information furnished to the Company by any
Purchaser or the Representative by or on behalf of any Purchaser
in writing expressly for use therein or to statements or
omissions in the Statement of Eligibility of the Trustee under
the Indenture, (v) the consummation of any transaction herein
contemplated will not result in a breach of any of the terms of
any agreement or instrument to which the Company is a party, and
(vi) the Indenture has been qualified under the Trust Indenture
Act of 1939, as amended.
VIII. INDEMNIFICATION
The Company agrees to indemnify and hold harmless each
Reselling Purchaser and each person, if any, who controls such
Reselling Purchaser within the meaning of either Section 15 of
the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages and liabilities based upon any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Basic Prospectus or
the Prospectus (if used within the period set forth in Paragraph
(C) of Article VI hereof, and as amended or supplemented if the
Company shall have furnished any amendments or supplements
thereto), or based upon any omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are based
upon any such untrue statement or omission or alleged untrue
statement or omission based
-5-
upon information furnished to the Company by any Reselling
Purchaser or the Representative by or on behalf of any Reselling
Purchaser in writing expressly for use therein or by any
statement or omission in the Statement of Eligibility of the
Trustee under the Indenture. The foregoing agreement, insofar as
it relates to the Prospectus, shall not inure to the benefit of
any Reselling Purchaser (or to the benefit of any person
controlling such Reselling Purchaser) on account of any losses,
claims, damages or liabilities arising from the sale of any New
Debentures by said Reselling Purchaser to any person if a copy of
the Prospectus (as amended or supplemented, if prior to
distribution of the Prospectus to the Reselling Purchaser, the
Company shall have made any supplements or amendments which have
been furnished to said Reselling Purchaser) shall not have been
sent or given by or on behalf of such Reselling Purchaser to such
person at or prior to the written confirmation of the sale of the
New Debentures to such person and such statement or omission is
cured in the Prospectus.
Each Reselling Purchaser agrees to indemnify and hold
harmless the Company, its directors, its officers who sign the
Registration Statement and any person controlling the Company to
the same extent as the foregoing indemnity from the Company to
each Reselling Purchaser, but only with reference to information
relating to said Reselling Purchaser furnished to the Company in
writing by the Reselling Purchaser or the Representative by or on
behalf of said Reselling Purchaser expressly for use in the
Registration Statement or the Prospectus.
In case any proceeding (including any governmental
investigation) shall be instituted involving any person in
respect of which indemnity may be sought pursuant to either of
the two preceding paragraphs, such person (the "indemnified
party") shall promptly notify the person or persons against whom
such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and
any others the indemnifying party may designate in such
proceeding (provided, however, that if such indemnified party
shall object to the selection of counsel after having been
advised by such counsel that there may be one or more legal
defenses available to the indemnified party which are different
from or additional to those available to the indemnifying party,
the indemnifying party shall designate other counsel reasonably
satisfactory to the indemnified party) and the indemnifying party
shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such
indemnified party unless the indemnifying party and the
indemnified party shall have mutually agreed to the retention of
such counsel. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent
but if settled with such consent or if there be a final judgment
for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by
reason of such settlement or judgment.
If the indemnification provided for in this Article VIII is
unavailable to an indemnified party under the first or second
paragraph hereof or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified
party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and
the Reselling Purchasers on the other from the offering of the
New Debentures or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company
on the one hand and of the Reselling Purchasers on the other in
connection with
-6-
the statement or omission that resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on
the one hand and the Reselling Purchasers on the other in
connection with the offering of the New Debentures shall be
deemed to be in the same proportion as the total net proceeds
from the offering of the New Debentures received by the Company
bear to the total commissions, if any, received by all of the
Reselling Purchasers in respect thereof. If there are no
commissions allowed or paid by the Company to the Reselling
Purchasers in respect of the New Debentures, the relative
benefits received by the Reselling Purchasers in the preceding
sentence shall be the difference between the price received by
such Reselling Purchasers upon resale of the New Debentures and
the price paid for the New Debentures pursuant to the Purchase
Agreement. The relative fault of the Company on the one hand and
of the Reselling Purchasers on the other shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied
by the Company or by the Reselling Purchasers and the parties'
relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to
in this Article VIII shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. No person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent
misrepresentation.
IX. SURVIVAL
The indemnity and contribution agreements contained in
Article VIII and the representations and warranties of the
Company contained in Article VII of this Agreement shall remain
operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by any
Reselling Purchaser or on behalf of any Reselling Purchaser or
any persons controlling any Reselling Purchaser and (iii)
acceptance of and payment for any of the New Debentures.
X. TERMINATION BY RESELLING PURCHASERS
At any time prior to the Closing Date this Agreement shall
be subject to termination in the absolute discretion of the
Reselling Purchasers, by notice given to the Company, if (i)
trading in securities generally on the New York Stock Exchange
shall have been suspended or materially limited, (ii) a general
moratorium on commercial banking activities in New York shall
have been declared by either Federal or New York State
authorities, (iii) minimum prices shall have been established on
the New York Stock Exchange by Federal or New York State
authorities or (iv) any outbreak or material escalation of
hostilities involving the United States or declaration by the
United States of a national emergency or war or other calamity or
crisis shall have occurred, the effect of any of which is such as
to make it impracticable or inadvisable to proceed with the
delivery of the New Debentures on the terms and in the manner
contemplated by the Prospectus.
XI. TERMINATION BY PURCHASERS
If this Agreement shall be terminated by the Purchasers
because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason (other
-7-
than those set forth in Article V) the Company shall be unable to
perform its obligations under this Agreement, the Company will
reimburse the Purchasers for all out-of-pocket expenses
(including the fees and disbursements of counsel) reasonably
incurred by such Purchasers in connection with the New
Debentures. Except as provided herein, the Purchasers shall bear
all of their expenses, including the fees and disbursements of
counsel.
XII. SUBSTITUTION OF PURCHASERS
If for any reason any Purchaser shall not purchase the New
Debentures it has agreed to purchase hereunder, the remaining
Purchasers shall have the right within 24 hours to make
arrangements satisfactory to the Company for the purchase of such
New Debentures hereunder. If they fail to do so, the amounts of
New Debentures that the remaining Purchasers are obligated,
severally, to purchase under this Agreement shall be increased in
the proportions which the total amount of New Debentures which
they have respectively agreed to purchase bears to the total
amount of New Debentures which all non-defaulting Purchasers have
so agreed to purchase, or in such other proportions as the
Purchasers may specify to absorb such unpurchased New Debentures,
provided that such aggregate increases shall not exceed 10% of
the total amount of the New Debentures set forth in Schedule A to
the Purchase Agreement. If any unpurchased New Debentures still
remain, the Company shall have the right either to elect to
consummate the sale except as to any such unpurchased New
Debentures so remaining or, within the next succeeding 24 hours,
to make arrangements satisfactory to the remaining Purchasers for
the purchase of such New Debentures. In any such cases, either
the Purchasers or the Representative or the Company shall have
the right to postpone the Closing Date for not more than seven
business days to a mutually acceptable date. If the Company shall
not elect to so consummate the sale and any unpurchased New
Debentures remain for which no satisfactory substitute Purchaser
is obtained in accordance with the above provisions, then this
Agreement shall terminate without liability on the part of any
non-defaulting Purchaser or the Company for the purchase or sale
of any New Debenture under this Agreement. No provision in this
paragraph shall relieve any defaulting Purchaser of liability to
the Company for damages occasioned by such default.
XIII. MISCELLANEOUS
This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of New York.
CA:S-3:42
Exhibit A
LETTERHEAD OF
RICHARD M. CAHILL
Vice President - General Counsel
_____________, 199_
and the other Purchasers named in
the Purchase Agreement dated ____________,
199_, between GTE California Incorporated
and such Purchasers
Re: GTE California Incorporated
___% Debentures, Series _, Due ____
Dear Sirs:
I have been requested by GTE California Incorporated, a
California corporation (the "Company"), as its Vice President-
General Counsel to furnish you with my opinion pursuant to a
Purchase Agreement dated ______, 199_ (the "Agreement") between
you and the Company, relating to the purchase and sale of
$___,000,000 aggregate principal amount of its ___% Debentures,
Series _, Due ____ (the "New Debentures").
In this connection I have examined among other things:
(a) The Restated Certificate of Incorporation of the
Company, as amended, and the by-laws, each as presently in
effect;
(b) A copy of the Indenture dated as of December 1, 1993
(the "Indenture"), between the Company and First Trust of
California, National Association, as successor trustee to Bank of
America National Trust and Savings Association (the "Trustee"),
under which the New Debentures are being issued, and the
resolution of the Board of Directors of the Company specifically
authorizing the New Debentures, including the issuance and sale
of the New Debentures (the "Board Resolution");
(c) The forms of the New Debentures set forth in the Board
Resolution;
(d) The records of the corporate proceedings of the Company
relating to the authorization, execution and delivery of the
Indenture;
(e) The records of the corporate proceedings of the Company
relating to the authorization, execution and delivery of the
Agreement;
(f) The record of all proceedings taken by the Company
relating to the registration of the New Debentures under the
Securities Act of 1933, as amended (the "Act"), and qualification
of the Indenture under the Trust Indenture Act of 1939, as
amended (the "TIA"), particularly Registration Statement No. 33-
51541 and Registration Statement No. 333-_____, including the
form of prospectus contained therein (unless the context shall
otherwise require, the Registration Statements as amended are
hereinafter called the "Registration Statement" and the
prospectus dated _________, together with the prospectus
supplement dated __________ relating to the New Debentures in the
form filed under Rule 424(b) of the Act, are hereinafter called
the "Prospectus");
-2-
(g) Statutes, permits and other documents relating to the
Company's franchises; and
(h) The Registration Statement, the Prospectus and all
documents filed by the Company under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), which are incorporated
by reference in the Prospectus (the "Incorporated Documents") .
On the basis of my examination of the foregoing and of such
other documents and matters as I have deemed necessary as the
basis for the opinions hereinafter expressed, I am of the opinion
that:
1. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
California, and has adequate corporate power to carry on the
business in which it is now engaged. There are no states or
jurisdictions in which the qualification or licensing of the
Company as a foreign corporation is necessary where the failure
to be qualified or licensed would have a material adverse effect
on the Company.
2. All legal proceedings necessary to the authorization,
issue and sale of the New Debentures to you have been taken by
the Company.
3. The Agreement has been duly and validly authorized,
executed and delivered by the Company.
4. The Indenture is in proper form, has been duly
authorized by the Company, has been duly executed by the Company
and the Trustee and delivered by the Company and constitutes a
legal, valid and binding agreement of the Company enforceable in
accordance with its terms, except as limited by bankruptcy,
insolvency and other laws affecting the enforcement of creditors'
rights and the availability of equitable remedies. The Indenture
has been duly qualified under the TIA.
5. The New Debentures conform as to legal matters with the
statements concerning them in the Registration Statement and
Prospectus and have been duly authorized and executed by the
Company and (assuming due authentication and delivery thereof by
the Trustee) have been duly issued for value by the Company and
(subject to the qualifications set forth in paragraph 4 above)
constitute legal, valid and binding obligations of the Company
enforceable in accordance with their terms and are entitled to
the benefits afforded by the Indenture.
6. The issuance and sale of the New Debentures, as
contemplated by the Agreement, have been duly authorized by the
California Public Utility Commission, and such authorization is
in full force and effect and, except as may be required by the
Securities or Blue Sky laws of certain jurisdictions, no other
authorization, approval or consent of any governmental regulatory
authority is required for the issuance and sale of the New
Debentures.
7. The Company holds valid and subsisting franchises,
licenses and permits adequate for the conduct of its business in
the territory served by it, except for limited areas where the
Company operates by sufferance, and none of the franchises,
licenses or permits of the Company contain any unduly burdensome
restrictions.
8. Registration Statement No. 33-51541 became effective on
January 10, 1994 and Registration Statement No. 333-_____ became
effective on _______, 1996 and, to the best of my knowledge, no
proceedings under Section 8 of the Act looking toward the
possible issuance of a stop order with respect thereto are
pending or threatened and the Registration Statement remains in
effect on
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the date hereof. The Registration Statement and the Prospectus
comply as to form in all material respects with the relevant
provisions of the Act and of the Exchange Act as to documents
incorporated by reference into said Registration Statement and
the applicable rules and regulations of the Securities and
Exchange Commission thereunder, except that I express no opinion
as to the financial statements contained therein. The
Prospectus is lawful for use for the purposes specified in the
Act in connection with the offer for sale and sale of the New
Debentures in the manner therein specified. I have no reason to
believe that the Registration Statement, the Prospectus or the
Incorporated Documents, considered as a whole on the effective
date of the Registration Statement and on the date hereof,
contained or contain any untrue statement of a material fact or
omitted or omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading.
Without my prior written consent, this opinion may not be
relied upon by any person or entity other than the addressee,
quoted in whole or in part, or otherwise referred to in any
report or document, or furnished to any other person or entity,
except that Milbank, Tweed, Hadley & McCloy may rely upon this
opinion as if this opinion were separately addressed to them.
Very truly yours,
Richard M. Cahill
Vice President - General Counsel
cc: Milbank, Tweed, Hadley & McCloy
CA:S-3:45
Exhibit B
MILBANK, TWEED, HADLEY & McCLOY
1 Chase Manhattan Plaza
New York, New York 10005
__________, 199_
GTE CALIFORNIA INCORPORATED
$___,000,000 __% Debentures, Series _, Due ____
and the other several Purchasers
referred to in the Purchase Agreement
dated ___________________, among such
Purchasers and GTE California Incorporated
Dear Sirs:
We have been designated by GTE California Incorporated (the
"Company") as counsel for the purchasers of $___,000,000
aggregate principal amount of its ___% Debentures, Series _, Due
____ (the "New Debentures"). Pursuant to such designation and
the terms of a Purchase Agreement dated ________, relating to the
New Debentures (the "Purchase Agreement"), entered into by you
with the Company, we have acted as your counsel in connection
with your several purchases this day from the Company of the New
Debentures, which are issued under an Indenture dated as of
December 1, 1993, ("Indenture") between the Company and First
Trust of California, National Association, as successor trustee
to Bank of America National Trust and Savings Association (the
"Trustee").
We have reviewed originals, or copies certified to our
satisfaction, of such corporate records of the Company,
indentures, agreements and other instruments, certificates of
public officials and of officers and representatives of the
Company, and other documents, as we have deemed necessary as a
basis for the opinions hereinafter expressed. In such
examination we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals,
the conformity with the original documents of all documents
submitted to us as copies, and the authenticity of the originals
of such latter documents. As to various questions of fact
material to such opinions, we have, when relevant facts were not
independently established, relied upon certifications by officers
of the Company and statements contained in the Registration
Statement hereinafter mentioned.
In addition, we attended the closing held today at the
offices of GTE Service Corporation, One Stamford Forum, Stamford,
Connecticut, at which the Company caused the New Debentures to be
delivered to your representatives at the Depository Trust
Company, 55 Water Street, New York, New York, for your several
accounts, against payment therefor.
On the basis of the foregoing and having regard to legal
considerations which we deem relevant, we are of the opinion
that:
1. The Company is a validly existing corporation, in good
standing, under the laws of the State of California.
-2-
2. The Purchase Agreement has been duly authorized,
executed and delivered by and on behalf of the Company.
3. The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a legal, valid and
binding agreement of the Company enforceable in accordance with
its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general
applicability affecting the enforceability of creditors' rights.
The enforceability of the Indenture is subject to the effect of
general principles of equity (regardless of whether considered in
a proceeding in equity or at law), including without limitation
(i) the possible unavailability of specific performance,
injunctive relief or any other equitable remedy and (ii) concepts
of materiality, reasonableness, good faith and fair dealing. The
Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended.
4. The New Debentures have been duly authorized and conform
as to legal matters in all substantial respects to the
description thereof contained in the Registration Statement and
Prospectus hereinafter mentioned. The New Debentures (assuming
due execution thereof by the Company and due authentication and
delivery by the Trustee) have been duly issued for value by the
Company and (subject to the qualifications stated in paragraph 3
above) constitute legal, valid and binding obligations of the
Company, and are entitled to the benefits afforded by the
Indenture in accordance with the terms of the Indenture and of
the New Debentures.
5. On the basis of information received by the Company from
the Securities and Exchange Commission (the "Commission")
Registration Statement No. 33-51541 and Registration Statement
No. 333-_____ with respect to the New Debentures (collectively,
the "Registration Statement"), filed with the Commission pursuant
to the Securities Act of 1933, as amended (the "Act"), became
effective under the Act on January 10, 1994, and on
______________, respectively, and thereupon the Prospectus dated
_________ as supplemented by the Prospectus Supplement dated
____________ (collectively, the "Prospectus") became lawful for
use for the purposes specified in the Act, in connection with the
offer for sale and sale of the New Debentures in the manner
therein specified, subject to compliance with the provisions of
securities or Blue Sky laws of certain States in connection with
the offer for sale or sale of the New Debentures in such States.
To the best of our knowledge, the Registration Statement remains
in effect at this date.
6. The Registration Statement, as of its effective date,
and the Prospectus, as of the date hereof, together with the
documents incorporated by reference therein (the "Incorporated
Documents") (except any financial statements or other financial
data contained or incorporated by reference in the Registration
Statement, the Prospectus or such Incorporated Documents, as to
which no opinion is expressed) appear on their face to be
appropriately responsive, in all material respects relevant to
the offering of the New Debentures, to the requirements of the
Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as applicable, and the applicable rules and
regulations of the Commission thereunder.
The Registration Statement was filed on Form S-3 under the
Act and, accordingly, the Prospectus does not necessarily contain
a current description of the Company's business and affairs,
since Form S-3 provides for the incorporation by reference of
certain documents filed with the Commission which contain
descriptions as of various dates. We participated in conferences
with counsel for, and representatives of, the Company in
connection with the preparation of the Registration Statement and
Prospectus and we have reviewed the Incorporated Documents. In
connection with our
-3-
participation in the preparation of the Registration Statement
and the Prospectus, we have not independently verified the
accuracy, completeness or fairness of the statements contained
therein or in the Incorporated Documents, and the limitations
inherent in the review made by us and the knowledge available to
us are such that we are unable to assume, and we do not assume,
any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement, the
Prospectus or the Incorporated Documents, except as otherwise
specifically stated herein. None of the foregoing disclosed to
us any information which gave us reason to believe that the
Registration Statement or the Incorporated Documents, considered
as a whole on the effective date of the Registration Statement,
contained or contain any untrue statement of a material fact or
omitted or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading or that the Prospectus and the Incorporated Documents,
considered as a whole on the date hereof, contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. We
express no opinion as to any document filed by the Company under
the Exchange Act, whether prior or subsequent to such effective
date, except to the extent that such documents are Incorporated
Documents read together with the Registration Statement or the
Prospectus and considered as a whole, nor do we express any
opinion as to the financial statements or other financial data
included in or omitted from, or incorporated by reference in the
Registration Statement, the Prospectus or the Incorporated
Documents.
We express no opinion as to matters governed by any laws
other than the laws of the State of New York, the Federal laws of
the United States of America and, to the extent the foregoing
opinions involve the laws of the State of California, in reliance
upon the opinion of even date herewith of Richard M. Cahill,
Esq., Vice President-General Counsel of the Company, the laws of
the State of California.
The opinions contained herein are rendered to you and are
solely for your benefit and the benefit of the Purchasers
represented by you in connection with the transaction
contemplated by the Purchase Agreement. These opinions may not
be relied upon by you for any other purpose, or furnished to,
quoted or relied upon by any other person, firm or corporation
for any purpose, without our prior written consent.
Very truly yours,
MILBANK, TWEED, HADLEY &
McCLOY
CA:S-3:48
Exhibit C
LETTER OF INDEPENDENT PUBLIC ACCOUNTANTS
The letter of independent public accountants for the Company
to be delivered pursuant to Article IV, paragraph (E) of the
document entitled Standard Purchase Agreement Provisions,
February 1996 Edition, shall be to the effect that:
At the closing, the Purchasers shall have received such
number of copies as are necessary to provide one for each
Purchaser of a letter addressed to the Company and satisfactory
to the Purchasers or the Representative and counsel to the
Purchasers, dated as of the Closing Date and encompassing the
performance of certain procedures described in the letter as of a
date not more than five business days prior to the Closing Date
(the "Cutoff Date"), from Arthur Andersen LLP, confirming that
they are independent public accountants with respect to the
Company within the meaning of the Securities Act of 1933, as
amended (the "Act") and the applicable published rules and
regulations of the Commission thereunder, specifically Rule 2-01
of Regulation S-X, and stating in effect (1) that in their
opinion, the financial statements and schedules audited by them
and incorporated by reference in the Prospectus comply as to form
in all material respects with the applicable accounting
requirements of the Act, and the Securities Exchange Act of 1934,
as amended the ("Exchange Act") and the published rules and
regulations thereunder, (2) that although they have not audited
any financial statements of the Company as of any date or for any
period subsequent to the prior-year audit, and although they have
conducted an audit for that period, the purpose (and therefore
the scope) of the audit was to enable them to express their
opinion on the financial statements as of that date and for the
year then ended, but not on the financial statements for any
interim period within that year; therefore, they are unable to
and do not express any opinion on the unaudited condensed
consolidated balance sheet as of the latest available interim
date, and the unaudited condensed consolidated statements of
income, reinvested earnings, and cash flows for the latest
available interim period subsequent to that prior-year audit
which are included in the Prospectus and for the comparable
period of the preceding year; they have performed the procedures
specified by the American Institute of Certified Public
Accountants for a review of interim financial information as
described in SAS No. 71, Interim Financial Information, on the
latest available unaudited interim condensed consolidated
financial statements prepared by the Company, inquired of certain
officials of the Company responsible for financial and accounting
matters, and read the minutes of the Board of Directors and
shareholders of the Company, all of which procedures have been
agreed to by the Purchasers, nothing has come to their attention
which caused them to believe that: (a) any unaudited interim
condensed consolidated financial statements incorporated by
reference in the Prospectus (i) do not comply as to form in all
material respects with the applicable accounting requirements of
the Exchange Act as it applies to Form 10-Q and the related
published rules and regulations thereunder or (ii) have not been
presented in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that
of the audited financial statements incorporated by reference in
the Prospectus; or (b) (i) as of the date of the latest available
unaudited condensed consolidated interim financial statements
prepared by the Company, there have been any changes in the
capital stock or any increase in the short-term indebtedness or
long-term debt of the Company or any decrease in net assets, in
each case as compared with the amounts shown on the latest
balance sheet incorporated by reference in the Prospectus, (ii)
for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the
specified date referred to in the preceding clause (i), there
were any decreases in operating revenues, net operating income,
net income or the Company's ratio to earnings to fixed charges,
in each case as compared with
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the comparable period of the preceding year, or (iii) as of the
Cutoff Date there have been any material changes in the capital
stock or any material increase in the debt of the Company, or any
material decreases in net assets, in each case as compared with
amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, and (iv) for the
period from the date of the latest available interim financial
statements referred to in clause (b)(i) above to the Cutoff Date,
there were any material decreases in operating revenues, net
operating income or net income, in each case as compared with the
comparable period of the preceding year, except in all instances
for changes or decreases which the Prospectus discloses have
occurred or may occur or as disclosed in such letter and except
for changes occasioned by the declaration and payment of
dividends on the stock of the Company or occasioned by sinking
fund payments made on the debt securities of the Company, and (3)
that they have performed the following additional procedures with
respect to the ratios of earnings to fixed charges included or
incorporated by reference in the Prospectus: (i) compared the
amounts used in the computation of such ratios with the amounts
included in the financial statements incorporated by reference in
the Prospectus and noted agreement in all material respects, and
(ii) recomputed the ratios and noted agreement in all material
respects.
CA:S-3:50
Exhibit
4.2
GTE CALIFORNIA INCORPORATED
BOARD OF DIRECTORS' RESOLUTION
RESOLVED:
(1) GTE California Incorporated (the "Company") shall
create and issue $___,000,000 aggregate principal amount of its
Debentures, Series _, Due ____ (the "New Debentures"), with the
terms set forth in the proposal of the purchasers and the
Indenture dated as of December 1, 1993 ("Indenture"), between the
Company and First Trust of California, National Association, as
successor trustee to Bank of America National Trust and Savings
Association (the "Trustee"), to wit:
(a) The New Debentures shall mature on __________________.
(b) The New Debentures shall bear interest from
____________, 199_, until the principal thereof becomes due
and payable at the rate of _____% per annum, payable semi-
annually on ____________ and ____________ in each year
commencing __________, and any overdue principal and (to the
extent that the payment of such interest is enforceable
under applicable law) any overdue installment of interest
thereon shall bear interest at the same rate per annum; the
principal of and the interest on the New Debentures shall be
payable in any coin or currency of the United States of
America which at the time of payment is legal tender for the
payment of public and private debts, at the office or agency
of the Company in the City of Los Angeles, and State of
California; provided, however, that payment of interest may
be made at the option of the Company by check mailed to the
registered holder at such address as shall appear in the
Security Register. The regular record date with respect to
any interest payment date for the New Debentures shall mean
the ____________ or ____________, as the case may be, next
preceding such interest payment date, whether or not such
date is a business day.
(c) [The New Debentures will not be redeemable prior to
maturity.]
OR
[The New Debenture will not be redeemable prior to _______.
Thereafter, the New Debenture will be redeemable on not less
than 30 nor more than 60 days' notice given as provided in the
Indenture, as a whole or in part, at the option of the Company
at the redemption price set forth below. The "initial regular
redemption price" will be the initial public offering price as
defined below plus the rate of interest on the New Debentures.
The redemption price during the twelve month period beginning
_________ and during the twelve month periods beginning on
each ____________ thereafter through the twelve month period
ended ___________ will be determined by reducing the initial
regular redemption price by an amount determined by multiplying
(a) 1/_ of the amount by which such initial regular
redemption price exceeds 100% by (b) the number of such full
twelve month periods which shall have elapsed between
__________ and the date fixed for redemption, and thereafter
the redemption prices during the twelve month periods
beginning ____________ shall be 100%; provided, however, that all
such 0.01%, then to the next higher 0.01%.
For the purpose of determining the redemption prices of the
New Debentures, the initial public offering price of the
New Debentures shall be the price, expressed in percentage
of principal amount (exclusive of accrued interest), at
which the New Debentures are to be
-2-
initially offered for sale to the public; if there is not a
public offering of the New Debentures, the initial public
offering price of the New Debentures shall be deemed to be the
price, expressed in percentage of principal amount (exclusive
of accrued interest), to be paid to the Company by the
Purchasers.]
(d) The New Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be
substantially in the following form:
-3-
(FORM OF FACE OF DEBENTURE)
No. _____________ $ _____________
GTE California Incorporated
____% Debentures, Series _, Due ____
GTE California Incorporated, a corporation duly organized and
existing under the laws of the State of California (herein
referred to as the "Company"), for value received, hereby
promises to pay to _______________ or registered assigns, the
principal sum of __________________ Dollars on __________________
and to pay interest on said principal sum from
__________________, or from the most recent interest payment date
to which interest has been paid or duly provided for, semi-
annually on _________ and ____________ in each year, commencing
____________, at the rate of _____% per annum until the principal
hereof shall have become due and payable, and on any overdue
principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of
interest at the same rate per annum. The interest installment so
payable, and punctually paid or duly provided for, on any
interest payment date will, as provided in the Indenture
hereinafter referred to, be paid to the person in whose name this
Debenture (or one or more Predecessor Securities, as defined in
said Indenture) is registered at the close of business on the
regular record date for such interest installment, which shall be
the __________ or __________, as the case may be (whether or not
a business day), next preceding such interest payment date. Any
such interest installment not so punctually paid or duly provided
for shall forthwith cease to be payable to the registered holder
on such regular record date, and may be paid to the person in
whose name this Debenture (or one or more Predecessor Securities)
is registered at the close of business on a special record date
to be fixed by the Trustee for the payment of such defaulted
interest, notice whereof shall be given to the registered holders
of this series of Debentures not less than 10 days prior to such
special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any
securities exchange on which the Debentures may be listed, and
upon such notice as may be required by such exchange, all as more
fully provided in the Indenture hereinafter referred to. The
principal of and the interest on this Debenture shall be payable
at the office or agency of the Company maintained for that
purpose in the City of Los Angeles, State of California in any
coin or currency of the United States of America which at the
time of payment is legal tender for payment of public and private
debts; provided, however, that payment of interest may be made at
the option of the Company by check mailed to the registered
holder at such address as shall appear in the Security Register.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, or be valid or become
obligatory for any purpose, until the Certificate of
Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Debenture are continued on the reverse
side hereof and such continued provisions shall for all purposes
have the same effect as though fully set forth at this place.
-4-
IN WITNESS WHEREOF, the Company has caused this instrument
to be executed.
Dated _______________________
GTE CALIFORNIA INCORPORATED
By __________________________
President
Attest:
By __________________________
Secretary
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein
referred to in the within-mentioned Indenture.
First Trust of California, National Association
as Trustee, Authenticating Agent and
Security Registrar
By __________________________
Authorized Signatory
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Securities
of the Company (herein sometimes referred to as the
"Securities"), all issued or to be issued in one or more series
under and pursuant to an Indenture dated as of December 1, 1993,
duly executed and delivered between the Company and First Trust
of California, National Association, a national banking
association organized and existing under the laws of the United
States of America, as successor trustee to Bank of America
National Trust and Savings Association (hereinafter referred to
as the "Trustee") (said Indenture hereinafter referred to as the
"Indenture"), to which Indenture reference is hereby made for a
description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and
the holders of the Securities. By the terms of the Indenture, the
Securities are issuable in series which may vary as to amount,
date of maturity, rate of interest and in other respects as in
the Indenture provided. This Debenture is one of the series
designated on the face hereof (herein called the "Debentures")
limited in aggregate principal amount to $___,000,000.
-5-
In case an Event of Default, as defined in the Indenture, with
respect to the Debentures shall have occurred and be continuing,
the principal of all of the Debentures may be declared, and upon
such declaration shall become, due and payable, in the manner,
with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a
majority in aggregate principal amount of the Securities of each
series affected at the time outstanding, as defined in the
Indenture, to execute supplemental indentures for the purpose of
adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the holders
of the Securities; provided, however, that no such supplemental
indenture shall (i) extend the fixed maturity of any Securities
of any series, or reduce the principal amount thereof, or reduce
the rate or extend the time of payment of interest thereon, or
reduce any premium payable upon the redemption thereof, without
the consent of the holder of each Security so affected or (ii)
reduce the aforesaid percentage of Securities, the holders of
which are required to consent to any such supplemental indenture,
without the consent of the holders of each Security then
outstanding and affected thereby. The Indenture also contains
provisions permitting the holders of a majority in aggregate
principal amount of the Securities of any series at the time
outstanding, on behalf of the holders of Securities of such
series, to waive any past default in the performance of any of
the covenants contained in the Indenture, or established pursuant
to the Indenture with respect to such series, and its
consequences, except a default in the payment of the principal
of, or premium, if any, or interest on any of the Securities of
such series. Any such consent or waiver by the registered holder
of this Debenture (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such holder and upon all
future holders and owners of this Debenture and of any Debenture
issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether
or not any notation of such consent or waiver is made upon this
Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and interest on this Debenture at the
times and place and at the rate and in the money herein
prescribed.
The Debentures are issuable as registered Debentures without
coupons in denominations of $1,000 or any integral multiple
thereof. Debentures may be exchanged, upon presentation thereof
for that purpose, at the office or agency of the Company in the
City of Los Angeles, State of California, for other Debentures of
authorized denominations, and for a like aggregate principal
amount and series, and upon payment of a sum sufficient to cover
any tax or other governmental charge in relation thereto.
[The Debentures will not be redeemable prior to maturity.]
OR
[The Debentures may not be redeemed prior to ________________.
The Debentures may be redeemed on not less than 30 nor more than
60 days' prior notice given as provided in the Indenture, as a
whole or from time to time in part, at the option of the Company,
on any date or dates on or after ______________, and prior to
maturity, at the applicable percentage of the principal amount
thereof to be redeemed as set forth below under the heading
"Redemption Price" during the respective twelve month periods
beginning ____ of the years shown below:
-6-
Year Redemption Price
____ ________________
%
together, in each case, with accrued interest to the date fixed
for redemption (but if the date fixed for redemption is an
interest payment date, the interest installment payable on such
date shall be payable to the registered holder at the close of
business on the applicable record date).]
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the
registered holder hereof on the Security Register of the Company,
upon surrender of this Debenture for registration of transfer at
the office or agency of the Company in the City of Los Angeles,
State of California accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company or
the Security Registrar duly executed by the registered holder
hereof or his attorney duly authorized in writing, and thereupon
one or more new Debentures of authorized denominations and for
the same aggregate principal amount and series will be issued to
the designated transferee or transferees. No service charge will
be made for any such transfer, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture the Company, the Trustee, any paying agent and any
Security Registrar may deem and treat the registered holder
hereof as the absolute owner hereof (whether or not this
Debenture shall be overdue and notwithstanding any notice of
ownership or writing hereon made by anyone other than the
Security Registrar) for the purpose of receiving payment of or on
account of the principal hereof and (subject to Section 2.03 of
the Indenture) interest due hereon and for all other purposes,
and neither the Company nor the Trustee nor any paying agent nor
any Security Registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of or
the interest on this Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the
Indenture, against any incorporator, stockholder, officer or
director, past, present or future, as such, of the Company or of
any predecessor or successor corporation, whether by virtue of
any constitution, statute or rule of law, or by the enforcement
of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration
for the issuance hereof, expressly waived and released.
Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Indenture.
(2) The office of First Trust of California, National
Association is hereby designated and created as the agency of the
Company in the City of Los Angeles, State of California at which
(i) both the principal and the interest on the New Debentures are
payable and notices, presentations and demands to or upon the
Company in respect of the New Debentures may be given or made,
(ii) the New Debentures may be surrendered for transfer or
exchange and transferred or exchanged in accordance with the
terms of the Indenture and (iii) books for the registration and
transfer of the New Debentures shall be kept;
(3) The office of First Trust of California, National
Association is hereby designated and created as Security
Registrar of the Company in the City of Los Angeles, State of
California at which (i) the Company shall register the New
Debentures, (ii) the New Debentures may be surrendered for
transfer or exchange and transferred or exchanged in accordance
with the terms of the
-7-
Indenture, and (iii) books for the registration and transfer of
the New Debentures shall be kept;
(4) The New Debentures authorized at this meeting shall be
in substantially the forms and shall have the characteristics
provided in the Indenture, and the forms of the New Debentures of
each such series set forth in these resolutions is hereby
approved and adopted;
FURTHER RESOLVED:
(1) The President or any Vice President is hereby
authorized and directed to sign a Purchase Agreement in
substantially the form of the Purchase Agreement provided as an
exhibit to the registration statement filed with respect to the
New Debentures (the "Registration Statement"), reflecting the
terms of the New Debentures approved hereby.
(2) The President or any Vice President and the Secretary
or any Assistant Secretary are hereby authorized and directed to
deliver to the Trustee a certified record of this Board
Resolution setting forth the terms of the New Debentures as
required by Section 2.01 of the Indenture.
(3) The President or any Vice President is hereby
authorized and directed to execute $____,000,000 aggregate
principal amount of New Debentures on behalf of the Company under
its corporate seal or a facsimile attested by the Secretary or
any Assistant Secretary, and the signature of the President, or
any Vice President, may be in the form of a facsimile signature
of the present or any future President or Vice President and/or
the signature of the Secretary or any Assistant Secretary in
attestation of the corporate seal may be in the form of a
facsimile signature of the present or any future Secretary or
Assistant Secretary, and should any officer who signs, or whose
facsimile signature appears upon, any of the New Debentures,
cease to be such an officer prior to their issuance, the New
Debentures so signed or bearing such facsimile signature shall
still be valid and, without prejudice to the use of the facsimile
signature of any other officer as herein above authorized, the
facsimile signature of M.L. Keith, Jr., President, and the
facsimile signature of Charles J. Somes, Secretary, are hereby
expressly approved and adopted;
(4) The officers are hereby authorized and directed to
cause the New Debentures to be delivered to the Trustee for
authentication and delivery by it in accordance with the
provisions of the Indenture, and the Trustee is hereby authorized
and requested to authenticate the New Debentures upon compliance
by the Company with the provisions of the Indenture and to
deliver the same to or upon the written order of the President or
any Vice President, and the President or any Vice President is
hereby authorized and directed to apply to the Trustee for the
authentication and delivery of the New Debentures;
(5) The President or any Vice President and the Treasurer
or any Assistant Treasurer are hereby authorized and empowered to
endorse, in the name and on behalf of the Company, any and all
checks received in connection with the sales of the New
Debentures for application as set forth in the "Use of Proceeds"
section of the Registration Statement, or for deposit to the
account of the Company in any bank, and that any such endorsement
be sufficient to bind the Company;
(6) The officers are hereby authorized and directed to sell
to the purchasers the aggregate principal amounts of the New
Debentures at the price and upon the terms and conditions set
forth in the Purchase Agreement covering the sale of the New
Debentures; and
(7) The officers are authorized and directed to execute and
deliver all such instruments and documents, to incur on behalf of
the Company all such expenses and obligations, to make all such
payments, and to do all such other
-8-
acts and things as they may consider necessary or desirable in
connection with the accomplishment of the intent and purposes of
the foregoing resolutions.
CA:S-3:59
Exhibit 5
RICHARD M. CAHILL
Vice President - General Counsel
GTE California Incorporated
600 Hidden Ridge
Irving, Texas 75038
(214) 718-6304
February 14, 1996
GTE California Incorporated
600 Hidden Ridge
Irving, Texas 75038
Gentlemen:
I have examined a copy of the Registration Statement of GTE
California Incorporated (the "Company") on Form S-3 under the
Securities Act of 1933, as amended, and accompanying Prospectus
pertaining to the issuance and sale of $500,000,000 aggregate
principal amount of debentures (the "Debentures"). I have also
examined a copy of the Company's Restated Certificate of
Incorporation, as amended, and such corporate records and other
documents as I have deemed to be requisite in the premises. I am
familiar with the proceedings taken and proposed to be taken by
you under my supervision as your counsel in connection with the
proposed authorization, issuance, and sale of the Debentures.
It is my opinion that, subject to any applicable regulatory
approvals, the Debentures, upon the issuance and sale thereof in
the manner contemplated in said Registration Statement, will be
legally and validly issued and will be binding obligations of the
Company.
I hereby consent to the reference to me under the caption
"Certain Legal Matters" in the Prospectus forming a part of the
Registration Statement and to the filing of this opinion as an
exhibit to the Registration Statement.
Yours truly,
Richard M. Cahill, Esq.
CA:S-3:61
Exhibit
12.1
GTE CALIFORNIA INCORPORATED
STATEMENT OF THE CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
(Thousands of Dollars)
<TABLE>
<CAPTION>
Nine Months
Ended Years Ended December 31
September 30, 1994 1993 (a) 1993
1992 1991 1990
1995 ________ _______
________ ________ ________ ________
<S> <C> <C> <C> <C> <C>
<C> <C>
Net Earnings Available for
Fixed Charges:
Income before
extraordinary charge$238,715$434,540$389,019$93,619$415,370$
442,458 $443,865
Add:
Income tax expense171,030293,465255,035 70,535237,089242,724
248,078
Fixed charges87,745115,405131,550131,550143,359153,934152,621
________ ________________________________________
________
Adjusted earnings$497,490$843,410$775,604$295,704$795,818$839,
116 $844,564
Fixed Charges:
Interest expense$80,802$102,938$121,117$121,117$131,527$140,977
$139,674
Portion of rent expense
representing interest 6,943 12,467 10,433 10,43311,832 12,957
12,947
__________________________________________________
______
Adjusted fixed charges$87,745$115,405$131,550$131,550$143,359$
153,934 $152,621
Consolidated Ratios of
Earnings to Fixed Charges5.67 7.31 5.90 2.25 5.55 5.45
5.53
</TABLE>
_____________
(a) Results for 1993 exclude an after-tax restructuring charge of
approximately $274,000,000 for the implementation of a re-
engineering plan and a one-time, after-tax charge of $21,000,000
related to the enhanced early retirement and voluntary separation
programs offered to eligible employees in 1993.
CA:S-3:63
Exhibit
12.2
GTE CALIFORNIA INCORPORATED
PRO FORMA COMBINED STATEMENT OF THE CONSOLIDATED RATIOS OF
EARNINGS
TO FIXED CHARGES(a)
(Thousands of Dollars)
<TABLE>
<CAPTION>
Nine Months
Ended Years Ended December 31
September 30, 1994 1993(b) 1993
1992 1991 1990
1995 ________ _______
________ ________ ________ _________
<S> <C> <C> <C> <C>
<C> <C> <C>
Net Earnings Available for
Fixed Charges:
Income before
extraordinary charge$266,466$500,286$476,088$148,688$509,068
$533,090 $521,816
Add:
Income tax expense 192,617339,585312,432107,932297,822302,579
310,307
Fixed charges97,809128,645144,714144,714157,845169,497170,266
________ __________________________________________
__________
Adjusted earnings$556,892$968,516$933,234$401,334$964,735$1,005
,166 $1,002,389
Fixed Charges:
Interest expense$89,583$115,012$133,214$133,214$144,946$155,
573 $154,953
Portion of rent expense
representing interest 8,226 13,633 11,500 11,50012,899 13,924
15,313
__________________________________________________
______
Adjusted fixed charges$97,809$128,645$144,714$144,714$157,845$1
69,497 $170,266
Pro Forma Combined
Consolidated Ratios of
Earnings to Fixed Charges5.69 7.53 6.45 2.77 6.11 5.93
5.89
</TABLE>
____________
(a) The pro forma combined consolidated ratios of earnings to
fixed charges represent the ratios of the Company as if the
Merger had been consummated at the beginning of each period
presented.
(b) Results for 1993 exclude an after-tax restructuring charge of
approximately $304,000,000 for the implementation of a re-
engineering plan and a one-time, after-tax charge of $23,000,000
related to the enhanced early retirement and voluntary separation
programs offered to eligible employees in 1993.
CA:S-3:63
Exhibit 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939, AS AMENDED, OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
_______________
FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
United States 94-
3160100
(State of Incorporation (I.R.S.
employer
if not a national bank)
identification no.)
333 South Beaudry Avenue
25th Floor (#8510)
Los Angeles, California 90017
(zip code)
_____________________________
GTE CALIFORNIA INCORPORATED
(Exact name of obligor as specified in its charter)
CALIFORNIA 95-0510200
(State or other jurisdiction of
(I.R.S. employer
incorporation or organization)
identification no.)
600 HIDDEN RIDGE
IRVING, TEXAS 75038
(Zip Code)
(Address and telephone number of principal executive offices)
DAVID S. KAUFFMAN, ESQ. CHARLES J.
SOMES, ESQ.
GTE Service Corporation GTE California
Incorporated
One Stamford Forum 600 Hidden
Ridge
Stamford, Connecticut 06904 Irving, Texas
75038
(203) 965-2986 (214) 718-
5600
(Names, addresses and telephone numbers of agents for service)
__________________________________________
DEBENTURES
(Title of the indenture securities)
________________________________________________________________
-2-
1. General information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Comptroller of the Currency
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
2. Affiliations with obligor and underwriters.
If the obligor or any underwriter for the obligor is an
affiliate of the trustee, describe each such affiliation.
None.
See Note following Item 16.
Item 3 through Item 15 are not applicable because to the best of
the Trustee's knowledge the obligor is not in default under any
Indenture for which the Trustee acts as Trustee.
16. List of Exhibits.
List below all exhibits filed as a part of this statement of
eligibility.
Exhibit 1 - Articles of Association of First Trust of
California, National Association, dated June 5,
1992. Incorporated herein by reference to Exhibit 1
with Form T-1 Statement, Registration No. 33-50826
Exhibit 2 - Certificate of the Comptroller of Currency as to
authority of First Trust of California, National
Association to commence the business of banking.
Incorporated herein by reference to Exhibit 2 filed with
Form T-1 Statement, Registration No. 33-50826
Exhibit 3 - Authorization of the Comptroller of Currency
granting First Trust of California, National
Association, the right to exercise corporate
trust powers. Incorporated herein by reference to
Exhibit 3 filed with Form T-1 Statement, Registration No. 33-
50826
Exhibit 4 - By-laws of First Trust of California, National
Association, dated June 15, 1992. Incorporated herein by
reference to Exhibit 4 filed with Form T-1 Statement,
Registration No. 33-50826
Exhibit 5 - Not applicable
Exhibit 6 - Consent of First Trust of California, National
Association, required by Section 321(b) of the Act.
Incorporated by reference to Exhibit 6 filed with Form T-
1 Statement, Registration No. 33-50826
-3-
Exhibit 7 - Report of Condition of First Trust of California,
National Association, as of the close of business
on December 31, 1995 published pursuant to law or
the requirements of its supervising or examining
authority.
NOTE
The answers to this statement insofar as such answers relate
to what persons have been underwriters for any securities of the
obligor within three years prior to the date of filing this
statement, or what persons are owners of 10% or more of the
voting securities of the obligor, or affiliates, are based upon
information furnished to the trustee by the obligor. While the
trustee has no reason to doubt the accuracy of any such
information, it cannot accept any responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939, as amended (the "TIA"), the Trustee, First Trust of
California, National Association, an association organized and
existing under the laws of the United States, has duly caused
this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, and its seal to be
hereunto affixed and attested, all in the City and County of Los
Angeles, State of California, on the 14th day of February, 1996.
FIRST TRUST OF CALIFORNIA
NATIONAL ASSOCIATION
By: FONDA J. HALL
Fonda J. Hall
Trust Officer
Attest: SHERI B. BALL
Sheri B. Ball
Vice President
-4-
EXHIBIT 6 to Form T-1
CONSENT
In accordance with Section 321(b) of the TIA, the undersigned,
FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION, hereby consents
that reports of examination of the undersigned by Federal, State,
Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon its
request therefor.
Dated February 14, 1996
FIRST TRUST OF CALIFORNIA,
NATIONAL ASSOCIATION
By FONDA J. HALL
_________________
Fonda J. Hall
Trust Officer
-5-
EXHIBIT 7 TO FORM T-1
CONSOLIDATED REPORT OF CONDITION
OF
FIRST BANK OF CALIFORNIA, NATIONAL ASSOCIATION
of 333 South Beaudry Avenue, 25th Floor (#8510), Los Angeles, CA
90017
And Foreign and Domestic Subsidiaries
a member of the Federal Reserve System at the close of business
December 31, 1995, published in accordance with a call made by
the Federal Reserve Bank of the District pursuant to the
provisions of the Federal Reserve Act.
Dollar Amounts
STATEMENT OF RESOURCES AND LIABILITIES in
Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin...
$ 32,433
Interest-bearing balances............................
0
Securities.............................................
3,317
Federal funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds sold...................................
0
Securities purchased under agreements to resell......
0
Loans and Lease financing receivables:
Loans and Leases, net of unearned income.............
0
Less: Allowance for loan and lease losses............
0
Less: Allocated transfer risk reserve................
0
Loans and Leases, net of unearned income,
allowance, and reserve...............................
0
Assets held in trading accounts........................
0
Premises and fixed assets (including capitalized leases)
117
Other real estate owned................................
0
Investments in unconsolidated subsidiaries and
associated companies.................................
0
Customers' liability to this bank on acceptances
outstanding..........................................
0
Intangible assets......................................
88,792
Other assets...........................................
5,290
Total assets...........................................
$129,949
-6-
STATEMENT OF RESOURCES AND LIABILITIES cont'd.
Deposits:
In domestic offices................................. $0
Noninterest-bearing................................ 0
Interest-bearing................................... 0
In foreign offices, Edge and Agreement subsidiaries,
and IBFs.............................................. 0
Noninterest-bearing................................ 0
Interest-bearing................................... 0
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds purchased.............................
0
Securities sold under agreements to repurchase......
0
Demand notes issued to the U.S. Treasury...............
0
Other borrowed money...................................
147
Mortgage indebtedness and obligations under
capitalized leases..................................
0
Bank's liability on acceptances executed and
outstanding.........................................
0
Subordinated notes and debentures......................
0
Other liabilities......................................
7,193
__
Total liabilities......................................
7,340
Common stock...........................................
1,000
Surplus (exclude all surplus related to preferred stock)
121,200
Undivided profits and capital reserves.................
409
Less: Net unrealized loss on marketable equity
securities..........................................
Cumulative foreign currency translation adjustments....
0
Total equity capital...................................
122,609
Total liabilities and equity capital...................
$129,949
I, Sheri B. Ball, Vice President of the above-named bank do
hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best
of my knowledge and belief.
Sheri B. Ball
CA:S-3:72
Exhibit 26
GTE CALIFORNIA INCORPORATED
Invitation For Bids For the Purchase of
$____,000,000 _____% Debentures, Series _, Due ____
GTE CALIFORNIA INCORPORATED (the "Company") is inviting
bids, subject to the terms and conditions stated herein, for the
purchase from it of $___,000,000 aggregate principal amount of
its ____% Debentures, Series _, Due ___ (the "Debentures").
1. Information Respecting the Company and the Debentures.
Prospective bidders may examine, at the office of the
Secretary of the Company, 600 Hidden Ridge, Irving, Texas, 75038,
or at the office of GTE Service Corporation, 10th Floor, One
Stamford Forum, Stamford, Connecticut 06904 (Telephone (203) 965-
2986), on any business day between 10:00 A.M. and 4:00 P.M., the
following:
(a) the Registration Statement on Form S-3 (including the
Prospectus, documents incorporated by reference and exhibits),
with respect to the Debentures;
(b) the Restated Certificate of Incorporation of the
Company, as amended;
(c) a copy of the Indenture dated as of December 1, 1993
(herein called the "Indenture") under which the Debentures are to
be issued, together with the resolution of the Board of Directors
of the Company specifically authorizing the issuance of the
Debentures;
(d) the form of Purchase Agreement (including the Standard
Purchase Agreement Provisions (February 1996 Edition)) to be used
in submitting bids for the purchase of the Debentures;
(e) the form of questionnaire to be provided by prospective
bidders; and
(f) memoranda prepared by counsel to the Company with
respect to the status of the Debentures under securities or blue
sky laws of certain jurisdictions.
Copies of said documents in reasonable quantities (except
the Restated Certificate of Incorporation of the Company, the
Indenture, and other exhibits to the Registration Statement) will
be supplied upon request, so long as available, to prospective
bidders.
The Company reserves the right to amend the Registration
Statement (including exhibits thereto) and Prospectus and to
supplement the Prospectus in such manner as shall not be
unsatisfactory to Messrs. Milbank, Tweed, Hadley & McCloy. The
Company will make copies of any such amendments or supplements
available for examination at the above offices in Irving and
Stamford.
2. Information Respecting the Bidders to be Furnished to the
Company.
In the case of a bid by a group of bidders, the several
bidders in the group shall act through a duly authorized
representative or representatives (the "Representative"), who may
be included in such group, and who shall be designated and
authorized as such in the questionnaires filed by members of such
group.
-2-
No bid will be considered unless the bidder, or in the case
of a group of bidders, each member of the group, shall have
furnished to the Company, and the Company shall have received,
two signed copies of the form of questionnaire referred to above,
properly filled out (the Company reserving, however, the right to
waive the form of the questionnaire or any irregularity which it
deems to be immaterial in any such questionnaire and to extend
either generally or in specific instances the time for furnishing
questionnaires, and specifically reserving the right to obtain
all required bidder information by telegraph or other means of
communication). Such copies shall be furnished to the Company at
the office of GTE Service Corporation, 10th Floor, One Stamford
Forum, Stamford, CT 06904, Attention: David S. Kauffman, Esq.,
before 5:00 P.M., New York City time on ____________________ (or
on such later date as may be determined pursuant to Section 4
hereof). Notwithstanding the furnishing of such questionnaires
to the Company, any prospective bidder or group of prospective
bidders thereafter may determine, without liability to the
Company, not to bid, or any of the several members of a group may
withdraw therefrom and additional members may be added thereto if
a questionnaire properly filled out and signed by each additional
member is filed at or before the time of submission of the bid of
such group. Without the consent of the Company not more than
three additional members may be so included in such group after
the time or any extended time for filing questionnaires shall
have expired.
3. Form and Contents of Bids.
Each bid shall be for the purchase of all of the Debentures.
Each bid may be made by a single bidder or by a group of
bidders. In case the bid of a group of bidders is accepted, the
obligations of the members of the group to purchase the
respective principal amounts of Debentures indicated in the bid
shall be several and not joint. Such bidders shall act through a
duly authorized Representative who may be included in the group
and said Representative shall be empowered to bind the bidders in
the group. No bidder may submit or participate in more than one
bid.
4. Submission of Bids and Delivery of Confirmation of Bids.
All bids must be submitted by telephone and confirmed in
writing in the manner set forth in Exhibit A, Confirmation of
Bid, attached, signed by the Representative on behalf of the
members of a group of bidders, or in the case of a single bidder,
by such bidder. Each bid must specify: (a) the interest rate,
which shall be a multiple of 1/8 of 1%; and (b) the price to be
paid to the Company for the Debentures, which shall be expressed
as a percentage of the principal amount of the Debentures and
shall not be less than 98% thereof nor more than 101% thereof.
The Confirmation of Bid shall specify the same interest rate and
price specified in the telephonic bid.
The Company reserves the right in its discretion from time
to time to postpone the time and the date for submission of bids
for an aggregate period
of not exceeding thirty days, and will give notice of any such
postponement to each prospective bidder, or the Representative of
each group of prospective bidders, who have filed questionnaires
as provided in Section 2 hereof, specifying in such notice the
changes in the times and dates set forth in the Purchase
Agreement occasioned by such postponement. In the event that any
such postponement should be for a period of more than three full
business days after the date of sending or delivering such
notice, the time for filing of questionnaires by prospective
bidders under Section 2 hereof shall by such notice be postponed
to 5:00 P.M., New York City time, at the place of delivery
specified in Section 2 hereof, on the third full business day
prior to the postponed date for presentation and opening of bids.
-3-
5. Acceptance or Rejection of Bids.
The Company may reject all bids, but if any bid for the
Debentures is accepted the Company will accept that bid which
shall result in the lowest "annual cost of money" to the Company
for the Debentures, and any bid not so accepted by the Company
shall, unless such bid shall be involved in rebidding as
hereinafter provided, be deemed to have been rejected. The
lowest annual cost of money to the Company for the Debentures
shall be determined by the Company and such determination shall
be final. In case the lowest annual cost of money to the Company
is provided by two or more such bids, the Company (unless it
shall reject all bids) will give the makers of such identical
bids an opportunity (the duration of which the Company may in its
sole discretion determine) to improve their bids. The Company
will accept, unless it shall reject all bids, the improved bid
providing the Company with the lowest annual cost of money for
the Debentures. If no improved bid is made within the time fixed
by the Company, or if upon such rebidding the lowest annual cost
of money to the Company is again provided by two or more bids,
the Company may without liability to the maker of any other bid
accept any one of such bids in its sole discretion, or may reject
all bids.
The Company further reserves the right to reject the bid of
any bidder or group of bidders if the Company, in the opinion of
its counsel, may not lawfully sell the Debentures to such bidder
or to any member of such group, unless, in the case of a group of
bidders, prior to 1:00 P.M., New York City time, on the date on
which the bids are submitted, the member or members to which, in
the opinion of the Company's counsel, the Debentures may not be
lawfully sold have withdrawn from the group and the remaining
members have agreed to purchase the Debentures which such
withdrawing member or members had offered to purchase.
6. Purchase Agreement and Completion of Registration Statement.
The Company will signify its acceptance of a bid by signing
the Purchase Agreement. The Company shall, upon request, execute
the acceptance on additional copies of the Purchase Agreement
furnished by the Representative of the successful bidders. Upon
the acceptance of a bid, the successful bidder, or, in the case
of a bid by a group of bidders, the Representative on behalf of
the successful bidders, shall furnish to the Company, in writing,
all information regarding the bidder or bidders and the public
offering, if any, of the Debentures required in connection with
the prospectus supplement to the Registration Statement, any
further information regarding the bidders and the public
offering, if any, to be made by them, which may be required to
complete the applications filed by the Company with public
authorities having jurisdiction over the Company, and other
information required by law in respect of the purchase or sale of
the Debentures as herein contemplated.
7. Delivery of the Debentures.
The Debentures will be delivered in temporary or definitive
form, at the election of the Company, to the purchasers of the
Debentures at the place, at the time and in the manner indicated
in the Purchase Agreement, against payment of the purchase price
therefor as provided in the Purchase Agreement.
-4-
8. Opinion of Counsel for the Purchasers.
Messrs. Milbank, Tweed, Hadley & McCloy, 1 Chase Manhattan
Plaza, New York, NY 10005, have been requested by the Company to
act as counsel for the successful bidder or bidders of the
Debentures and to give to the purchasers an opinion as outlined
in the Purchase Agreement. Such counsel has reviewed or will
review, from the standpoint of possible purchasers of the
Debentures, the form of the Registration Statement and the
Prospectus and competitive bidding papers, including the Purchase
Agreement, and has reviewed or will review the corporate
proceedings with respect to the issue and sale of the Debentures.
Prospective bidders may confer with Messrs. Milbank, Tweed,
Hadley & McCloy with respect to any of the foregoing matters at
the offices of said firm, 1 Chase Manhattan Plaza, New York, NY
10005, Attn.: Robert W. Mullen, Jr., Esq. The successful bidders
are to pay the compensation and disbursements of such counsel,
except as otherwise provided in the Purchase Agreement. Such
counsel will, on request, advise any prospective bidder who has,
or the Representative of any group of prospective bidders who
have, furnished questionnaires as provided in Section 2 hereof,
of the amount of such compensation and of the estimated amount of
such disbursements.
GTE CALIFORNIA INCORPORATED
_____________, 199_
CA:S-3:77
Exhibit A
GTE CALIFORNIA INCORPORATED
(the "Company")
CONFIRMATION OF BID FOR
$___,000,000 ____% Debentures, Series _, Due ____
(the "Debentures")
TERMS
Maturity: ________________.
Interest Payable: Semi-annually on _____ and _____, commencing
______,
____.
Redemption Provisions:
[The Debentures will not be redeemable prior to maturity.]
OR
[The New Debentures will not be redeemable prior to ______.
Thereafter, the New Debentures will be redeemable on not less
than 30 nor more than 60 days' notice given as provided in the
Indenture, as a whole or in part, at the option of the Company at
the redemption price set forth below. The "initial regular
redemption price" will be the initial public offering price as
defined below plus the rate of interest on the Debentures. The
redemption price during the twelve month period beginning
__________ and during the twelve month periods beginning on each
_____________ thereafter through the twelve month period ended
___________ will be determined by reducing the initial regular
redemption price by an amount determined by multiplying (a) 1/_
of the amount by which such initial regular redemption price
exceeds 100% by (b) the number of such full twelve month periods
which shall have elapsed between __________ and the date fixed
for redemption; and thereafter the redemption prices during the
twelve month periods beginning _________ shall be 100%;
provided, however, that all such prices will be specified to the
nearest 0.01% or if there is no nearest 0.01%, then to the next
higher 0.01%.
For the purpose of determining the redemption prices of the
Debentures, the initial public offering price of the Debentures
shall be the price, expressed in percentage of principal amount
(exclusive of accrued interest), at which the Debentures are to
be initially offered for sale to the public; if there is not a
public offering of the Debentures, the initial public offering
price of the Debentures shall be deemed to be the price,
expressed in percentage of principal amount (exclusive of accrued
interest), to be paid to the Company by the Purchasers.]
NAME OF BIDDER:
_________________________________________________________
TELEPHONE NUMBER TO BE USED TO CALL IN BID:
_____________________________
-2-
TIME AND DATE BID RECEIVED:
_____________________________________________
(to be completed by GTE Service Corporation on behalf of the
Company)
By submitting this bid, the bidder named above agrees to the
following terms and conditions:
o Each bid shall be for the purchase of all of the Debentures.
o Each bid may be made by a single bidder or by a group of
bidders.
o The bidder acknowledges that it (and all members of the
bidding group it represents) has received a copy of the
Prospectus dated _________________.
o If the bid is made by a group of bidders, the undersigned
represents and warrants that it is fully authorized by all
bidders in the group to act on their behalf and to bind them to
the terms of the Purchase Agreement relating to the Debentures.
o Each bid shall specify:
- the annual interest rate on the Debentures, which rate
shall be a multiple of 1/8%;
- the price (exclusive of accrued interest) to be paid to
the Company for the Debentures, which price shall not be less
than 98% and not more than 101% of the principal amount of the
Debentures, and that accrued interest on the Debentures from
_______________, to the date of payment of the Debentures and the
delivery thereof will be paid to the Company by the
purchaser or purchasers; and
- in the case of a bid by a group of bidders, the name of,
and amount to be purchased by each bidder;
o Bids must be received by 10:00 A.M., New York City time, on
____________, ____, or such later time and/or date as the Company
may specify (the "Bid Time").
o Bids shall be irrevocable for one (1) hour after the Bid Time.
o The winning bid shall be selected on the basis of the lowest
"annual cost of money" to the Company.
o Whether or not this bid is accepted by the Company, an
executed copy of this Confirmation of Bid must be sent promptly
by facsimile to GTE Service Corporation on behalf of the Company
at 203-965-3746 or 203-965-2830.
o If this bid is accepted, upon acceptance the undersigned
agrees to promptly furnish to the Company a signed copy of the
Purchase Agreement relating to the Debentures and a copy of all
information required to be included in the Prospectus relating to
the Debentures.
o Closing Date: __________________ at 10:00 A.M., New York City
time.
-3-
BID:
Interest Rate ________________ %
Price to be paid to the Company ________________ %
___________________________________
(Name of Bidder)
___________________________________
(Authorized Signature)
CA:S-3:80
