PROSPECTUS SUPPLEMENT
(To Prospectus dated October 23, 1995)
$35,000,000
GREEN MOUNTAIN POWER CORPORATION
Medium-Term Notes, Series A
Due 9 Months or more from Date of Issue
Green Mountain Power Corporation (the "Company") may offer from time
to time up to $35,000,000 aggregate principal amount of its unsecured
Medium-Term Notes, Series A (the "Notes"). The designation or
designations, the principal amount or amounts, the offering price or
prices, the interest accrual date or dates, the date or dates of
maturity, the interest rate or rates, the interest payment dates, any
sinking fund or other redemption or repayment provisions and any other
material terms of the Notes will be established from time to time and
will be set forth in supplements hereto ("Pricing Supplements"). The
Notes will have maturities of nine months or more from their respective
dates of issue, as selected by the purchasers and agreed to by the
Company. Unless otherwise specified in the applicable Pricing
Supplement, the Notes will be issued in denominations of $1,000 or any
integral multiple thereof; and interest on each Note will accrue from
its date of issue and will be payable semi-annually in arrears on each
May 1 and November 1 and at maturity. If so specified in the applicable
Pricing Supplement, a Note may be redeemed at the option of the Company
or repaid at the option of its holder at a specified price or prices and
on a specified date or dates.
The Notes will be represented either by global securities registered
in the name of a nominee of The Depository Trust Company, as depository,
or by certificated securities issued to the registered owners thereof,
as set forth in the applicable Pricing Supplement. Interests in the
global securities will be shown on, and transfers thereof will be
effected only through, records maintained by The Depository Trust
Company (with respect to its participant's interests) and by its
participants or persons that hold through such participants (with
respect to the interest of persons other than such participants).
Except under the circumstances described herein, certificated securities
will not be issued in exchange for global securities.
For further information relating to the Notes, see "Description of
the Notes" herein, "Description of the Notes" and "Book-Entry System" in
the accompanying Prospectus, and the applicable Pricing 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 OR ANY SUPPLEMENT
HERETO. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Price to Agent's Discounts Proceeds to
Public (1) and Commission (2) the Company (2) (3)
Per Note ............ 100% .125% - .750% 99.275% - 99.250%
Total ............... $35,000,000 $43,750 - $262,500 $34,956,250 - $34,737,500
</TABLE>
(1) Unless otherwise specified in the applicable Pricing Supplement,
the Notes will be issued at 100% of their principal amount.
(2) The commissions payable to the Agent for each Note sold through the
Agent, as agent, shall range from .125% to .750% of the principal
amount of such Note, depending upon maturity, except that the Company
and the Agent may agree to a higher commission for maturities in
excess of 30 years. The Company may also sell Notes to the Agent, as
principal, for resale to investors or other purchasers. Unless
otherwise specified in the applicable Pricing Supplement, a Note sold
to the Agent as principal will be purchased by the Agent at a price
equal to 100% of the principal amount thereof less a percentage equal
to the commission applicable to an agency sale of a Note of like
maturity. The Company has agreed to indemnify the Agent against
certain liabilities under the Securities Act of 1933 (the "Act").
(3) Assuming that the Notes will be issued at 100% of their principal
amount and before deducting expenses payable by the Company estimated
at $295,000, including reimbursement of certain expenses of the Agent.
Offers to purchase the Notes may be solicited from time to time by
Smith Barney Inc. (the "Agent") on behalf of the Company. The Agent has
agreed to use reasonable efforts to solicit purchases of the Notes. The
Company may sell Notes to the Agent acting as principal for its own
account for resale to investors and other purchasers at varying prices
related to prevailing market prices at the times of resale or otherwise,
to be determined by the Agent. The Company also may sell the Notes
directly to investors on its own behalf. The Company or the Agent may
reject any offer in whole or in part. The Notes will not be listed on
any securities exchange. There can be no assurance that all of the
Notes offered hereby will be sold or that there will be a secondary
market for the Notes. See "Plan of Distribution of Notes".
Smith Barney Inc.
November 13, 1995.
DESCRIPTION OF THE NOTES
The statements under this caption are intended to summarize the Notes
and the Indenture. They do not purport to be complete and are qualified
in their entirety by reference to the descriptions thereof set forth
under the captions, "Description of the Notes" and "Book-Entry System",
in the accompanying Prospectus and to the Sections of the Indenture
cited therein. Capitalized terms used herein and not defined have the
meanings specified in the accompanying Prospectus.
General
The Notes are to be issued as a series of the Company's unsecured
indebtedness under the Indenture. The Indenture does not limit the
amount of other debt, secured or unsecured, which may be issued by the
Company. The Notes will rank pari passu with all other unsecured
indebtedness of the Company. Substantially all of the materially
important properties of the Company are subject to the lien of the
Mortgage securing the Bonds. (See "Description of the New Bonds" in the
accompanying Prospectus.)
Unless otherwise indicated in the applicable Pricing Supplement and
except under the circumstances described under the caption, "Book-Entry
System", in the accompanying Prospectus, the Notes will be issued as one
or more global notes, each of which will represent beneficial interest
in such Notes, and such global notes will be deposited with the
Depository. Beneficial interest in the Notes will be shown on and
transfers thereof will be effected through records maintained by the
Depository and its Participants. Beneficial interests will be exchanged
for Notes in definitive form only under the limited circumstances
described under "Book-Entry System".
The Notes will be offered on a continuous basis, will mature nine
months or more from their date of issue, and may be subject to
redemption prior to maturity or repayment at the option of the Holder at
the price or prices and the time or times specified in the applicable
Pricing Supplement. Unless otherwise indicated in the applicable
Pricing Supplement, the Notes will be issued in denominations of $1,000
or any integral multiple thereof.
The Pricing Supplement relating to each Note will describe the
following terms: (1) the designation and principal amount of such Note,
(2) the offering price (expressed as a percentage of the aggregate
principal amount thereof) of such Note, (3) the interest accrual date of
such Note, (4) the date on which such Note will mature, (5) the rate per
annum at which such Note will bear interest, (6) the dates on which such
interest will be payable, (7) any sinking fund or other redemption or
repayment provisions of such Note, and (8) any other material terms of
such Note.
Payment of Principal and Interest
Each Note will bear interest from its original issue date (the
"Original Issue Date") until the principal amount thereof shall have
been paid or made available for payment. Interest on each Note will be
payable semi-annually on each May 1 and November 1 (each an "Interest
Payment Date"), except as otherwise indicated in the applicable Pricing
Supplement, and at maturity; provided, however, that the first payment
of interest on any Note with an Original Issue Date between a Record
Date (as hereinafter defined) and an Interest Payment Date shall be made
on the second Interest Payment Date succeeding the Original Issue Date,
as specified in the applicable Pricing Supplement.
Interest in respect of Notes issued as global notes will be payable
by the Company to the Depository and by the Depository to its Direct
Participants. Payments to the Beneficial Owners of the Notes will be
the responsibility of Direct and Indirect Participants. (See "Book-
Entry System" in the accompanying Prospectus.)
Interest payable on certificated Notes will be payable to the person
in whose name such Notes are registered at the close of business on the
Record Date with respect to each Interest Payment Date; provided,
however, that interest payable at maturity will be payable to the person
to whom principal shall be payable.
Unless otherwise specified in the applicable Pricing Supplement, (i)
the "Record Date" with respect to any Interest Payment Date shall be the
April 15 or October 15 (whether or not a Business Day), as the case may
be, preceding such Interest Payment Date, and (ii) interest on each Note
will be computed on the basis of a 360-day year of twelve 30-day months.
Redemption
The Pricing Supplement relating to each Note will indicate whether
and under what circumstances such Note will be redeemable by the Company
prior to maturity and the redemption price or prices, including
premiums, if any, applicable thereto.
In the case of any redemption of the Notes, notice thereof shall be
provided by mail to the holders of the Notes being redeemed by first
class mail, mailed not less than 30 days prior to the date fixed for
redemption to the respective addresses of such holders as shown in the
registry books for the Notes.
Redemption may be made subject to the receipt of redemption moneys by
the Trustee on or before the date fixed for redemption, and in such
case, if such moneys shall not have been so received, such notice shall
be of no effect and the Notes subject to such redemption shall not be
redeemed.
The Pricing Supplement relating to each Note will indicate whether
and under what circumstances such Note will be the subject of any
sinking fund or analogous provision.
Repayment at Option of Holder
The Pricing Supplement relating to each Note will indicate whether
such Note will be repayable at the option of its Holder, and, if so, the
repayment price or prices and the time or times at which such option may
be exercised. In order for a Note to be repaid, the Company must
receive at its office or agency in New York City (currently, the
Trustee), within the period specified in the applicable Pricing
Supplement, such Note with the form entitled "Option to Elect Repayment"
on the reverse of, or otherwise accompanying, such Note duly completed.
Any such election so received by the Company within such period shall be
irrevocable. The repayment option may be exercised by the registered
holder of a Note for less than the entire principal amount of such Note
provided the principal amount which is to be repaid is equal to $1,000
or an integral multiple of $1,000 or such other minimum amount as
specified in the applicable Pricing Supplement. All questions as to the
validity, eligibility (including time of receipt) and acceptance of any
Note for repayment will be determined by the Company, whose
determination will be final and binding. Beneficial Owners of Notes
issued as global securities must exercise this option through Direct or
Indirect Participants.
PLAN OF DISTRIBUTION OF THE NOTES
Subject to the terms and conditions set forth in the Distribution
Agreement, dated November 14, 1995 (the "Distribution Agreement"), the
Notes are being offered, from time to time, on a continuous basis by the
Company through Smith Barney Inc. (the "Agent"), which has agreed to use
its reasonable efforts to solicit purchases of the Notes. The Company
will have the right to accept or reject any proposed purchase of Notes
in whole or in part. The Agent will have the right, in its discretion
reasonably exercised, to reject any proposed purchase of Notes, in whole
or in part. Payment of the purchase price of the Notes will be required
to be made in immediately available funds. The Company will pay to the
Agent commissions of from .125% to .750% of the principal amounts of
Notes, depending upon maturities, for sales made through it as Agent,
except that the Company and the Agent may agree to a higher commission
for maturities in excess of 30 years.
The Company also may sell Notes to the Agent as principal for resale
to investors or other purchasers at varying prices related to prevailing
market prices at the time of resale, or otherwise, as determined by the
Agent. Unless otherwise agreed upon at the time of sale, a Note sold to
the Agent, as principal, will be purchased by the Agent at a price equal
to 100% of its principal amount less a percentage equal to the
commission applicable to an agency sale of a Note of like maturity. The
Agent may resell any Note purchased by it as principal to dealers at
prices determined by the Agent at the time of resale and may pay such
dealer a commission not in excess of the commission received by the
Agent from the Company. Such dealers may be deemed to be "underwriters"
within the meaning of the Act. After the initial public offering of
Notes to be resold at a fixed public offering price, the public offering
price and discount may be changed.
The Company has reserved the right to sell Notes directly on its own
behalf. No commission will be payable on any Note sold directly by the
Company.
The Agent, as agent or principal, may be deemed to be an
"underwriter" within the meaning of the Act. The Company has agreed to
indemnify the Agent against certain liabilities, including liabilities
under the Act. The Company also has agreed to reimburse the Agent for
certain expenses.
The Agent, from time to time, may perform various investment banking
services for the Company.
The Notes are a new issue of securities with no established trading
market and will not be listed on any securities exchange. The Agent has
informed the Company that it intends to make a market in the Notes, but
is under no obligation to do so, and that such market making may be
discontinued at any time. No assurance can be given as to the existence
or liquidity of a secondary market for the Notes.
PROSPECTUS
GREEN MOUNTAIN POWER CORPORATION
First Mortgage Bonds
Unsecured Notes
Common Stock
Green Mountain Power Corporation (the Company) intends from time to
time to sell its First Mortgage Bonds (the New Bonds), Unsecured Notes
(the Notes) and/or Common Stock, $3.33 1/3 par value (the New Common
Stock) (the New Bonds and the Notes being collectively referred to
herein as the Debt Securities, and the Debt Securities and the New
Common Stock being collectively referred to herein as the Securities) in
any combination at an aggregate initial offering price not to exceed
$50,000,000. The Securities will be offered at prices and on terms to
be determined at the times of sale. For each issue of the Debt
Securities for which this Prospectus will be delivered, there will be an
accompanying Prospectus Supplement, together with any accompanying
Pricing Supplement, that will set forth, with respect to the Debt
Securities of such issue, (i) the series designation and aggregate
principal amount thereof, (ii) the initial public offering price and
other terms of their offering, (iii) the date or dates on which they
will mature, (iv) the rate or rates per annum at which they will bear
interest, (v) the times at which such interest will be payable and the
date from which it will accrue, (vi) whether all or any portion thereof
will be issued to a designated depositary, (vii) any redemption or
repayment provisions, and (viii) other specific terms. For each issue
of the New Common Stock for which this Prospectus will be delivered,
there will be an accompanying Prospectus Supplement that will set forth
the terms of the offering. The Common Stock is traded on the New York
Stock Exchange. Its price and volume data are reported on the New York
Stock Exchange using the symbol "GMP". The sale of one of the
Securities will not be contingent upon the sale of any other.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR BY 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 Securities may be sold directly by the Company or through
agents designated from time to time or through underwriters or dealers.
If any agents of the Company or any underwriters are involved in the
sale of the Securities in respect of which this Prospectus will be
delivered, the names of such agents or underwriters, and the initial
price to the public, any applicable commissions or discounts and the net
proceeds to the Company, or the means of determining the same, will be
set forth in an accompanying Prospectus Supplement or Supplements. The
Company may indemnify agents and underwriters against certain civil
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Plan of Distribution".
The date of this Prospectus is October 23, 1995.
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, proxy statements and other
information with the Securities and Exchange Commission (the
Commission). The Registration Statement and such exhibits and schedules
may be inspected without charge at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C., and at the regional offices of the Commission located at Seven
World Trade Center, Suite 1300, New York, New York 10048, and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661, at prescribed
rates. Copies of such material may also be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Company's Common Stock is listed on the New
York Stock Exchange. Such reports, proxy statements and other
information concerning the Company can also be inspected at the offices
of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, heretofore filed with the Commission (File
No. 1-8291) pursuant to the Exchange Act, are hereby incorporated by
reference:
(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1994.
(2) The Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, and June 30, 1995.
All documents filed by the Company pursuant to Section 13(a) and
(c), 14 or 15(d) of the Securities and Exchange Act after the date of
this Prospectus and prior to the termination of this offering shall be
deemed to be incorporated by reference into this Prospectus and to be a
part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded, for
purposes of this Prospectus, to the extent that a statement contained
herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes
such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The Company hereby undertakes to provide, without charge, to each
person, including any beneficial owner, to whom a copy of this
Prospectus shall have been delivered, upon the written or oral request
of any such person, a copy of any or all of the documents 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 such documents. Written or telephone
requests for such copies should be directed to the Corporate Secretary,
Green Mountain Power Corporation, 25 Green Mountain Drive, P. O. Box
850, South Burlington, Vermont 05402-0850 (Telephone 802-864-5731).
THE COMPANY
The Company is a public utility operating company engaged in
supplying electrical energy in the State of Vermont in a territory with
an estimated population of 195,000. The Company has its principal
executive office at 25 Green Mountain Drive, P. O. Box 850, South
Burlington, Vermont 05402-0850 (Telephone 802-864-5731.) It serves
approximately 80,500 customers.
RATIO OF EARNINGS TO FIXED CHARGES
As computed in accordance with Regulation S-K of the Commission,
the Company's ratios of earnings to fixed charges for each of the years
1990 through 1994, and for the twelve months ended June 30, 1995, are as
follows:
Ratio of
Earnings to
Year Ended Fixed Charges (1)
December 31, 1990 2.47
December 31, 1991 2.73
December 31, 1992 3.01
December 31, 1993 2.78
December 31, 1994 2.74
Twelve Months Ended June 30, 1995 2.76
(1) Earnings consist of pretax income plus fixed charges as defined in
Item 503 paragraph (d)(3). Fixed charges computed pursuant to
paragraph (d)(4) of Item 503 consist of interest on all indebtedness,
amortization of debt expense and discount or premium relating to any
indebtedness, and the estimated interest portion of rentals charged to
income.
USE OF PROCEEDS AND FINANCING PROGRAM
The net proceeds to be received by the Company from the sale of the
Securities will be applied to the refunding of long-term debt, the
financing of capital projects and the repayment of short-term bank
borrowings incurred for such purposes and for other general corporate
purposes.
The Company expects its capital expenditures in 1995 to be
approximately $22 million. The Company expects such expenditures for
the five-year period, 1995-99, to aggregate approximately $93.5 million.
The Company anticipates that for the period 1995 - 1999, internally
generated funds will provide approximately 90 percent of total capital
expenditure requirements. The remaining amount, plus funds required to
meet sinking fund requirements and debt maturities totaling
approximately $34.9 million, will be funded through short-term
borrowings, which will be refinanced periodically through the sale of
long-term debt and equity securities, in such amounts and at such times
as the Company's cash requirements and market conditions shall
determine.
DESCRIPTION OF THE NEW BONDS
The statements under this caption are intended to summarize the New
Bonds and the Mortgage; they do not purport to be complete and are
qualified in their entirety by reference to the New Bonds and the
Mortgage, copies of which have been filed as exhibits to the
Registration Statement of which this Prospectus is a part.
General. The New Bonds are to be issued under the Company's
Indenture of First Mortgage and Deed of Trust, dated as of February 1,
1955, to the United States Trust Company of New York [successor to the
Chase Manhattan Bank (National Association), successor to the Chase
National Bank of the City of New York], as trustee, as supplemented by
15 supplemental indentures and as to be further supplemented by one or
more additional supplemental indentures providing for one or more series
of the New Bonds, all of which are collectively referred to as the
Mortgage.
Reference is made to the Prospectus Supplement or Supplements for
each issue of the New Bonds for the following terms, among others, of
the New Bonds offered thereby: (i) the series designation and aggregate
principal amount thereof, (ii) the initial public offering price and
other terms of their offering, (iii) the date or dates on which they
will mature, (iv) the rate or rates per annum at which they will bear
interest, (v) the times at which such interest will be payable and the
date from which it will accrue, (vi) whether all or any portion thereof
will be issued to a designated depositary, (vii) any redemption or
repayment provisions, and (viii) other specific terms.
Form, Exchange and Payment. Unless otherwise indicated in the
Prospectus Supplement for an issue of the New Bonds, the New Bonds
offered thereby will be issued only in the form of a fully registered
global bond, interests in which will be transferable by a book-entry
system in denominations of $1,000 and any multiple thereof. If
definitive New Bonds are exchanged for a global bond, they will be
issued in denominations of $1,000 and integral multiples of $1,000. See
"Book-Entry System."
Security. The New Bonds together with all other bonds (Bonds) now
or hereafter issued under the Mortgage will be secured by the Mortgage,
which, in the opinion of Peter H. Zamore, Esq., General Counsel of the
Company, subject only to permitted encumbrances as defined in the
Mortgage, constitutes a valid, direct first mortgage lien upon the real
and personal property described or referred to in the Mortgage as owned
by the Company (other than classes of property expressly excepted in the
Mortgage and property heretofore released from the lien of the Mortgage
in accordance with the terms thereof), which include all of the physical
properties and franchises of the Company used or useful in its public
utility business; and all physical properties and franchises of the
Company used or useful in its public utility business (other than those
of the character not subject to the lien of the Mortgage as aforesaid)
acquired by the Company after the respective dates of the Original
Indenture and each Supplemental Indenture have become, or will upon such
acquisition become, subject to the lien thereof, subject, however, to
permitted encumbrances and to liens, if any, existing or placed thereon
by the Company at the time of the acquisition thereof by the Company
and, subject, in the case of after acquired properties located in
municipalities or counties in which the Mortgage has not been recorded
at or prior to the time of acquisition, to the rights of holders or
liens perfected on such properties prior to the recording of the
Mortgage in such municipalities or counties. There are excepted from
the lien of the Mortgage certain specifically excepted properties; all
cash on hand and in banks, contracts, shares of stock, bonds, notes,
evidences of indebtedness and other securities, bills, notes and
accounts receivable and other choses in action, conditional sales
agreements and appliance rental or lease agreements other than those
expressly subjected to the Mortgage; all equipment, materials and
supplies not installed as part of the fixed property of the Company and
which are held for use or consumption in its business; all goods, wares,
merchandise, appliances and supplies, purchased, acquired or held for
the purpose of sale, lease or distribution; and gas, oil, coal,
fissionable material and other minerals and other products, fuel and
other personal property which are consumable in their use in the
operation of the plants or systems of the Company; office furniture,
equipment and supplies; aircraft, automobiles, trucks and similar
vehicles; and certain other properties of the Company set forth in the
Mortgage. (See Mortgage, Granting Clauses.)
The Mortgage contains provisions subjecting after-acquired property
(subject to pre-existing liens) to the lien thereof, subject to
limitations in the case of consolidation, merger or sale of
substantially all of the Company's assets. (See Mortgage, Granting
Clauses and Article Fourteen.)
The Mortgage provides that the trustees shall have a lien upon the
mortgaged property, prior to that of the Bonds, for the payment of their
reasonable compensation and expenses, and for indemnity against certain
liabilities. (See Mortgage, Section 15.10.)
Issuance of Additional Bonds. Additional Bonds of any series may
be issued in an aggregate principal amount equal to:
(1) 60 percent of unfunded net property additions (the cost or
fair value at the time of acquisition, whichever is less, of
utility property charged to plant accounts of the Company
after December 31, 1954, less the minimum provision for
depreciation from said date);
(2) the principal amount of unfunded Bond credits for the
retirement of Bonds of any series; and /or
(3) cash deposited with the Trustee;
subject to the filing of an earnings certificate (except in the case of
certain refundings) showing net earnings available for interest (as
defined), for a period of 12 consecutive months within the 15 calendar
months preceding the date of application, to be at least two times
annual interest requirements on bonded debt then to be outstanding.
Property additions generally include the utility property, tangible
or intangible, of the Company, located in the United States of America,
which (except as provided below) is used by or useful to the Company in
the business of generating, manufacturing, storing, transmitting,
distributing, utilizing, purchasing, furnishing, supplying and/or
disposing of electricity and/or gas, for heat, light, power, or
refrigeration or other uses, or in any business which is incidental
thereto, including, without limiting the generality of the foregoing,
all properties necessary or appropriate for generating, manufacturing,
storing, transmitting, distributing, utilizing, purchasing, furnishing,
supplying and/or disposing of electricity and/or gas, together with
betterments, improvements, additions, replacements, or alterations of,
upon or to such property of the Company acquired after December 31,
1954.
Utility property shall not be deemed to include any property
excepted from the lien of the Mortgage. As of December 31, 1994,
approximately $17,000,000 of property additions and $15,100,000 of
unfunded Bond Credits were available for use as the basis for the
issuance of Bonds.
The Mortgage contains certain restrictions upon the issuance of
Bonds against property subject to liens. The New Bonds will be issued
against property additions and/or unfunded Bond Credits for the
retirement of Bonds. (See Mortgage, Articles Two, Seven, Nine and
Fourteen.)
The Mortgage provides that the Company and/or the Trustee may
release property from the lien of the Mortgage, so long as no default
exists: (1) in the ordinary course of the Company's business, with
respect to property which has become old or worn out, provided such
property is replaced by the Company, and in connection with a release,
surrender, abandonment or termination of any rights of the Company which
is necessary, desirable or advisable in connection with the conduct of
the utility business of the Company; (2) upon written request of the
Company to the Trustee in connection with the sale of any such property,
provided that the Company shall receive fair consideration therefor and
provided that the release will not impair the security of the Mortgage;
(3) in connection with a condemnation by any government entity of
property of the Company, provided the Company receives fair value
therefor; (4) without any consent or release by the Trustee, in
connection with a sale of property by the Company of property no longer
used or useful in the conduct of the Company's business, provided that
the aggregate value of any such property so disposed of in any one
calendar year shall not exceed the greater of $50,000 or 3/4 of 1% of
the outstanding Bonds; or (5) in connection with the taking, sale or
release of all or substantially all of the Company's property, upon the
deposit of Government or purchase money securities with the Trustee.
(See Mortgage, Article Seven.)
Defaults and Notice Thereof. The Mortgage defines the following
events as "defaults":
(1) failure to pay principal of, or premium (if any) on, any
Bond when due;
(2) failure to pay interest on any Bond when due and continuance
of such failure for a period of 30 days;
(3) failure to discharge or satisfy any improvement,
maintenance, or depreciation fund obligation and continuance
of such failure for a period of 60 days;
(4) failure to discharge or satisfy any sinking fund obligation
and continuance of such failure for a period of 20 Business
Days;
(5) failure to perform or observe any of the other covenants,
agreements or conditions in the Mortgage and continuance of
such failure for a period of 90 days following written notice
by the Trustee or by holders of at least 15 percent in
principal amount of the Bonds;
(6) the entry of an order for reorganization or appointment of a
trustee or receiver of all or a substantial part of the
mortgaged property and continuance of such order or
appointment unstayed for a period of 90 days;
(7) certain adjudications, petitions or consents in bankruptcy,
insolvency or reorganization proceedings or an admission of
insolvency or an assignment for the benefit of creditors by
the Company; or
(8) the rendering of a judgment against the Company for the
payment of moneys in excess of the Judgment Amount (as herein
defined) and continuance of such judgment unsatisfied and
without stay of execution for a period of 90 days after (i)
the entry of such judgment or (ii) the termination of any stay
of execution entered during the initial 90-day grace period;
but only, in either case, if such judgment shall have been
continued unstayed or unsatisfied for a period of 10 days
after the giving of written notice of default to the Company
by the Trustee or to the Company and the Trustee by the
holders of at least 15 percent in principal amount of the
Bonds outstanding. As used herein, "Judgment Amount" shall
mean (a) $50,000 until the earlier to occur of (i) all Bonds
of any series established prior to the execution of the
Company's Tenth Supplemental Indenture having ceased to be
outstanding, whether at their respective stated maturities or
through a provision for redemption prior to their stated
maturities, or (ii) the execution of a supplemental indenture
with the written consent of the holders of not less than
66 2/3 percent in principal amount of all Bonds of any series
heretofore created and issued (and, if more than one such
series of Bonds shall at the time be outstanding, not less
than 66 2/3 percent in principal amount of the Bonds of each
such series), and (b) thereafter $1,000,000.
So long as one or more of such defaults shall continue to exist and
provided that the principal of all the Bonds shall not have already
become due and payable, either the Trustee (by notice in writing to the
Company) or the holders of not less than 25 percent in principal amount
of the Bonds outstanding (by notice in writing to the Company and the
Trustee) may declare the principal of and accrued interest on all Bonds
then outstanding to be immediately due and payable notwithstanding the
Company's right, following such declaration but prior to any sale of all
or a substantial part of the mortgaged property, to cure all defaults to
the satisfaction of the Trustee in accordance with the terms of the
Indenture.
(See Mortgage, Article Twelve.)
The Mortgage does not require the Company to give the Trustee or
any holders of any Bonds periodic reports as to the Company's compliance
with the provisions of the Mortgage. The Company and the Trustee are
required to provide the notices and reports to the holders of the Bonds
required by the Trust Indenture Act of 1939, as amended, and copies of
the reports and information required under the Securities Exchange Act
of 1934, as amended. (See Mortgage, Article Eleven.)
Evidence to be Furnished to the Trustee. Compliance with Mortgage
provisions is evidenced by written statements of the Company's officers
or persons selected by the Company. In certain major matters the
accounting, engineer, appraiser or other expert must be independent.
Various certificates and other papers, including a certificate with
respect to compliance with the terms of the Mortgage and the absence of
defaults, are required to be filed annually and upon the occurrence of
certain events. (See Mortgage, Sections 9.06, 9.07, 9.08.)
Modification of the Mortgage. The Mortgage may be amended and/or
any past default thereunder (except a default in the payment of the
principal of, premium, if any, or interest on any of the Bonds) and its
consequences may be waived with the consent of the holders of at least
66 2/3 percent in principal amount of Bonds then outstanding, and of
each series of Bonds then outstanding and affected by the proposed
modification or waiver. Upon the earlier to occur of (i) all Bonds of
any series established prior to the execution of the Company's Tenth
Supplemental Indenture having ceased to be outstanding, whether at their
respective stated maturities or through a provision for redemption prior
to their stated maturities, and (ii) the execution of a supplemental
indenture with the written consent of the holders of all Bonds of any
series created and issued prior to the date of the Tenth Supplemental
Indenture, the Mortgage may be amended and/or any past default
thereunder (except a default in the payment of the principal of,
premium, if any, or interest on any of the Bonds) and its consequences
may be waived with the consent of the holders, acting together as a
single class, of at least 66 2/3 percent in principal amount then
outstanding of all Bonds issued pursuant to the Indenture and affected
by the proposed modification or waiver. In no instance shall any
modification regarding the terms of payment of principal of, premium, if
any, and interest on the New Bonds or a waiver of any past default with
respect to payment of such principal, premium or interest or its
consequences be effected without the consent of the holders of the New
Bonds, nor may any modification affecting the lien of the Mortgage or
reducing the percentage in principal amount of Bonds required for
modification, be effected without the consent of the holders of all
outstanding Bonds. (See Mortgage, Article Eighteen and Tenth
Supplemental Indenture.)
Concerning the Trustee. United States Trust Company of New York,
successor to the Chase Manhattan Bank (National Association), successor
to the Chase National Bank of the City of New York, is the trustee under
the Mortgage.
DESCRIPTION OF THE NOTES
The statements under this caption are intended to summarize the
Notes and the Indenture; they do not purport to be complete and are
qualified in their entirety by reference to the Notes and Indenture,
copies of which have been filed as exhibits to the Registration
Statement of which this Prospectus is a part.
General. The Notes are to be issued under an Indenture,
(Indenture) between the Company and The Bank of New York, as trustee
(Unsecured Trustee).
The Indenture provides that debt securities (including the Notes
and including both interest bearing and original issue discount
securities) may be issued thereunder, without limitation as to aggregate
principal amount. (See Indenture, Sec. 301.) All debt securities
issued under the Indenture (including the Notes) are collectively
referred to as the "Indenture Securities". The Indenture does not limit
the amount of other unsecured debt which may be issued by the Company.
The Notes will rank pari passu with all other unsecured indebtedness of
the Company. Substantially all of the materially important physical
properties of the Company are subject to the lien of the Mortgage
securing the Bonds. (See "Description of the New Bonds".)
Reference is made to the Prospectus Supplement or Supplements for
each issue of the Notes for the following terms, among others, of the
Notes offered thereby: (i) the series designation and aggregate
principal amount thereof, (ii) the initial public offering price and
other terms of their offering, (iii) the date or dates on which they
will mature, (iv) the rate or rates per annum at which they will bear
interest, (v) the times at which such interest will be payable and the
date from which it will accrue, (vi) whether all or any portion thereof
will be issued to a designated depositary, (vii) any redemption or
repayment provisions, and (viii) other specific terms.
Form, Exchange and Payment. Unless otherwise indicated in the
Prospectus Supplement for an issue of the Notes, the Notes offered
thereby will be issued only in the form of a fully registered global
note, interests in which will be transferable by a book-entry system in
denominations of $1,000 and any multiple thereof. If definitive Notes
are exchanged for a global note, they will be issued in denominations of
$1,000 and integral multiples of $1,000. See "Book-Entry System."
Restrictions on Liens. The Indenture provides that the Company
will not issue, assume or guarantee any notes, bonds, debentures or
other similar evidences of indebtedness for money borrowed ("Debt")
secured by a mortgage, lien, pledge or other encumbrance ("Mortgages")
upon any property of the Company without effectively providing that the
Indenture Securities (together with, if the Company so determines, any
other indebtedness or obligation then existing or thereafter created
ranking equally with the Indenture Securities) shall be secured equally
and ratably with (or prior to) such Debt so long as such Debt shall be
so secured, except that this restriction will not apply to: (a) the
Mortgage securing the Bonds (See "Description of the New Bonds -
General"), as amended and supplemented and as it may be hereafter
amended and supplemented ("Existing Mortgage"); (b) Mortgages affecting
property of a corporation existing at the time it becomes a Subsidiary
or at the time it is merged into or consolidated with the Company or a
Subsidiary; provided, that the lien of any such Mortgage as a result of
such consolidation or merger shall not be extended to the property owned
by the Company immediately prior thereto; (c) Mortgages on any property
existing at the time of acquisition thereof or incurred to secure
payment of the purchase price thereof or to secure Debt incurred prior
to, at the time of, or within 12 months after the acquisition for the
purpose of financing of the purchase price thereof; (d) Mortgages on any
property to secure of the cost of construction or improvements thereon
or Debt incurred to provide funds for such purpose; (e) certain
Mortgages to government entities, including mortgages to secure debt
incurred in pollution control or industrial revenue bond financings; (f)
Mortgages required by any contract or statute in order to permit the
Company to perform any contract or subcontract made by it with or at the
request of governmental entities; (g) Mortgages to secure loans to the
Company or any Subsidiary maturing within 12 months from the creation
thereof and made in the ordinary course of business; (h) "Permitted
Encumbrances" as such term is defined in the Existing Mortgage or any
encumbrances resulting from the Company's obligations arising from its
ownership interest in Vermont Electric Power Company, Inc. or Vermont
Yankee Nuclear Power Corporation; (i) certain Mortgages typically
incurred in the ordinary course of business; and (j) any extension,
renewal or replacement of any Mortgage referred to in the foregoing
clauses (b) through (i). Notwithstanding the foregoing, the Company
may, without securing the Indenture Securities, issue, assume or
guarantee Debt secured by Mortgages in an aggregate principal amount
which (not including Debt permitted to be secured under clauses (a) to
(j) inclusive above) does not at any one time exceed 10% of Net Tangible
Assets of the Company. (See Indenture, Section 1103)
"Net Tangible Assets" is defined as the aggregate amount of assets
(less applicable reserves and other properly deductible items) after
deducting therefrom (a) all current liabilities (excluding any
constituting Funded Debt), and (b) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other
like intangibles, all as set forth on the most recent balance sheet of
the Company and computed in accordance with generally accepted
accounting principles.
"Funded Debt" is defined as all indebtedness for money borrowed
having a maturity of more than 12 months from the date of the most
recent balance sheet of the Company or having a maturity of less than 12
months but by its terms being renewable or extendible beyond 12 months
from the date of such balance sheet at the option of the borrower.
Events of Default and Notice Thereof. The Indenture defines the
following events as "defaults":
(1) failure to pay any installment of interest on any Note within 30
days after its stated maturity;
(2) failure to pay the principal of, or premium, if any, on any Note
within three business days after its maturity;
(3) failure to perform or breach of any covenant of the Company in the
Indenture (other than a covenant, a default in the performance of
which is elsewhere specifically dealt with or which has been
included in the Indenture solely for the benefit of one or more
series of Notes other than such series) for a period of 90 days
after there has been given, by registered or certified mail, to the
Company by the Unsecured Trustee, or to the Company and the
Unsecured Trustee by the holders of at least 33% in principal
amount of the outstanding Notes of such series a written notice
specifying such default and requiring it to be remedied and stating
that such notice is a "Notice of Default";
(4) either (a) the entry of an order approving a petition seeking
reorganization of the Company upon the basis of insolvency or
inability to pay debts as they mature under the Federal bankruptcy
laws or any other applicable law or statute of the United States of
America or any State thereof; or (b) the appointment in any
judicial proceeding upon the application of any creditor or
creditors of a trustee or a receiver of all or a substantial part
of the trust estate; and the continuance of such order or
appointment unstayed and in effect for a period of 90 days;
(5) the adjudication of the Company as a bankrupt by any court of
competent jurisdiction or the filing by the Company of a voluntary
petition in bankruptcy or the making by the Company of an
assignment for the benefit of creditors or the admission by the
Company in writing of its inability to pay its debts as they become
due; the consent by the Company to the appointment in any judicial
proceeding upon the application of any creditor or creditors of a
receiver or trustee of all or a substantial part of its properties;
the filing by the Company of a petition or answer seeking
reorganization or readjustment on the basis of insolvency or
inability to pay debts as they mature under the Federal bankruptcy
laws or any other applicable law or statute of the United States of
America or of any State thereof; or the filing by the Company of a
petition to take advantage of any insolvency act;
(6) any other Event of Default specified with respect to Notes of such
series;
(7) default by the Company in the payment of principal of, or interest
on, securities issued under the Mortgage in an aggregate amount
exceeding $5,000,000, and the continuation thereof for 90 days
after written notice to the Company by the Unsecured Trustee, or to
the Company and the Unsecured Trustee by the holders of at least
33% in principal amount of the outstanding Notes of such series a
written notice specifying such default and requiring it to be
remedied and stating that such notice is a "Notice of Default".
No Event of Default with respect to a series of Indenture Securities
necessarily constitutes an Event of Default with respect to the
Indenture Securities of any other series. The Unsecured Trustee may
withhold notice of default (except in payment of principal, interest or
any funds for the retirement of Indenture Securities) if it, in good
faith, determines that withholding of such notice is in the interest of
the Holders of the Indenture Securities. (See Indenture, Secs. 801 and
903.)
Either the Unsecured Trustee or the Holders of not less than 33% in
principal amount (or such lesser amount as may be provided in the case
of discount Indenture Securities) of the outstanding Indenture
Securities of all defaulted series, considered as one class, may declare
the principal and interest on such series due on default, but the
Company may annul such default by effecting its cure and paying overdue
interest and principal. No Holder of Indenture Securities may enforce
the Indenture without having given the Unsecured Trustee written notice
of default, and unless the Holders of a majority of the Indenture
Securities of all defaulted series, considered as one class, shall have
requested the Unsecured Trustee to act and offered reasonable indemnity,
and for 60 days the Unsecured Trustee shall have failed to act, but each
Holder has an absolute right to receive payment of principal and
interest when due and to institute suit for the enforcement of such
payment. The Unsecured Trustee is not required to risk its funds or
incur any financial liability if it shall have reasonable grounds for
believing that repayment is not reasonably assured. The Holders of a
majority of the Indenture Securities of all defaulted series, considered
as one class, may direct the time, method and place of conducting any
proceedings for any remedy available to the Unsecured Trustee, or
exercising any trust or power conferred on the Unsecured Trustee, with
respect to the Indenture Securities of such series, but the Unsecured
Trustee is not required to follow such direction if not sufficiently
indemnified and the Unsecured Trustee may take any other action it deems
proper which is not inconsistent with such direction. (See Indenture,
Secs. 802, 807, 808, 812 and 902.)
Evidence to be Furnished to the Unsecured Trustee. Compliance with
Indenture provisions will be evidenced by written statements of the
Company's officers. An annual certificate with reference to compliance
with the covenants and conditions of the Indenture and the absence of
defaults is required to be filed with the Unsecured Trustee. (See
Indenture, Sec. 1004.)
Modification of the Indenture. The rights of the Holders of the
Indenture Securities may be modified with the consent of the Holders of
a majority of the Indenture Securities of all series or Tranches, as
defined below, affected, considered as one class. However, certain
specified rights of the Holders of Indenture Securities may be modified
without the consent of the Holders if such modification would not be
deemed to affect their interests adversely in any material respect. In
general, no modification of the terms of payment of principal and
interest, no reduction of the percentage in principal amount of the
Indenture Securities outstanding under such series required to consent
to any supplemental indenture or waiver under the Indenture, no
reduction of such percentage necessary for quorum and voting, and no
modification of certain of the provisions in the Indenture relating to
supplemental indentures, waivers of certain covenants and waivers of
past defaults is effective against any Holder of Indenture Securities
without his consent. "Tranche" means a group of Indenture Securities
which are of the same series and have identical terms except as to
principal amount and/or date of issuance. (See Indenture, Art. Twelve.)
Concerning the Indenture Trustee. The Bank of New York, New York,
New York is the trustee under the Indenture.
BOOK-ENTRY SYSTEM
For each issue of Debt Securities subject to the book-entry system
hereinafter described, a global security representing all of such issue
will be issued to the Depository Trust Company, New York, New York (DTC)
or such other depository as may be subsequently designated (Depository),
and registered in the name of CEDE & Co. (DTC's partnership nominee), or
such other Depository or its nominee as may be subsequently designated.
So long as the Depository, or its nominee, is the registered owner
of an issue of the Debt Securities, such Depository or such nominee, as
the case may be, will be considered the owner of such Debt Securities
for all purposes under the Mortgage or the Indenture, as the case may
be, including notices and voting. Payments of principal of, and
premium, if any, and interest on, such Debt Securities will be made to
the Depository or its nominee, as the case may be, as the registered
owner of such Debt Securities. Except as set forth below, owners of
beneficial interests in such Debt Securities will not be entitled to
have any such Debt Securities registered in their names, will not
receive or be entitled to receive physical delivery of such Debt
Securities and will not be considered the owners of such Debt Securities
under the Mortgage or the Indenture. Accordingly, each person holding a
beneficial interest in such Debt Security must rely on the procedures of
the Depository and, if such person is not a Direct Participant (as
hereinafter defined), on procedures of the Direct Participant through
which such person holds its interest, to exercise any of the rights of
the registered owner of such Debt Security.
The following nine paragraphs are based solely on information
furnished by DTC:
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code,
and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC holds securities that its participants
(Participants) deposit with DTC. DTC also facilitates the settlement
among Participants of securities transactions, such as transfer and
pledges, in deposited securities through electronic computerized book-
entry changes in Participants' accounts, thereby eliminating the need
for physical movement of securities certificates.
Direct Participants include securities brokers and dealers, banks,
trust companies, clearing corporations, and certain other organizations
(Direct Participants). DTC is owned by a number of its Direct
Participants and by The New York Stock Exchange, Inc., the American
Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such
as securities brokers and dealers, banks, and trust companies that clear
through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly (Indirect Participants). The rules
applicable to DTC and its Participants are on file with the Commission.
Purchases of the Debt Securities under the DTC system must be made
by or through Direct Participants, which will receive a credit for the
Debt Securities on DTC's records. The ownership interest of each actual
purchaser of each Debt Security (Beneficial Owner) is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial
Owners will not receive written confirmation from DTC of their purchase,
but Beneficial Owners are expected to receive written confirmation
providing details of the transaction, as well as periodic statements of
their holdings, from the Direct and Indirect Participant through which
the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Debt Securities are to be accomplished by
entries made on the books of Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates representing
their ownership interests in the Debt Securities, except in the event
that use of the book-entry system for the Debt Securities is
discontinued.
To facilitate subsequent transfers, all Debt Securities deposited
by Participants with DTC are registered in the name of CEDE & Co. The
deposit of Debt Securities with DTC and their registration in the name
of CEDE & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Debt Securities; DTC's
records reflect only the identity of the Direct Participants to whose
accounts such Debt Securities are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners will
be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
If the Debt Securities of any issue are redeemable prior to the
maturity date, redemption notices shall be sent to CEDE & Co. If less
than all of the Debt Securities of any issue are being redeemed, DTC's
practice is to determine by lot the amount of the interest of each
Direct Participant in such issue to be redeemed.
Neither DTC nor CEDE & Co. will consent or vote with respect to the
Debt Securities. Under its usual procedures, DTC mails an Omnibus Proxy
to the Company as soon as possible after the record date. The Omnibus
Proxy assigns CEDE & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Debt Securities are credited on the
record date (identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Debt Securities will be made
to DTC. DTC's practice is to credit Direct Participants' accounts on
the date on which interest is payable in accordance with their
respective holdings shown on DTC's records, unless DTC has reason to
believe that it will not receive payment on such payment date. Payments
by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in
"street name", and will be the responsibility of such Participant and
not of DTC, the Trustee or the Unsecured Trustee, as the case may be, or
the Company, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of principal and interest to
DTC is the responsibility of the Company and the Trustee or the
Unsecured Trustee, as the case may be. Disbursement of such payments to
Direct Participants shall be the responsibility of DTC, and disbursement
of such payments to the Beneficial Owners shall be the responsibility of
Direct and Indirect Participants.
DTC may discontinue providing services as securities depository
with respect to the Debt Securities at any time by giving notice to the
Company and the Trustee or the Unsecured Trustee, as the case may be.
Under such circumstances, in the event that a successor securities
depository is not obtained, Debt Securities in certificated form are
required to be printed and delivered.
The Company may decide to discontinue use of the system of book-
entry transfers through DTC (or a successor securities depository). In
that event, Debt Securities in certificated form will be printed and
delivered.
None of the Company or the Trustee or the Unsecured Trustee will
have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial interests in the
Debt Securities or for maintaining, supervising or reviewing any records
relating to such beneficial interests.
DESCRIPTION OF NEW COMMON STOCK
The following is a summary of certain rights and privileges and
restrictions on the Common Stock. This summary does not purport to be
complete. Reference is made to the Restated Articles of Association and
the Bylaws of the Company and the Mortgage, filed as exhibits to the
Registration Statement, for complete statements. The following
statements are qualified in their entirety by such references.
General. The outstanding shares of Common Stock, $3.33 1/3 par
value, of the Company are fully paid and nonassessable. The shares of
the New Common Stock, upon payment of the purchase price, will be fully
paid and nonassessable.
Dividend Restrictions. No dividends may be paid on the Common
Stock nor may the Company purchase any Common Stock unless all
cumulative dividends on the Company's outstanding Preferred Stock have
been paid or provided for, all Preferred Stock purchase-fund
requirements have been satisfied, full dividends on any Preference Stock
have been paid or provided for and the other restrictions summarized
below have been complied with. In addition, so long as any shares of
Preferred Stock are outstanding, the Company shall not pay any dividends
on any shares of stock junior to the Preferred Stock or make any other
distributions thereon or any expenditures for the purchase, redemption
or other retirement for a consideration of such junior stock except from
net income of the Corporation available for dividends on such junior
stock accumulated subsequent to December 31, 1954 plus the sum of
$150,000.
The Mortgage provides that the Company shall not declare or pay any
cash dividend on or make any other distribution in respect of its Common
Stock, or, with certain exceptions, repurchase any capital stock of the
Company if the aggregate amount so declared, paid, distributed or
expended after December 31, 1992 would exceed the aggregate amount of
net income of the Company available for dividends on its Common Stock
accumulated after December 31, 1992, plus $18,500,000. As of December
31, 1994, the amount of retained earnings available for dividends on the
Common Stock under this provision was $19,900,000.
Voting Rights. The holders of the Common Stock have exclusive
voting rights except as referred to below and as otherwise provided by
law.
Whenever dividends on any series of outstanding Preferred Stock
shall be in arrears in an amount equivalent to four or more quarterly
dividends, the holders of the Preferred Stock shall have the right,
until no dividends are in arrears and the current dividend is provided
for, to elect that number of directors, not exceeding the smallest
number of directors necessary to constitute a majority of the Board of
Directors equal to two times the number of full years that such
arrearage shall continue. Whenever an event of default occurs in
payment of any purchase or sinking-fund installment, the holders of
Preferred Stock shall have the right, until such default shall have been
remedied, to elect two directors. In addition, the votes or consent of
the holders of specified percentages of the Preferred Stock and any
Preference Stock are required as a condition to effecting various
changes in the capital structure of the Company and certain other
transactions. The Company is prohibited, without the consent of the
holders of at least two-thirds of the aggregate number of shares of all
classes of Preferred Stock entitled to vote thereon, from (x) creating
or authorizing, or increasing the authorized amount of, any shares of
any class of stock ranking as to dividends or assets prior to the
Preferred Stock, or of any obligation or security convertible into stock
ranking as to dividends or assets prior to the Preferred Stock; or (y)
amending, changing or repealing any of the express terms of the
Preferred Stock outstanding in any manner adverse to the holders
thereof; or (z) issuing shares of Preferred Stock unless certain income
and asset tests are satisfied. The Company is prohibited, without the
consent of the holders of a majority of the aggregate number of shares
of Preferred Stock, from (x) issuing, creating, guaranteeing or
permitting to exist any unsecured securities evidencing indebtedness
maturing more than one year from the date of issuance, except for the
purpose of refunding or retiring the outstanding Preferred Stock if the
principal amount of such unsecured securities would exceed twenty
percent (20%) of (a) the total principal amount of all secured
indebtedness then outstanding and (b) the total of the capital and
surplus; (y) merging or consolidating with or into any other
corporation, provided that such vote is not required if such other
corporation is a public utility principally engaged in the distribution
of gas or electricity in the State of Vermont and if after such merger
or consolidation certain financial tests with respect to the Preferred
Stock are satisfied; or (z) selling, leasing or otherwise disposing of
all or substantially all of its property.
Liquidation Rights. After satisfaction of the preferential
liquidation rights of the Preferred Stock and any Preference Stock, the
holders of Common Stock are entitled to share, ratably, in the
distribution of all remaining assets of the Company. Holders of the
Preferred Stock are entitled to receive $100 per share and accrued
dividends on involuntary liquidation.
Holders of any Preference Stock will be entitled to receive such
amounts as determined by the Board of Directors at the time of issuance
of such Stock.
Preemptive Rights. The holders of the Common Stock have no
preemptive rights.
Anti-Greenmail, Fair Price and Business Judgment Provisions.
Section 7.05 of the Company's Restated Articles of Association is
intended to prevent so-called "greenmail". That Section prohibits the
Company, in the absence of a special shareholder approval, from
purchasing any of its outstanding shares of Common Stock at a price in
excess of the fair market value of such shares from a beneficial owner
of more than five percent of the Company's Common Stock (a "Related
Person," as such term is more specifically defined in Section 7.06 of
the Restated Articles of Association) who has owned such shares for less
than two years, subject to certain limited exceptions. The special
shareholder approval required by Section 7.05 is the greater of eighty
percent of the voting power of the Company, or the sum of the number of
shares owned by the Related Person plus a majority of the voting power
of the Company not beneficially owned by the Related Person.
Section 7.06 of the Company's Restated Articles of Association is a
fair-price provision that is designed to provide reasonable assurance
that any attempt to acquire the Company will be made only on terms that
are fair to all shareholders. That Section requires that mergers and
certain other Business Combinations (as defined below) involving the
Company and a Related Person, unless approved by a majority of the
Directors who are unaffiliated with such Related Person, must be
approved by at least eighty percent of the voting power of the Company,
as compared to the two-thirds vote required by Vermont law, and satisfy
certain minimum-price, form-of-consideration and procedural
requirements.
Section 7.07 of the Company's Restated Articles of Association is a
business judgment provision that requires that the Board of Directors,
in evaluating any proposal for a merger or Business Combination
involving the Company, take into consideration certain relevant factors,
including the impact of any such transaction on the Company's suppliers,
customers and employees, that might not otherwise be considered. For
the purposes of Sections 7.06 and 7.07, a "Business Combination," in
general, includes the following transactions: (1) a merger or
consolidation of the Company or any subsidiary with a Related Person or
certain affiliates or associates of the Related Person; (2) the sale or
other disposition by the Company or a subsidiary of assets having an
aggregate fair market value of $5,000,000 or more, or the use thereof in
certain financial arrangements, if a Related Person is a party to the
transaction; (3) the issuance or transfer (other than on a pro rata
basis to all shareholders) of stock or other securities of the Company
or of a subsidiary to a Related Person or affiliates or associates of
the Related Person; (4) the adoption of any plan or proposal for the
liquidation or dissolution of the Company proposed by or on behalf of or
voted for or consented to by any Related Person or any affiliates or
associates thereof; (5) any reclassification of securities,
recapitalization, merger or consolidation with a subsidiary or other
transaction that has the effect, directly or indirectly, of increasing
the percentage of the outstanding stock of any class of the Company or a
subsidiary owned by a Related Person or any affiliate or associate
thereof; or (6) any similar transaction of similar purpose or effect or
any agreement, contract or other arrangement providing for any one or
more of the foregoing actions. The Restated Articles of Association
provide that any amendment to Sections 7.06 and 7.07 must be approved by
at least eighty percent of the voting power of the Company, unless such
amendment has been recommended by a majority of the members of the Board
of Directors who are not Related Persons, and who are unaffiliated with
a Related Person and became Directors of the Company prior to the time
that a Related Person became such.
Staggered Board of Directors. The Company's By-laws provide that
the members of the Company's Board of Directors are elected for three
year terms, with one-third of the members of the Board of Directors
elected each year.
Transfer Agent and Registrar. The Transfer Agent and Registrar is
Chemical Bank, New York, New York.
PLAN OF DISTRIBUTION
The Company may sell the Securities (i) through underwriters; (ii)
through dealers; (iii) directly to one or more institutional purchasers;
or (iv) through agents. Securities may be sold outside the United
States. An accompanying Prospectus Supplement or Supplements will set
forth the terms of each offering of the Securities including the name or
names of any underwriters, dealers, purchasers or agents, the purchase
price of such Securities and the proceeds to the Company from such sale,
any underwriting discounts 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 Securities may be listed. Any
initial public offering price and any discounts or concessions allowed
or reallowed or paid to dealers may be changed from time to time. Only
firms named in the Prospectus Supplement are deemed to be underwriters,
dealers or agents in connection with the Securities offered thereby.
If underwriters are used in the sale, Securities will be acquired
by the underwriters for their own account and may be resold from time to
time in one or more transactions, including negotiated transactions, at
a fixed public offering price or at varying prices determined at the
time of sale. Unless otherwise set forth in the Prospectus Supplement,
the obligations of the underwriters to purchase the Securities will be
subject to certain conditions precedent, and the underwriters will be
obligated to purchase all such Securities if any are purchased.
Securities may be sold directly by the Company or through any firm
designated by the Company from time to time, acting as principal or as
agent. The Prospectus Supplement will set forth the name of any dealer
or agent involved in the offer or sale of the Securities in respect of
which the Prospectus Supplement is delivered and the price payable to
the Company by such dealer or any commissions payable by the Company to
such agent. Unless otherwise indicated in the Prospectus Supplement,
any such agent will be acting on a reasonable efforts basis for the
period of its appointment.
Underwriters, dealers 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, or to contribution with respect to payments for such
liabilities which underwriters, dealers or agents may be required to
make. Underwriters, dealers and agents may engage in transactions with
or perform services for the Company in the ordinary course of business.
The anticipated date of delivery of Securities will be as set forth
in the Prospectus Supplement or Supplements relating to such offering.
LEGAL OPINIONS AND EXPERTS
The legality of the Securities offered hereby is being passed upon
for the Company by Hunton & Williams, 200 Park Avenue, 43rd Floor, New
York, New York 10166, special counsel for the Company, and by Peter H.
Zamore, Esq., General Counsel of the Company, and for the underwriters,
dealers or agents by Reid & Priest LLP, 40 West 57th Street, New York,
New York 10019. Hunton & Williams and Reid & Priest LLP will rely on
the opinion of Peter H. Zamore, Esq. as to matters of Vermont law.
The audited consolidated financial statements and schedules of the
Company for the period ended December 31, 1994, included in the
Company's Annual Report on Form 10-K for the year ended December 31,
1994, which are incorporated in this Prospectus by reference, have been
examined by Arthur Andersen LLP, independent certified public
accountants, as set forth in their report dated January 31, 1995, with
respect thereto, and are included in this Prospectus, through
incorporation by reference, in reliance upon the report of such firm and
their authority as experts in accounting and auditing.
No dealer, salesperson or
any other person has been
authorized to give any
information, or to make any
representations, other than
those contained in this
Prospectus Supplement or the
Prospectus, in connection
with the offer contained in
this Prospectus Supplement
and the Prospectus, and, if
given or made, such
information or
representations must not be
relied upon as having been
authorized by the Company or
by the Agent. Neither this
Prospectus Supplement nor the
Prospectus constitutes an
offer of any securities other
than those to which it
relates or an offer to sell,
or a solicitation of an offer
to buy, those to which it
relates in any state to any
person to whom it is not
lawful to make such offer in
such state. The delivery of
this Prospectus Supplement or
the Prospectus at any time
does not imply that the
information contained in
either is correct as of any
time subsequent to its date.
TABLE OF CONTENTS
Page
Prospectus Supplement
Description of the Notes .............. S-2
Plan of Distribution of the Notes...... S-3
Prospectus
Available Information.................. 2
Incorporation of Certain
Documents by Reference ............... 2
The Company ........................... 2
Ratio of Earnings to Fixed Charges..... 3
Use of Proceeds and Financing Program.. 3
Description of the New Bonds .......... 3
Description of the Notes .............. 7
Book-Entry System ..................... 11
Description of New Common Stock........ 13
Plan of Distribution .................. 15
Legal Opinions and Experts ............ 16
$35,000,000
Green Mountain Power
Corporation
Medium-Term Notes, Series A
Due 9 Months or More from Date of Issue
PROSPECTUS SUPPLEMENT
November 13, 1995
(Including Prospectus
dated October 23, 1995)
Smith Barney Inc.
