<PAGE>
PROSPECTUS SUPPLEMENT
(To Prospectus dated October 23, 1995)
$35,000,000
GREEN MOUNTAIN POWER CORPORATION
Secured 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 Secured Medium-Term
Notes, Series A (the "Notes"), consisting of an issue of its First Mortgage
Bonds. 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 June
1 and December 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
Secured Notes" herein, "Description of the New Bonds" 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>
===================================================================================================================================
Price to Agent's Discounts Proceeds to
Public (1) and Commission (2) the Company (2)(3)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Note..................... 100% .125% - .750% 99.875% - 99.250%
- -----------------------------------------------------------------------------------------------------------------------------------
Total........................ $35,000,000 $43,750 - $262,500 $34,956,250 - $34,737,500
===================================================================================================================================
<FN>
(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.
</FN>
</TABLE>
--------------------------------------------
<PAGE>
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.
December 7, 1995.
<PAGE>
DESCRIPTION OF THE SECURED NOTES
The statements under this caption are intended to summarize the Notes
and the Mortgage. 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 New Bonds" and "Book-Entry System", in the accompanying
Prospectus and to the Sections of the Mortgage 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 Bonds under the
Mortgage. The Notes will rank pari passu with all other Bonds outstanding under
the Mortgage (except insofar as any sinking or other fund may afford additional
security for the Bonds of any particular series). Substantially all of the
materially important properties of the Company are subject to the lien of the
Mortgage. (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 issue of the Notes will
describe the following terms: (1) the designation and aggregate principal amount
of such Notes, (2) the offering price (expressed as a percentage of the
aggregate principal amount thereof) of such Notes, (3) the interest accrual date
of such Notes, (4) the date on which such Notes will mature, (5) the rate per
annum at which such Notes 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 Notes, and (8) any other material terms of such Notes.
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 June 1 and December 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.)
S-2
<PAGE>
Interest payable on certificated Notes will be payable to the persons
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 persons 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 May 15
or November 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.
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 registered 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 SECURED NOTES
Subject to the terms and conditions set forth in the Distribution
Agreement, dated December 11, 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.
S-3
<PAGE>
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.
S-4
<PAGE>
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.
<PAGE>
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.
- 2-
<PAGE>
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:
<TABLE>
<CAPTION>
Ratio of
Earnings to
Year Ended Fixed Charges (1)
---------- -----------------
<S> <C>
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
- ------
<FN>
(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.
</FN>
</TABLE>
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.
- 3 -
<PAGE>
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.)
- 4 -
<PAGE>
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.)
- 5 -
<PAGE>
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.)
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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".)
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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.
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<PAGE>
"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.)
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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.
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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.
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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.
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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
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<PAGE>
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
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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.
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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.
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No dealer, salesperson or any other person has
been authorized to give any information, or to make
any representations, other than those contained in $35,000,000
this Prospectus Supplement or the Prospectus or the
documents incorporated by reference therein, in
connection with the offer contained in this Prospectus [LOGO]
Supplement and the Prospectus, and, if given or
made, such information or representations must not
be relied upon as having been authorized by the Green Mountain Power
Company or by the Agent. Neither this Prospectus Corporation
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,
in any state to any person to whom it is not lawful to Secured Medium-Term Notes, Series A
make such offer in such state. The delivery of this Due 9 Months or More from Date of Issue
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.
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TABLE OF CONTENTS PROSPECTUS SUPPLEMENT
December 7, 1995
Page (Including Prospectus
dated October 23, 1995)
Prospectus Supplement
Description of the Secured Notes.................. S-2 ---------------------------
Plan of Distribution of the Secured Notes......... S-3
Prospectus
Available Information............................... 2
Incorporation of Certain Documents Smith Barney Inc.
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
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