Registration Nos.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________
JERSEY CENTRAL POWER & LIGHT COMPANY JCP&L CAPITAL, L.P.
(Exact name of registrant as (Exact name of registrant as
specified in its charter) specified in its charter)
NEW JERSEY DELAWARE
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
21-0485010 51-0364870
(I.R.S. Employer (I.R.S. Employer
Identification No.) Identification No.)
300 Madison Avenue Mellon Bank Center
Morristown, New Jersey 07962-1911 Second Floor
(201) 455-8200 919 N. Market Street
Wilmington, Delaware 19801
(302) 654-5893
(Addresses, including zip codes, and telephone numbers, including
area codes, of registrants' principal executive offices)
TERRANCE G. HOWSON
Vice President and Treasurer
GPU Service Corporation
100 Interpace Parkway
Parsippany, New Jersey 07054-1149
(201) 263-6500
(Name, address, including zip code, and telephone number,
including area code, of agent for service for each registrant)
Please send copies of all communications to:
RICHARD S. COHEN, ESQ.
Secretary and Corporate Counsel
Jersey Central Power & Light Company
300 Madison Avenue
Morristown, New Jersey 07962-1911
(201) 455-8200<PAGE>
DOUGLAS E. DAVIDSON, ESQ. STEPHEN K. WAITE, ESQ.
Berlack, Israels & Liberman Winthrop, Stimson, Putnam &
120 West 45th Street Roberts
New York, New York 10036-4003 One Battery Park Plaza
(212) 704-0100 New York, New York 10004-1490
(212) 858-1000
____________________
Approximate date of commencement of proposed sale to the
public: to be determined by market conditions after the effective
date of this Registration Statement.
____________________
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box: / /
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, please check the following box: /X/
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Title of Each Amount Offering Aggregate
Class of To Be Price Per Offering Amount Of
Securities To Registered Unit Price Registration
Be Registered (1) (1)(2)(3)(4) (1)(2)(3)(4) Fee(1)
JCP&L
Capital, L.P.
limited
partner
interests
Jersey Central
Power & Light
Company
Subordinated
Debentures
Jersey Central
Power & Light
Company
Guarantee
with respect
to JCP&L
Capital, L.P.
limited
partner
interests
Total $125,000,000 100% $125,000,000 $43,104
<PAGE>
(1) There are being registered hereunder limited partner
interests of JCP&L Capital, L.P. with an aggregate initial
offering price not to exceed $125,000,000, plus up to
$125,000,000 aggregate principal amount of Subordinated
Debentures of Jersey Central Power & Light Company which may
be distributed upon a dissolution of JCP&L Capital, L.P.,
for which no separate consideration will be received.
Pursuant to Rule 457(o) under the Securities Act of 1933
which permits the registration fee to be calculated on the
basis of the maximum offering price of all the securities
listed, the table does not specify by each class information
as to the amount to be registered, proposed maximum offering
price per unit or proposed maximum aggregate offering price.
(2) Estimated solely for the purpose of determining the
registration fee.
(3) Exclusive of accrued interest and distributions, if any.
(4) No separate consideration will be received for Jersey
Central Power & Light Company's Guarantee.
____________________
The Registrants hereby amend this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrants shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 2, 1995
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED _________, 1995
___________ Preferred Securities
JCP&L Capital
__% Cumulative Monthly Income Preferred Securities,
Series A
(liquidation preference $25 per Preferred Security)
guaranteed to the extent the issuer has funds
as set forth herein by
JERSEY CENTRAL POWER & LIGHT COMPANY
__________________
The __% Cumulative Monthly Income Preferred Securities,
Series A (the "Series A Preferred Securities"), representing the
limited partner interests offered hereby, are being issued by
JCP&L Capital, L.P., a limited partnership formed under the laws
of the State of Delaware ("JCP&L Capital"). All of the general
partner interests in JCP&L Capital are owned by JCP&L Preferred
Capital, Inc. (the "General Partner"), a Delaware corporation and
a wholly owned subsidiary of Jersey Central Power & Light
Company, a New Jersey corporation (the "Company"). JCP&L Capital
exists for the sole purpose of issuing its partner interests and
using the proceeds thereof to purchase the Company's subordinated
debentures. The limited partner interests represented by the
Series A Preferred Securities will have a preference with respect
to cash distributions (hereinafter called "Dividends") and
amounts payable on liquidation over the general partner interests
in JCP&L Capital, and will rank pari passu with all other series
of Preferred Securities which may be issued by JCP&L Capital.
See "Description of Preferred Securities" in the accompanying
Prospectus.
Holders of the Series A Preferred Securities will be
entitled to receive cumulative preferential cash Dividends at an
annual rate of __% of the liquidation preference of $25 per
Series A Preferred Security, accruing from the date of original
issuance and payable monthly in arrears on the last day of each
calendar month of each year, commencing ___________, 1995. The
payment of Dividends, to the extent that JCP&L Capital has
sufficient cash on hand to permit such payments and funds legally
available therefor, and payments on liquidation or redemption
with respect to the Series A Preferred Securities are guaranteed
on a limited basis by the Company to the extent set forth herein
and in the accompanying Prospectus (the "Guarantee"). See
"Description of the Guarantee" in the accompanying Prospectus.
If the Company fails to make interest payments on the ___%
Deferrable Interest Subordinated Debentures, Series A ("Series A
Subordinated Debentures") purchased by JCP&L Capital with the
proceeds of this offering, JCP&L Capital will have insufficient
funds to pay Dividends on the Series A Preferred
S-1<PAGE>
Securities, and, since the Guarantee does not cover the payment
of Dividends for which JCP&L Capital does not have sufficient
funds available, the Company would not be obligated under the
Guarantee to make such undeclared Dividend payments. In such
event, the remedy of a holder of Series A Preferred Securities is
to enforce JCP&L Capital's rights under the Series A Subordinated
Debentures. See "Description of the Subordinated Debentures -
Enforcement of Certain Rights by Holders of Preferred
Securities".
The Company's obligations under the Guarantee and the Series
A Subordinated Debentures are subordinate and junior in right of
payment to all present and future Senior Indebtedness (as defined
herein) of the Company (which aggregated approximately
$1,547,000,000 at December 31, 1994). In addition, the Company
has the right to extend from time to time the interest payment
period on the Series A Subordinated Debentures for up to 60
consecutive months, at the end of which period all accrued and
unpaid interest is required to be paid in full. As a
consequence, Dividends on the Series A Preferred Securities will
be deferred by JCP&L Capital during any such extended interest
payment period. However, during any such extended interest
payment period (which the Company considers remote), the Company
may not declare or pay any dividends on, or redeem or acquire,
any of its preferred or common stock.
The Series A Preferred Securities are redeemable at the
option of JCP&L Capital, in whole or in part, from time to time,
on or after ___________, 2000, at $25 per Series A Preferred
Security plus any accumulated and unpaid Dividends (including any
additional Dividends accruing thereon) to the date fixed for
redemption (the "Redemption Price"), and will be redeemed at such
price from the proceeds of any repayment or redemption of the
Series A Subordinated Debentures. See "Description of Preferred
Securities-Mandatory Redemption; Optional Redemption".
Upon the occurrence of certain special events arising from a
change in law or a pronouncement or decision interpreting or
applying such law, the Series A Preferred Securities are
redeemable in whole at the Redemption Price at the option of
JCP&L Capital. In such event, JCP&L Capital may dissolve and
cause Series A Subordinated Debentures to be distributed to the
holders of the Series A Preferred Securities in liquidation of
their interests in JCP&L Capital. See "Description of Preferred
Securities-Optional Redemption; Special Event Redemption or
Distribution" and "Description of the Subordinated Debentures" in
the accompanying Prospectus. If the Series A Subordinated
Debentures are so distributed, the Company will use its best
efforts to have them listed on the same exchange on which the
Series A Preferred Securities are then listed.
In the event of the dissolution of JCP&L Capital, the
holders of Series A Preferred Securities will be entitled to a
liquidation preference for each Series A Preferred Security of
$25 plus any accumulated and unpaid Dividends (including any
additional Dividends accruing thereon) to the date of payment,
unless, in connection with such dissolution, Series A Subordinated
Debentures
S-2<PAGE>
are distributed to the holders of the Series A Preferred
Securities. See "Description of Preferred Securities-Liquidation
Distribution" in the accompanying Prospectus.
___________________
See "Certain Investment Considerations" for certain
considerations relevant to an investment in the Series A
Preferred Securities, including circumstances under which payment
of Dividends on the Series A Preferred Securities may be deferred
and optional redemption events.
___________________
Application will be made to list the Series A Preferred
Securities on the New York Stock Exchange.
___________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
____________________
Proceeds to
Initial Public Underwriting JCP&L
Offering Price Commission(1) Capital (2)(3)
Per Series A
Preferred
Security..........$ 25.00 (2) $ 25.00
Total..............$ _______ (2) $ _______
________
(1) JCP&L Capital and the Company have agreed to indemnify the
several Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, as amended. See
"Underwriting".
(2) In view of the fact that the proceeds of the sale of the
Series A Preferred Securities will be used to purchase the
Company's Series A Subordinated Debentures, the Company will pay
the Underwriters, as compensation for their services, the amount
of $____ per Series A Preferred Security (or $____ in the
aggregate), except that such compensation will be $___ per Series
A Preferred Security sold to certain institutions, thus reducing
the aggregate compensation specified above. See "Underwriting".
(3) Expenses of the offering which are payable by the Company
are estimated to be $360,000.
S-3<PAGE>
The Series A Preferred Securities offered hereby are offered
severally by the Underwriters, as specified herein, subject to
receipt and acceptance by them and subject to their right to
reject any order in whole or in part. It is expected that
delivery of certificates for the Series A Preferred Securities
will be made only in book-entry form through the facilities of
The Depository Trust Company on or about ___________, 1995.
Merrill Lynch & Co.
The date of this Prospectus Supplement is ___________, 1995.
___________________
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission.
These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes
effective. This prospectus supplement shall not constitute an
offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any state in which such
offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any
such state.
___________________
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-
ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE
MARKET PRICE OF THE SECURITIES OFFERED HEREBY AT LEVELS ABOVE
THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN
THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-4<PAGE>
The following information concerning the Series A Preferred
Securities, the Guarantee and the Series A Subordinated
Debentures supplements and should be read in conjunction with the
information contained in the accompanying Prospectus.
Capitalized terms used in this Prospectus Supplement have the
same meanings as in the accompanying Prospectus.
JCP&L CAPITAL
JCP&L Capital is a limited partnership formed under the laws
of the State of Delaware, all of the general partner interests in
which are owned by the General Partner, a wholly owned special
purpose subsidiary of the Company. JCP&L Capital exists solely
for the purpose of issuing its partner interests and utilizing
the proceeds thereof to acquire the Company's Subordinated
Debentures. All of the business and affairs of JCP&L Capital
will be managed by the General Partner, subject to JCP&L
Capital's Amended and Restated Limited Partnership Agreement,
which will be substantially in the form filed as an exhibit to
the Registration Statement of which this Prospectus Supplement
and the accompanying Prospectus form a part.
JERSEY CENTRAL POWER & LIGHT COMPANY
The Company, a public utility furnishing electric service
wholly within the State of New Jersey, is a subsidiary of General
Public Utilities Corporation ("GPU"), a holding company
registered under the Public Utility Holding Company Act of 1935.
In 1994, the Company provided retail service to approximately
917,000 customers in an area in northern, western and east
central New Jersey having an estimated population of
approximately 2,600,000. The Company is affiliated with
Metropolitan Edison Company and Pennsylvania Electric Company,
which are also wholly owned subsidiaries of GPU.
CERTAIN INVESTMENT CONSIDERATIONS
Prospective purchasers of the Series A Preferred Securities
should carefully review the information contained elsewhere in
this Prospectus Supplement and in the accompanying Prospectus and
should particularly consider the following matters:
Subordinate Obligations Under the Guarantee and the
Series A Subordinated Debentures. The Company's obligations
under the Guarantee and the Series A Subordinated Debentures
are subordinate and junior in right of payment to all
present and future Senior Indebtedness of the Company. At
December 31, 1994, Senior Indebtedness of the Company
aggregated approximately $1,547,000,000. There are no terms
in the Series A Preferred Securities, the Series A
Subordinated Debentures or the Guarantee that limit the
Company's ability to incur additional indebtedness,
including indebtedness that
S-5<PAGE>
ranks senior to the Series A Subordinated Debentures and the
Guarantee. See "Description of the Guarantee-Status of the
Guarantee" and "Description of the Subordinated Debentures-
Subordination" in the accompanying Prospectus.
The Guarantee guarantees payment to the holders of the
Series A Preferred Securities of accumulated and unpaid
monthly Dividends, amounts payable on redemption, and
amounts payable on liquidation of JCP&L Capital, in each
case, however, only to the extent that JCP&L Capital has
funds on hand legally available therefor. If JCP&L were to
default in its obligation to pay interest or amounts payable
on redemption or maturity of the Series A Subordinated
Debentures, JCP&L Capital would lack legally available funds
for the payment of Dividends or amounts payable on
redemption of the Series A Preferred Securities or on
liquidation of JCP&L Capital, and in such event holders of
the Series A Preferred Securities would not be able to rely
upon the Guarantee for payment of such amounts. Instead,
holders of the Series A Preferred Securities may appoint a
special representative who would be required to seek
enforcement of JCP&L Capital's rights against JCP&L pursuant
to the terms of the Indenture. See "Description of the
Guarantee -- Status of the Guarantee" and "Description of
the Subordinated Debentures -- Subordination" in the
accompanying Prospectus.
Option to Extend Interest Payment Period for Series A
Subordinated Debentures; Resulting Deferral of Dividends;
Tax Consequences. The Company has the right under the
Indenture to extend the interest payment period on the
Series A Subordinated Debentures at any time and from time
to time to up to 60 consecutive months, and, as a
consequence, monthly Dividends on the Series A Preferred
Securities can be deferred by JCP&L Capital during any such
extended interest payment period (but will continue to
accumulate, with Dividends accruing thereon at the rate
applicable to the Series A Preferred Securities). In the
event that the Company exercises its right to extend, the
Company may not declare or pay dividends on any shares of
its preferred or common stock until deferred interest on the
Series A Subordinated Debentures is paid in full. JCP&L
Capital and the Company currently believe that the extension
of an interest payment period on the Series A Subordinated
Debentures is remote. See "Description of Preferred
Securities-Dividends" and "Description of the Subordinated
Debentures-Option to Extend Interest Payment Period" in the
accompanying Prospectus.
Should an extended interest payment period occur, JCP&L
Capital will continue to accrue income for United States
federal income tax purposes with respect to such deferred
interest which income will be allocated, but not
distributed, to holders of Series A Preferred Securities.
As a result, such a holder will include such interest in
gross income for United States federal income tax purposes
in advance of the receipt of cash, and will not receive the
cash related to such
S-6
<PAGE>
income from JCP&L Capital if such a holder disposes of the
Series A Preferred Securities prior to the record date for
payment of Dividends. See "United States Taxation-Potential
Extension of Interest Payment Period" in the accompanying
Prospectus.
Special Event Redemption or Distribution. Upon the
occurrence and continuation of a Special Event arising from
a change in law or a pronouncement or decision interpreting
or applying any applicable law (see "Description of
Preferred Securities-Special Event Redemption or
Distribution" in the accompanying Prospectus), the General
Partner shall either: (i) redeem the Series A Preferred
Securities in whole (and not in part); or (ii) dissolve
JCP&L Capital and cause the Series A Subordinated Debentures
to be distributed to the holders of the Series A Preferred
Securities in liquidation of such holders' interests in
JCP&L Capital, provided that JCP&L Capital shall have
received an opinion of tax counsel (which may be regular tax
counsel to the Company or an affiliate but not an employee
thereof) to the effect that the holders of the Series A
Preferred Securities will not recognize any gain or loss for
federal income tax purposes as a result of such dissolution
and distribution. Alternatively, in the case of a Tax Event
only, JCP&L Capital may elect to cause the Series A
Preferred Securities to remain outstanding.
USE OF PROCEEDS
The proceeds to be received by JCP&L Capital from the sale
of the Series A Preferred Securities will be used to purchase
Series A Subordinated Debentures of the Company and will be
applied by the Company to the repayment of outstanding short-term
debt incurred to fund the Company's construction program and
retirement of senior securities.
CERTAIN TERMS OF THE SERIES A PREFERRED SECURITIES
The following information should be read in conjunction with
the statements under "Description of Preferred Securities" in the
accompanying Prospectus.
General
All of the general partner interests in JCP&L Capital are
owned by the General Partner. The Limited Partnership Agreement
authorizes the General Partner to cause JCP&L Capital to issue
one or more series of Preferred Securities. The Series A
Preferred Securities are the first series so issued. All series
of Preferred Securities will rank equally, and will have a
preference over the general partner interests in JCP&L Capital,
with respect to Dividends and amounts payable on redemption or
liquidation.
S-7
<PAGE>
Amount, Dividends, Redemption
An aggregate of ___________ Series A Preferred Securities,
having an aggregate stated liquidation preference of $__________
($25 per Series A Preferred Security), are being offered hereby.
Dividends on the Series A Preferred Securities will be
cumulative, will accrue from the date of original issuance and
will be payable monthly in arrears on the last day of each
calendar month of each year, commencing ______________, 1995,
except as otherwise described in the accompanying Prospectus.
The Dividends payable on each Series A Preferred Security
will be fixed at a rate per annum of __% of the $25 stated
liquidation preference thereof.
The Series A Preferred Securities will be redeemable at the
option of JCP&L Capital, in whole or in part from time to time,
on or after _________________, 2000 at the Redemption Price. In
addition, the Series A Preferred Securities are subject to
redemption at the Redemption Price under circumstances described
under "Description of Preferred Securities-Mandatory Redemption;
Optional Redemption; Special Event Redemption or Distribution" in
the accompanying Prospectus.
CERTAIN TERMS OF THE SERIES A
SUBORDINATED DEBENTURES
The following information should be read in conjunction with
the statements under "Description of the Subordinated Debentures"
in the accompanying Prospectus.
General
The Series A Subordinated Debentures will be issued under
the Indenture dated as of ______________, 1995 between the
Company and United States Trust Company of New York, as Trustee,
and may be distributed to the holders of Series A Preferred
Securities upon a dissolution of JCP&L Capital under
circumstances described under "Description of Preferred
Securities-Special Event Redemption or Distribution" in the
accompanying Prospectus.
Principal Amount, Interest, Maturity, Redemption
An aggregate of $_____________ principal amount of Series A
Subordinated Debentures will be issued, such amount being the sum
of the aggregate stated liquidation preference of the Series A
Preferred Securities and the General Partner's related capital
contribution.
Each Series A Subordinated Debenture will bear interest at
the rate of __% per annum from the original date of issuance,
payable monthly in arrears on the last day of each calendar month
of each year, except as otherwise provided in the accompanying
Prospectus.
S-8<PAGE>
The Series A Subordinated Debentures will mature on
__________, 2044 and will be redeemable at the option of the
Company at any time on or after _________________, 2000 at a
Debenture Redemption Price equal to 100% of their principal
amount plus accrued and unpaid interest to the Redemption Date,
together with any additional interest accrued thereon. The
Series A Subordinated Debentures are also redeemable upon the
occurrence of certain events which cause the Series A Preferred
Securities to become redeemable. Proceeds from the repayment or
redemption of Series A Subordinated Debentures will be applied to
redeem the Series A Preferred Securities.
UNDERWRITING
Subject to the terms and conditions of the Underwriting
Agreement, JCP&L Capital has agreed to sell to each of the
several Underwriters named below, and each of the Underwriters,
for whom Merrill Lynch & Co. and ________________ are acting as
Representatives, has severally agreed to purchase from JCP&L
Capital the respective number of Series A Preferred Securities
set forth opposite its name below:
Number of
Series A
Preferred
Underwriter Securities
Merrill Lynch & Co. . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . ___________
Under the terms and conditions of the Underwriting
Agreement, the Underwriters are committed to take and pay for all
such Series A Preferred Securities offered hereby, if any are
taken.
The Underwriters propose to offer the Series A Preferred
Securities in part directly to the public at the initial public
offering price set forth on the cover page of this Prospectus
Supplement, and in part to certain securities dealers at such
price less a concession of $____ per Series A Preferred Security,
except that such concession will be $___ per Series A Preferred
Security sold to certain institutions. The Underwriters may
allow, and such dealers may reallow, a concession not in excess
of $____ per Series A Preferred Security to certain brokers and
dealers. After the Series A Preferred Securities are released
for sale to the public, the offering price and other selling
terms may from time to time be varied by the Representatives.
S-9<PAGE>
In view of the fact that the proceeds of the sale of the
Series A Preferred Securities will be used to purchase the
Company's Series A Subordinated Debentures, the Company will pay
to the Underwriters, as compensation for their services, the
amount of $____ per Series A Preferred Security for the accounts
of the several Underwriters, except that such compensation will
be $___ per Series A Preferred Security sold to certain
institutions.
The Company and JCP&L Capital have agreed, during the period
beginning from the date of the Underwriting Agreement and
continuing to and including the earlier of (i) the date, after
the closing date, on which the distribution of the Series A
Preferred Securities and the Guarantee ceases, as determined by
the Underwriters, or (ii) 90 days after the closing date, not to
offer, sell, contract to sell, or otherwise dispose of any Series
A Preferred Securities, any limited partner interests of JCP&L
Capital, or any preferred stock or any other securities of JCP&L
Capital or the Company which are substantially similar to the
Series A Preferred Securities or the Guarantee, or any securities
convertible into or exchangeable for Series A Preferred
Securities, limited partner interests, preferred stock or such
substantially similar securities of either JCP&L Capital or the
Company without the prior written consent of the Underwriters.
Application will be made to list the Series A Preferred
Securities on the New York Stock Exchange. Prior to this
offering, there has been no public market for the Series A
Preferred Securities. In order to meet one of the requirements
for listing the Series A Preferred Securities on the New York
Stock Exchange, the Underwriters will undertake to sell lots of
100 or more Series A Preferred Securities to a minimum of 400
beneficial holders.
JCP&L Capital and the Company have agreed to indemnify the
Underwriters against certain liabilities, including liabilities
under the Securities Act.
Certain of the Underwriters engage in transactions with, and
from time to time have performed services for, the Company and
its affiliates in the ordinary course of business.
S-10<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 2, 1995
PROSPECTUS
$125,000,000
JCP&L CAPITAL
Preferred Securities
guaranteed to the extent the issuer has funds as
set forth herein by
JERSEY CENTRAL POWER & LIGHT COMPANY
JCP&L Capital, L.P. ("JCP&L Capital"), a Delaware limited
partnership, all of the general partner interests in which are
owned by a wholly owned subsidiary of Jersey Central Power &
Light Company (the "Company"), may offer, from time to time, its
preferred securities, representing limited partner interests
("Preferred Securities"), in one or more series. The payment of
periodic cash distributions (hereinafter called "Dividends") with
respect to Preferred Securities of any series, out of funds held
by JCP&L Capital and legally available therefor, and payments on
liquidation or redemption with respect to the Preferred
Securities are guaranteed on a limited basis by the Company to
the extent described herein ("Guarantee"). The Company's
obligations under the Guarantee are subordinate and junior in
right of payment to all present and future Senior Indebtedness
(as defined herein) of the Company but senior in right of payment
to the Company's preferred and common stock. Deferrable Interest
Subordinated Debentures of the Company ("Subordinated
Debentures") will also be issued and sold from time to time in
one or more series by the Company to JCP&L Capital in connection
with the investment of the proceeds from the offering of
Preferred Securities. Subordinated Debentures subsequently may
be distributed to holders of Preferred Securities in connection
with a dissolution of JCP&L Capital upon the occurrence of
certain events as described under "Description of Preferred
Securities-Special Event Redemption or Distribution". The
Subordinated Debentures will be unsecured and subordinate and
junior in right of payment to all present and future Senior
Indebtedness of the Company. The Preferred Securities may be
offered in amounts, at prices and on terms to be determined at
the time of offering; provided, however, that the aggregate
initial public offering price of all Preferred Securities offered
hereby shall not exceed $125,000,000.<PAGE>
The specific designation, Dividend rate (or method of
determination thereof), and any other rights, preferences,
privileges, limitations and restrictions relating to the
Preferred Securities of the particular series in respect of which
this Prospectus is being delivered will be set forth in a
Prospectus Supplement pertaining to such series (a "Prospectus
Supplement").
_________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
_________________________
The Preferred Securities may be sold to or through
underwriters or dealers as designated from time to time. See
"Plan of Distribution". The names of any such underwriters or
dealers involved in the sale of the Preferred Securities of the
particular series in respect of which this Prospectus is being
delivered, the number of Preferred Securities to be purchased by
any such underwriters or dealers and any applicable commissions
or discounts will be set forth in a Prospectus Supplement. The
net proceeds to the Company will also be set forth in a
Prospectus Supplement.
The date of this Prospectus is ___________, 1995.
2<PAGE>
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission.
These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any
sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
3<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 and other
information with the Securities and Exchange Commission (the
"Commission"). Such reports and other information filed by the
Company can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following Regional
Offices of the Commission: Seven World Trade Center, New York,
New York 10048; and 500 West Madison Street, Chicago, Illinois
60661-2511. Copies of such material can also be obtained from
the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.
Certain of the Company's securities are listed on, and reports
and other information concerning the Company may also be
inspected at the offices of, the New York Stock Exchange, Inc.,
20 Broad Street, New York, New York 10005.
This Prospectus does not contain all the information set
forth in the Registration Statement on Form S-3 (herein, together
with all amendments and exhibits thereto, referred to as the
"Registration Statement"), which the Company and JCP&L Capital
have filed with the Commission under the Securities Act of 1933,
as amended (the "Securities Act"). Statements contained or
incorporated by reference herein concerning the provisions of
documents are necessarily summaries of such documents, and each
statement is qualified in its entirety by reference to the
Registration Statement.
No separate financial statements of JCP&L Capital have been
included herein. The Company and JCP&L Capital do not consider
that such financial statements would be material to holders of
Preferred Securities because JCP&L Capital is a newly formed
special purpose entity, has no operating history and no
independent operations and is not engaged in, and does not
propose to engage in, any activity other than as set forth below.
See "JCP&L Capital".
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with
the Commission pursuant to the Exchange Act are incorporated
herein by reference:
1. The Company's Annual Report on Form 10-K for
the year ended December 31, 1993;
2. The Company's Current Reports on Form 8-K
dated February 16, 1994 and February 28, 1994; and
3. The Company's Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1994, June 30, 1994 and
September 30, 1994.
4<PAGE>
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to
the termination of the offering of the securities offered hereby
shall be deemed to be incorporated by reference herein and to be
a part hereof from the date of filing of such documents. Any
statement contained herein or in a document all or a portion of
which is 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 or in a
Prospectus Supplement modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this
Prospectus.
Any person receiving a copy of this Prospectus or any
Prospectus Supplement may obtain, without charge, upon written or
oral request, a copy of any or all of the documents incorporated
herein or therein by reference (not including the exhibits to
such documents, unless such exhibits are specifically
incorporated by reference in such documents). Requests for such
copies should be directed to Jersey Central Power & Light
Company, 300 Madison Avenue, Morristown, New Jersey 07962-1911,
Attention: Secretary. The Company's telephone number is (201)
455-8200.
JERSEY CENTRAL POWER & LIGHT COMPANY
The Company, a public utility furnishing electric service
wholly within the State of New Jersey, is a subsidiary of General
Public Utilities Corporation ("GPU"), a holding company
registered under the Public Utility Holding Company Act of 1935.
In 1994, the Company provided retail service to approximately
917,000 customers in an area in northern, western and east
central New Jersey having an estimated population of
approximately 2,600,000. The Company's principal executive
offices are located at 300 Madison Avenue, Morristown, New Jersey
07962-1911 and its telephone number is (201) 455-8200.
During 1994, residential sales accounted for approximately
44% of the Company's operating revenues from customers and 41% of
kilowatt-hour ("kwh") sales to customers; commercial sales
accounted for approximately 38% of operating revenues from
customers and 38% of kwh sales to customers; industrial sales
accounted for approximately 17% of operating revenues from
customers and 21% of kwh sales to customers; and sales to a rural
electric cooperative, municipalities (primarily for street and
highway lighting) and others accounted for approximately 1% of
operating revenues from customers and less than 1% of kwh sales
to customers. The Company also makes interchange and spot market
sales of electricity to other utilities. The revenues derived
from the largest single customer accounted for less than 3% of
the electric operating revenues for the year and the 25 largest
5<PAGE>
customers, in the aggregate, accounted for approximately 10% of
such revenues.
The electric generating and transmission facilities of the
Company and its affiliates, Metropolitan Edison Company and
Pennsylvania Electric Company, are physically interconnected and
are operated as a single integrated and coordinated system. The
transmission facilities of the integrated system are physically
interconnected with neighboring nonaffiliated utilities in
Pennsylvania, New Jersey, Maryland, New York and Ohio. The
Company is a member of the Pennsylvania-New Jersey-Maryland
Interconnection ("PJM") and the Mid-Atlantic Area Council, an
organization providing coordinated review of the planning by
utilities in the PJM area. The interconnection facilities are
used for substantial capacity and energy interchange and
purchased power transactions as well as emergency assistance.
The Company owns the Oyster Creek nuclear generating station
in Lacey Township, New Jersey, and 25% undivided interests in
Unit 1 and the inactive Unit 2 of the Three Mile Island nuclear
generating station near Middletown, Pennsylvania. The Company's
nuclear generating facilities are operated by GPU Nuclear
Corporation, a subsidiary of GPU. The Company and its affiliates
are seeking regulatory approval for GPU Generation Corporation, a
newly formed subsidiary of GPU, to operate and maintain their
fossil-fueled and hydroelectric generating facilities.
FINANCING PROGRAM
Depending upon market conditions, during 1995 JCP&L Capital
expects to offer up to $125,000,000 stated liquidation preference
of Preferred Securities, the proceeds of which would be used to
purchase the Company's Subordinated Debentures. Pursuant to one
or more separate offerings, the Company may also offer during
1995-96 up to a maximum aggregate principal amount and stated
value of $275,000,000 of first mortgage bonds, which may be in
the form of secured medium-term notes, and cumulative preferred
stock. The Company also expects to have short-term borrowings
outstanding from time to time during such period.
6<PAGE>
CERTAIN COMPANY CONSOLIDATED FINANCIAL INFORMATION (1)
(Dollars In Thousands)
Years Ended December 31,
1992 1993 1994
Income Summary:
Operating
Revenues $1,774,071 $1,935,909 $1,952,425
Net Income 117,361 158,344 162,841
7<PAGE>
December 31, 1994
(unaudited)
Actual Pro Forma (2)
Amount % Amount %
Capital Structure:
Long-term debt
(including unamortized
net discount)(3) $1,215,883 44.0% $1,215,883 42.1%
Preferred Stock
(including premium) 187,741 6.8 187,741 6.5
Preferred Securities of
Subsidiary - - 125,000 4.3
Common Equity 1,361,668 49.2 1,361,668 47.1
Total $2,765,292 100.0% $2,890,292 100.0%
____________________
(1) This information should be read in conjunction with the
Company's Annual Report on Form 10-K for the year ended
December 31, 1993.
(2) Gives effect to the issuance of $125,000,000 aggregate
stated liquidation preference of Preferred Securities and
the use of the proceeds thereof to purchase the Company's
Subordinated Debentures.
(3) Includes obligations due within one year.
COMPANY COVERAGE RATIOS
(Dollars in Thousands)
The Company's Ratio of Earnings to Fixed Charges for each of
the periods indicated was as follows:
Twelve Months
Ended
December 31, 1994
Years Ended December 31, (unaudited)
1990 1991 1992 1993
2.71 2.69 2.54 3.03 3.09
The Ratio of Earnings to Fixed Charges represents, on a pre-
tax basis, the number of times earnings cover fixed charges.
Earnings consist of Income Before Cumulative Effect of Accounting
Change, to which has been added fixed charges and taxes based on
income. Fixed charges consist of interest on funded
indebtedness, other interest, amortization of net discount on
debt and the interest portion of all rentals charged to income.
8<PAGE>
The Company's Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends for each of the periods indicated
was as follows:
Twelve
Months Ended
December 31, 1994
Years Ended December 31, (unaudited)
1990 1991 1992 1993
2.22 2.13 2.00 2.49 2.60
The Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends represents, on a pre-tax basis, the
number of times earnings cover fixed charges and preferred stock
dividends. Earnings consist of Income Before Cumulative Effect
of Accounting Change, to which has been added fixed charges and
taxes based on income of the Company. Combined fixed charges and
preferred stock dividends consist of interest on funded
indebtedness, other interest, amortization of net discount on
debt, preferred stock dividends (increased to reflect the pre-tax
earnings required to cover such dividend requirements) and the
interest portion of all rentals charged to income.
USE OF PROCEEDS
The proceeds to be received by JCP&L Capital from the sale
of the Preferred Securities will be used to purchase Subordinated
Debentures of the Company and, unless otherwise specified in any
Prospectus Supplement, will be applied by the Company to the
repayment of outstanding short-term debt incurred to fund the
Company's construction program and retirement of senior
securities.
JCP&L CAPITAL
JCP&L Capital is a limited partnership formed under the laws
of the State of Delaware. All of its general partner interests,
which are non-transferable, are owned by JCP&L Preferred Capital,
Inc. (the "General Partner"), a Delaware corporation and a wholly
owned special purpose subsidiary of the Company, which will be
the sole general partner of JCP&L Capital. JCP&L Capital's
principal executive offices are located at Mellon Bank Center,
Second Floor, 919 N. Market Street, Wilmington, Delaware 19801,
and its telephone number is (302) 654-5893. As a limited
partnership, all of the business and affairs of JCP&L Capital
will be managed by the General Partner. JCP&L Capital exists
solely for the purpose of issuing its partner interests and
utilizing the proceeds thereof to acquire the Company's
Subordinated Debentures, which will be issued under and pursuant
to the Indenture (the "Indenture") dated as of
___________________, 1995 between the Company and United States
Trust Company of New York, as Trustee (the "Trustee").
9<PAGE>
JCP&L Capital has been advised by its special Delaware
counsel that, assuming that a holder of Preferred Securities acts
in conformity with the provisions of JCP&L Capital's Amended and
Restated Limited Partnership Agreement, which will be
substantially in the form filed as an exhibit to the Registration
Statement of which this Prospectus forms a part (the "Limited
Partnership Agreement"), a holder of Preferred Securities (other
than the General Partner) will not be liable for the debts,
obligations and liabilities of JCP&L Capital, whether arising in
contract, tort or otherwise, solely by reason of being a limited
partner of JCP&L Capital (subject to the obligation of a limited
partner to repay any funds wrongfully distributed to it).
Pursuant to the Limited Partnership Agreement, each holder
of Preferred Securities, upon acquisition thereof, will be deemed
to have appointed the General Partner as such holder's attorney-
in-fact to execute, in the name, place and stead of such holder,
certain instruments, documents and certificates as may be
required from time to time for the purposes contemplated in the
Limited Partnership Agreement.
DESCRIPTION OF PREFERRED SECURITIES
General
All of the general partner interests of JCP&L Capital will
be owned by the General Partner. The Limited Partnership
Agreement will authorize the General Partner to establish series
of Preferred Securities having such designations, rights,
privileges, restrictions, and other terms and provisions, whether
in regard to distributions, return of capital or otherwise, as
the General Partner may determine. JCP&L Capital will therefore
be authorized to issue and sell additional Preferred Securities
from time to time, pursuant to the Registration Statement of
which this Prospectus forms a part or otherwise; provided,
however, that all Preferred Securities shall be of equal rank
with regard to participation in the profits and the assets of
JCP&L Capital including any payments upon the voluntary or
involuntary dissolution and winding up of JCP&L Capital. The
summary of certain terms and provisions of the Preferred
Securities set forth below does not purport to be complete and is
subject to, and qualified in its entirety by reference to, the
Limited Partnership Agreement.
Dividends
Dividends on each series of Preferred Securities will be
cumulative, will accrue from the date of issuance thereof and
will be payable monthly in arrears on the last day of each
calendar month of each year, except as otherwise described below.
The Dividend rate applicable to a series of Preferred
Securities shall be specified in a Prospectus Supplement.
10<PAGE>
The Company, in its sole and absolute discretion, has the
right under the Indenture to extend the interest payment period
on the Subordinated Debentures at any time and from time to time
for up to 60 consecutive months (but not beyond the maturity date
of the Subordinated Debentures) and, as a consequence, monthly
Dividends on the Preferred Securities can be deferred (but will
continue to accumulate) by JCP&L Capital during any such extended
interest payment period. Accrued and unpaid Dividends on the
Preferred Securities will accrue additional Dividends in respect
thereof after the monthly payment date therefor at the Dividend
rate per annum applicable to the Preferred Securities. In the
event that the Company exercises its right to extend the interest
payment period, the Company may not declare or pay dividends on,
or redeem, purchase or acquire, any of its preferred or common
stock. JCP&L Capital and the Company currently believe that an
extension of an interest payment period on the Subordinated
Debentures and thus on the Preferred Securities is remote. See
"Voting Rights" and "Description of the Subordinated Debentures-
Option to Extend Interest Payment Period".
The amount of the Dividends payable for any period will be
computed on the basis of twelve 30-day months and a 360-day year
and, for any period shorter than a full monthly Dividend period,
will be computed on the basis of the actual number of days
elapsed in such period.
JCP&L Capital may not pay a Dividend or make a distribution
to a partner to the extent that at the time of the Dividend or
distribution, after giving effect thereto, all liabilities of
JCP&L Capital, other than liabilities to partners on account of
their partner interests and liabilities for which the recourse of
creditors is limited to specified property of JCP&L Capital,
exceed the fair value of the assets of JCP&L Capital, except that
the fair value of property that is subject to a liability for
which the recourse of creditors is limited shall be included in
the assets of JCP&L Capital only to the extent that the fair
value of that property exceeds that liability.
Dividends on the Preferred Securities must be paid by JCP&L
Capital in any calendar year or portion thereof to the extent
that JCP&L Capital has cash on hand sufficient to permit such
payments and funds legally available therefor. It is anticipated
that JCP&L Capital's earnings will consist only of interest
payable by the Company under the Subordinated Debentures. See
"Description of the Subordinated Debentures-Interest".
Dividends on the Preferred Securities will be payable to the
holders thereof as they appear on the books and records of JCP&L
Capital on the relevant record dates, which, so long as the
Preferred Securities remain in book-entry-only form, will be one
Business Day prior to the relevant payment dates. Subject to any
applicable laws and regulations and the provisions of the Limited
Partnership Agreement, each such payment will be made as
described under "Book-Entry-Only Issuance-The Depository Trust
Company". In the event that the Preferred Securities do not
remain in book-entry-only form, the record dates will be the
11<PAGE>
fifteenth day of each month. In the event that any date on which
Dividends are payable on the Preferred Securities is not a
Business Day, then payment of the Dividend payable on such date
will be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such
delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same
force and effect as if made on such date. A "Business Day" shall
mean any day other than a day on which banking institutions in
The City of New York are authorized or required by law to close.
Certain Restrictions on JCP&L Capital
If Dividends have not been paid in full on any series of
Preferred Securities, JCP&L Capital may not:
(i) pay or declare any Dividends on any other
series of Preferred Securities unless the amount of any
Dividends paid or declared on any Preferred Securities
is paid or declared on all Preferred Securities then
outstanding on a pro rata basis on the date such
Dividends are paid or declared, so that
(x) (a) the aggregate amount of Dividends
paid or declared on such series of Preferred
Securities bears to (b) the aggregate amount of
Dividends paid or declared on all such Preferred
Securities outstanding the same ratio as
(y) (a) the aggregate of all accumulated
arrears of unpaid Dividends in respect of such
series of Preferred Securities bears to (b) the
aggregate of all accumulated arrears of unpaid
Dividends in respect of all such Preferred
Securities outstanding;
(ii) pay or declare any distributions on any of
its general partner interests; or
(iii) redeem, purchase or otherwise acquire any
Preferred Securities or its general partner interests;
until, in each case, such time as all accumulated and unpaid
Dividends on all series of Preferred Securities shall have been
paid in full for all prior Dividend periods. As of the date of
this Prospectus, there are no Preferred Securities outstanding.
Mandatory Redemption
If the Company pays when due the Subordinated Debentures
purchased by JCP&L Capital with the proceeds of the sale of a
series of Preferred Securities or redeems such Subordinated
Debentures at any time as described under "Description of the
Subordinated Debentures-Optional Redemption", the proceeds will
be applied to redeem the related series of Preferred Securities
12<PAGE>
at a redemption price equal to the stated liquidation preference
thereof, plus any accumulated and unpaid Dividends (including any
additional Dividends accruing thereon) to the date fixed for
redemption (the "Redemption Price").
Optional Redemption
The Preferred Securities of each series will be redeemable,
at the option of JCP&L Capital, in whole or in part, at such time
or times as shall be specified in a Prospectus Supplement, at the
Redemption Price.
Special Event Redemption or Distribution
If a Special Event (as defined below) shall occur and be
continuing, JCP&L Capital shall either: (i) redeem the Preferred
Securities in whole (but not in part) at the Redemption Price
within 90 days following the occurrence of such Special Event;
provided that, if at the time there is available to the General
Partner the opportunity to eliminate, within such 90 day period,
the Special Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other
similar reasonable measure which would not involve unreasonable
cost or expense, which has no adverse effect on JCP&L Capital or
the Company, the General Partner will pursue such measure in lieu
of redemption; or (ii) dissolve JCP&L Capital and cause
Subordinated Debentures with an aggregate principal amount equal
to the aggregate stated liquidation preference of, and with an
interest rate identical to, the Preferred Securities, to be
distributed to the holders of the Preferred Securities in
liquidation of such holders' interests in JCP&L Capital, within
90 days following the occurrence of such Special Event, provided,
however, that JCP&L Capital shall have received an opinion of tax
counsel (which may be regular tax counsel to the Company or an
affiliate but not an employee thereof) to the effect that the
holders of the Preferred Securities will not recognize any gain
or loss for federal income tax purposes as a result of such
dissolution and distribution. Alternatively, in the case of a
Tax Event only, JCP&L Capital may elect to have the Preferred
Securities remain outstanding. Either a Tax Event or an
Investment Company Act Event shall be deemed a "Special Event".
"Tax Event" means that JCP&L Capital shall have received an
opinion of tax counsel (which may be regular tax counsel to the
Company or an affiliate but not an employee thereof) to the
effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein affecting
taxation, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying any
applicable laws or regulations, which amendment or change is
effective, or which pronouncement or decision has been issued or
rendered, on or after the date of issuance of any series of
Preferred Securities, there is more than an insubstantial risk
that (i) JCP&L Capital will be subject to federal income tax with
13<PAGE>
respect to interest received on the Subordinated Debentures or
JCP&L Capital will otherwise not be taxed as a partnership, (ii)
interest payable on the Subordinated Debentures will not be
deductible for federal income tax purposes or (iii) JCP&L Capital
is subject to more than a de minimis amount of other taxes,
duties or other governmental charges.
"Investment Company Act Event" means the occurrence of a
change in law or regulation or a change in an official
interpretation of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in
40 Act Law") to the effect that JCP&L Capital is or will be
considered an "investment company" required to be registered
under the Investment Company Act of 1940, as amended (the "1940
Act"), which Change in 40 Act Law becomes effective on or after
the date of issuance of any series of Preferred Securities;
provided that no Investment Company Act Event shall be deemed to
have occurred if JCP&L Capital shall have received an opinion of
counsel (which may be regular counsel to the Company or an
affiliate but not an employee thereof) to the effect that the
Company and/or JCP&L Capital have taken reasonable measures, in
their discretion, to avoid such Change in 40 Act Law so that in
the opinion of such counsel, notwithstanding such Change in 40
Act Law, JCP&L Capital is not required to be registered as an
"investment company" within the meaning of the 1940 Act.
After the date fixed for any such dissolution of JCP&L
Capital and distribution of Subordinated Debentures, (i) the
Preferred Securities will no longer be deemed to be outstanding,
(ii) The Depository Trust Company or its nominee, as the record
holder of the Preferred Securities, will exchange the global
certificate or certificates representing the Preferred Securities
for a registered global certificate or certificates representing
the Subordinated Debentures to be so delivered and (iii) any
certificates representing Preferred Securities not held by The
Depository Trust Company or its nominee will be deemed to
represent Subordinated Debentures having a principal amount equal
to the stated liquidation preference of such Preferred Securities
until such certificates are presented to the Company or its agent
for replacement.
Redemption Procedures
JCP&L Capital may not redeem any outstanding Preferred
Securities unless all accumulated and unpaid Dividends have been
paid on all Preferred Securities for all monthly Dividend periods
terminating on or prior to the date of redemption.
If JCP&L Capital gives a notice of redemption in respect of
a series of Preferred Securities (which notice will be given not
less than 30 nor more than 90 days prior to the redemption date),
then, on or before the redemption date, JCP&L Capital will
irrevocably deposit with The Depository Trust Company or its
successor securities depository funds sufficient to pay the
applicable Redemption Price and will give The Depository Trust
Company or its successor securities depository irrevocable
14<PAGE>
instructions and authority to pay the Redemption Price to the
Beneficial Owners (as defined under "Book-Entry-Only Issuance-The
Depository Trust Company"). Notwithstanding the foregoing,
however, any such notice may state that it is subject to the
receipt by JCP&L Capital of redemption funds on or before such
date fixed for redemption, which notice shall be of no effect
unless such funds are so received on or before such date.
If notice of redemption shall have been given and funds
deposited in the required amount, then on the date of such
deposit, all rights of holders of such series of Preferred
Securities so called for redemption will cease, except the right
of the holders of such series of Preferred Securities to receive
the Redemption Price, but without interest. In the event that
any date fixed for redemption of such series of Preferred
Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that if such
Business Day falls in the next succeeding calendar year, such
payment will be made on the immediately preceding Business Day,
in each case with the same force and effect as if made on such
date. In the event that payment of the Redemption Price in
respect of any Preferred Securities is not made either by JCP&L
Capital or by the Company pursuant to the Guarantee described
under "Description of the Guarantee", Dividends on such Preferred
Securities will continue to accrue at the then applicable rate,
from the original redemption date to the date of payment, in
which case the actual payment date will be considered the date
fixed for redemption for purposes of calculating the Redemption
Price.
In the event that less than all of a series of outstanding
Preferred Securities are to be so redeemed, the Preferred
Securities to be redeemed will be selected as described under
"Book-Entry-Only Issuance-The Depository Trust Company".
Subject to applicable law, the Company or its subsidiaries
may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private
agreement.
If a partial redemption or a purchase of outstanding
Preferred Securities by tender, in the open market or by private
agreement would result in a delisting of such series of Preferred
Securities from any national securities exchange on which such
series of Preferred Securities is then listed, JCP&L Capital may
then only redeem or purchase such series of Preferred Securities
in whole.
Liquidation Distribution
In the event of any voluntary or involuntary dissolution and
winding up of JCP&L Capital, other than in connection with the
distribution of Subordinated Debentures in liquidation of all of
the interests of the holders of Preferred Securities as described
15<PAGE>
under "Special Event Redemption or Distribution" ("Distribution
Event"), the holders of a series of Preferred Securities at the
time outstanding will be entitled to receive out of the assets of
JCP&L Capital, after satisfaction of liabilities to creditors as
required by Delaware law, before any distribution of assets is
made to holders of its general partner interests, but together
with the holders of every other series of Preferred Securities
outstanding, an amount equal to the aggregate of the stated
liquidation preference thereof and any accumulated and unpaid
Dividends (including any additional Dividends accruing thereon)
to the date of payment (the "Liquidation Distribution").
If, upon such liquidation, the Liquidation Distribution can
be paid only in part because JCP&L Capital has insufficient
assets available to pay in full the aggregate Liquidation
Distribution and the aggregate liquidation distributions on all
other Preferred Securities then outstanding, then the amounts
payable directly by JCP&L Capital on such series of Preferred
Securities and on all other Preferred Securities then outstanding
shall be paid on a pro rata basis, so that
(i) (x) the aggregate amount paid in respect of
the Liquidation Distribution bears to (y) the aggregate
amount paid as liquidation distributions on all other
Preferred Securities then outstanding the same ratio as
(ii) (x) the aggregate Liquidation Distribution
bears to (y) the aggregate liquidation distributions on
all other Preferred Securities then outstanding.
Pursuant to the Limited Partnership Agreement, JCP&L Capital
shall be dissolved and its affairs shall be wound up: (i) upon
the expiration of the term of JCP&L Capital on June 30, 2060,
(ii) upon the bankruptcy, liquidation, dissolution or winding up
of the Company, (iii) upon the occurrence of an event that causes
the General Partner to cease being the general partner of JCP&L
Capital (provided that JCP&L Capital will not be so dissolved
under certain circumstances, including, without limitation, a
transfer of the general partner interest to a permitted successor
of the General Partner as set forth in the Limited Partnership
Agreement), (iv) upon the entry of a decree of judicial
dissolution, (v) in connection with a Distribution Event, or (vi)
upon the written consent of the General Partner and all of the
holders of the Preferred Securities.
Merger, Consolidation, Amalgamation, etc. of JCP&L Capital
JCP&L Capital may not consolidate, amalgamate, merge with or
into, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any corpor-
ation or other entity, except with the prior approval of the
holders of not less than 66-2/3% of the aggregate stated liquida-
tion preference of the outstanding Preferred Securities or except
as described below. The General Partner may, without the consent
of the holders of the Preferred Securities, cause JCP&L Capital
to consolidate, amalgamate, merge with or into, or be replaced
16<PAGE>
by, or convey, transfer or lease its properties and assets
substantially as an entirety to, a corporation, a limited
liability company, a limited partnership, a trust or other entity
organized as such under the laws of the United States or any
state thereof or the District of Columbia, provided that (i) such
successor entity either (x) expressly assumes all of the terms
and provisions of the Preferred Securities by which JCP&L Capital
is bound and the other obligations of JCP&L Capital or (y)
substitutes for the Preferred Securities other securities having
substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank,
with regard to participation in the profits and the assets of the
successor entity, at least as high as the Preferred Securities
rank, with regard to participation in the profits and the assets
of JCP&L Capital, (ii) the Company confirms its obligation under
the Guarantee with regard to the Preferred Securities or
Successor Securities, if any, (iii) such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease
does not cause any series of Preferred Securities or Successor
Securities, if any, to be delisted by any national securities
exchange on which such series of Preferred Securities or
Successor Securities, if any, is then listed, (iv) such
consolidation, amalgamation, merger, replacement, conveyance,
transfer or lease does not cause the Preferred Securities or
Successor Securities, if any, to be downgraded by any "nationally
recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under
the Securities Act, (v) such consolidation, amalgamation, merger,
replacement, conveyance, transfer or lease does not adversely
affect the powers, preferences and other special rights of
holders of Preferred Securities or Successor Securities, if any,
in any material respect, (vi) such successor entity has a purpose
substantially identical to that of JCP&L Capital and (vii) prior
to such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease, JCP&L Capital shall have received
an opinion of counsel (which may be regular tax or other counsel
to the Company or an affiliate but not an employee thereof) to
the effect that (w) the holders of outstanding Preferred
Securities will not recognize any gain or loss for federal income
tax purposes as a result of the consolidation, amalgamation,
merger, replacement, conveyance, transfer or lease, (x) such
successor entity will be treated as a partnership for federal
income tax purposes, (y) following such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease,
the Company and such successor entity will be in compliance with
the 1940 Act without registering thereunder as an investment
company, and (z) such consolidation, amalgamation, merger,
replacement, conveyance, transfer or lease will not adversely
affect the limited liability of the holders of Preferred
Securities or Successor Securities.
Voting Rights
Except as provided below and under "Merger, Consolidation,
Amalgamation, etc. of JCP&L Capital", "Description of the
Guarantee-Amendments and Assignment" and "Description of the
17<PAGE>
Subordinated Debentures-Amendment of the Indenture" and as
otherwise required by law and the Limited Partnership Agreement,
the holders of the Preferred Securities will have no voting
rights.
If (i) JCP&L Capital fails to pay Dividends in full on the
Preferred Securities for 18 consecutive monthly Dividend periods,
or (ii) an Event of Default (as defined in the Indenture) occurs
and is continuing, or (iii) the Company is in default on any of
its payment or other obligations under the Guarantee (as
described under "Description of the Guarantee-Certain Covenants
of the Company"), then the holders of all Preferred Securities,
acting as a single class, will be entitled, by a vote of the
holders of a majority of the aggregate stated liquidation
preference thereof, to appoint and authorize a special
representative of JCP&L Capital and the holders of Preferred
Securities (a "Special Representative") to enforce JCP&L
Capital's rights under the Indenture, including, after failure to
pay interest for 60 consecutive monthly interest periods, the
payment of interest on the Subordinated Debentures, and to
enforce the obligations of the Company under the Guarantee.
Unless otherwise required by applicable law, the Special
Representative shall not be admitted as a partner in JCP&L
Capital or otherwise be deemed to be a partner in JCP&L Capital
and shall have no liability for the debts, obligations or
liabilities of JCP&L Capital.
For purposes of determining whether JCP&L Capital has failed
to pay Dividends in full for 18 consecutive monthly Dividend
periods, Dividends shall be deemed to remain in arrears, notwith-
standing any payments in respect thereof, until full cumulative
Dividends have been or contemporaneously are paid with respect to
all monthly Dividend periods terminating on or prior to the date
of payment of such full cumulative Dividends. Subject to
requirements of applicable law, not later than 30 days after such
right to appoint a Special Representative arises, the General
Partner will convene a general meeting for the above purpose. If
the General Partner fails to convene such meeting within such 30-
day period, the holders of 10% of the aggregate stated
liquidation preference of the Preferred Securities will be
entitled to convene such meeting. The provisions of the Limited
Partnership Agreement relating to the convening and conduct of
the general meetings of partners will apply with respect to any
such meeting. Any Special Representative so appointed shall
cease to act in such capacity immediately if JCP&L Capital (or
the Company pursuant to the Guarantee) shall have paid in full
all accumulated and unpaid Dividends on the Preferred Securities
or such default or breach, as the case may be, shall have been
cured. Notwithstanding the appointment of any such Special
Representative, the Company shall retain all rights under the
Indenture, including the right to extend the interest payment
period on the Subordinated Debentures as provided under
"Description of the Subordinated Debentures-Option to Extend
Interest Payment Period".
18<PAGE>
If any proposed amendment to the Limited Partnership
Agreement provides for, or the General Partner otherwise proposes
to effect, any action which would materially adversely affect the
powers, preferences or special rights of any series of Preferred
Securities, then the holders of such series of Preferred
Securities will be entitled to vote on such amendment or action
of the General Partner (but not on any other amendment or action)
and, in the case of an amendment or action which would equally
materially adversely affect the powers, preferences or special
rights of any other series of Preferred Securities outstanding,
all such series of Preferred Securities will be entitled to vote
together as a single class on such amendment or action of the
General Partner (but not on any other amendment or action), and
such amendment or action shall not be effective except with the
approval of the holders of not less than 66-2/3% of the aggregate
stated liquidation preference of such Preferred Securities.
Except in certain circumstances described under "Liquidation
Distribution", which include a dissolution in connection with a
Distribution Event, JCP&L Capital will be dissolved and wound up
only with the consent of the holders of all Preferred Securities
then outstanding.
The rights attached to any Preferred Securities will be
deemed not to be adversely affected by the creation or issue of,
and no vote will be required for the creation or issue of, any
further series of Preferred Securities or any general partner
interests of JCP&L Capital. Holders of Preferred Securities have
no preemptive rights.
The Limited Partnership Agreement provides that the General
Partner will not permit or cause JCP&L Capital to file a
voluntary petition in bankruptcy without the approval of the
holders of not less than 66-2/3% of the aggregate stated
liquidation preference of the outstanding Preferred Securities.
So long as any Subordinated Debentures are held by JCP&L
Capital, the General Partner shall not (i) direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or executing any trust or power
conferred on the Trustee with respect to such series, (ii) waive
any past default which is available under the Indenture, (iii)
exercise any right to rescind or annul a declaration that the
principal of all the Subordinated Debentures shall be due and
payable, or (iv) consent to any amendment, modification or
termination of the Indenture, where such consent shall be
required, without, in each case, obtaining the prior approval of
the holders of not less than 66-2/3% of the aggregate stated
liquidation preference of all Preferred Securities affected
thereby, acting as a single class (or the Special Representative
acting on their behalf); provided, however, that where a consent
under the Indenture would require the consent of each holder
affected thereby, no such consent shall be given by the General
Partner without the prior consent of each holder of Preferred
Securities affected thereby. The General Partner shall not
revoke any action previously authorized or approved by a vote of
any holders of Preferred Securities. The General Partner shall
19<PAGE>
notify all holders of Preferred Securities of any notice of
default received from the Trustee with respect to the
Subordinated Debentures.
Any required approval of holders of Preferred Securities may
be given at a separate meeting of such holders convened for such
purposes, at a general meeting of holders of JCP&L Capital's
partner interests or pursuant to written consent. JCP&L Capital
will cause a notice of any meeting at which holders of any series
of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be
taken, to be mailed to each holder of record of such series of
Preferred Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which
such action is to be taken, (ii) a description of any matter to
be voted on at such meeting or upon which written consent is
sought, and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the holders of the Preferred
Securities will be required for JCP&L Capital to redeem and
cancel Preferred Securities in accordance with the Limited
Partnership Agreement.
Notwithstanding that holders of Preferred Securities are
entitled to vote or consent under any of the circumstances
described above, any of the Preferred Securities that are owned
by the Company or any entity owned more than 50% by the Company,
either directly or indirectly, shall not be entitled to vote or
consent and shall, for the purposes of such vote or consent, be
treated as if they were not outstanding.
Holders of Preferred Securities will have no rights to
remove or replace the General Partner.
Book-Entry-Only Issuance-The Depository Trust Company
The Depository Trust Company ("DTC") will act as securities
depository for the Preferred Securities. Each series of
Preferred Securities will be issued only as fully-registered
securities registered in the name of Cede & Co. (DTC's nominee).
One or more fully-registered global Preferred Security
certificates will be issued, representing in the aggregate the
total number of Preferred Securities of each series, and will be
deposited with 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 transfers and
pledges, in deposited securities through electronic computerized
20<PAGE>
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 Preferred Securities under the DTC system must
be made by or through Direct Participants, which will receive a
credit for the Preferred Securities on DTC's records. The
ownership interest of each actual purchaser of each Preferred
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
purchases, but Beneficial Owners are expected to receive written
confirmations providing details of the transactions, as well as
periodic statements of their holdings, from the Direct or
Indirect Participants through which the Beneficial Owners
purchased Preferred Securities. Transfers of ownership interests
in the Preferred 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 Preferred Securities,
except in the event that use of the book-entry system for the
Preferred Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the
Preferred Securities; DTC's records reflect only the identity of
the Direct Participants to whose accounts such Preferred
Securities are credited, which may or may not be the Beneficial
Owners. Direct and Indirect 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.
Redemption notices will be sent to Cede & Co. If less than
all of a series of Preferred Securities are being redeemed, DTC's
practice is to determine by lot the amount of the interest of
each Direct Participant in such series to be redeemed.
Although voting with respect to the Preferred Securities is
limited, in those cases where a vote is required, neither DTC nor
21<PAGE>
Cede & Co. will consent or vote with respect to Preferred
Securities. Under its usual procedure, DTC would mail an Omnibus
Proxy to JCP&L Capital 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
Preferred Securities are credited on the record date (identified
in a listing attached to the Omnibus Proxy).
Dividend payments on the Preferred Securities will be made
to DTC. DTC's practice is to credit Direct Participants'
accounts on the relevant payable date in accordance with their
respective holdings shown on DTC's records unless DTC has reason
to believe that it will not receive payments on such payable
date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customer practices and will
be the responsibility of such Participants and not of DTC, JCP&L
Capital, the General Partner or the Company, subject to any
statutory or regulatory requirements as may be in effect from
time to time. Payment of Dividends to DTC is the responsibility
of JCP&L Capital, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursement of
such payments to the Beneficial Owners is the responsibility of
Direct and Indirect Participants.
The information in this section concerning DTC and DTC's
book-entry system has been obtained from sources, including DTC,
that JCP&L Capital and the Company believe to be reliable, but
neither JCP&L Capital nor the Company takes any responsibility
for the accuracy thereof.
DTC may discontinue providing its services as securities
depository with respect to the Preferred Securities at any time
by giving reasonable notice to JCP&L Capital. Under such circum-
stances, in the event that a successor securities depository is
not obtained, Preferred Security certificates are required to be
printed and delivered. Additionally, JCP&L Capital (with the
consent of the General Partner) may decide to discontinue use of
the system of book-entry transfers through DTC (or a successor
depository). In that event, certificates for the Preferred
Securities will be printed and delivered.
Registrar, Transfer Agent and Paying Agent
In the event that the Preferred Securities do not remain in
book-entry-only form, the following provisions would apply:
Chemical Bank will act as registrar, transfer agent and
paying agent for the Preferred Securities, but the Company may
designate an additional or substitute registrar, transfer agent
and paying agent at any time.
Registration of transfers of Preferred Securities will be
effected without charge by or on behalf of JCP&L Capital, but
upon payment (with the giving of such indemnity as JCP&L Capital
or the transfer agent may require) in respect of any tax or other
governmental charges which may be imposed in relation to it.
JCP&L Capital will not be required to register or cause to
be registered the transfer of Preferred Securities after such
Preferred Securities have been called for redemption.
22
<PAGE>
Miscellaneous
The General Partner is authorized and directed to use its
best efforts to conduct the affairs of, and to operate, JCP&L
Capital in such a way that JCP&L Capital would not be deemed to
be an "investment company" required to be registered under the
1940 Act or taxed as a corporation for federal income tax
purposes and so that the Subordinated Debentures will be treated
as indebtedness of the Company for federal income tax purposes.
In this connection, the General Partner is authorized, in its
sole and absolute discretion, to take any action not inconsistent
with applicable law, the Certificate of Limited Partnership of
JCP&L Capital or the Limited Partnership Agreement, that does not
materially adversely affect the interests of holders of Preferred
Securities, that the General Partner determines in its sole and
absolute discretion to be necessary, advisable or desirable for
such purposes.
DESCRIPTION OF THE GUARANTEE
Set forth below is a summary of information concerning the
Guarantee which will be executed and delivered by the Company in
connection with each series of Preferred Securities for the
benefit of the holders from time to time of the series of
Preferred Securities to which it relates. This summary describes
certain terms and provisions of the Guarantee, but does not
purport to be complete. References to provisions of the
Guarantee are qualified in their entirety by reference to the
text of the Guarantee, which will be substantially in the form
filed as an exhibit to the Registration Statement of which this
Prospectus forms a part.
General
The Company will agree, on a limited basis as set forth
therein, to pay in full, to the holders of the Preferred
Securities, the Guarantee Payments (as defined below) (except to
the extent paid by JCP&L Capital), as and when due, regardless of
any defense, right of set-off or counterclaim which the Company
or JCP&L Capital may have or assert. The following payments to
the extent not paid by JCP&L Capital (the "Guarantee Payments")
will be subject to the Guarantee (without duplication): (i) any
accumulated and unpaid monthly Dividends on the Preferred
Securities (except for monthly Dividends which are not paid
during an Extension Period (as defined under "Description of the
Subordinated Debentures-Option to Extend Interest Payment
Period")) to the extent that JCP&L Capital has sufficient cash on
hand to permit such payments and funds legally available
therefor, (ii) the Redemption Price with respect to any Preferred
Securities called for redemption by JCP&L Capital to the extent
that JCP&L Capital has sufficient cash on hand to permit such
payments and funds legally available therefor, and (iii) upon a
liquidation of JCP&L Capital other than in connection with a
Distribution Event, the lesser of (a) the Liquidation
Distribution and (b) the amount of assets of JCP&L Capital
23
<PAGE>
available for distribution to holders of Preferred Securities in
liquidation of JCP&L Capital. The Guarantee further provides
that the Company shall (a) cause the General Partner to declare
and pay Dividends to the extent that JCP&L Capital has legally
available funds and sufficient cash on hand and (b) so long as
any of the Preferred Securities are outstanding, cause the
General Partner to remain the general partner of JCP&L Capital
and timely perform all its duties as such (including the duty to
pay Dividends on the Preferred Securities) in all material
respects, which include, among other things, the General
Partner's duties under the Limited Partnership Agreement to
directly pay all costs and expenses of JCP&L Capital (thereby
insuring that the full amount of the Company's payments on its
Subordinated Debentures will be available to allow payment to the
holders of the Preferred Securities) and the covenant of the
General Partner in the Limited Partnership Agreement to at all
times maintain a "fair market value net worth" of, initially, at
least 10% of the total contributions (less redemptions) to JCP&L
Capital. While the assets of the General Partner will not be
available for making distributions on the Preferred Securities,
they will be available for the payment of expenses of JCP&L
Capital. Accordingly, the Guarantee, together with the related
covenants contained in the Limited Partnership Agreement and the
Company's obligations under the Subordinated Debentures, provides
for the Company's full and unconditional guarantee of the
Preferred Securities as set forth above.
The Company's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the
Company to the holders of Preferred Securities or by payment of
such amounts by JCP&L Capital to such holders, and may be
enforced directly by or for the benefit of the holders of
Preferred Securities.
Effect of Obligations under Subordinated Debenture and Guarantee
As set forth in the Limited Partnership Agreement, the sole
purpose of JCP&L Capital is to issue its Preferred Securities and
use the proceeds thereof, plus the General Partner's capital
contributions, to purchase the JCP&L Subordinated Debentures.
As long as payments of principal and interest are made when
due on the Subordinated Debentures corresponding to the Preferred
Securities, such payments will be sufficient to enable JCP&L
Capital to make all payments of Dividends on the Preferred
Securities, because (i) the aggregate principal amount of such
Subordinated Debentures will be equal to the sum of the aggregate
liquidation preference of the Preferred Securities plus the
General Partner's capital contributions to JCP&L Capital; (ii)
the interest rate and interest and other payment dates of the
Subordinated Debentures of each series will correspond to the
Dividend rate and Dividend and other payment dates for the
Preferred Securities of the related series; and (iii) the Limited
Partnership Agreement provides that the General Partner will pay
for all costs and expenses of JCP&L Capital.
24
<PAGE>
If JCP&L Capital fails to pay Dividends in full on any
series of the Preferred Securities for 18 consecutive months or
if a default under the Indenture occurs and is continuing, the
Limited Partnership Agreement provides a mechanism whereby the
holders of the Preferred Securities may elect a Special
Representative to enforce the rights of JCP&L Capital under the
Indenture. Payments of Dividends on the Preferred Securities out
of monies held by JCP&L Capital are guaranteed by the Company to
the extent set forth under "Description of the Guarantee --
General" above. The Limited Partnership Agreement also provides
that, if JCP&L is in default on any payment or other obligation
under the Guarantee, a Special Representative may be appointed;
and the Company, under the Guarantee, acknowledges, that such
Special Representative may enforce the Guarantee on behalf of the
holders of the Preferred Securities. In addition, if the General
Partner or the Special Representative fails to enforce the
Guarantee, a holder of Preferred Securities may institute a legal
proceeding directly against the Company to enforce such holder's
rights under the Guarantee without first instituting a legal
proceeding against JCP&L Capital or any other person or entity.
Certain Covenants of the Company
So long as any Preferred Securities remain outstanding,
neither the Company, nor any majority owned subsidiary of the
Company, will declare or pay any dividend on, or redeem,
purchase, acquire or make a liquidation payment with respect to,
any of its preferred or common stock (other than dividends to the
Company by a wholly owned subsidiary of the Company) (i) during
an Extension Period (as defined under "Description of the
Subordinated Debentures-Option to Extend Interest Payment
Period") or (ii) if at such time the Company shall be in default
with respect to its payment or other obligations under the
Guarantee or there shall have occurred any event that, with the
giving of notice or the lapse of time or both, would constitute
an Event of Default under the Indenture.
In addition, so long as any Preferred Securities remain
outstanding, the Company will (i) maintain direct or indirect
100% ownership of the general partner interests in JCP&L Capital;
(ii) cause at least 3% of the total value of JCP&L Capital and at
least 3% of all interests in the capital, income, gain, loss,
deduction and credit of JCP&L Capital to be represented by
general partner interests; (iii) not cause JCP&L Capital to be
voluntarily dissolved and wound-up except upon the entry of a
decree of judicial dissolution, in connection with a Distribution
Event or certain mergers, consolidations or similar transactions
permitted by the Limited Partnership Agreement or as otherwise
described under "Description of Preferred Securities-Liquidation
Distribution"; (iv) except as otherwise provided in the Limited
Partnership Agreement, cause the General Partner to remain the
general partner of JCP&L Capital and timely perform all of its
duties as general partner of JCP&L Capital (including the duty to
pay Dividends on the Preferred Securities out of cash on hand and
funds legally available therefor) in all material respects,
provided that any permitted successor of the Company under the
25
<PAGE>
Indenture may directly or indirectly succeed to the duties as
general partner of JCP&L Capital; and (v) use its reasonable
efforts to cause JCP&L Capital to remain a limited partnership
and otherwise continue to be treated as a partnership for United
States federal income tax purposes.
Amendments and Assignment
The Guarantee may only be amended by a written instrument
executed by the Company; provided that, so long as any of the
Preferred Securities remain outstanding, any such amendment that
materially adversely affects the holders of the related series of
Preferred Securities, any termination of the Guarantee and any
waiver of compliance with any covenant thereunder shall be
effected only with the prior approval of the holders of not less
than 66-2/3% of the aggregate stated liquidation preference of
the affected series of Preferred Securities. Except in
connection with a merger, sale, transfer or lease involving the
Company as may be permitted under the Indenture (see "Description
of the Subordinated Debentures-Consolidation, Merger, Sale or
Conveyance"), the Company may not assign its obligations under
the Guarantee without the approval of the holders of not less
than 66-2/3% of the aggregate stated liquidation preference of
the related series of Preferred Securities. See "Description of
Preferred Securities-Voting Rights". All guarantees and
agreements contained in the Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Company
and shall inure to the benefit of the holders of the Preferred
Securities.
Termination of the Guarantee
The Guarantee will terminate and be of no further force and
effect upon full payment of the Redemption Price of all of the
related series of Preferred Securities or upon full payment of
the amounts payable upon liquidation of JCP&L Capital or upon
consummation of a Distribution Event. The Guarantee will
continue to be effective or will be reinstated, as the case may
be, if at any time any holder of such series of Preferred
Securities must restore payment of any sums paid under such
Preferred Securities or the Guarantee.
Status of the Guarantee
The Guarantee will constitute an unsecured obligation of the
Company and will rank (i) subordinate and junior in right of
payment to all present and future Senior Indebtedness of the
Company, and (ii) senior in right of payment to the Company's
preferred and common stock. The Limited Partnership Agreement
provides that each holder of Preferred Securities by acceptance
thereof agrees to the subordination provisions and other terms of
the Guarantee.
The Guarantee will constitute a limited guarantee of payment
and not of collection. The Guarantee will be held for the
benefit of the holders of the related series of Preferred
26
<PAGE>
Securities. If appointed, a Special Representative may enforce
the Guarantee. If no Special Representative has been appointed
to enforce the Guarantee, the General Partner has the right to
enforce the Guarantee on behalf of the holders of the Preferred
Securities. If the General Partner or the Special Representative
fails to enforce the Guarantee, any holder of Preferred
Securities may institute a legal proceeding directly against the
Company to enforce its rights under the Guarantee, without first
instituting a legal proceeding against JCP&L Capital or any other
person or entity.
DESCRIPTION OF THE SUBORDINATED DEBENTURES
Set forth below is a description of the Subordinated
Debentures which will be purchased by JCP&L Capital with the
proceeds of the sale of the Preferred Securities and the General
Partner's related capital contribution. This description is a
brief summary of certain provisions contained in the Indenture,
does not purport to be complete and is qualified in its entirety
by reference to the text of the Indenture, including the
definition therein of certain capitalized terms, a copy of which
is filed as an exhibit to the Registration Statement of which
this Prospectus forms a part.
Under certain circumstances following the occurrence of a
Special Event, JCP&L Capital may dissolve and cause Subordinated
Debentures to be distributed to the holders of the Preferred
Securities in liquidation of their interests in JCP&L Capital.
See "Description of Preferred Securities-Special Event Redemption
or Distribution".
General
The Subordinated Debentures will be issued in series under
the Indenture. Each series of Subordinated Debentures will be
limited in aggregate principal amount to the amount of the
aggregate stated liquidation preference of the related series of
Preferred Securities together with any related capital
contribution from the General Partner.
So long as any Preferred Securities remain outstanding, any
Special Representative appointed by the holders of Preferred
Securities, as described under "Description of Preferred
Securities-Voting Rights", will be entitled to enforce the
Company's obligations under the Indenture and the Subordinated
Debentures directly against the Company.
The Subordinated Debentures will become due and payable,
together with (i) all accrued and unpaid interest to the date of
payment and (ii) any accrued interest thereon, on the 49th
anniversary of the date of issuance thereof.
27
<PAGE>
Mandatory Prepayment
If JCP&L Capital redeems Preferred Securities in accordance
with their terms, the related Subordinated Debentures will become
due and payable in a principal amount equal to the aggregate
stated liquidation preference of the Preferred Securities so
redeemed, together with (i) all accrued and unpaid interest to
the date of payment and (ii) any accrued interest thereon.
Optional Redemption
The Company will have the right to redeem the Subordinated
Debentures, without premium or penalty, at a price equal to 100%
of their principal amount, together with (i) all accrued and
unpaid interest on the Subordinated Debentures being redeemed to
the Redemption Date and (ii) any accrued interest thereon
(collectively, the "Debenture Redemption Price") in whole or in
part at such time or times as shall be specified in a Prospectus
Supplement.
Redemption Procedures
If the Company gives a notice of redemption in respect of a
series of Subordinated Debentures (which notice will be given not
less than 30 nor more than 90 days prior to the redemption date),
then, on the redemption date, the Company will irrevocably
deposit with the Trustee funds sufficient to pay the applicable
Debenture Redemption Price. If notice of redemption shall have
been given and funds deposited as required, then on the date of
such deposit, all rights of holders of such Subordinated
Debentures so called for redemption will cease, except the right
of the holders of such Subordinated Debentures to receive the
Debenture Redemption Price, but without interest. Notwith-
standing the foregoing, however, any such notice may state that
it is subject to the receipt by the Trustee of redemption funds
on or before such date fixed for redemption, which notice shall
be of no effect unless such funds are so received on or before
such date. In the event that any date fixed for redemption of
Subordinated Debentures is not a Business Day, then payment of
the Debenture Redemption Price payable on such date will be made
on the next succeeding day which is a Business Day (and without
any interest or other payment in respect of any such delay),
except that, if such Business Day falls in the next succeeding
calendar year, such payment shall be made on the immediately
preceding Business Day in each case with the same force and
effect as if made on such date.
In the event that less than all of a series of outstanding
Subordinated Debentures are to be so redeemed following a
Distribution Event, the Subordinated Debentures to be redeemed
will be selected as described under "Description of Preferred
Securities-Book-Entry-Only Issuance-The Depository Trust
Company".
Subject to applicable law, after a Distribution Event the
Company or its subsidiaries may at any time and from time to time
28
<PAGE>
purchase outstanding Subordinated Debentures by tender, in the
open market or by private agreement.
If a partial redemption or a purchase of outstanding
Subordinated Debentures by tender, in the open market or by
private agreement would result in a delisting of such series of
Subordinated Debentures from any national securities exchange on
which such series of Subordinated Debentures is then listed, the
Company may then only redeem or purchase such series of
Subordinated Debentures in whole.
Interest
Each Subordinated Debenture will bear interest at a rate per
annum equal to the Dividend rate on the related series of
Preferred Securities, payable monthly in arrears on the last day
of each calendar month of each year (each an "Interest Payment
Date"), to the person in whose name such Subordinated Debenture
is registered, subject to certain exceptions, at the close of
business on the Business Day next preceding such Interest Payment
Date (the "Regular Record Date"). In the event that the
Subordinated Debentures do not remain in book-entry-only form,
the record dates will be the fifteenth day of each month.
The amount of interest payable for any period will be
computed on the basis of twelve 30-day months and a 360-day year
and, for any period shorter than a full monthly interest period,
on the basis of the actual number of days elapsed. In the event
that any date on which interest is payable on the Subordinated
Debentures is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such
Business Day falls on the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day,
in each case with the same force and effect as if made on such
date.
If at any time JCP&L Capital would be required to pay any
taxes, duties, assessments or governmental charges of whatever
nature (other than withholding taxes) imposed by the United
States, or any other taxing authority, then, in any such case,
the Company will also pay as additional interest such amounts as
shall be required so that the net amounts received and retained
by JCP&L Capital after paying any such taxes, duties, assessments
or governmental charges will be not less than the amounts JCP&L
Capital would have received had no such taxes, duties,
assessments or governmental charges been imposed.
Option to Extend Interest Payment Period
The Company will have the right at any time and from time to
time during the term of the Subordinated Debentures, so long as
the Company is not in default in the payment of interest on the
Subordinated Debentures, to extend the interest payment period on
the Subordinated Debentures to up to 60 consecutive months,
29
<PAGE>
provided that at the end of each such period (an "Extension
Period") the Company shall pay all interest then accrued and
unpaid (together with interest thereon at the rate specified for
the Subordinated Debentures to the extent permitted by
applicable law). During any such Extension Period, neither the
Company, nor any majority owned subsidiary of the Company, may
declare or pay any dividends on, or redeem, purchase, acquire or
make a liquidation payment with respect to, any of its capital
stock (other than dividends to the Company by a wholly owned
subsidiary of the Company). No interest shall be due and payable
during an Extension Period, except at the end thereof. If JCP&L
Capital shall be the sole holder of the Subordinated Debentures,
the Company shall give JCP&L Capital notice of its selection of
such extended interest payment period one Business Day prior to
the earlier of (i) the date the related Dividend on the Preferred
Securities is payable or (ii) the date JCP&L Capital is required
to give notice to any national securities exchange on which the
Preferred Securities are listed or other applicable self-
regulatory organization or to the holders of the Preferred
Securities of the record date or the date such Dividend is
payable, but in any event not less than one Business Day prior to
such record date. The Company shall cause JCP&L Capital to give
notice of the Company's selection of such extended interest
payment period to the holders of the Preferred Securities. If
JCP&L Capital shall not be the sole holder of the Subordinated
Debentures, the Company will give the holders of the
Subordinated Debentures notice of its selection of such extended
interest payment period ten Business Days prior to the earlier of
(i) the Interest Payment Date or (ii) the date the Company is
required to give notice of the record or payment date of such
related interest payment to any national securities exchange on
which the Subordinated Debentures are then listed or other
applicable self-regulatory organization or to holders of the
Subordinated Debentures, but in any event not less than two
Business Days prior to such record date.
Credit
Prior to a Distribution Event, the Company shall receive a
credit against any payment it is otherwise required to make under
the Subordinated Debentures to the extent it has theretofore
made, or is concurrently making, a payment under the Guarantee.
Subordination
All payments by the Company in respect of the Subordinated
Debentures shall be subordinated to the prior payment in full of
all amounts payable on Senior Indebtedness. "Senior
Indebtedness" consists of (i) the principal of and premium (if
any) in respect of (A) indebtedness of the Company for money
borrowed and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments (including
purchase money obligations) for payment of which the Company is
responsible or liable; (ii) all capital lease obligations of the
Company; (iii) all obligations of the Company issued or assumed
30
<PAGE>
as the deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company
under any title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business); (iv) certain
obligations of the Company for the reimbursement of any obligor
on any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction; (v) all obligations of
the type referred to in clauses (i) through (iv) of other persons
for the payment of which the Company is responsible or liable as
obligor, guarantor or otherwise; and (vi) all obligations of the
type referred to in clauses (i) through (v) of other persons
secured by any lien on any property or asset of the Company
(whether or not such obligation is assumed by the Company),
except for any such indebtedness that is by its terms
subordinated to or pari passu with the Subordinated Debentures.
Upon any payment or distribution of assets or securities of
the Company or upon any dissolution or winding up or total or
partial liquidation or reorganization of the Company, whether
voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings, all amounts payable on Senior
Indebtedness (including any interest accruing on such Senior
Indebtedness subsequent to the commencement of a bankruptcy,
insolvency or similar proceeding) shall first be paid in full
before the Trustee or the holders of Preferred Securities or
Subordinated Debentures (or the Special Representative) will be
entitled to receive from the Company any payment of principal of,
or interest on, or any other amounts in respect of, the
Subordinated Debentures.
No direct or indirect payment by or on behalf of the Company
of principal of or interest on the Subordinated Debentures
whether pursuant to the terms of the Subordinated Debentures or
upon acceleration or otherwise may be made if, at the time of
such payment, there exists, (i) a default in the payment of all
or any portion of any Senior Indebtedness or (ii) any other
default (other than a default of the nature described in clause
(i) above) affecting Senior Indebtedness permitting its
acceleration, as the result of which the maturity of Senior
Indebtedness has been accelerated, and in either case requisite
notice has been given to the Company and the Trustee and such
default shall not have been cured or waived by or on behalf of
the holders of such Senior Indebtedness.
If the Trustee or any holder of Preferred Securities or
Subordinated Debentures (or the Special Representative) has
received any payment on account of the principal of or interest
on the Subordinated Debentures when such payment is prohibited
and before all amounts payable on Senior Indebtedness are paid in
full, then and in such event such payment or distribution shall
be received and held in trust for the holders of Senior
Indebtedness and shall be paid over or delivered first to the
holders of the Senior Indebtedness remaining unpaid to the extent
necessary to pay such Senior Indebtedness in full.
31
<PAGE>
Upon the payment in full of all Senior Indebtedness, the
Trustee and the holders of Preferred Securities or Subordinated
Debentures (and the Special Representative) shall be subrogated
to the rights of the holders of such Senior Indebtedness to
receive payments or distributions of assets of the Company made
on such Senior Indebtedness until the Subordinated Debentures are
paid in full.
Certain Covenants of the Company
Neither the Company nor any majority owned subsidiary shall
declare or pay any dividend on, or redeem, purchase, acquire or
make a liquidation payment with respect to, any of its preferred
or common stock (other than dividends to the Company by a wholly
owned subsidiary of the Company) (i) during an Extension Period,
(ii) if there shall have occurred and is continuing any event
that, with the giving of notice or the lapse of time or both,
would constitute an Event of Default under the Indenture or (iii)
so long as any Preferred Securities remain outstanding, if the
Company shall be in default with respect to its payment or other
obligations under the Guarantee.
Book-Entry and Settlement
If Subordinated Debentures are distributed to holders of
Preferred Securities, the Subordinated Debentures will be issued
in book-entry-only form. For a description of DTC and the
specific terms of the depository arrangements, see "Description
of Preferred Securities-Book-Entry-Only Issuance-The Depository
Trust Company", which would also apply to the Subordinated
Debentures in book-entry-only form.
Neither the Company, the Trustee, any paying agent nor any
other agent of the Company or the Trustee will have any
responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership
interests in a global security for such Subordinated Debentures
or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
Discontinuance of the Depository's Services. A global
security will be exchangeable for Subordinated Debentures
registered in the names of persons other than the depository or
its nominee only if (i) the depository notifies the Company that
it is unwilling or unable to continue as depository for such
global security or if at any time the depository ceases to be a
clearing agency registered under the Exchange Act at a time when
the depository is required to be so registered to act as such
depository, (ii) the Company in its sole discretion determines
that such global security shall be so exchangeable or (iii) there
shall have occurred and be continuing a default in the payment of
principal of, or interest on, such Subordinated Debentures or an
Event of Default or an event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default
with respect to such Subordinated Debentures. Any global
security that is exchangeable pursuant to the preceding sentence
32
<PAGE>
shall be exchangeable for Subordinated Debentures registered in
such names as the depository shall direct. It is expected that
such instructions will be based upon directions received by the
depository from its Participants with respect to ownership of
beneficial interests in such global security.
33
<PAGE>
Payment; Registration and Transfer
In the event that the Subordinated Debentures do not remain
in book-entry-only form, the following provisions would apply:
Payment of principal of any Subordinated Debenture will be
made only against surrender to the Trustee or the Paying Agent
appointed by the Company, if not the Trustee, of such
Subordinated Debenture. Principal of, and interest on,
Subordinated Debentures will be payable, subject to any
applicable laws and regulations, at the office of the Trustee or
such Paying Agent as the Company may designate from time to time,
except that at the option of the Company payment of any interest
may be made by check mailed to the address of the person entitled
thereto as such address shall appear in the security Register
with respect to such Subordinated Debentures. Payment of
interest on a Subordinated Debenture on any Interest Payment Date
will be made to the person in whose name such Subordinated
Debenture is registered at the close of business on the Regular
Record Date for such interest, with certain exceptions.
The Corporate Trust Office of the Trustee in The City of New
York shall initially be designated as the Company's sole Paying
Agent for payments with respect to Subordinated Debentures of
each series. The Company may at any time designate other or
additional Paying Agents or rescind the designation of any Paying
Agent or approve a change in the office through which any Paying
Agent acts.
Subordinated Debentures may be presented for registration
of transfer (with the form of transfer endorsed thereon duly
executed), at the office of the Registrar appointed by the
Company without service charge and upon payment of any taxes and
other governmental charges as described in the Indenture. The
Company has initially appointed the Trustee as Registrar with
respect to the Subordinated Debentures. The Company shall not be
required to make, and the Registrar need not register, the
transfer or exchange of (i) any Subordinated Debenture during a
period beginning at the opening of business five days before the
mailing of a notice of redemption of Subordinated Debentures, and
ending at the close of business on the day of such mailing, or
(ii) any Subordinated Debenture selected, called or being called
for redemption, in whole or in part, except in the case of any
Subordinated Debenture to be redeemed in part, the portion
thereof not to be redeemed.
Amendment of the Indenture
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a
majority in principal amount of the Subordinated Debentures which
are affected by the amendment or waiver, to amend the Indenture
or the Subordinated Debentures or to waive compliance by the
Company with any provision of the Indenture or the Subordinated
Debentures; provided that no such amendment or waiver may,
without the consent of the holder of each outstanding
34
<PAGE>
Subordinated Debenture affected thereby, (a) reduce the principal
amount of the Subordinated Debentures, (b) reduce the percentage
of principal amount of outstanding Subordinated Debentures of any
series, the consent of holders of which is required for amendment
of the Indenture or for waiver of compliance with certain
provisions of the Indenture or for waiver of certain defaults,
(c) change the stated maturity date of the principal of, or the
interest or the rate of interest on, the Subordinated Debentures,
(d) change the redemption provisions applicable to the
Subordinated Debentures adversely to the holders thereof, (e)
impair the right to institute suit for the enforcement of any
payment with respect to the Subordinated Debentures, (f) change
the currency in which payments with respect to the Subordinated
Debentures are to be made, (g) change the subordination
provisions applicable to the Subordinated Debentures adversely to
the holders thereof, or (h) waive a default in the payment of the
principal of, or interest on, any Subordinated Debenture. The
Indenture or the Subordinated Debentures may be amended, without
the consent of the holders of the Subordinated Debentures, to
cure any ambiguity, defect or inconsistency or to make other
changes that do not adversely affect the rights of such holders.
Events of Default
The following are Events of Default under the Indenture:
(i) default for 15 days in payment of any interest (including any
accrued interest thereon) on Subordinated Debentures (whether by
virtue of the provisions described above under "Subordination" or
otherwise); provided that an extension of the interest payment
period by the Company as described under "Option to Extend
Interest Payment Period" shall not constitute a default in the
payment of interest for this purpose; (ii) default in payment of
principal of Subordinated Debentures when due (whether by virtue
of the provisions described above under "Subordination" or
otherwise); (iii) default for 30 days after notice in the
performance of any other covenant in the Indenture; or (iv)
certain events of bankruptcy, insolvency or reorganization of the
Company. If an Event of Default shall occur and be continuing,
the Trustee or the holders of not less than a majority in
principal amount of the Subordinated Debentures then outstanding
may declare the principal of, and all accrued and unpaid interest
(including any interest accrued but not paid during an Extension
Period and any accrued interest thereon) on, the Subordinated
Debentures to be due and payable; provided that, upon certain
events of bankruptcy, insolvency or reorganization of the
Company, such amounts shall immediately become due and payable
without any declaration or other action by the Trustee or such
holders. The Company is required to furnish to the Trustee
annually a statement as to the performance by the Company of its
obligations under the Indenture and as to any default in such
performance. Under certain circumstances, any declaration of
acceleration with respect to the Subordinated Debentures may be
rescinded and past defaults (except, unless theretofore cured, a
default in the payment of principal of, or interest on, the
Subordinated Debentures) may be waived by the holders of a
majority in principal amount of the Subordinated Debentures then
35
<PAGE>
outstanding. The Indenture provides that the Trustee may
withhold notice to the holders of the Subordinated Debentures of
any continuing default (except in the payment of the principal
of, or interest on, the Subordinated Debentures) if the Trustee
considers it in the interests of holders of Subordinated
Debentures to do so.
Enforcement of Certain Rights by Holders of Preferred Securities
So long as any Subordinated Debentures are held by JCP&L
Capital, the holders of any outstanding Preferred Securities will
have the rights referred to under "Description of Preferred
Securities-Voting Rights", including the right to appoint a
Special Representative authorized to exercise JCP&L Capital's
right, as the holder of Subordinated Debentures, to accelerate
the principal amount of the Subordinated Debentures and to
enforce the Company's obligations under the Indenture and the
Subordinated Debentures directly against the Company, without
first proceeding against JCP&L Capital or any other person or
entity.
Consolidation, Merger, Sale or Conveyance
The Indenture provides that the Company may not consolidate
with or merge into any other Person or sell, convey, transfer or
lease all or substantially all of its properties and assets to
any Person, unless (i) the successor Person shall be organized
and existing under the laws of the United States or any state
thereof or the District of Columbia; (ii) the successor Person
shall expressly assume (x) by a supplemental indenture, all of
the Company's obligations under the Subordinated Debentures and
the Indenture and (y) so long as any Preferred Securities remain
outstanding, the Company's obligations under the Guarantee; (iii)
so long as any Preferred Securities remain outstanding, the
successor Person becomes or acquires the General Partner; and
(iv) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, conveyance, transfer or lease and
such supplemental indenture comply with the Indenture. In case
of any such consolidation, merger, sale, conveyance, transfer or
lease, such successor Person will succeed to and be substituted
for the Company as obligor on the Subordinated Debentures, with
the same effect as if it had been named in the Indenture as the
issuer in place of the Company.
The Indenture does not contain any other covenant which
restricts the Company's ability to consolidate or merge with, or
sell, convey, transfer or lease all or substantially all of its
assets to, any Person, firm or corporation or otherwise engage in
restructuring transactions.
Title
The Company, the Trustee and any agent of the Company or the
Trustee may treat the registered owner of any Subordinated
Debenture as the absolute owner thereof (whether or not such
36
<PAGE>
Subordinated Debenture shall be overdue and notwithstanding any
notice to the contrary) for the purpose of making payment and for
all other purposes.
Defeasance and Discharge
Under the terms of the Indenture, the Company will be
discharged from any and all obligations in respect of the
Subordinated Debentures of any series (except in each case for
certain obligations to register the transfer or exchange of
Subordinated Debentures, replace stolen, lost or mutilated
Subordinated Debentures, maintain paying agencies and hold monies
for payment in trust) if the Company deposits with the Trustee,
in trust, (i) money and/or (ii) U. S. Government Obligations (as
defined in the Indenture) sufficient to pay all the principal of,
and interest on, the Subordinated Debentures of such series on
the dates such payments are due; provided that no Event of
Default has occurred and is continuing. In connection with such
a defeasance and discharge, the Company, among other things, will
deliver to the Trustee an Opinion of Counsel to the effect that
(i) the deposit and related defeasance would not cause the
holders of the Subordinated Debentures of such series to
recognize income, gain or loss for federal income tax purposes,
or a copy of a ruling or other formal statement or action to such
effect received from or published by the Internal Revenue
Service; and (ii) the trust resulting from the defeasance is a
valid trust and will not constitute a regulated investment
company under the 1940 Act.
Replacement of Subordinated Debentures
Any mutilated Subordinated Debenture will be replaced by the
Company at the expense of the holder upon its surrender to the
Trustee. Subordinated Debentures that become destroyed, lost or
stolen will be replaced by the Company at the expense of the
holder upon delivery to the Trustee of evidence of the
destruction, loss or theft thereof satisfactory to the Company
and the Trustee. In the case of a destroyed, lost or stolen
Subordinated Debenture, an indemnity satisfactory to the Trustee
and the Company may be required at the expense of the holder of
such Subordinated Debenture before a replacement Subordinated
Debenture will be issued.
Governing Law
The Indenture and the Subordinated Debentures will be
governed by and construed in accordance with the laws of the
State of New York.
Information Concerning the Trustee
Subject to the provisions of the Indenture relating to its
duties, the Trustee will be under no obligation to exercise any
of its rights or powers under the Indenture at the request, order
or direction of any of the holders thereunder, unless such
holders shall have offered to the Trustee reasonable indemnity.
Subject to such provision for indemnification, the holders of a
majority in principal amount of the Subordinated Debentures then
outstanding thereunder will have the right to direct the time,
method and place of conducting any proceeding for any remedy
37
<PAGE>
available to the Trustee thereunder, or exercising any trust or
power conferred on the Trustee.
The Indenture contains limitations on the right of the
Trustee, as a creditor of the Company, to obtain payment of
claims in certain cases, or to realize on certain property
received in respect of any such claim as security or otherwise.
In addition, the Trustee may be deemed to have a conflicting
interest and may be required to resign as Trustee if at the time
of default under the Indenture it is a creditor of the Company.
United States Trust Company of New York, the Trustee under
the Indenture, has from time to time engaged in transactions
with, or performed services for, the Company and its affiliates
in the ordinary course of business.
Miscellaneous
For restrictions on certain actions of the General Partner
with respect to Subordinated Debentures held by JCP&L Capital,
see "Description of Preferred Securities-Voting Rights".
UNITED STATES TAXATION
General
This section is a summary of certain United States federal
income tax considerations that may be relevant to prospective
purchasers of Preferred Securities and represents the opinion of
Carter, Ledyard & Milburn, special tax counsel to the Company and
JCP&L Capital, insofar as it relates to matters of law and legal
conclusions. This section is based upon current provisions of
the Internal Revenue Code of 1986, as amended ("Code"), existing
and proposed regulations thereunder and current administrative
rulings and court decisions, all of which are subject to change.
Subsequent changes may cause tax consequences to vary
substantially from the consequences described below.
No attempt has been made in the following discussion to
comment on all United States federal income tax matters affecting
purchasers of Preferred Securities. Moreover, the discussion
focuses on holders of Preferred Securities who are individual
citizens or residents of the United States and has only limited
application to corporations, estates, trusts or non-resident
aliens. Accordingly, each prospective purchaser of Preferred
Securities should consult, and should depend on, his or her own
tax advisor in analyzing the federal, state, local and foreign
tax consequences of the purchase, ownership or disposition of
Preferred Securities.
In April 1994, the Internal Revenue Service ("IRS")
issued certain notices generally addressing the characteristics
which distinguish debt from equity for various purposes under the
federal income tax laws. In these notices, the IRS indicated
that transactions involving securities that, like the securities
offered hereunder, have both debt and equity characteristics
38
<PAGE>
would be reviewed with scrutiny to determine how they would be
treated for tax purposes. Based upon advice from Carter, Ledyard
& Milburn, the Company's special tax counsel, the Company
believes that interest on the Subordinated Debentures will be
deductible under the tests referred to in these notices. If, as
a result of a change in law or a pronouncement or decision
interpreting or applying any applicable law, JCP&L Capital
receives an opinion of tax counsel to the effect that interest on
any Subordinated Debentures would not be deductible, JCP&L
Capital would have the option to redeem the related Preferred
Securities or to dissolve and cause Subordinated Debentures to
be distributed to the holders of the Preferred Securities, as
described under "Description of Preferred Securities-Special
Event Redemption or Distribution".
Income from Preferred Securities
In the opinion of Carter, Ledyard & Milburn, JCP&L Capital
will be treated as a partnership for federal income tax purposes.
Accordingly, each holder of Preferred Securities (a "Preferred
Securityholder") will be required to include in gross income such
holder's distributive share of the income of JCP&L Capital. Such
income will not exceed Dividends received on such Preferred
Securities, except in limited circumstances as described below
under "Potential Extension of Interest Payment Period". No
portion of such income will be eligible for the dividends
received deduction.
If the Subordinated Debentures were not treated as debt, or
if JCP&L Capital were not treated as a partnership, for United
States income tax purposes, holders of Preferred Securities could
experience tax consequences different from those described below.
Disposition of Preferred Securities
Gain or loss will be recognized on a sale (including a
redemption for cash) of Preferred Securities in an amount equal
to the difference between the amount realized and the Preferred
Securityholder's tax basis in the Preferred Securities sold.
Gain or loss recognized by a Preferred Securityholder on the sale
or exchange of a Preferred Security held for more than one year
will generally be taxable as long-term capital gain or loss.
Receipt of Subordinated Debentures Upon Liquidation of JCP&L
Capital
Under certain circumstances described under the caption
"Description of Preferred Securities-Special Event Redemption or
Distribution", JCP&L Capital may dissolve and cause Subordinated
Debentures to be distributed to the holders of Preferred
Securities in liquidation of such holders' interests in JCP&L
Capital. As described in "Description of Preferred Securities-
Special Event Redemption or Distribution", in the case of a
Special Event, Subordinated Debentures may not be distributed to
the holders of Preferred Securities in connection with a
dissolution of JCP&L Capital unless JCP&L Capital receives an
39
<PAGE>
opinion of tax counsel to the effect that the holders of the
Preferred Securities will not recognize any gain or loss for
federal income tax purposes as a result of such dissolution and
distribution. Such a tax-free transaction would result in the
holder of Preferred Securities receiving an aggregate tax basis
in the Subordinated Debentures equal to such holder's aggregate
tax basis in the holder's Preferred Securities. A holder's
holding period in such Subordinated Debentures would include the
period for which the Preferred Securities were held by such
holder.
JCP&L Capital Information Returns and Audit Procedures
The General Partner will furnish each Preferred Security-
holder with a Schedule K-1 each year setting forth such Preferred
Securityholder's allocable share of income for the prior calendar
year. The General Partner is required to furnish such schedules
as soon as practicable following the end of the year, but in any
event prior to March 31.
Any person who holds Preferred Securities as a nominee for
another person is required to furnish to JCP&L Capital (a) the
name, address and taxpayer identification number of the
beneficial owner and the nominee; (b) information as to whether
the beneficial owner is (i) a person that is not a United States
person, (ii) a foreign government, an international organization
or any wholly owned agency or instrumentality of either of the
foregoing, or (iii) a tax-exempt entity; (c) the amount and
description of Preferred Securities held, acquired or transferred
for the beneficial owner; and (d) certain information including
the dates of acquisitions and transfers, means of acquisitions
and transfers, and acquisition cost for purchases, as well as the
amount of net proceeds from sales. Brokers and financial
institutions are required to furnish additional information,
including whether they are United States persons and certain
information on Preferred Securities they acquire, hold or
transfer for their own accounts. A penalty of $50 per failure
(up to a maximum of $100,000 per calendar year) is imposed by the
Code for failure to report such information to JCP&L Capital.
The nominee is required to supply the beneficial owners of
Preferred Securities with the information furnished to JCP&L
Capital.
Potential Extension of Interest Payment Period
Under the terms of the Indenture, the Company has the right
to extend from time to time the interest payment period on the
Subordinated Debentures for up to 60 consecutive months. JCP&L
Capital and the Company currently believe that the extension of
an interest payment period is remote. Because the interest
payment period is extendable by the Company, the interest on the
Subordinated Debentures will be treated as "original issue
discount" pursuant to Code sections 1271 et seq. and the Treasury
Regulations promulgated thereunder. In the event that the
interest payment period is extended, JCP&L Capital will continue
to accrue income, on an economic accrual basis, generally equal
40
<PAGE>
to the amount of the interest payment due at the end of the
extended interest payment period, over the length of the extended
interest payment period. Similar treatment would apply to
Subordinated Debentures distributed to holders of Preferred
Securities.
Accrued income will be allocated, but not distributed, to
holders of record on the Business Day preceding the last day of
each calendar month. As a result, holders of record during an
extended interest payment period will include interest in gross
income in advance of the receipt of cash, and any such holders
who dispose of Preferred Securities prior to the record date for
the payment of Dividends following such extended interest payment
period will include interest in gross income but will not receive
any cash related thereto from the Company or JCP&L Capital. A
holder's tax basis in a Preferred Security will be increased by
the amount of any interest that is included in income without a
receipt of cash, and will be decreased when and if such cash is
subsequently received from JCP&L Capital. The subsequent receipt
of such cash will not be includible in gross income.
United States Alien Holders
For purposes of this discussion, a "United States Alien
Holder" is any holder who or which is (i) a nonresident alien
individual or (ii) a foreign corporation, partnership or estate
or trust, in each case not subject to United States federal
income tax on a net income basis in respect of a Preferred
Security.
Under current United States federal income tax law, subject
to the discussion below with respect to backup withholding, and
assuming satisfaction by the Company of its withholding tax
obligations, if any:
(i) payments by JCP&L Capital or any of its paying
agents to any holder of a Preferred Security who or
which is a United States Alien Holder will not be
subject to United States federal withholding tax
provided that (a) the beneficial owner of the Preferred
Security does not actually or constructively own 10% or
more of the total combined voting power of all classes
of stock of the Company or 10% or more of the Preferred
Securities entitled to vote, (b) the beneficial owner
of the Preferred Security is not a controlled foreign
corporation that is related to the Company or JCP&L
Capital through stock ownership, and (c) either: (x)
the beneficial owner of the Preferred Security
certifies to JCP&L Capital or its agent, under
penalties of perjury, that it is a United States Alien
Holder and provides its name and address or (y) the
holder of the Preferred Security is a securities
clearing organization, bank or other financial
institution that holds customers' securities in the
ordinary course of its trade or business (a "financial
institution"), and such holder certifies to JCP&L
41
<PAGE>
Capital or its agent, under penalties of perjury, that
such statement has been received from the beneficial
owner by it or by a financial institution between it
and the beneficial owner and furnishes JCP&L Capital or
its agent with a copy thereof; and
(ii) a United States Alien Holder of a Preferred
Security will generally not be subject to United States
federal withholding or income tax on any gain realized
on the sale or exchange of a Preferred Security unless
such holder is present in the United States for 183
days or more in the taxable year of sale and either has
a "tax home" in the United States or certain other
requirements are met.
Backup Withholding and Information Reporting
In general, information reporting requirements will apply to
payments of the proceeds of the sale of Preferred Securities
within the United States to noncorporate United States holders,
and "backup withholding" at a rate of 31% will apply to such
payments if the United States holder fails to provide an accurate
taxpayer identification number.
Payments of the proceeds from the sale by a United States
Alien Holder of Preferred Securities made to or through a foreign
office of a broker will not be subject to information reporting
or backup withholding, except that, if the broker is a United
States person, a controlled foreign corporation for United States
tax purposes or a foreign person 50% or more of whose gross
income is effectively connected with a United States trade or
business for a specified three-year period, information reporting
may apply to such payments. Payments of the proceeds from the
sale of Preferred Securities to or through the United States
office of a broker is subject to information reporting and backup
withholding unless the holder or beneficial owner certifies as to
its non-United States status or otherwise establishes an
exemption from information reporting and backup withholding.
Similar backup withholding and information reporting would also
apply to Subordinated Debentures distributed to holders of
Preferred Securities.
PLAN OF DISTRIBUTION
JCP&L Capital may offer or sell Preferred Securities to one
or more underwriters for public offering and sale by them. JCP&L
Capital may sell Preferred Securities as soon as practicable
after effectiveness of the Registration Statement, provided that
favorable market conditions exist. Any such underwriter involved
in the offer and sale of the Preferred Securities will be named
in an applicable Prospectus Supplement.
Underwriters may offer and sell the Preferred Securities at
a fixed price or prices, which may be changed, or from time to
time at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
42
<PAGE>
In connection with the sale of Preferred Securities, underwriters
may be deemed to have received compensation from the Company
and/or JCP&L Capital in the form of underwriting discounts or
commissions. Underwriters may sell Preferred Securities to or
through dealers, and such dealers may receive compensation in the
form of discounts, concessions or commissions from the
underwriters.
Any underwriting compensation paid by the Company and/or
JCP&L Capital to underwriters in connection with the offering of
Preferred Securities, and any discounts, concessions or
commissions allowed by underwriters to participating dealers,
will be set forth in an applicable Prospectus Supplement.
Underwriters and dealers participating in the distribution of the
Preferred Securities may be deemed to be underwriters, and any
discounts and commissions received by them and any profit
realized by them on resale of the Preferred Securities may be
deemed to be underwriting discounts and commissions, under the
Securities Act. Underwriters and dealers may be entitled, under
agreement with the Company and/or JCP&L Capital, to
indemnification against and contribution toward certain
liabilities, including liabilities under the Securities Act, and
to reimbursement by the Company and/or JCP&L Capital for certain
expenses.
Underwriters and dealers may engage in transactions with, or
perform services for, the Company and/or JCP&L Capital and/or any
of their affiliates in the ordinary course of business.
Each series of Preferred Securities will be a new issue of
securities and will have no established trading market. Any
underwriters to whom Preferred Securities are sold by JCP&L
Capital for public offering and sale may make a market in such
Preferred Securities, but such underwriters will not be obligated
to do so and may discontinue any market making at any time
without notice. The Preferred Securities may or may not be
listed on a national securities exchange. No assurance can be
given as to the liquidity of or the trading markets for any
Preferred Securities.
LEGAL OPINIONS
Certain legal matters will be passed upon for the Company
and JCP&L Capital by Berlack, Israels & Liberman, New York, New
York, and Richard S. Cohen, Esq., Corporate Counsel of the
Company, and for any underwriters by Winthrop, Stimson, Putnam &
Roberts, New York, New York. Certain matters of Delaware law
relating to the validity of the Preferred Securities will be
passed upon by Richards, Layton & Finger, Wilmington, Delaware,
special Delaware counsel to JCP&L Capital and the General
Partner. Berlack, Israels & Liberman and Winthrop, Stimson,
Putnam & Roberts may rely on the opinion of Richard S. Cohen,
Esq., as to matters of New Jersey law, and Berlack, Israels &
Liberman, Richard S. Cohen, Esq., and Winthrop, Stimson, Putnam &
Roberts may rely on the opinion of Richards, Layton & Finger as
to matters of Delaware law. Members and attorneys of Berlack,
43
<PAGE>
Israels & Liberman own an aggregate of 12,595 shares of the
Common Stock of the Company's parent, GPU. In addition, one such
member holds 986 such shares as custodian for his children.
Richard S. Cohen, Esq., owns an aggregate of 970 shares, and
units representing 1,499 shares, of the Common Stock of GPU.
EXPERTS
The financial statements and financial statement schedules
included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1993 are incorporated herein by reference in
reliance on the report of Coopers & Lybrand, independent
accountants, given on the authority of said firm as experts in
auditing and accounting. The report of Coopers & Lybrand,
included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1993 incorporated herein by reference,
contains explanatory paragraphs related to a contingency which
has resulted from the accident at Unit 2 of the Three Mile Island
nuclear generating station and the change in the method of
accounting for unbilled revenues in 1991.
44
<PAGE>
No person has been authorized to
give any information or to make any ______ Preferred
representations other than those Securities
contained in this Prospectus Supplement
or the Prospectus, and, if given or JCP&L Capital
made, such information or
representations must not be relied upon % Cumulative
as having been authorized. This Monthly Income
Prospectus Supplement and the Prospectus P r e f e r r e d
Securities,
do not constitute an offer to sell or a Series A
solicitation of an offer to buy any guaranteed to the
securities other than the securities extent the issuer
described in this Prospectus Supplement has funds as set
or an offer to sell or the solicitation forth herein by
of an offer to buy such securities in
any circumstances in which such offer
or solicitation is unlawful. Neither JERSEY CENTRAL
the delivery of this Prospectus POWER & LIGHT
Supplement or the Prospectus nor any COMPANY
sale made hereunder or thereunder
shall, under any circumstances, create
any implication that the information
contained herein or therein is correct
as of any time subsequent to the date
of such information.
___________________ PROSPECTUS
SUPPLEMENT
TABLE OF CONTENTS
Prospectus Supplement
Page
JCP&L Capital . . . . . . . . . . . .
Jersey Central Power & Light Company
Certain Investment Considerations . .
Use of Proceeds . . . . . . . . . . .
Certain Terms of the Series A
Preferred Securities . . . . . . .
Certain Terms of the Series A
Subordinated Debentures . . . . .
Underwriting . . . . . . . . . . . .
Prospectus
Available Information . . . . . . . .
Incorporation of Certain Documents
by Reference . . . . . . . . . . .
Jersey Central Power & Light Company
Financing Program . . . . . . . . . .
Certain Company Consolidated Financial
Information . . . . . . . . . . . Merrill Lynch & Co.
Company Coverage Ratios . . . . . . .
Use of Proceeds . . . . . . . . . . .
JCP&L Capital . . . . . . . . . . . .
Description of Preferred Securities .
Description of the Guarantee . . . .
Description of the Subordinated Debentures
United States Taxation . . . . . . .
Plan of Distribution . . . . . . . .
Legal Opinions . . . . . . . . . . . Representatives of the
Experts . . . . . . . . . . . . . . . Underwriters
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Filing fees - Securities and Exchange
Commission . . . . . . . . . . . . $ 45,104
Printing and engraving . . . . . . . . 30,000*
New York Stock Exchange listing fee . . 47,800*
Legal fees:
Berlack, Israels & Liberman . . . . 70,000*
Richard S. Cohen, Esq. . . . . . . . 15,000*
Carter, Ledyard & Milburn . . . . . 15,000*
Richards, Layton & Finger . . . . . 10,000*
Blue Sky fees and expenses . . . . . . 15,000*
Accounting fees:
Coopers & Lybrand . . . . . . . . . 15,000*
Indenture Trustee fees and expenses . . 20,000*
Rating agencies fees and expenses . . . 48,125*
Miscellaneous . . . . . . . . . . . . 28,971*
Total . . . . . . . . . . . . . . $360,000*
_________________
* Estimated
Item 15. Indemnification of Directors and Officers
The By-Laws of the Company provide, in part, as follows:
"32. (a) The corporation shall indemnify any person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed civil, criminal, administrative
or arbitrative action, suit or proceeding, and any appeal therein
and any inquiry or investigation which could lead to such action,
suit or proceeding, other than a proceeding by or in the right of
the corporation, by reason of the fact that he was a director,
officer or employee of the corporation (and may indemnify any
person who was an agent of the corporation), or a person serving
at the request of the corporation as a director, officer,
trustee, employee or agent of another corporation, partnership,
joint venture, sole proprietorship, trust, employee benefit plan
or other enterprise, whether or not for profit, to the fullest
extent permitted by law, including without limitation
indemnification against liabilities (amounts paid or incurred in
satisfaction of settlements, judgments, fines and penalties) and
expenses (reasonable costs, disbursements and counsel fees)
incurred by such person in connection with such proceeding, if
(i) such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the
best interest of the corporation; and
II-1<PAGE>
(ii) with respect to any criminal proceeding, such
person had no reasonable cause to believe his
conduct was unlawful.
The termination of any proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its
equivalent, shall not of itself create a presumption that such
person did not meet the applicable standards of conduct set forth
in Section 32(a)(i) or in Section 32(a)(ii).
(b) The corporation shall pay the expenses of a person
in connection with any proceeding by or in the right of the
corporation to procure a judgment in its favor which involves
such person by reason of his being or having been a director,
officer or employee of the corporation (and may pay the expenses
of an agent of the corporation) if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the
best interests of the corporation. However, in such proceeding
no indemnification shall be provided in respect of any claim,
issue or matter as to which such person shall have been adjudged
to be liable to the corporation, unless and only to the extent
that the Superior Court or the court in which such proceeding was
brought shall determine upon application that despite the
adjudication of liability, but in view of all circumstances of
the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the Superior Court or such other
court shall deem proper.
(c) The corporation shall indemnify a corporate agent,
as defined in N.J.S. 14A:3-5(1), against expenses to the extent
that such corporate agent has been successful on the merits or
otherwise in any proceeding referred to in Section 32(a) and (b)
or in defense of any claim, issue or matter therein.
(d) Any indemnification under Section 32(a) and,
unless ordered by a court, under Section 32(b), may be made by
the corporation only as authorized in a specific case upon a
determination that indemnification is proper in the circumstances
because the director, officer, employee or agent met the
applicable standard of conduct set forth therein. Unless
otherwise provided in the Certificate of Incorporation or By-
Laws, such determination shall be made
(i) by the Board of Directors or a committee thereof,
acting by a majority vote of a quorum consisting
of directors who were not parties to or otherwise
involved in the proceeding; or
(ii) if such a quorum is not obtainable, or, even if
obtainable and such quorum of the Board of
Directors or committee by a majority vote of the
disinterested directors so directs, by independent
legal counsel, in a written opinion, such counsel
to be designated by the Board of Directors.
II-2<PAGE>
(e) Expenses incurred by a director, officer or
employee in connection with such a proceeding shall (and expenses
incurred by an agent in connection with such a proceeding may) be
paid by the corporation in advance of the final disposition of
the proceeding as authorized by the Board of Directors upon
receipt of an undertaking by or on behalf of such person to repay
such amount if it shall ultimately be determined that he is not
entitled to be indemnified as provided in this section.
(f) The indemnification and advancement of expenses
provided by or granted pursuant to the other subsections of this
section shall not exclude any other rights, including the right
to be indemnified against liabilities and expenses incurred in
proceedings by or in the right of the corporation, to which a
person may be otherwise entitled provided that no indemnification
shall be made to or on behalf of a person if a judgment or other
final adjudication adverse to such person establishes that his
acts or omissions (a) were in breach of his duty of loyalty to
the corporation or its shareholders, as defined in subsection (3)
of N.J.S. 14A:2-7, (b) were not in good faith or involved a
knowing violation of law or (c) resulted in receipt by the
corporate agent of an improper personal benefit.
(g) The corporation shall have the power to purchase
and maintain insurance on behalf of any director, officer,
employee or agent of the corporation against any expenses
incurred in any proceeding and any liabilities asserted against
him by reason of his being or having been such, whether or not
the corporation would have the power to indemnify him against
such expenses and liabilities under the provisions of this
section. The corporation may purchase such insurance from, or
such insurance may be reinsured in whole or in part by, an
insurer owned by or otherwise affiliated with the corporation,
whether or not such insurer does business with other insureds.
(h) For purposes of this section: (i) the corporation
shall be deemed to have requested an officer, director, employee
or agent to serve as fiduciary with respect to an employee
benefit plan where the performance by such person of duties to
the corporation also imposes duties on, or otherwise involves
services by, such person as a fiduciary with respect to the plan;
(ii) excise taxes assessed with respect to any transaction with
an employee benefit plan shall be deemed "fines"; and (iii)
action taken or omitted by such person with respect to an
employee benefit plan in the performance of duties for a purpose
reasonably believed to be in the interest of the participants and
beneficiaries of the plan shall be deemed to be for a purpose
which is not opposed to the best interests of the corporation.
(i) All rights of indemnification under this section
shall be deemed a contract between the corporation and the person
entitled to indemnification under this section pursuant to which
the corporation and each such person intend to be legally bound.
Any repeal, amendment or modification thereof shall be
prospective only and shall not limit, but may expand, any rights
or obligations in respect of any proceeding whether commenced
prior to or after such change to the extent such proceeding
pertains to actions or
II-3<PAGE>
failures to act occurring prior to such change.
(j) The indemnification and advancement of expenses
provided by, or granted pursuant to, this section shall continue
as to a person who has ceased to be an officer, director,
employee or agent in respect of matters arising prior to such
time, and shall inure to the benefit of the heirs, executors and
administrators of such person."
The Limited Partnership Agreement provides, in part as
follows:
"Section 9.03 Indemnification. To the fullest extent permitted
by applicable law, except as set forth in Section 8.03(c), an
Indemnified Person shall be entitled to indemnification from the
Partnership for any loss, damage or claim incurred by such
Indemnified Person by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the
Partnership and in a manner reasonably believed to be within the
scope of authority conferred on such Indemnified Person by this
Agreement, except that no Indemnified Person shall be entitled to
be indemnified in respect of any loss, damage or claim incurred
by such Indemnified Person by reason of willful misconduct, gross
negligence or fraud with respect to such acts or omissions;
provided, however, that any indemnity under this Section 9.03
shall be provided out of and to the extend of Partnership assets
only, and except as otherwise expressly provided in Section
9.01(a) or by the Delaware Act, no Covered Person shall have any
personal liability on account thereof. To the fullest extent
permitted by applicable law, expenses (including legal fees)
incurred by an Indemnified Person in defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced
by the Partnership prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the
Partnership of an undertaking by or on behalf of the Indemnified
Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as
authorized in this Section 9.03."
Section 14A:3-5 of the New Jersey Business Corporation Act
provides authority for corporations to indemnify under certain
circumstances their officers, directors and other agents against
expenses and liabilities incurred in connection with proceedings
arising out of such person's having taken action on behalf of the
corporation.
In addition, applicable Delaware partnership law provides
authority for limited partnerships to indemnify under certain
circumstances any partner or other person from and against any
and all claims and demands.
The foregoing rights of indemnification shall apply to any
liability of any director or officer, partner or other person (or
his legal representatives) arising under any of the provisions of
the Securities Act of 1933, as amended, only to the extent that
such rights of indemnification may be determined to be valid by a
court of competent jurisdiction.
II-4<PAGE>
The directors and officers of the Company are insured under
policies of insurance, within the limits and subject to the
limitations of the policies, against claims made against them for
acts in the discharge of their duties and, subject to certain
exceptions, the Company is insured to the extent that it is
required or permitted by law to indemnify the directors and
officers of such loss. The premiums for such insurance are paid
by the Company.
Item 16. Exhibits:
Exhibit No. Description
1-A -Form of Underwriting Agreement relating to
Preferred Securities - To be filed by amendment.
3-A -Restated Certificate of Incorporation of the
Company, as amended - Incorporated by reference to
Exhibit 3-A, 1990 Annual Report on Form 10-K, SEC
File No. 1-3141.
3-B -Certificate of Amendment to Restated Certificate
of Incorporation, dated June 19, 1992 -
Incorporated by reference to Exhibit A-2(a),
Certificate Pursuant to Rule 24, SEC File No.
70-7949.
3-C -Certificate of Amendment to Restated Certificate
of Incorporation, dated June 19, 1992 -
Incorporated by reference to Exhibit A-2(a)(i),
Certificate Pursuant to Rule 24, SEC File No.
70-7949.
3-D -By-Laws of the Company, as amended - Incorporated
by reference to Exhibit 3-B, 1993 Annual Report on
Form 10-K, SEC File No. 1-3141.
3-E -Certificate of Incorporation of JCP&L Preferred
Capital, Inc. - Incorporated by reference to
Exhibit A-1, Application on Form U-1, SEC File No.
70-8495.
3-F -Form of By-Laws of JCP&L Preferred Capital, Inc.
-Incorporated by reference to Exhibit A-2,
Application on Form U-1, SEC File No. 70-8495.
3-G -Certificate of Limited Partnership of JCP&L
Capital - Incorporated by reference to Exhibit A-
3, Application on Form U-1, SEC File No. 70-8495.
3-H -Form of Limited Partnership Agreement of JCP&L
Capital - Incorporated by reference to Exhibit A-
4, Application on Form U-1, SEC File No. 70-8495.
II-5<PAGE>
3-I -Form of Amended and Restated Limited Partnership
Agreement of JCP&L Capital - Incorporated by
reference to Exhibit A-5, Application on Form U-1,
SEC File No. 70-8495.
3-J -Form of Action Creating Preferred Securities -
Incorporated by reference to Exhibit A-6,
Application on Form U-1, SEC File No. 70-8495.
4-A -Form of Subordinated Debenture Indenture -
Incorporated by reference to Exhibit A-8,
Application on Form U-1, SEC File No. 70-8495.
4-A(1) -Cross-reference sheet showing location in the
Subordinated Debenture Indenture of provisions of
Sections 310(a) through 318(a) of the Trust
Indenture Act of 1939 (Included in Form of
Subordinated Debenture Indenture filed as Exhibit
4-A).
4-B -Form of Preferred Security Certificate -
Incorporated by reference to Exhibit A to Exhibit
3-I hereto.
4-C -Form of Subordinated Debenture - Incorporated by
reference to form of Subordinated Debenture
contained in Exhibit 4-A.
4-D -Form of Payment and Guarantee Agreement -
Incorporated by reference to Exhibit B-1,
Application on Form U-1, SEC File No. 70-8495.
5-A -Opinion of Berlack, Israels & Liberman - to be
filed by amendment.
5-B -Opinion of Richard S. Cohen, Esq. - to be filed
by amendment.
5-C -Opinion of Richards, Layton & Finger - to be
filed by amendment.
8 -Opinion of Carter, Ledyard & Milburn - to be
filed by amendment.
12-A -Statement Showing Computation of Ratio of
Earnings to Fixed Charges and Computation of Ratio
of Earnings to Combined Fixed Charges and
Preferred Stock Dividends.
23-A -Consent of Berlack, Israels & Liberman (to be
included in their opinion filed as Exhibit 5-A).
23-B -Consent of Richard S. Cohen, Esq. (to be included
in his opinion filed as Exhibit 5-B).
II-6<PAGE>
23-C -Consent of Richards, Layton & Finger (to be
included in their opinion filed as Exhibit 5-C).
23-D -Consent of Carter, Ledyard & Milburn (to be
included in their opinion filed as Exhibit 8).
23-E -Consent of Coopers & Lybrand.
24 -Power of Attorney-included in signature page.
25 -Statement of Eligibility of Trustee under the
Trust Indenture Act of 1939.
_________
The Exhibits listed above which have heretofore been filed
with the Securities and Exchange Commission and which are
designated in prior filings as noted above, are hereby
incorporated by reference and made a part hereof with the same
effect as if filed herewith.
Item 17. Undertakings.
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement (i) to include any prospectus required by
section 10(a)(3) of the Securities Act of 1933; (ii) to reflect
in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement; and (iii) to include any
material information with respect to the plan of distribution not
previously disclosed in the registration statement or any
material change to such information in the registration
statement; provided, however, that clauses (i) and (ii) above do
not apply if the information required to be included in a post-
effective amendment by those clauses is contained in periodic
reports filed by a registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purposes of determining any
liability under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
II-7<PAGE>
(4) That, for purposes of determining any liability
under the Securities Act of 1933, each filing of a registrant's
annual report pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference
in the registration statement shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrants pursuant to the
foregoing provisions or otherwise, the registrants have been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by a registrant
of expenses incurred or paid by any such persons in the
successful defense of any action, suit or proceeding) is asserted
by any such person in connection with the securities being
registered, the registrants will, unless in the opinion of their
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of
whether such indemnification by them is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
II-8<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the Township of Morris, State of New Jersey on the 2nd day of
March, 1995.
JERSEY CENTRAL POWER & LIGHT COMPANY
By:
D. Baldassari, President
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that Jersey Central Power &
Light Company and each of its undersigned officers and directors
hereby constitute and appoint each of Richard S. Cohen, John G.
Graham, Terrance G. Howson, Ira H. Jolles and Douglas E. Davidson
his/her/its true and lawful attorney-in-fact and agent with full
power of substitution and resubstitution for him/her/it and in
his/her/its name, place and stead, in any and all capacities, to
sign all or any amendments (including post-effective amendments)
of and supplements to this Registration Statement on Form S-3 and
to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange
Commission, granting unto each such attorney-in-fact and agent
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, to all intents and purposes and as fully as said
Corporation itself and each said officer or director might or
could do in person, hereby ratifying and confirming all that each
such attorney-in-fact and agent, or his/her substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following persons in the capacities with respect to Jersey
Central Power & Light Company and on the dates indicated.
II-9<PAGE>
Signature Title Date
Chairman (Principal March 2, 1995
(J.R. Leva) Executive Officer) and
Director
President and Director March 2, 1995
(D. Baldassari)
Vice President March 2, 1995
(J.G. Graham) (Principal Financial
Officer) and Director
Vice President, March 2, 1995
(D.W. Myers) Comptroller (Principal
Accounting Officer) and
Director
Vice President and March 2, 1995
(M.P. Morrell) Director
Director March 2, 1995
(R.C. Arnold)
Director March 2, 1995
(G.E. Persson)
Director March 2, 1995
(S.C. Van Ness)
Director March 2, 1995
(S.B. Wiley)
II-10<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the Township of Morris, State of New Jersey on the 2nd day of
March, 1995.
JCP&L CAPITAL, L.P.
By: JCP&L Preferred Capital, Inc.,
its general partner
By:
D. Baldassari, President
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that JCP&L Capital, L.P. and the
undersigned director of JCP&L Preferred Capital, Inc. hereby
constitute and appoint each of Richard S. Cohen, John G. Graham,
Terrance G. Howson, Ira H. Jolles and Douglas E. Davidson its/his
true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution for it/him and in its/his name,
place and stead, in any and all capacities, to sign all or any
amendments (including post-effective amendments) of and
supplements to this Registration Statement on Form S-3 and to
file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each such attorney-in-fact and agent
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, to all intents and purposes and as fully as said
limited partnership itself and said director might or could do in
person, hereby ratifying and confirming all that each such
attorney-in-fact and agent, or his substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following person in the capacity on behalf of JCP&L Preferred
Capital, Inc., as the general partner of JCP&L Capital, L.P., and
on the date indicated.
Signature Title Date
_______________________ Sole Director March 2, 1995
D. Baldassari
II-11<PAGE>
EXHIBIT INDEX
Exhibit No. Description
1-A -Form of Underwriting Agreement relating to
Preferred Securities - To be filed by amendment.
3-A -Restated Certificate of Incorporation of the
Company, as amended-Incorporated by reference to
Exhibit 3-A, 1990 Annual Report on Form 10-K, SEC
File No. 1-3141.
3-B -Certificate of Amendment to Restated Certificate
of Incorporation, dated June 19, 1992 -
Incorporated by reference to Exhibit A-2(a),
Certificate Pursuant to Rule 24, SEC File No.
70-7949.
3-C -Certificate of Amendment to Restated Certificate
of Incorporation, dated June 19, 1992 -
Incorporated by reference to Exhibit A-2(a)(i),
Certificate Pursuant to Rule 24, SEC File No.
70-7949.
3-D -By-Laws of the Company, as amended - Incorporated
by reference to Exhibit 3-B, 1993 Annual Report on
Form 10-K, SEC File No. 1-3141.
3-E -Certificate of Incorporation of JCP&L Preferred
Capital, Inc. - Incorporated by reference to
Exhibit A-1, Application on Form U-1, SEC File No.
70-8495.
3-F -Form of By-Laws of JCP&L Preferred Capital, Inc.
-Incorporated by reference to Exhibit A-2,
Application on Form U-1, SEC File No. 70-8495.
3-G -Certificate of Limited Partnership of JCP&L
Capital - Incorporated by reference to Exhibit A-
3, Application on Form U-1, SEC File No. 70-8495.
3-H -Form of Limited Partnership Agreement of JCP&L
Capital - Incorporated by reference to Exhibit A-
4, Application on Form U-1, SEC File No. 70-8495.
3-I -Form of Amended and Restated Limited Partnership
Agreement of JCP&L Capital - Incorporated by
reference to Exhibit A-5, Application on Form U-1,
SEC File No. 70-8495.
3-J -Form of Action Creating Preferred Securities -
Incorporated by reference to Exhibit A-6,
Application on Form U-1, SEC File No. 70-8495.<PAGE>
4-A -Form of Subordinated Debenture Indenture -
Incorporated by reference to Exhibit A-8,
Application on Form U-1, SEC File No. 70-8495.
4-A(1) -Cross-reference sheet showing location in the
Subordinated Debenture Indenture of provisions of
Sections 310(a) through 318(a) of the Trust
Indenture Act of 1939 (Included in Form of
Subordinated Debenture Indenture filed as Exhibit
4-A).
4-B -Form of Preferred Security Certificate -
Incorporated by reference to Exhibit A to Exhibit
3-I hereto.
4-C -Form of Subordinated Debenture - Incorporated by
reference to form of Subordinated Debenture
contained in Exhibit 4-A.
4-D -Form of Payment and Guarantee Agreement -
Incorporated by reference to Exhibit B-1,
Application on Form U-1, SEC File No. 70-8495.
5-A -Opinion of Berlack, Israels & Liberman - to be
filed by amendment.
5-B -Opinion of Richard S. Cohen, Esq. - to be filed
by amendment.
5-C -Opinion of Richards, Layton & Finger - to be
filed by amendment.
8 -Opinion of Carter, Ledyard & Milburn - to be
filed by amendment.
12-A -Statement Showing Computation of Ratio of
Earnings to Fixed Charges and Computation of Ratio
of Earnings to Combined Fixed Charges and
Preferred Stock Dividends.
23-A -Consent of Berlack, Israels & Liberman (to be
included in their opinion filed as Exhibit 5-A).
23-B -Consent of Richard S. Cohen, Esq. (to be included
in their opinion filed as Exhibit 5-B).
23-C -Consent of Richards, Layton & Finger (to be
included in their opinion filed as Exhibit 5-C).
23-D -Consent of Carter, Ledyard & Milburn (to be
included in their opinion filed as Exhibit 8).
23-E -Consent of Coopers & Lybrand.
24 -Power of Attorney-included in signature page.<PAGE>
25 -Statement of Eligibility of Trustee under the
Trust Indenture Act of 1939.<PAGE>
STATEMENT OF DIFFERENCES
Difference Description
1. The statements on page 2 of A statement that the
each Prospectus will be in registration statement
the left-hand margin on the has been filed and has
cover pages printed not become effective.
vertically.
2. The page numbers in the The printed and distri-
electronic document do buted document will have
not correspond to the pages fewer pages than the filed
in the printed document. document because there is
more material on each page
of the printed document
and Part II is not part of
the printed document.<PAGE>
EXHIBITS TO BE FILED BY EDGAR
Exhibits:
12-A -Statement ShowingComputation of Ratio of Earnings
to Fixed Charges and Computation of Ratio of
Earnings to Combined Fixed Charges and Preferred
Stock Dividends.
23-E -Consent of Coopers & Lybrand.
25 -Statement of Eligibility of Trustee under the
Trust Indenture Act of 1939.<PAGE>
<TABLE>
Exhibit 12-A
Page 1 of 2
JERSEY CENTRAL POWER & LIGHT COMPANY
STATEMENT SHOWING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS BASED ON SEC REGULATION S-K, ITEM 503
(In Thousands)
<CAPTION>
Twelve Months Ended
(unaudited)
December 31, December 31, December 31, December 31, December 31,
1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C>
OPERATING REVENUES $1 604 962 $1 773 219 $1 774 071 $1 935 909 $1 952 425
OPERATING EXPENSES 1 358 796 1 519 908 1 536 596 1 600 984 1 622 399
Interest portion
of rentals (A) 15 925 13 085 12 414 10 944 10 187
Net expense 1 342 871 1 506 823 1 524 182 1 590 040 1 612 212
OTHER INCOME:
Allowance for funds
used during
construction 9 300 8 683 8 071 4 756 4 143
Other income, net 24 519 20 664 21 519 6 281 21 995
Total other income 33 819 29 347 29 590 11 037 26 138
EARNINGS AVAILABLE FOR FIXED
CHARGES AND PREFERRED
STOCK DIVIDENDS
(excluding taxes
based on income) $ 295 910 $ 295 743 $ 279 479 $ 356 906 $ 366 351
FIXED CHARGES:
Interest on funded
indebtedness $ 78 196 $ 85 420 $ 92 942 $ 100 246 $ 93 477
Other interest 14 945 11 540 4 873 6 530 14 726
Interest portion
of rentals (A) 15 925 13 085 12 414 10 944 10 187
Total fixed charges $ 109 066 $ 110 045 $ 110 229 $ 117 720 $ 118 390
RATIO OF EARNINGS TO
FIXED CHARGES 2.71 2.69 2.54 3.03 3.09
Preferred stock dividend
requirement 16 313 19 440 20 604 16 810 14 795
Ratio of income before
provision for income
taxes to net income (B) 147.7% 146.8% 144.2% 151.1% 152.2%
Preferred stock dividend
requirement on a pretax
basis 24 094 28 538 29 711 25 400 22 529
Fixed charges, as above 109 066 110 045 110 229 117 720 118 390
Total fixed charges
and preferred
stock dividends $ 133 160 $ 138 583 $ 139 940 $ 143 120 $ 140 919
RATIO OF EARNINGS TO
COMBINED FIXED CHARGES
AND PREFERRED STOCK
DIVIDENDS 2.22 2.13 2.00 2.49 2.60<PAGE>
Exhibit 12-A
Page 2 of 2
JERSEY CENTRAL POWER & LIGHT COMPANY
STATEMENTS SHOWING COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS BASED ON SEC REGULATION S-K, ITEM 503
(In Thousands)
<FN>
NOTES:
(A) The Company has included the equivalent of the interest portion of all
rentals charged to income as fixed charges for this statement and has
excluded such components from Operating Expenses.
(B) Represents income before provision for income taxes of $247,961, $239,187,
$169,250, $185,698 and $186,844 for the years 1994 through 1990,
respectively, divided by income before cumulative effect of accounting
change of $162,841, $158,344, $117,361, $126,460 and $126,532,
respectively.
</FN>
</TABLE>
<PAGE>
Exhibit 23-E
(LETTERHEAD OF COOPERS & LYBRAND L.L.P)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this
Registration Statement of Jersey Central Power and Light Company
on Form S-3 of our report dated February 2, 1994, on our audits
of the financial statements and the financial statement schedules
of Jersey Central Power and Light Company as of December 31, 1993
and 1992, and for each of the three years in the period ended
December 31, 1993, which report is included in the Company's
Annual Report on Form 10-K, for the year ended December 31, 1993.
Our report on such audits contains explanatory paragraphs related
to certain contingencies which have resulted from the accident at
Unit 2 of the Three Mile Island Nuclear Generating Station; the
adoption of the provisions of the Financial Accounting Standards
Board's Statement of Financial Accounting Standards ("SFAS") No.
109 "Accounting for Income Taxes," and the provisions of SFAS No.
106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions" in 1993; and the change in the method of
accounting for unbilled revenues in 1991. We also consent to the
reference to our Firm under the caption "Experts".
/s/ Coopers & Lybrand L.L.P
New York, New York
February 28, 1995<PAGE>
Exhibit 25
FORM T-1
===================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
__________________
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) _______
__________________
UNITED STATES TRUST COMPANY OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5459866
(Jurisdiction of incorporation (I.R.S. employer
if not a U.S. national bank) identification No.)
114 West 47th Street 10036-1532
New York, NY (Zip Code)
(Address of principal
executive offices)
__________________
Jersey Central Power & Light Company
(Exact name of obligor as specified in its charter)
New Jersey 21-0485010
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
300 Madison Avenue 07962-1911
Morristown, New Jersey (Zip Code)
(Address of principal executive offices)
__________________
% Subordinated Debentures Series due 204_
(Title of the indenture securities)
===================================================<PAGE>
GENERAL
1. General Information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Federal Reserve Bank of New York (2nd District),
New York, New York
(Board of Governors of the Federal Reserve System)
Federal Deposit Insurance Corporation, Washington, D.C.
New York State Banking Department, Albany, New York
(b) Whether it is authorized to exercise corporate trust
powers.
The trustee is authorized to exercise corporate trust
powers.
2. Affiliations with the Obligor
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None
3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15:
Jersey Central Power & Light Company currently is not in
default under any of its outstanding securities for which
United States Trust Company of New York is Trustee.
Accordingly, responses to Items 3, 4, 5, 6, 7, 8, 9, 10, 11,
12, 13, 14 and 15 of Form T-1 are not required under General
Instruction B.
16. List of Exhibits.
T-1.1 - "Chapter 204, Laws of 1853, An Act to Incorporate
the United States Trust Company of New York, as
Amended", is incorporated by reference to Exhibit
T-1.1 to Form T-1 filed on September 20, 1991 with
the Securities and Exchange Commission (the
"Commission") pursuant to the Trust Indenture Act of
1939 (Registration No. 2221291).
T-1.2 - The trustee was organized by a special act of the
New York Legislature in 1853 prior to the time that
the New York Banking Law was revised to require a
Certificate of authority to commence business.
Accordingly, under New York Banking Law, the Charter
(Exhibit T-1.1) constitutes an equivalent of a
certificate of authority to commence business.<PAGE>
T-1.3 - The authorization of the trustee to exercise
corporate trust powers is contained in the Charter
(Exhibit T-1.1).
16. List of Exhibits
(Continued)
T-1.4 - The By-laws of the United States Trust Company of
New York, as amended to date, are incorporated by
reference to Exhibit T-1.4 to Form T-1 filed on
September 20, 1991 with the Commission pursuant to
the Trust Indenture Act of 1939 (Registration No.
2221291).
T-1.6 - The consent of the trustee required by Section
321(b) of the Trust Indenture Act of 1939.
T-1.7 - A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
NOTE
As of February 27, 1995, the trustee had 2,999,020 shares of
Common Stock outstanding, all of which are owned by its parent
company, U.S. Trust Corporation. The term "trustee" in Item 2,
refers to each of United States Trust Company of New York and its
parent company, U.S. Trust Corporation.
In answering Item 2 in this statement of eligibility as to
matters peculiarly within the knowledge of the obligor or its
directors, the trustee has relied upon information furnished to
it by the obligor and will rely on information to be furnished by
the obligor and the trustee disclaims responsibility for the
accuracy or completeness of such information.
__________________
Pursuant to the requirements of the Trust Indenture Act of 1939,
the trustee, United States Trust Company of New York, a
corporation organized and existing under the laws of the State of
New York, has duly caused this statement of eligibility and
qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of New York, and State
of New York, on the 27th day of February, 1995.
UNITED STATES TRUST COMPANY OF
NEW YORK, Trustee
By:
John Guiliano
Vice President
<PAGE>
Exhibit T-1.6
The consent of the trustee required by Section 321(b) of the Act.
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
March 19, 1992
Securities and Exchange Commission
450 5th Street, N.W.
Washington, DC 20549
Gentlemen:
Pursuant to the provisions of Section 321(b) of the Trust
Indenture Act of 1939, as amended by the Trust Indenture Reform
Act of 1990, and subject to the limitations set forth therein,
United States Trust Company of New York ("U.S. Trust") hereby
consents that reports of examinations of U.S. Trust by Federal,
State, Territorial or District authorities may be furnished by
such authorities to the Securities and Exchange Commission upon
request therefor.
Very truly yours,
UNITED STATES TRUST COMPANY
OF NEW YORK
By: S/Gerard F. Ganey
Senior Vice President<PAGE>
EXHIBIT T-1.7
Consolidated Report of Condition of
United States Trust Company of New York
and Foreign and Domestic Subsidiaries, a member of the Federal
Reserve System, at the close of business on September 30, 1994,
published in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of the Federal
Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depository institutions:
a. Noninterest bearing balances and currency
and coin: $356,398
b. Interest bearing balances: 70,000
Held to maturity securities: 448,254
Available for sale securities: 1,021,191
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and of its Edge and Agreement
subsidiaries, and in IBF's:
a: Federal funds sold: 24,448
b: Securities purchased under agreements
to resell: 0
Loans and lease financing receivables:
a. Loans and leases, net of unearned income: 1,392,864
b. LESS: Allowance for loan and lease losses: 12,619
c. Loans and leases, net of unearned income,
allowance and reserve: 1,380,245
Assets held in trading accounts: 0
Premises and fixed assets (including
capitalized leases): 95,900
Other real estate owned: 11,418
Investments in unconsolidated subsidiaries
and associated companies: 581
Customers' liability to this bank on acceptance
outstanding: 0
Intangible assets: 1,854
Other assets: 123,230
TOTAL ASSETS: $ 3,533,519
LIABILITIES
Deposits:
a. In domestic offices: $ 2,032,684
(1) Non interest bearing: 898,457
(2) Interest bearing: 1,134,227
b. In foreign offices, Edge and Agreement
subsidiaries, and IBF's: 7,611
(1) Noninterest bearing 0
(2) Interest bearing: 7,611
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices
of the bank and of its Edge and Agreement
subsidiaries, and in IBF's:
a. Federal funds purchased: 1,148,301
b. Securities sold under agreements
to repurchase: 8,099
Demand notes issued to the U.S. Treasury: 2,000
Trading Liabilities 0
<PAGE>
Other Borrowed Money:
With original maturity of one year or less: 35,035
With original maturity of more than one year: 0
Mortgage indebtedness and obligations under
capitalized leases: 1,243
Bank's liability on acceptances executed
and outstanding: 0
Subordinated notes and debentures: 12,453
Other liabilities: 84,934
TOTAL LIABILITIES: $ 3,332,360
Limited life preferred stock and related surplus: 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus: 0
Common Stock: $ 14,995
Surplus: 41,500
Undivided profits and capital reserves: 148,014
Net unrealized holding gains (losses)
on available-for-sale securities (3,350)
Cumulative foreign currency translation adjustments: 0
TOTAL EQUITY CAPITAL: $ 201,159
TOTAL LIABILITIES, LIMITED LIFE PREFERRED STOCK,
AND EQUITY CAPITAL: $ 3,533,519
I, RICHARD E. BRINKMANN, SENIOR VICE PRESIDENT & CONTROLLER, of
the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
RICHARD E. BRINKMANN, SVP & CONTROLLER
October 31, 1994
We, the undersigned directors, attest the correctness of this
Report of Condition and declare that it has been examined by us
and to the best of our knowledge and belief has been prepared in
conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
H. MARSHALL SCHWARZ : Directors
JEFFREY S. MAURER :
FREDERICK S. WONHAM :<PAGE>
