Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Appalachian Power Company
(Exact name of registrant as specified in its charter)
Virginia 54-0124790
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
40 Franklin Road, S.W.
Roanoke, Virginia 24011
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 540-985-2300
ARMANDO A. PENA, Treasurer
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza
Columbus, Ohio 43215
614-223-2850
(Name, address and telephone number of agent for service)
It is respectfully requested that the Commission send copies
of all notices, orders and communications to:
Simpson Thacher & Bartlett Dewey Ballantine LLP
425 Lexington Avenue 1301 Avenue of the Americas
New York, NY 10017-3909 New York, NY 10019-6092
Attention: James M. Cotter Attention: E. N. Ellis, IV
Approximate date of commencement of proposed sale to the public:
At such time or times after the effective date of the Registra-
tion Statement as the registrant shall determine.
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. [ ]
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
[ ]
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of Proposed Proposed
Each Class of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Unit* Price* Fee
Senior Notes $100,000,000 100% $100,000,000 $29,500
*Estimated solely for purpose of calculating the registration
fee.
The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until the registration statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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 JURISDICTION IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.
SUBJECT TO COMPLETION, DATED MARCH 31, 1998
PROSPECTUS
$100,000,000
APPALACHIAN POWER COMPANY
____% Senior Notes, Series B, Due 2038
The Senior Notes, Series B, Due 2038, will mature on June
30, 2038 (the "New Senior Notes"). Interest on the New Senior
Notes at the rate of _____% per annum is payable quarterly, in
arrears, on each March 31, June 30, September 30 and December 31
(each an "Interest Payment Date"), commencing June 30, 1998. The
New Senior Notes will be redeemable at 100% of the principal
amount redeemed plus accrued interest to the redemption date at
the option of the Company in whole or in part on or after April
__, 2003. The New Senior Notes will be available for purchase in
denominations of $25 and any integral multiple thereof. See
"Description of the New Senior Notes" herein.
The New Senior Notes will be direct, unsecured and
unsubordinated obligations of the Company ranking pari passu with
all other unsecured and unsubordinated obligations of the
Company. The New Senior Notes will be effectively subordinated
to all secured debt of the Company, including its first mortgage
bonds, aggregating approximately $1,102,000,000 outstanding at
December 31, 1997. The Indenture contains no restrictions on the
amount of additional indebtedness that may be incurred by the
Company.
The New Senior Notes initially will be represented by one or
more global Notes (each a "Global Note") registered in the name
of a nominee of The Depository Trust Company, as Depository, or
another depository (such a Note, so represented, being called a
"Book-Entry Note"). Beneficial interests in Global Notes
representing Book-Entry Notes will be shown on, and transfers
thereof will be effected only through, records maintained by the
Depository's participants. Book-Entry Notes will not be issuable
as certificated notes except under circumstances described
herein. See "Description of the New Senior Notes -- Book-Entry
Notes" herein.
Application will be made to have the New Senior Notes listed
on the New York Stock Exchange ("NYSE").
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Price to Underwriting Proceeds to
Public(1) Discount(2)(4) Company(3)(4)
Per New
Senior Note . 100.00% ____% __.___%
Total . . . . $100,000,000 $_,___,___ $___,___,___
(1) Plus accrued interest, if any, from the date of original
issuance.
(2) The Company has agreed to indemnify the Underwriters against
certain liabilities, including certain liabilities under the
Securities Act of 1933, as amended. See "Underwriting"
herein.
(3) Before deducting expenses payable by the Company, estimated
at $200,500.
(4) The Underwriting Discount will be __% of the principal
amount of the New Senior Notes sold to certain institutions.
Therefore, to the extent any such sales are made to such
institutions, the actual total Underwriting Discount will be
less than, and the actual total Proceeds to the Company will
be greater than, the amounts shown in the table above.
The New Senior Notes 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 the New
Senior Notes will be made only in book-entry form through the
facilities of The Depository Trust Company on or about April __,
1998 against payment therefor in immediately available funds.
Salomon Smith Barney
Merrill Lynch & Co.
Morgan Stanley Dean Witter
PaineWebber Incorporated
Prudential Securities Incorporated
The date of this Prospectus is __________ __, 1998.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE
PRICE OF THE NEW SENIOR NOTES OFFERED HEREBY, INCLUDING BY
ENTERING STABILIZING BIDS, PURCHASING NEW SENIOR NOTES TO COVER
SYNDICATE SHORT POSITIONS AND IMPOSING PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING" HEREIN.
No dealer, salesperson or other person has been authorized
to give any information or to make any representation not
contained in this Prospectus in connection with the offer made by
this Prospectus, and, if given or made, such information or
representation must not be relied upon as having been authorized
by the Company or any underwriter, agent or dealer. This
Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, by any underwriter, agent or
dealer in any jurisdiction in which it is unlawful for such
underwriter, agent or dealer to make such an offer or
solicitation. Neither the delivery of this Prospectus nor any
sale made thereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of the
Company since the date hereof or thereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934 (the "1934 Act") and in
accordance therewith files reports and other information with the
Securities and Exchange Commission (the "SEC"). Such reports and
other infor-mation may be inspected and copied at the public
reference facilities maintained by the SEC at 450 Fifth Street,
N.W., Washington, D.C., 20549; Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois, 60661; and 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such
material can be obtained from the Public Reference Section of the
SEC, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The SEC maintains a Web site at http://www.sec.gov
containing reports, proxy statements and information statements
and other information regarding registrants that file electroni-
cally with the SEC, including the Company. Certain of the
Company's securities are listed on the New York Stock Exchange
and on the Philadelphia Stock Exchange, where reports and other
information concerning the Company may also be inspected.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the SEC
are incorporated in this Prospectus by reference:
-- The Company's Annual Report on Form 10-K for the year
ended December 31, 1997.
All documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date
of this Prospectus and prior to the termination of the offering
made by this Prospectus shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other
subsequently filed document which is deemed to be incorporated by
reference herein 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.
The Company will provide without charge to each person to
whom a copy of this Prospectus has been delivered, on the written
or oral request of any such person, a copy of any or all of the
documents described above which have been incorporated by
reference in this Prospectus, other than exhibits to such
documents. Written requests for copies of such documents should
be addressed to Mr. G. C. Dean, American Electric Power Service
Corporation, 1 Riverside Plaza, Columbus, Ohio 43215 (telephone
number: 614-223-1000). The information relating to the Company
contained in this Prospectus does not purport to be comprehensive
and should be read together with the information contained in the
documents incorporated by reference.
TABLE OF CONTENTS
Page
Available Information . . . . . . . . . . . . . . . . . . . . . 2
Documents Incorporated by Reference . . . . . . . . . . . . . . 2
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . 3
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 4
Ratio of Earnings to Fixed Charges . . . . . . . . . . . . . . 4
Description of New Senior Notes . . . . . . . . . . . . . . . . 4
Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . 14
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . 15
THE COMPANY
The Company is engaged in the generation, purchase,
transmission and distribution of electric power to approximately
877,000 customers in southwestern Virginia and southern West
Virginia, and in supplying electric power at wholesale to other
electric utility companies, municipalities and non-utility
entities engaged in the wholesale power market. Its principal
executive offices are located at 40 Franklin Road, S.W., Roanoke,
Virginia 24011 (telephone number: 540-985-2300). The Company is
a subsidiary of American Electric Power Company, Inc. ("AEP") and
is a part of the American Electric Power integrated utility
system (the "AEP System"). The executive offices of AEP are
located at 1 Riverside Plaza, Columbus, Ohio 43215 (telephone
number: 614-223-1000).
USE OF PROCEEDS
The Company proposes to use the net proceeds from the sale
of the New Senior Notes to redeem or repurchase certain of its
outstanding debt and/or preferred stock, to fund its construction
program, to repay short-term indebtedness incurred in connection
with such repurchases, redemptions or funding its construction
program and for other corporate purposes. Proceeds may be
temporarily invested in short-term instruments pending their
application to the foregoing purposes. The Company's First
Mortgage Bonds, 8.43% Series due 2022 ($37,471,000 principal
amount outstanding) may be redeemed at their regular redemption
price of 106.33% or at par with cash deposited with the Trustee
under the Company's Mortgage (as defined below) pursuant to
certain provisions thereof.
The Company has estimated that its consolidated construction
costs (inclusive of allowance for funds used during construction)
for 1998 will be approximately $206,000,000. At March 30, 1998,
the Company had approximately $122,000,000 of short-term
indebtedness outstanding.
RATIO OF EARNINGS TO FIXED CHARGES
Below is set forth the ratio of earnings to fixed charges
for each of the twelve month periods ended December 31, 1993
through 1997:
12-Month
Period Ended Ratio
December 31, 1993 2.69
December 31, 1994 2.37
December 31, 1995 2.54
December 31, 1996 2.78
December 31, 1997 2.44
DESCRIPTION OF NEW SENIOR NOTES
The New Senior Notes will be issued as a series of
Securities under an Indenture, dated as of January 1, 1998,
between the Company and The Bank of New York, as Trustee (the
"Trustee"), as heretofore supplemented and amended and as to be
further supplemented and amended (the "Indenture"). The
following summary does not purport to be complete and is subject
in all respects to the provisions of, and is qualified in its
entirety by reference to, the Indenture. Whenever particular
provisions or defined terms in the Indenture are referred to
herein, such provisions or defined terms are incorporated by
reference herein. Section and Article references used herein are
references to provisions of the Indenture unless otherwise noted.
All Notes (including the New Senior Notes) to be issued
under the Indenture are herein sometimes referred to as "Notes".
Copies of the Indenture, including the form of Company Order
pursuant to which each series of Notes may be issued, are filed
as exhibits to the Registration Statement.
General
The New Senior Notes will be issued in fully registered form
only, without coupons. The New Senior Notes will be issued
initially as one or more Book-Entry Notes. Except as set forth
herein under "Book-Entry Notes", the New Senior Notes will not be
issuable as certificated notes. The authorized denominations of
Global Notes will be $25 and any integral multiple thereof.
The New Senior Notes will be unsecured obligations of the
Company and will rank pari passu with all other unsecured debt of
the Company, except debt that by its terms is subordinated to the
unsecured debt of the Company. The Indenture provides that New
Senior Notes may be issued thereunder without limitation as to
aggregate principal amount and may be issued thereunder from time
to time in one or more series or one or more Tranches thereof, as
authorized by a Board Resolution and as set forth in a Company
Order or one or more supplemental indentures creating such
series. (Section 2.01).
Substantially all of the fixed properties and franchises of
the Company are subject to the lien of its first mortgage bonds
(the "Bonds") issued under and secured by a Mortgage and Deed of
Trust, dated as of December 1, 1940, as previously supplemented
and amended by supplemental indentures, between the Company and
Bankers Trust Company, as trustee (the "Mortgage").
The New Senior Notes are not convertible into any other
security of the Company. The covenants contained in the
Indenture do not limit the amount of other debt, secured or
unsecured, which may be issued by the Company. In addition, the
Indenture does not contain any provisions that afford holders of
New Senior Notes protection in the event of a highly leveraged
transaction involving the Company.
Principal Amount, Maturity and Interest
The New Senior Notes will be limited in aggregate principal
amount to $100,000,000.
The New Senior Notes will mature and become due and payable,
together with any accrued and unpaid interest thereon, on June
30, 2038 and will bear interest at the rate per annum shown in
the title thereof from the date on which the New Senior Notes are
originally issued until the principal amount thereof becomes due
and payable. The New Senior Notes are not subject to any sinking
fund provision.
Interest on each New Senior Note will be payable quarterly
in arrears on each March 31, June 30, September 30 and December
31 and at redemption, if any, or maturity. The initial Interest
Payment Date is June 30, 1998. Each payment of interest in
respect of an Interest Payment Date shall include interest
accrued through the day before such Interest Payment Date.
Interest on New Senior Notes will be computed on the basis of a
360-day year of twelve 30-day months.
Payments of interest on the New Senior Notes (other than
interest payable at redemption, if any, or maturity) will be
made, except as provided below, in immediately available funds to
the owners of such New Senior Notes (which, in the case of Global
Notes representing Book-Entry Notes, will be a nominee of the
Depository, as hereinafter defined) as of the Regular Record Date
(as defined below) for each Interest Payment Date.
The principal of the New Senior Notes and any premium and
interest thereon payable at redemption, if any, or maturity will
be paid in immediately available funds upon surrender thereof at
the office of The Bank of New York at 101 Barclay Street in New
York, New York. Should any New Senior Note be issued other than
as a Global Note, interest (other than interest payable at
redemption or maturity) may, at the option of the Company, be
paid to the person entitled thereto by check mailed to any such
person. See "Book-Entry Notes" herein.
If, with respect to any New Senior Note, any Interest
Payment Date, redemption date or the maturity is not a Business
Day (as defined below), payment of amounts due on such New Senior
Note on such date may be made on the next succeeding Business
Day, and, if such payment is made or duly provided for on such
Business Day, no interest shall accrue on such amounts for the
period from and after such Interest Payment Date, redemption date
or maturity, as the case may be, to such Business Day, except
that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding
Business Day, with the same force and effect as if made on such
date.
The "Regular Record Date" with respect to a New Senior Note
will be one Business Day prior to the relevant Interest Payment
Date, except if the New Senior Notes are no longer represented by
a Global Note, the "Regular Record Date" shall be the close of
business on the March 15, June 15, September 15 or December 15,
as the case may be, next preceding an Interest Payment Date or if
such March 15, June 15, September 15 or December 15 is not a
Business Day, the next preceding Business Day.
"Business Day" with respect to any New Senior Note means any
day that (a) in the Place of Payment (as defined in the
Indenture) (or in any of the Places of Payment, if more than one)
in which amounts are payable as specified in the form of such
Note and (b) in the city in which the Trustee administers its
corporate trust business, is not a day on which banking
institutions are authorized or required by law or regulation to
close.
Certain Trading Characteristics of the New Senior Notes
The New Senior Notes are expected to trade at a price that
takes into account the value, if any, of accrued but unpaid
interest; thus, purchasers will not pay and sellers will not
receive accrued and unpaid interest with respect to the New
Senior Notes that is not included in the trading price thereof.
Any portion of the trading price of a New Senior Note received
that is attributable to accrued interest will be treated as
ordinary interest income for federal income tax purposes and will
not be treated as part of the amount realized for purposes of
determining gain or loss on the disposition of the New Senior
Note.
The trading price of the New Senior Notes is likely to be
sensitive to the level of interest rates generally. If interest
rates rise in general, the trading price of the New Senior Notes
may decline to reflect the additional yield requirements of the
purchasers. Conversely, a decline in interest rates may increase
the trading price of the New Senior Notes, although any increase
will be moderated by the Company's ability to call the New Senior
Notes at any time on or after April __, 2003 at a Redemption
Price equal to 100% of the principal amount to be redeemed plus
accrued but unpaid interest.
Optional Redemption
The New Senior Notes will be redeemable at the option of the
Company, in whole or in part, at any time on or after April __,
2003, upon not less than 30 nor more than 60 days' notice, at
100% of the principal amount redeemed together with accrued and
unpaid interest to the redemption date.
Form, Exchange, Registration and Transfer
New Senior Notes in definitive form will be issued only as
registered Notes without coupons in denominations of $25 and in
integral multiples thereof authorized by the Company. New Senior
Notes may be presented for registration of transfer (with the
form of transfer endorsed thereon duly executed) or exchange, at
the office of the Security Registrar, without service charge and
upon payment of any taxes and other governmental charges as
described in the Indenture. Such transfer or exchange will be
effected upon the Company or the Security Registrar being
satisfied with the documents of title and identity of the person
making the request. The Company has appointed the Trustee as
Security Registrar with respect to New Senior Notes. The Company
may change the place for registration of transfer and exchange of
the New Senior Notes and may designate one or more additional
places for such registration and exchange. (Sections 2.05 and
4.02).
The Company shall not be required to (i) issue, register the
transfer of or exchange any New Senior Note during a period
beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of less than all the
outstanding New Senior Notes and ending at the close of business
on the day of such mailing or (ii) register the transfer of or
exchange any New Senior Notes or portions thereof called for
redemption in whole or in part. (Section 2.05).
Payment and Paying Agents
Payment of principal of and premium, if any, on any New
Senior Note will be made only against surrender to the Paying
Agent of such New Senior Note. Principal of and any premium and
interest on New Senior Note will be payable at the office of such
Paying Agent or Paying Agents 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 New Senior Note.
The Trustee initially will act as Paying Agent with respect
to New Senior Notes. The Company may at any time designate
additional Paying Agents or rescind the designation of any Paying
Agents or approve a change in the office through which any Paying
Agent acts. (Sections 4.02 and 4.03).
All moneys paid by the Company to a Paying Agent for the
payment of the principal of and premium, if any, or interest, if
any, on any New Senior Notes that remain unclaimed at the end of
two years after such principal, premium, if any, or interest
shall have become due and payable, subject to applicable law,
will be repaid to the Company and the holder of such New Senior
Note will thereafter look only to the Company for payment
thereof. (Section 11.04).
Book-Entry Notes
Except under the circumstances described below, the New
Senior Notes will be issued in whole or in part in the form of
one or more Global Notes that will be deposited with, or on
behalf of, The Depository Trust Company, New York, New York
("DTC"), or such other depository as may be subsequently
designated (the "Depository"), and registered in the name of a
nominee of the Depository.
Book-Entry Notes represented by a Global Note will not be
exchangeable for certificated notes and, except under the
circumstances described below, will not otherwise be issuable as
certificated notes.
So long as the Depository, or its nominee, is the registered
owner of a Global Note, such Depository or such nominee, as the
case may be, will be considered the sole owner of the individual
Book-Entry Notes represented by such Global Note for all purposes
under the Indenture. Payments of principal of and premium, if
any, and any interest on individual Book-Entry Notes represented
by a Global Note will be made to the Depository or its nominee,
as the case may be, as the owner of such Global Note. Except as
set forth below, owners of beneficial interests in a Global Note
will not be entitled to have any of the individual Book-Entry
Notes represented by such Global Note registered in their names,
will not receive or be entitled to receive physical delivery of
any such Book-Entry Note and will not be considered the owners
thereof under the Indenture, including, without limitation, for
purposes of consenting to any amendment thereof or supplement
thereto.
If the Depository is at any time unwilling or unable to
continue as depository and a successor depository is not
appointed, the Company will issue individual certificated notes
in exchange for the Global Note representing the corresponding
Book-Entry Notes. In addition, the Company may at any time and
in its sole discretion determine not to have any New Senior Notes
represented by the Global Note and, in such event, will issue
individual certificated notes in exchange for the Global Note
representing the corresponding Book-Entry Notes. In any such
instance, an owner of a Book-Entry Note represented by a Global
Note will be entitled to physical delivery of individual
certificated notes equal in principal amount to such Book-Entry
Note and to have such certificated notes registered in his or her
name. Individual certificated notes so issued will be issued as
registered New Senior Notes in denominations, unless otherwise
specified by the Company, of $25 and integral multiples thereof.
DTC has confirmed to the Company and the Underwriters the
following information:
1. DTC will act as securities depository for the Global
Notes. The New Senior Notes will be issued as fully-registered
securities registered in the name of Cede & Co. (DTC's
partnership nominee). One fully-registered Global Note will be
issued for the series of New Senior Notes, in the aggregate
principal amount of such series, and will be deposited with DTC.
2. 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 1934
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
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. 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 Securities and
Exchange Commission.
3. Purchases of New Senior Notes under the DTC system must
be made by or through Direct Participants, which will receive a
credit for the New Senior Notes on DTC's records. The ownership
interest of each actual purchaser of each New Senior Note
("Beneficial Owner") is in turn to be recorded on the Direct and
Indirect Participants' records. Beneficial Owners will not
receive written confirmation from DTC of their purchase, but
Beneficial Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect
Participant through which the Beneficial Owner entered into the
transaction. Transfers of ownership interests in the New Senior
Notes 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 New Senior Notes, except in the event that use of
the book-entry system for the New Senior Notes is discontinued.
4. To facilitate subsequent transfers, all New Senior
Notes deposited by Participants with DTC are registered in the
name of DTC's partnership nominee, Cede & Co. The deposit of New
Senior Notes with DTC and their registration in the name of Cede
& Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the New Senior
Notes; DTC's records reflect only the identity of the Direct
Participants to whose accounts such New Senior Notes are
credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
5. 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.
6. Redemption notices shall be sent to Cede & Co. If less
than all of the New Senior Notes are being redeemed, DTC's
practice is to determine by lot the amount of the interest of
each Direct Participant in such issue to be redeemed.
7. Neither DTC nor Cede & Co. will consent or vote with
respect to the New Senior Notes. Under its usual procedures, DTC
mails an Omnibus Proxy to the Company as soon as possible after
the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose
accounts the New Senior Notes are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
8. Principal and interest payments on the New Senior Notes
will be made to DTC. DTC's practice is to credit Direct
Participants' accounts on the date on which interest is payable
in accordance with their respective holdings shown on DTC's
records unless DTC has reason to believe that it will not receive
payment on such date. Payments by Participants to Beneficial
Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts
of customers in bearer form or registered in "street name", and
will be the responsibility of such Participant and not of DTC,
the Underwriters or the Company, subject to any statutory or
regulatory requirements as may be in effect from time to time.
Payment of principal and interest to DTC is the responsibility of
the Company or the Trustee, disbursement of such payments to
Direct Participants shall be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners shall be
the responsibility of Direct and Indirect Participants.
9. DTC may discontinue providing its services as
securities depository with respect to the New Senior Notes at any
time by giving reasonable notice to the Company and the Trustee.
Under such circumstances, in the event that a successor
securities depository is not obtained, certificated notes are
required to be printed and delivered.
10. The Company may decide to discontinue use of the system
of book-entry transfers through DTC (or a successor securities
depository). In that event, certificated notes will be printed
and delivered.
The information in this section concerning DTC and DTC's
book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility
for the accuracy thereof.
None of the Company, the Trustee or any agent for payment on
or registration of transfer or exchange of any Global Note will
have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial
interests in such Global Note or for maintaining, supervising or
reviewing any records relating to such beneficial interests.
Modification 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 Notes of each series that are
affected by the modification, to modify the Indenture or any
supplemental indenture affecting that series or the rights of the
holders of that series of Notes; provided, that no such
modification may, without the consent of the holder of each
outstanding Note affected thereby, (i) extend the fixed maturity
of any Notes of any series, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any premium payable upon the
redemption thereof, or reduce the amount of the principal of a
Discount Security (as defined in the Indenture) that would be due
and payable upon a declaration of acceleration of the maturity
thereof pursuant to the Indenture, (ii) reduce the percentage of
Notes, the holders of which are required to consent to any such
supplemental indenture, or (iii) reduce the percentage of Notes,
the holders of which are required to waive any default and its
consequences. (Section 9.02).
In addition, the Company and the Trustee may execute,
without the consent of any holder of Notes, any supplemental
indenture for certain other usual purposes including the creation
of any new series of Notes. (Sections 2.01, 9.01 and 10.01).
Events of Default
The Indenture provides that any one or more of the following
described events, which has occurred and is continuing,
constitutes an "Event of Default" with respect to each series of
Notes:
(a) failure for 30 days to pay interest on Notes of
that series when due and payable; or
(b) failure for 3 Business Days to pay principal or
premium, if any, on Notes of that series when due and
payable whether at maturity, upon redemption, pursuant to
any sinking fund obligation, by declaration or otherwise; or
(c) failure by the Company to observe or perform any
other covenant (other than those specifically relating to
another series) contained in the Indenture for 90 days after
written notice to the Company from the Trustee or the
holders of at least 33% in principal amount of the
outstanding Notes of that series; or
(d) certain events involving bankruptcy, insolvency or
reorganization of the Company; or
(e) any other event of default provided for in a series
of Notes. (Section 6.01).
The Trustee or the holders of not less than 33% in aggregate
outstanding principal amount of any particular series of Notes
may declare the principal due and payable immediately upon an
Event of Default with respect to such series, but the holders of
a majority in aggregate outstanding principal amount of such
series may annul such declaration and waive the default with
respect to such series if the default has been cured and a sum
sufficient to pay all matured installments of interest and
principal otherwise than by acceleration and any premium has been
deposited with the Trustee. (Sections 6.01 and 6.06).
The holders of a majority in aggregate outstanding principal
amount of any series of Notes have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee for that series. (Section 6.06).
Subject to the provisions of the Indenture relating to the duties
of the Trustee in case an Event of Default shall occur and be
continuing, the Trustee will be under no obligation to exercise
any of its rights or powers under the Indenture at the request or
direction of any of the holders of the Notes, unless such holders
shall have offered to the Trustee indemnity satisfactory to it.
(Section 7.02).
The holders of a majority in aggregate outstanding principal
amount of any series of Notes affected thereby may, on behalf of
the holders of all Notes of such series, waive any past default,
except a default in the payment of principal, premium, if any, or
interest when due otherwise than by acceleration (unless such
default has been cured and a sum sufficient to pay all matured
installments of interest and principal otherwise than by
acceleration and any premium has been deposited with the Trustee)
or a call for redemption of Notes of such series. (Section
6.06). The Company is required to file annually with the Trustee
a certificate as to whether or not the Company is in compliance
with all the conditions and covenants under the Indenture.
(Section 5.03(d)).
Consolidation, Merger and Sale
The Indenture does not contain any covenant that restricts
the Company's ability to merge or consolidate with or into any
other corporation, sell or convey all or substantially all of its
assets to any person, firm or corporation or otherwise engage in
restructuring transactions, provided that the successor
corporation assumes due and punctual payment of principal or
premium, if any, and interest on the Notes. (Section 10.01).
Legal Defeasance and Covenant Defeasance
Notes of any series may be defeased in accordance with their
terms and, unless the supplemental indenture or Company Order
establishing the terms of such series otherwise provides, as set
forth below. The Company at any time may terminate as to a
series all of its obligations (except for certain obligations,
including obligations with respect to the defeasance trust and
obligations to register the transfer or exchange of a Note, to
replace destroyed, lost or stolen Notes and to maintain agencies
in respect of the Notes) with respect to the Notes of such series
and the Indenture ("legal defeasance"). The Company at any time
also may terminate as to a series its obligations with respect to
the Notes of that series under any restrictive covenant which may
be applicable to that particular series ("covenant defeasance").
The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance
option. If the Company exercises its legal defeasance option,
the particular series may not be accelerated because of an Event
of Default. If the Company exercises its covenant defeasance
option, a series may not be accelerated by reference to any
restrictive covenant which may be applicable to that particular
series.
To exercise either of its defeasance options as to a series,
the Company must deposit with the Trustee or any paying agent, in
trust: moneys or Eligible Obligations, or a combination thereof,
in an amount sufficient to pay when due the principal of and
premium, if any, and interest, if any, due and to become due on
the Notes of such series that are Outstanding (as defined in the
Indenture). Such defeasance or discharge may occur only if,
among other things, the Company has delivered to the Trustee an
Opinion of Counsel to the effect that the holders of such Notes
will not recognize gain, loss or income for federal income tax
purposes as a result of the satisfaction and discharge of the
Indenture with respect to such series and that such holders will
realize gain, loss or income on such Notes, including payments of
interest thereon, in the same amounts and in the same manner and
at the same time as would have been the case if such satisfaction
and discharge had not occurred. (Section 11.01).
In the event the Company exercises its option to effect a
covenant defeasance with respect to the Notes of any series and
the Notes of that series are thereafter declared due and payable
because of the occurrence of any Event of Default other than an
Event of Default caused by failing to comply with the covenants
which are defeased, the amount of money and Eligible Obligations
on deposit with the Trustee may not be sufficient to pay amounts
due on the Notes of that series at the time of the acceleration
resulting from such Event of Default. However, the Company would
remain liable for such payments. (Section 11.01).
Governing Law
The Indenture and New Senior Notes will be governed by, and
construed in accordance with, the laws of the State of New York.
(Section 13.05).
Concerning the Trustee
AEP System companies, including the Company, utilize or may
utilize some of the banking services offered by The Bank of New
York in the normal course of their businesses. Among such
services are the making of short-term loans, generally at rates
related to the prime commercial interest rate.
LEGAL OPINIONS
Opinions with respect to the legality of the New Senior
Notes will be rendered by Simpson Thacher & Bartlett, 425
Lexington Avenue, New York, New York and 1 Riverside Plaza,
Columbus, Ohio, counsel for the Company, and by Dewey Ballantine
LLP, 1301 Avenue of the Americas, New York, New York, counsel for
the Underwriters. Additional legal opinions in connection with
the offering of the New Senior Notes may be given by Thomas G.
Berkemeyer or David C. House, counsel for the Company. Mr.
Berkemeyer is Assistant General Counsel, and Mr. House is an
Attorney, in the Legal Department of American Electric Power
Service Corporation, a wholly owned subsidiary of AEP. From time
to time, Dewey Ballantine LLP acts as counsel to affiliates of
the Company in connection with certain matters.
EXPERTS
The financial statements and related financial statement
schedule incorporated in this prospectus by reference from the
Company's Annual Report on Form 10-K have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their
reports, which are incorporated herein by reference, and have
been so incorporated in reliance upon the reports of such firm
given upon their authority as experts in accounting and auditing.
UNDERWRITING
Subject to the terms and conditions of the Underwriting
Agreement, the Company has agreed to sell to each of the
Underwriters named below ("Underwriters"), and each of the
Underwriters has severally agreed to purchase from the Company
the respective principal amount of New Senior Notes set forth
opposite its name below:
Principal Amount
Underwriters of New Senior Notes
Smith Barney Inc. . . . . . . . . . . . . . . $
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . $
Morgan Stanley & Co. Incorporated . . . . . . $
PaineWebber Incorporated . . . . . . . . . . . $
Prudential Securities Incorporated . . . . . . $
TOTAL . . . . . . . . . . . . . . . . . . . $100,000,000
In the Underwriting Agreement, the Underwriters have agreed,
subject to the terms and conditions set forth therein, to
purchase all of the New Senior Notes offered hereby if any of the
New Senior Notes are purchased.
The Underwriters propose to offer the New Senior Notes in
part directly to the public at the initial public offering price
set forth on the cover page of this Prospectus, and in part to
certain securities dealers at such price less a concession not in
excess of $______ per New Senior Note. The Underwriters may
allow, and such dealers may reallow, a concession not in excess
of $______ per New Senior Note to certain brokers and dealers.
After the New Senior Notes are released for sale to the public,
the offering price and other selling terms may from time to time
be varied by the Underwriters.
The Company has agreed, during the period of 30 days from
the date of the Underwriting Agreement, not to sell, offer to
sell, grant any option for the sale of, or otherwise dispose of
any New Senior Notes, any security convertible into or
exchangeable into or exercisable for New Senior Notes or any debt
securities substantially similar to the New Senior Notes (except
for the New Senior Notes issued pursuant to the Underwriting
Agreement), without the prior written consent of the
Underwriters.
The New Senior Notes are a new issue of securities with no
established trading market. While the Company intends to list
the New Senior Notes on the NYSE, there can be no assurance that
an active market for the New Senior Notes will develop or be
sustained in the future on the NYSE. Listing will depend upon
satisfaction of the NYSE's listing requirements with respect to
the New Senior Notes. The Underwriters have advised the Company
that they intend to make a market in the New Senior Notes prior
to the commencement of trading on the NYSE. The Underwriters
will have no obligation to make a market in the New Senior Notes,
however, and may cease market making activities, if commenced, at
any time.
The Company has agreed to indemnify the Underwriters against
certain liabilities, including certain liabilities under the
Securities Act of 1933.
In connection with this offering and in compliance with
applicable law and industry practice, the Underwriters may
overallot or effect transactions which stabilize, maintain or
otherwise affect the market price of the New Senior Notes at
levels above those which might otherwise prevail in the open
market, including by entering stabilizing bids, purchasing New
Senior Notes to cover syndicate short positions and imposing
penalty bids. A stabilizing bid means the placing of any bid, or
the effecting of any purchase, for the purpose of pegging, fixing
or maintaining the price of a security. Covering a syndicate
short position means placing a bid or effecting a purchase of a
security on behalf of the underwriting syndicate to reduce the
short position created in connection with the offering. Imposing
a penalty bid means purchasing a security in the open market to
reduce the underwriting syndicate's short position or to
stabilize the price of the security and in connection therewith
reclaiming the amount of the selling concession from the
underwriters and selling group members who sold such securities
as part of the offering.
In general, purchases of a security for the purpose of
stabilization or to reduce a syndicate short position could cause
the price of the security to be higher than it might be in the
absence of such purchases. The imposition of a penalty bid might
also have an effect on the price of a security to the extent that
it were to discourage resales of the security.
Neither the Company nor any of the Underwriters makes any
representation or prediction as to the direction or magnitude of
any effect that the transactions described above may have on the
price of the New Senior Notes. In addition, neither the Company
nor any of the Underwriters makes any representation that the
Underwriters will engage in such transactions or that such
transactions once commenced, will not be discontinued without
notice.
The Underwriters, and certain affiliates thereof, engage in
transactions with, and from time to time have performed services
for, the Company and its affiliates in the ordinary course of
business.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.*
Estimation based upon the issuance of all of the New
Senior Notes in one issuance:
Securities and Exchange Commission
Filing Fees $ 29,500
Printing Registration Statement,
Prospectus, etc. 30,000
Independent Auditors' fees 15,000
Charges of Trustee (including counsel fees) 10,000
Legal fees 65,000
Rating Agency fees 31,000
Miscellaneous expenses $ 20,000
Total $200,500
* Estimated, except for filing fees.
Item 15. Indemnification of Directors and Officers.
The Bylaws of the Company provide that the Company shall
indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal because such person
is or was a director, officer or employee of the Company or is or
was serving at the request of the Company as a director, officer,
partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise, against any obligations to pay judgments,
settlements, penalties, fines (including any excise tax) or
reasonable expenses (including attorneys' fees) incurred by such
person in connection with such action, suit or proceeding if (a)
such person conducted him or herself in good faith, (b) such
person believed in the case of conduct in such person's official
capacity with the Company (as defined) that his or her conduct
was in the best interests of the Company, and, in all other
cases, that his or her conduct was at least not opposed to its
best interests, (c) with respect to any criminal action or
proceeding, such person had no reasonable cause to believe his or
her conduct was unlawful and (d) such person was not grossly
negligent or guilty of willful misconduct. Such indemni-fication
in connection with a proceeding by or in the right of the Company
is limited to reasonable expenses incurred in connection with the
proceeding. Any such indemnification (unless ordered by a court)
shall be made by the Company only as authorized in the specific
case upon a determination that indemnification of the director is
proper in the circumstances because such person has met the
applicable standard of conduct.
Section 13.1-698 of the Code of Virginia provides that
unless limited by the articles of incorporation, a corporation
shall indemnify a director who entirely prevails in the defense
of any proceeding to which such person was a party because such
person is or was a director of the corporation against reasonable
expenses incurred in connection with such proceeding. Section
13.1-699 provides that a corporation may pay for or reimburse
reasonable expenses incurred by a director who is a party to such
a proceeding in advance of final disposition of such proceeding
if (a) the director furnishes a written statement of his or her
good faith belief that the standard of conduct described in
Section 13.1-697 has been met; (b) the director furnishes the
corporation a written undertaking by or on behalf of the director
to repay the advance if it is ultimately determined that such
person did not meet the standard of conduct; and (c) a
determination is made that the facts then known to those making
the determination would not preclude indemnification. Section
13.1-700.1 provides procedures which allow directors to apply to
a court for an order directing advances or indemnification.
Section 13.1-702 provides that unless limited by the
articles of incorporation, (a) officers are entitled to mandatory
indemni-fication under Section 13.1-698 and to apply for court
ordered indemnification under Section 13.1-700.1 to the same
extent as a director, and (b) that a corporation may indemnify
and advance expenses to an officer, employee or agent to the same
extent as to a director. Section 13.1-704 provides that any
corporation shall have the power to make any further indemnity to
any director, officer, employee or agent that may be authorized
by the articles of incorporation or any bylaw made by the
stockholders or any resolution adopted, before or after the
event, by the stockholders, except an indemnity against willful
misconduct or a knowing violation of criminal law.
The above is a general summary of certain provisions of the
Company's Bylaws and the Code of Virginia and is subject in all
respects to the specific and detailed provisions of the Company's
Bylaws and the Code of Virginia.
Reference is made to the Selling Agency Agreement and the
Underwriting Agreement filed as Exhibits 1(a) and 1(b) hereto,
respectively, which provide for indemnification of the Company,
certain of its directors and officers, and persons who control
the Company, under certain circumstances.
The Company maintains insurance policies insuring its
directors and officers against certain obligations that may be
incurred by them.
Item 16. Exhibits.
Reference is made to the information contained in the
Exhibit Index filed as part of this Registration Statement.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) That, for purposes of determining any liability under
the Securities Act of 1933, each filing of the registrant's
annual report pursuant to section 13(a) or section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by
reference in this registration statement shall be deemed to
be a new registration statement relating to the New Senior
Notes, and the offering thereof at that time shall be deemed
to be the initial bona fide offering thereof.
(2) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the
registrant pursuant to the laws of the Commonwealth of
Virginia, the registrant's bylaws, or otherwise, the
registrant has been advised that in the opinion of the SEC
such indemnification is against public policy as expressed
in said Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the New
Senior Notes, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against
public policy as expressed in said Act and will be governed
by the final adjudication of such issue.
(3) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the
form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the
time it was declared effective.
(4) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable cause to believe
that it meets all of the requirements for filing on Form S-3 and
has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City
of Columbus and State of Ohio, on the 31st day of March, 1998.
APPALACHIAN POWER COMPANY
E. Linn Draper, Jr.*
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
(i) Principal Executive
Officer Chairman of the Board
and Chief Executive
E. Linn Draper, Jr.* Officer March 31, 1998
(ii) Principal Financial
Officer:
G. P. Maloney* Vice President March 31, 1998
(iii) Principal Accounting
Officer:
P. J. DeMaria* Controller March 31, 1998
(iv) A Majority of the
Directors:
P. J. DeMaria*
E. Linn Draper, Jr.*
H. W. Fayne*
Wm. J. Lhota*
G. P. Maloney*
James J. Markowsky*
J. H. Vipperman* March 31, 1998
*By_/s/ A. A. Pena_____
(A. A. Pena, Attorney-in-Fact)
EXHIBIT INDEX
Certain of the following exhibits, designated with an
asterisk (*), are filed herewith. The exhibits not so designated
have heretofore been filed with the Commission and, pursuant to
17 C.F.R. Sections 201.24 and 230.411, are incorporated herein by
reference to the documents indicated following the descriptions
of such exhibits.
Exhibit No. Description
* 1 - Copy of proposed form of Underwriting Agreement
for the New Senior Notes.
4(a) - Copy of Indenture, dated as of January 1, 1998,
between the Company and The Bank of New York, as
Trustee [Registration Statement No. 333-45927,
Exhibits 4(a) and 4(b)].
* 4(b) - Copy of Company Order, dated March 3, 1998, for
the 7.20% Senior Notes, Series A, Due 2038.
* 4(c) - Copy of proposed form of Company Order for the New
Senior Notes.
* 5 - Opinion of Simpson Thacher & Bartlett with respect
to the New Senior Notes.
12 - Statement re Computations of Ratios [Annual Report
on Form 10-K of the Company for the period ended
December 31, 1997, File No. 1-3457, Exhibit 12].
*23(a) - Consent of Deloitte & Touche LLP.
23(b) - Consent of Simpson Thacher & Bartlett (included in
Exhibit 5 filed herewith).
*24 - Powers of Attorney and resolutions of the Board of
Directors of the Company.
*25 - Form T-1 re eligibility of The Bank of New York to
act as Trustee under the Indenture.
Exhibit 1
APPALACHIAN POWER COMPANY
Underwriting Agreement
Dated ____________________
AGREEMENT made between APPALACHIAN POWER COMPANY, a
corporation organized and existing under the laws of the
Commonwealth of Virginia (the Company), and the several persons,
firms and corporations (the Underwriters) named in Exhibit 1
hereto.
WITNESSETH:
WHEREAS, the Company proposes to issue and sell $__________
principal amount of its [Senior Notes] to be issued pursuant to the
Indenture dated as of January 1, 1998, between the Company and The
Bank of New York, as trustee (the Trustee), as heretofore
supplemented and amended and as to be further supplemented and
amended (said Indenture as so supplemented being hereafter referred
to as the Indenture); and
WHEREAS, the Underwriters have designated the person signing
this Agreement (the Representative) to execute this Agreement on
behalf of the respective Underwriters and to act for the respective
Underwriters in the manner provided in this Agreement; and
WHEREAS, the Company has prepared and filed, in accordance
with the provisions of the Securities Act of 1933 (the Act), with
the Securities and Exchange Commission (the Commission), a
registration statement and prospectus or prospectuses relating to
the [Senior Notes] and such registration statement has become
effective; and
WHEREAS, such registration statement, as it may have been
amended through the time the same first became effective (the
Effective Date), including the financial statements, the documents
incorporated or deemed incorporated therein by reference, the
exhibits thereto and the information deemed to be part thereof
pursuant to Rule 430A(b) of the Commission's General Rules and
Regulations under the Act (the Rules), being herein called the
Registration Statement, the prospectus included in the Registration
Statement when the same became effective that omits the
information, if any, deemed to be a part thereof pursuant to Rule
430A(b) of the Rules, being herein called the Preliminary
Prospectus, and the prospectus, including the price and terms of
the offering, the interest rate, maturity date and certain
information relating to the Underwriters of the Debentures first
filed with the Commission in accordance with Rule 430A and pursuant
to Rule 424(b) of the Rules, including all documents then
incorporated or deemed to have been incorporated therein by
reference, being herein called the Prospectus.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, it is agreed between the parties
as follows:
1. Purchase and Sale: Upon the basis of the warranties and
representations and on the terms and subject to the conditions
herein set forth, the Company agrees to sell to the respective
Underwriters named in Exhibit 1 hereto, severally and not jointly,
and the respective Underwriters, severally and not jointly, agree
to purchase from the Company, the respective principal amounts of
the [Senior Notes] set opposite their names in Exhibit 1 hereto,
together aggregating all of the [Senior Notes], at a price equal to
______% of the principal amount thereof; except that such price
will be increased to ______% of the principal amount of the [Senior
Notes] sold to certain institutions.
2. Payment and Delivery: Payment for the [Senior Notes]
shall be made to the Company or its order by certified or bank
check or checks, payable in New York Clearing House funds, at the
office of Simpson Thacher & Bartlett, 425 Lexington Avenue, New
York, New York 10017-3909, or at such other place as the Company
and the Representative shall mutually agree in writing, upon the
delivery of the [Senior Notes] to the Representative for the
respective accounts of the Underwriters against receipt therefor
signed by the Representative on behalf of itself and for the other
Underwriters. Such payments and delivery shall be made at 10:00
A.M., New York Time, on _______________ (or on such later business
day, not more than five business days subsequent to such day, as
may be mutually agreed upon by the Company and the Underwriters),
unless postponed in accordance with the provisions of Section 7
hereof. The time at which payment and delivery are to be made is
herein called the Time of Purchase.
[The delivery of the [Senior Notes] shall be made in fully
registered form, registered in the name of CEDE & CO., to the
offices of The Depository Trust Company in New York, New York and
the Underwriters shall accept such delivery.]
3. Conditions of Underwriters' Obligations: The several
obligations of the Underwriters hereunder are subject to the
accuracy of the warranties and representations on the part of the
Company on the date hereof and at the Time of Purchase and to the
following other conditions:
(a) That all legal proceedings to be taken and all
legal opinions to be rendered in connection with
the issue and sale of the [Senior Notes] shall be
satisfactory in form and substance to Dewey
Ballantine LLP, counsel to the Underwriters.
(b) That, at the Time of Purchase, the Representative
shall be furnished with the following opinions,
dated the day of the Time of Purchase, with
conformed copies or signed counterparts thereof for
the other Underwriters, with such changes therein
as may be agreed upon by the Company and the
Representative with the approval of Dewey
Ballantine LLP, counsel to the Underwriters:
(1) Opinion of Simpson Thacher & Bartlett and
either of Thomas G. Berkemeyer, Esq. or David
C. House, Esq., counsel to the Company,
substantially in the forms attached hereto as
Exhibits A and B;
(2) Opinion of Dewey Ballantine LLP, counsel to
the Underwriters, substantially in the form
attached hereto as Exhibit C.
(c) That the Representative shall have received a
letter from Deloitte & Touche LLP in form and
substance satisfactory to the Representative, dated
as of the day of the Time of Purchase, (i)
confirming that they are independent public
accountants within the meaning of the Act and the
applicable published rules and regulations of the
Commission thereunder, (ii) stating that in their
opinion the financial statements audited by them
and included or incorporated by reference in the
Registration Statement complied as to form in all
material respects with the then applicable
accounting requirements of the Commission,
including the applicable published rules and
regulations of the Commission and (iii) covering as
of a date not more than five business days prior to
the day of the Time of Purchase such other matters
as the Representative reasonably requests.
(d) That no amendment to the Registration Statement and
that no prospectus or prospectus supplement of the
Company relating to the [Senior Notes] and no
document which would be deemed incorporated in the
Prospectus by reference filed subsequent to the
date hereof and prior to the Time of Purchase shall
contain material information substantially
different from that contained in the Registration
Statement which is unsatisfactory in substance to
the Representative or unsatisfactory in form to
Dewey Ballantine LLP, counsel to the Underwriters.
(e) That, at the Time of Purchase, appropriate orders
of the Virginia State Corporation Commission and
the Tennessee Regulatory Authority, necessary to
permit the sale of the [Senior Notes] to the
Underwriters, shall be in effect; and that, prior
to the Time of Purchase, no stop order with respect
to the effectiveness of the Registration Statement
shall have been issued under the Act by the
Commission or proceedings therefor initiated.
(f) That, at the Time of Purchase, there shall not have
been any material adverse change in the business,
properties or financial condition of the Company
from that set forth in the Prospectus (other than
changes referred to in or contemplated by the
Prospectus), and that the Company shall, at the
Time of Purchase, have delivered to the Representa-
tive a certificate of an executive officer of the
Company to the effect that, to the best of his
knowledge, information and belief, there has been
no such change.
(g) That the Company shall have performed such of its
obligations under this Agreement as are to be
performed at or before the Time of Purchase by the
terms hereof.
4. Certain Covenants of the Company: In further
consideration of the agreements of the Underwriters herein
contained, the Company covenants as follows:
(a) As soon as practicable, and in any event within the
time prescribed by Rule 424 under the Act, to file
any Prospectus Supplement relating to the [Senior
Notes] with the Commission; as soon as the Company
is advised thereof, to advise the Representative
and confirm the advice in writing of any request
made by the Commission for amendments to the
Registration Statement or the Prospectus or for
additional information with respect thereto or of
the entry of a stop order suspending the effective-
ness of the Registration Statement or of the
initiation or threat of any proceedings for that
purpose and, if such a stop order should be entered
by the Commission, to make every reasonable effort
to obtain the prompt lifting or removal thereof.
(b) To deliver to the Underwriters, without charge, as
soon as practicable (and in any event within 24
hours after the date hereof), and from time to time
thereafter during such period of time (not
exceeding nine months) after the date hereof as
they are required by law to deliver a prospectus,
as many copies of the Prospectus (as supplemented
or amended if the Company shall have made any
supplements or amendments thereto) as the
Representative may reasonably request; and in case
any Underwriter is required to deliver a prospectus
after the expiration of nine months after the date
hereof, to furnish to any Underwriter, upon
request, at the expense of such Underwriter, a
reasonable quantity of a supplemental prospectus or
of supplements to the Prospectus complying with
Section 10(a)(3) of the Act.
(c) To furnish to the Representative a copy, certified
by the Secretary or an Assistant Secretary of the
Company, of the Registration Statement as initially
filed with the Commission and of all amendments
thereto (exclusive of exhibits), and, upon request,
to furnish to the Representative sufficient plain
copies thereof (exclusive of exhibits) for
distribution of one to the other Underwriters.
(d) For such period of time (not exceeding nine months)
after the date hereof as they are required by law
to deliver a prospectus, if any event shall have
occurred as a result of which it is necessary to
amend or supplement the Prospectus in order to make
the statements therein, in the light of the
circumstances when the Prospectus is delivered to a
purchaser, not contain any untrue statement of a
material fact or not omit to state any material
fact required to be stated therein or necessary in
order to make the statements therein not
misleading, forthwith to prepare and furnish, at
its own expense, to the Underwriters and to dealers
(whose names and addresses are furnished to the
Company by the Representative) to whom principal
amounts of the [Senior Notes] may have been sold by
the Representative for the accounts of the
Underwriters and, upon request, to any other
dealers making such request, copies of such
amendments to the Prospectus or supplements to the
Prospectus.
(e) As soon as practicable, the Company will make
generally available to its security holders and to
the Underwriters an earnings statement or statement
of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act
and Rule 158 under the Act.
(f) To use its best efforts to qualify the [Senior
Notes] for offer and sale under the securities or
"blue sky" laws of such jurisdictions as the Repre-
sentative may designate within six months after the
date hereof and itself to pay, or to reimburse the
Underwriters and their counsel for, reasonable
filing fees and expenses in connection therewith in
an amount not exceeding $3,500 in the aggregate
(including filing fees and expenses paid and
incurred prior to the effective date hereof), pro-
vided, however, that the Company shall not be
required to qualify as a foreign corporation or to
file a consent to service of process or to file
annual reports or to comply with any other
requirements deemed by the Company to be unduly
burdensome.
(g) To pay all expenses, fees and taxes (other than
transfer taxes on resales of the [Senior Notes] by
the respective Underwriters) in connection with the
issuance and delivery of the [Senior Notes], except
that the Company shall be required to pay the fees
and disbursements (other than disbursements
referred to in paragraph (f) of this Section 4) of
Dewey Ballantine LLP, counsel to the Underwriters,
only in the events provided in paragraph (h) of
this Section 4, the Underwriters hereby agreeing to
pay such fees and disbursements in any other event.
(h) If the Underwriters shall not take up and pay for
the [Senior Notes] due to the failure of the
Company to comply with any of the conditions
specified in Section 3 hereof, or, if this
Agreement shall be terminated in accordance with
the provisions of Section 7 or 8 hereof, to pay the
fees and disbursements of Dewey Ballantine LLP,
counsel to the Underwriters, and, if the Under-
writers shall not take up and pay for the [Senior
Notes] due to the failure of the Company to comply
with any of the conditions specified in Section 3
hereof, to reimburse the Underwriters for their
reasonable out-of-pocket expenses, in an aggregate
amount not exceeding a total of $10,000, incurred
in connection with the financing contemplated by
this Agreement.
(i) The Company will timely file any certificate
required by Rule 52 under the Public Utility
Holding Company Act of 1935 in connection with the
sale of the [Senior Notes].
[(j) The Company will use its best efforts to list,
subject to notice of issuance, the [Senior Notes]
on the New York Stock Exchange.]
[(k) During the period from the date hereof and
continuing to and including the earlier of (i) the
date which is after the Time of Purchase on which
the distribution of the [Senior Notes] ceases, as
determined by the Representative in its sole dis-
cretion, and (ii) the date which is 30 days after
the Time of Purchase, the Company agrees not to
offer, sell, contract to sell or otherwise dispose
of any [Senior Notes] of the Company or any
substantially similar securities of the Company
without the consent of the Representative.]
5. Warranties of and Indemnity by the Company: The Company
represents and warrants to, and agrees with you, as set forth
below:
(a) the Registration Statement on its effective date
complied, or was deemed to comply, with the
applicable provisions of the Act and the rules and
regulations of the Commission and the Registration
Statement at its effective date did not, and at the
Time of Purchase will not, contain any untrue
statement of a material fact or omit to state a
material fact required to be stated therein or
necessary to make the statements therein not
misleading, and the Basic Prospectus at the time
that the Registration Statement became effective,
and the Prospectus when first filed in accordance
with Rule 424(b) complies, and at the Time of
Purchase the Prospectus will comply, with the
applicable provisions of the Act and the Trust
Indenture Act of 1939, as amended, and the rules
and regulations of the Commission, the Basic
Prospectus at the time that the Registration
Statement became effective, and the Prospectus when
first filed in accordance with Rule 424(b) did not,
and the Prospectus at the Time of Purchase will
not, contain any untrue statement of a material
fact or omit to state a material fact required to
be stated therein or necessary to make the
statements therein, in the light of the
circumstances under which they were made, not
misleading, except that the Company makes no
warranty or representation to the Underwriters with
respect to any statements or omissions made in the
Registration Statement or Prospectus in reliance
upon and in conformity with information furnished
in writing to the Company by, or through the
Representative on behalf of, any Underwriter
expressly for use in the Registration Statement,
the Basic Prospectus or Prospectus, or to any
statements in or omissions from that part of the
Registration Statement that shall constitute the
Statement of Eligibility under the Trust Indenture
Act of 1939 of any indenture trustee under an
indenture of the Company.
(b) As of the Time of Purchase, the Indenture will have
been duly authorized by the Company and duly
qualified under the Trust Indenture Act of 1939, as
amended, and, when executed and delivered by the
Trustee and the Company, will constitute a legal,
valid and binding instrument enforceable against
the Company in accordance with its terms and such
[Senior Notes] will have been duly authorized, exe-
cuted, authenticated and, when paid for by the pur-
chasers thereof, will constitute legal, valid and
binding obligations of the Company entitled to the
benefits of the Indenture, except as the enforce-
ability thereof may be limited by bankruptcy,
insolvency, or other similar laws affecting the
enforcement of creditors' rights in general, and
except as the availability of the remedy of
specific performance is subject to general prin-
ciples of equity (regardless of whether such remedy
is sought in a proceeding in equity or at law), and
by an implied covenant of good faith and fair
dealing.
(c) To the extent permitted by law, the Company agrees
to indemnify and hold you harmless and each person,
if any, who controls you within the meaning of
Section 15 of the Act, against any and all losses,
claims, damages or liabilities, joint or several,
to which you, they or any of you or them may become
subject under the Act or otherwise, and to
reimburse you and such controlling person or
persons, if any, for any legal or other expenses
incurred by you or them in connection with
defending any action, insofar as such losses,
claims, damages, liabilities or actions arise out
of or are based upon any alleged untrue statement
or untrue statement of a material fact contained in
the Registration Statement, in the Basic
Prospectus, or in the Prospectus, or if the Company
shall furnish or cause to be furnished to you any
amendments or any supplemental information, in the
Prospectus as so amended or supplemented other than
amendments or supplements relating solely to
securities other than the Notes (provided that if
such Prospectus or such Prospectus, as amended or
supplemented, is used after the period of time
referred to in Section 4(b) hereof, it shall
contain such amendments or supplements as the
Company deems necessary to comply with Section
10(a) of the Act), or arise out of or are based
upon any alleged omission or omission to state
therein a material fact required to be stated
therein or necessary to make the statements therein
not misleading, except insofar as such losses,
claims, damages, liabilities or actions arise out
of or are based upon any such alleged untrue state-
ment or omission, or untrue statement or omission
which was made in the Registration Statement, in
the Basic Prospectus or in the Prospectus, or in
the Prospectus as so amended or supplemented, in
reliance upon and in conformity with information
furnished in writing to the Company by or through
you expressly for use therein or with any state-
ments in or omissions from that part of the Regis-
tration Statement that shall constitute the State-
ment of Eligibility under the Trust Indenture Act,
of any indenture trustee under an indenture of the
Company, and except that this indemnity shall not
inure to your benefit (or of any person controlling
you) on account of any losses, claims, damages,
liabilities or actions arising from the sale of the
Notes to any person if such loss arises from the
fact that a copy of the Prospectus, as the same may
then be supplemented or amended to the extent such
Prospectus was provided to you by the Company
(excluding, however, any document then incorporated
or deemed incorporated therein by reference), was
not sent or given by you to such person with or
prior to the written confirmation of the sale
involved and the alleged omission or alleged untrue
statement or omission or untrue statement was
corrected in the Prospectus as supplemented or
amended at the time of such confirmation, and such
Prospectus, as amended or supplemented, was timely
delivered to you by the Company. You agree
promptly after the receipt by you of written notice
of the commencement of any action in respect to
which indemnity from the Company on account of its
agreement contained in this Section 5(c) may be
sought by you, or by any person controlling you, to
notify the Company in writing of the commencement
thereof, but your omission so to notify the Company
of any such action shall not release the Company
from any liability which it may have to you or to
such controlling person otherwise than on account
of the indemnity agreement contained in this
Section 8(a). In case any such action shall be
brought against you or any such person controlling
you and you shall notify the Company of the
commencement thereof, as above provided, the
Company shall be entitled to participate in, and,
to the extent that it shall wish, including the
selection of counsel (such counsel to be reasonably
acceptable to the indemnified party), to direct the
defense thereof at its own expense. In case the
Company elects to direct such defense and select
such counsel (hereinafter, "Company's counsel"),
you or any controlling person shall have the right
to employ your own counsel, but, in any such case,
the fees and expenses of such counsel shall be at
your expense unless (i) the Company has agreed in
writing to pay such fees and expenses or (ii) the
named parties to any such action (including any
impleaded parties) include both you or any
controlling person and the Company and you or any
controlling person shall have been advised by your
counsel that a conflict of interest between the
Company and you or any controlling person may arise
(and the Company's counsel shall have concurred in
good faith with such advice) and for this reason it
is not desirable for the Company's counsel to
represent both the indemnifying party and the
indemnified party (it being understood, however,
that the Company shall not, in connection with any
one such action or separate but substantially
similar or related actions in the same jurisdiction
arising out of the same general allegations or
circumstances, be liable for the reasonable fees
and expenses of more than one separate firm of
attorneys for you or any controlling person (plus
any local counsel retained by you or any
controlling person in their reasonable judgment),
which firm (or firms) shall be designated in
writing by you or any controlling person). No
indemnifying party shall, without the prior written
consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment
with respect to any litigation, or any
investigation or proceeding by any governmental
agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnifi-
cation could be sought under this Section 5
(whether or not the indemnified parties are actual
or potential parties thereto), unless such
settlement, compromise or consent (i) includes an
unconditional release of each indemnified party
from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of
fault, culpability or a failure to act by or on
behalf of any indemnified party. In no event shall
any indemnifying party have any liability or
responsibility in respect of the settlement or
compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened
action or claim effected without its prior written
consent.
(d) The documents incorporated by reference in the
Registration Statement or Prospectus, when they
were filed with the Commission, complied in all
material respects with the applicable provisions of
the 1934 Act and the rules and regulations of the
Commission thereunder, and as of such time of
filing, when read together with the Prospectus,
none of such documents contained an untrue
statement of a material fact or omitted to state a
material fact required to be stated therein or
necessary to make the statements therein, in the
light of the circumstances under which they were
made, not misleading.
(e) Since the respective dates as of which information
is given in the Registration Statement and the
Prospectus, except as otherwise referred to or
contemplated therein, there has been no material
adverse change in the business, properties or
financial condition of the Company.
(f) This Agreement has been duly authorized, executed
and delivered by the Company.
(g) The consummation by the Company of the transactions
contemplated herein will not conflict with, or
result in a breach of any of the terms or
provisions of, or constitute a default under, or
result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets
of the Company under any contract, indenture,
mortgage, loan agreement, note, lease or other
agreement or instrument to which the Company is a
party or by which it may be bound or to which any
of its properties may be subject (except for
conflicts, breaches or defaults which would not,
individually or in the aggregate, be materially
adverse to the Company or materially adverse to the
transactions contemplated by this Agreement.)
(h) No authorization, approval, consent or order of any
court or governmental authority or agency is
necessary in connection with the issuance and sale
by the Company of the Notes or the transactions by
the Company contemplated in this Agreement, except
(A) such as may be required under the 1933 Act or
the rules and regulations thereunder; (B) such as
may be required under the Public Utility Holding
Company Act of 1935, as amended (the "1935 Act");
(C) the qualification of the Indenture under the
1939 Act; (D) the approval of the Virginia State
Corporation Commission or the Tennessee Regulatory
Authority; and (E) such consents, approvals,
authorizations, registrations or qualifications as
may be required under state securities or Blue Sky
laws.
The Company's indemnity agreement contained in Section 5(c)
hereof, and its covenants, warranties and representations contained
in this Agreement, shall remain in full force and effect regardless
of any investigation made by or on behalf of any person, and shall
survive the delivery of and payment for the [Senior Notes]
hereunder.
6. Warranties of and Indemnity by Underwriters:
(a) Each Underwriter warrants and represents that the
information furnished in writing to the Company
through the Representative for use in the
Registration Statement, in the Basic Prospectus, in
the Prospectus, or in the Prospectus as amended or
supplemented is correct as to such Underwriter.
(b) Each Underwriter agrees, to the extent permitted by
law, to indemnify, hold harmless and reimburse the
Company, its directors and such of its officers as
shall have signed the Registration Statement, and
each person, if any, who controls the Company
within the meaning of Section 15 of the Act, to the
same extent and upon the same terms as the
indemnity agreement of the Company set forth in
Section 5(c) hereof, but only with respect to
untrue statements or alleged untrue statements or
omissions or alleged omissions made in the
Registration Statement, or in the Basic Prospectus,
or in the Prospectus, or in the Prospectus as so
amended or supplemented, in reliance upon and in
conformity with information furnished in writing to
the Company by the Representative on behalf of such
Underwriter expressly for use therein. The Company
agrees promptly after the receipt by it of written
notice of the commencement of any action in respect
to which indemnity from you on account of your
agreement contained in this Section 6(b) may be
sought by the Company, or by any person controlling
the Company, to notify you in writing of the
commencement thereof, but the Company's omission so
to notify you of any such action shall not release
you from any liability which you may have to the
Company or to such controlling person otherwise
than on account of the indemnity agreement
contained in this Section 6(b).
The indemnity agreement on the part of each Underwriter
contained in Section 6(b) hereof, and the warranties and
representations of such Underwriter contained in this Agreement,
shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or other person,
and shall survive the delivery of and payment for the [Senior
Notes] hereunder.
7. Default of Underwriters: If any Underwriter under this
Agreement shall fail or refuse (otherwise than for some reason
sufficient to justify, in accordance with the terms hereof, the
cancellation or termination of its obligations hereunder) to
purchase and pay for the principal amount of [Senior Notes] which
it has agreed to purchase and pay for hereunder, and the aggregate
principal amount of [Senior Notes] which such defaulting Under-
writer or Underwriters agreed but failed or refused to purchase is
not more than one-tenth of the aggregate principal amount of the
[Senior Notes], the other Underwriters shall be obligated severally
in the proportions which the amounts of [Senior Notes] set forth
opposite their names in Exhibit 1 hereto bear to the aggregate
principal amount of [Senior Notes] set forth opposite the names of
all such non-defaulting Underwriters, to purchase the [Senior
Notes] which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on the terms set forth herein;
provided that in no event shall the principal amount of [Senior
Notes] which any Underwriter has agreed to purchase pursuant to
Section 1 hereof be increased pursuant to this Section 7 by an
amount in excess of one-ninth of such principal amount of [Senior
Notes] without the written consent of such Underwriter. If any
Underwriter or Underwriters shall fail or refuse to purchase
[Senior Notes] and the aggregate principal amount of [Senior Notes]
with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of the [Senior Notes] then this
Agreement shall terminate without liability on the part of any non-
defaulting Underwriter; provided, however, that the non-defaulting
Underwriters may agree, in their sole discretion, to purchase the
[Senior Notes] which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase on the terms set forth
herein. In the event of any such termination, the Company shall
not be under any liability to any Underwriter (except to the
extent, if any, provided in Section 4(h) hereof), nor shall any
Underwriter (other than an Underwriter who shall have failed or
refused to purchase the [Senior Notes] without some reason
sufficient to justify, in accordance with the terms hereof, its
termination of its obligations hereunder) be under any liability to
the Company or any other Underwriter.
Nothing herein contained shall release any defaulting Under-
writer from its liability to the Company or any non-defaulting
Underwriter for damages occasioned by its default hereunder.
8. Termination of Agreement by the Underwriters: This
Agreement may be terminated at any time prior to the Time of
Purchase by the Representative if, after the execution and delivery
of this Agreement and prior to the Time of Purchase, in the Repre-
sentative's reasonable judgment, the Underwriters' ability to
market the [Senior Notes] shall have been materially adversely
affected because:
(i) trading in securities on the New York Stock Exchange
shall have been generally suspended by the Commission or by
the New York Stock Exchange, or
(ii) (A) a war involving the United States of America
shall have been declared, (B) any other national calamity
shall have occurred, or (C) any conflict involving the armed
services of the United States of America shall have escalated,
or
(iii) a general banking moratorium shall have been
declared by Federal or New York State authorities, or
(iv) there shall have been any decrease in the ratings of
the Company's first mortgage bonds by Moody's Investors
Services, Inc. (Moody's) or Standard & Poor's Ratings Group
(S&P) or either Moody's or S&P shall publicly announce that it
has such first mortgage bonds under consideration for possible
downgrade.
If the Representative elects to terminate this Agreement,
as provided in this Section 8, the Representative will promptly
notify the Company by telephone or by telex or facsimile transmis-
sion, confirmed in writing. If this Agreement shall not be carried
out by any Underwriter for any reason permitted hereunder, or if
the sale of the [Senior Notes] to the Underwriters as herein con-
templated shall not be carried out because the Company is not able
to comply with the terms hereof, the Company shall not be under any
obligation under this Agreement and shall not be liable to any
Underwriter or to any member of any selling group for the loss of
anticipated profits from the transactions contemplated by this
Agreement (except that the Company shall remain liable to the
extent provided in Section 4(h) hereof) and the Underwriters shall
be under no liability to the Company nor be under any liability
under this Agreement to one another.
9. Notices: All notices hereunder shall, unless otherwise
expressly provided, be in writing and be delivered at or mailed to
the following addresses or by telex or facsimile transmission con-
firmed in writing to the following addresses: if to the Under-
writers, to _______________________________________________, as
Representative, _____________________________________________, and,
if to the Company, to Appalachian Power Company, c/o American
Electric Power Service Corporation, 1 Riverside Plaza, Columbus,
Ohio 43215, attention of A. A. Pena, Treasurer, (fax 614/223-1687).
10. Parties in Interest: The agreement herein set forth has
been and is made solely for the benefit of the Underwriters, the
Company (including the directors thereof and such of the officers
thereof as shall have signed the Registration Statement), the
controlling persons, if any, referred to in Sections 5 and 6
hereof, and their respective successors, assigns, executors and
administrators, and, except as expressly otherwise provided in
Section 7 hereof, no other person shall acquire or have any right
under or by the virtue of this Agreement.
11. Definition of Certain Terms: If there be two or more
persons, firms or corporations named in Exhibit 1 hereto, the term
"Underwriters", as used herein, shall be deemed to mean the several
persons, firms or corporations, so named (including the
Representative herein mentioned, if so named) and any party or
parties substituted pursuant to Section 7 hereof, and the term
"Representative", as used herein, shall be deemed to mean the
representative or representatives designated by, or in the manner
authorized by, the Underwriters. All obligations of the
Underwriters hereunder are several and not joint. If there shall
be only one person, firm or corporation named in Exhibit 1 hereto,
the term "Underwriters" and the term "Representative", as used
herein, shall mean such person, firm or corporation. The term
"successors" as used in this Agreement shall not include any
purchaser, as such purchaser, of any of the [Senior Notes] from any
of the respective Underwriters.
12. Conditions of the Company's Obligations: The obligations
of the Company hereunder are subject to the Underwriters'
performance of their obligations hereunder, and the further
condition that at the Time of Purchase the Virginia State
Corporation Commission and the Tennessee Regulatory Authority shall
have issued appropriate orders, and such orders shall remain in
full force and effect, authorizing the transactions contemplated
hereby.
13. Applicable Law: This Agreement will be governed and
construed in accordance with the laws of the State of New York.
14. Execution of Counterparts: This Agreement may be
executed in several counterparts, each of which shall be regarded
as an original and all of which shall constitute one and the same
document.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, on the date first above written.
APPALACHIAN POWER COMPANY
By:____________________________
A. A. Pena
Treasurer
___________________________________
as Representative
and on behalf of the Underwriters
named in Exhibit 1 hereto
By:____________________________
EXHIBIT 1
Name Principal Amount
Exhibit 4(b)
March 3, 1998
Company Order and Officers' Certificate
Senior Notes, Series A
The Bank of New York, as Trustee
101 Barclay Street
New York, New York 10286
Attn: Corporate Trust Division
Ladies and Gentlemen:
Pursuant to Article Two of the Indenture, dated as of January 1,
1998 (as it may be amended or supplemented, the "Indenture"), from
Appalachian Power Company (the "Company") to The Bank of New York,
as trustee (the "Trustee"), and the Board Resolutions dated
December 17, 1997, a copy of which certified by the Secretary or an
Assistant Secretary of the Company is being delivered herewith
under Section 2.01 of the Indenture, and unless otherwise provided
in a subsequent Company Order pursuant to Section 2.04 of the
Indenture,
1. The Company's Senior Notes, Series A, Due 2038 (the
"Notes") are hereby established. The Notes shall be in
substantially the form attached hereto as Exhibit 1.
2. The terms and characteristics of the Notes shall be
as follows (the numbered clauses set forth below corresponding
to the numbered subsections of Section 2.01 of the Indenture,
with terms used and not defined herein having the meanings
specified in the Indenture):
(i) the aggregate principal amount of Notes which may
be authenticated and delivered under the Indenture shall
be limited to $100,000,000, except as contemplated in
Section 2.01(i) of the Indenture;
(ii) the date on which the principal of the Notes
shall be payable shall be March 31, 2038;
(iii) interest shall accrue from the date of
authentication of the Notes; the Interest Payment Dates
on which such interest will be payable shall be March 31,
June 30, September 30 and December 31, and the Regular
Record Date for the determination of holders to whom
interest is payable on any such Interest Payment Date
shall be the March 15, June 15, September 15 or December
15, as the case may be, next preceding such Interest
Payment Date; provided however that if the Original Issue
Date of a Note shall be after a Regular Record Date and
before the corresponding Interest Payment Date, payment
of interest shall commence on the second Interest Payment
Date succeeding such Original Issue Date and shall be
paid to the Person in whose name this Note was registered
on the Regular Record Date for such second Interest
Payment Date; and provided further, that interest payable
on the Stated Maturity Date or any Redemption Date shall
be paid to the Person to whom principal shall be paid;
(iv) the interest rate at which the Notes shall bear
interest shall be 7.20% per annum;
(v) the Notes shall be redeemable at the option of
the Company, in whole or in part, at any time on or after
March 3, 2003, upon not less than 30 nor more than 60
days' notice, at 100% of the principal amount redeemed
together with accrued and unpaid interest to the
redemption date;
(vi) (a) the Notes shall be issued in the form of a
Global Note; (b) the Depositary for such Global Note
shall be The Depository Trust Company; and (c) the
procedures with respect to transfer and exchange of
Global Notes shall be as set forth in the form of Note
attached hereto;
(vii) the title of the Notes shall be "Senior Notes,
Series A, Due 2038";
(viii) the form of the Notes shall be as set forth in
Paragraph 1 above;
(ix) not applicable;
(x) the Notes shall not be subject to a Periodic
Offering;
(xi) not applicable;
(xii) not applicable;
(xiii) not applicable;
(xiv) the Notes shall be issuable in denominations of
$25 and any integral multiple thereof;
(xv) not applicable;
(xvi) the Notes shall not be issued as Discount
Securities;
(xvii) not applicable;
(xviii) not applicable; and
(xix) not applicable.
3. You are hereby requested to authenticate
$100,000,000 aggregate principal amount of 7.20% Senior Notes,
Series A, Due 2038 in such name as requested by The Depository
Trust Company ("DTC") in the Letter of Representations dated
March 3, 1998, from the Company and the Trustee to DTC in the
manner provided by the Indenture.
4. You are hereby requested to hold the Notes as
custodian for DTC in accordance with the Letter of
Representations.
5. Concurrently with this Company Order, an Opinion of
Counsel under Sections 2.04 and 13.06 of the Indenture is
being delivered to you.
6. The undersigned Armando A. Pena and John F. Di
Lorenzo, Jr., the Treasurer and Secretary, respectively, of
the Company do hereby certify that:
(i) we have read the relevant portions of the
Indenture, including without limitation the conditions
precedent provided for therein relating to the action
proposed to be taken by the Trustee as requested in this
Company Order and Officers' Certificate, and the
definitions in the Indenture relating thereto;
(ii) we have read the Board Resolutions of the Company
and the Opinion of Counsel referred to above;
(iii) we have conferred with other officers of the
Company, have examined such records of the Company and
have made such other investigation as we deemed relevant
for purposes of this certificate;
(iv) in our opinion, we have made such examination or
investigation as is necessary to enable us to express an
informed opinion as to whether or not such conditions
have been complied with; and
(v) on the basis of the foregoing, we are of the
opinion that all conditions precedent provided for in the
Indenture relating to the action proposed to be taken by
the Trustee as requested herein have been complied with.
Kindly acknowledge receipt of this Company Order and Officers'
Certificate, including the documents listed herein, and confirm the
arrangements set forth herein by signing and returning the copy of
this document attached hereto.
Very truly yours,
APPALACHIAN POWER COMPANY
By:/s/ A. A. Pena______________
Treasurer
And:/s/ John F. Di Lorenzo, Jr.
Secretary
Acknowledged by Trustee:
By:/s/ Michael Culhane_________
Vice President
Exhibit 1
Unless this certificate is presented by an authorized representa-
tive of The Depository Trust Company (55 Water Street, New York,
New York) to the issuer or its agent for registration of transfer,
exchange or payment, and any certificate to be issued is registered
in the name of Cede & Co. or in such other name as is requested by
an authorized representative of The Depository Trust Company and
any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an
interest herein. Except as otherwise provided in Section 2.11 of
the Indenture, this Security may be transferred, in whole but not
in part, only to another nominee of the Depository or to a
successor Depository or to a nominee of such successor Depository.
No. R-1 4,000,000 Senior Notes,
$25 principal amount each
APPALACHIAN POWER COMPANY
7.20% Senior Notes, Series A, Due 2038
CUSIP: 037735 79 2
Original Issue Date: March 3, 1998
Stated Maturity Date: March 31, 2038
Interest Rate: 7.20%
Principal Amount: $100,000,000
Redeemable: Yes X No ____
In Whole: Yes X No ____
In Part: Yes X No ____
Initial Redemption Date: March 3, 2003
Redemption Limitation Date: N/A
Initial Redemption Price: 100%
Reduction Percentage: N/A
APPALACHIAN POWER COMPANY, a corporation duly organized and
existing under the laws of the Commonwealth of Virginia (herein
referred to as the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to CEDE & CO. or registered
assigns, the Principal Amount specified above on the Stated
Maturity Date specified above, and to pay interest on said Prin-
cipal Amount from the Original Issue Date specified above or from
the most recent interest payment date (each such date, an "Interest
Payment Date") to which interest has been paid or duly provided
for, quarterly in arrears on March 31, June 30, September 30 and
December 31 in each year, commencing (except as provided below)
with the Interest Payment Date next succeeding the Original Issue
Date specified above, at the Interest Rate per annum specified
above, until the Principal Amount shall have been paid or duly
provided for. Interest shall be computed on the basis of a 360-day
year of twelve 30-day months.
The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date, as provided in the Indenture, as
hereinafter defined, shall be paid to the Person in whose name this
Note (or one or more Predecessor Securities) shall have been
registered at the close of business on the Regular Record Date with
respect to such Interest Payment Date, which shall be the March 15,
June 15, September 15 or December 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment
Date; provided however that if the Original Issue Date of this Note
shall be after a Regular Record Date and before the corresponding
Interest Payment Date, payment of interest shall commence on the
second Interest Payment Date succeeding such Original Issue Date
and shall be paid to the Person in whose name this Note was
registered on the Regular Record Date for such second Interest
Payment Date; and provided further, that interest payable on the
Stated Maturity Date or any Redemption Date shall be paid to the
Person to whom principal shall be paid. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be
payable to the Holder on such Regular Record Date and shall be paid
as provided in said Indenture.
If any Interest Payment Date, any Redemption Date or the
Stated Maturity Date is not a Business Day, then payment of the
amounts due on this Note on such date will be made on the next
succeeding Business Day, and no interest shall accrue on such
amounts for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity Date, as the case may be, except
that, if such Business Day is in the next succeeding calendar year,
such payment shall be made on the immediately preceding Business
Day, with the same force and effect as if made on such date. The
principal of (and premium, if any) and the interest on this Note
shall be payable at the office or agency of the Company maintained
for that purpose in the Borough of Manhattan, the City of New York,
New York, in any coin or currency of the United States of America
which at the time of payment is legal tender for payment of public
and private debts; provided, however, that payment of interest
(other than interest payable on the Stated Maturity Date or any
Redemption Date) may be made at the option of the Company by check
mailed to the registered holder at such address as shall appear in
the Note Register.
This Note is one of a duly authorized series of Notes of the
Company (herein sometimes referred to as the "Notes"), specified in
the Indenture, all issued or to be issued in one or more series
under and pursuant to an Indenture dated as of January 1, 1998 duly
executed and delivered between the Company and The Bank of New
York, a New York banking corporation organized and existing under
the laws of the State of New York, as Trustee (herein referred to
as the "Trustee") (such Indenture, as originally executed and
delivered and as thereafter supplemented and amended being herein-
after referred to as the "Indenture"), to which Indenture and all
indentures supplemental thereto or Company Orders reference is
hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the
Company and the holders of the Notes. By the terms of the
Indenture, the Notes are issuable in series which may vary as to
amount, date of maturity, rate of interest and in other respects as
in the Indenture provided. This Note is one of the series of Notes
designated on the face hereof.
If so specified on the face hereof and subject to the terms of
Article Three of the Indenture, this Note is subject to redemption
at any time on or after the Initial Redemption Date specified on
the face hereof, as a whole or, if specified, in part, at the
election of the Company, at the applicable redemption price (as
described below) plus any accrued but unpaid interest to the date
of such redemption. Unless otherwise specified on the face hereof,
such redemption price shall be the Initial Redemption Price
specified on the face hereof for the twelve-month period commencing
on the Initial Redemption Date and shall decline for the twelve-
month period commencing on each anniversary of the Initial
Redemption Date by a percentage of principal amount equal to the
Reduction Percentage specified on the face hereof until such
redemption price is 100% of the principal amount of this Note to be
redeemed.
Notwithstanding the foregoing, the Company may not, prior to
the Redemption Limitation Date, if any, specified on the face
hereof, redeem any Note of this series as contemplated above as a
part of, or in anticipation of, any refunding operation by the
application, directly or indirectly, of moneys borrowed having an
effective interest cost to the Company (calculated in accordance
with generally accepted financial practice) of less than the
effective interest cost to the Company (similarly calculated) of
this Note.
This Note shall be redeemable to the extent set forth herein
and in the Indenture upon not less than thirty, but not more than
sixty, days previous notice by mail to the registered owner.
The Company shall not be required to (i) issue, exchange or
register the transfer of any Notes during a period beginning at the
opening of business 15 days before the day of the mailing of a
notice of redemption of less than all the outstanding Notes of the
same series and ending at the close of business on the day of such
mailing, nor (ii) register the transfer of or exchange of any Notes
of any series or portions thereof called for redemption. This
Global Note is exchangeable for Notes in definitive registered form
only under certain limited circumstances set forth in the
Indenture.
In the event of redemption of this Note in part only, a new
Note or Notes of this series, of like tenor, for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon
the surrender of this Note.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the
Notes may be declared, and upon such declaration shall become, due
and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time
of the entire indebtedness of this Note upon compliance by the
Company with certain conditions set forth therein.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than a
majority in aggregate principal amount of the Notes of each series
affected at the time outstanding, as defined in the Indenture, to
execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Notes;
provided, however, that no such supplemental indenture shall (i)
extend the fixed maturity of any Notes of any series, or reduce the
principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the
redemption thereof, or reduce the amount of the principal of a
Discount Security that would be due and payable upon a declaration
of acceleration of the maturity thereof pursuant to the Indenture,
without the consent of the holder of each Note then outstanding and
affected; (ii) reduce the aforesaid percentage of Notes, the
holders of which are required to consent to any such supplemental
indenture, or reduce the percentage of Notes, the holders of which
are required to waive any default and its consequences, without the
consent of the holder of each Note then outstanding and affected
thereby; or (iii) modify any provision of Section 6.01(c) of the
Indenture (except to increase the percentage of principal amount of
securities required to rescind and annul any declaration of amounts
due and payable under the Notes), without the consent of the holder
of each Note then outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Notes of all series at the time
outstanding affected thereby, on behalf of the Holders of the Notes
of such series, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established
pursuant to the Indenture with respect to such series, and its
consequences, except a default in the payment of the principal of
or premium, if any, or interest on any of the Notes of such series.
Any such consent or waiver by the registered Holder of this Note
(unless revoked as provided in the Indenture) shall be conclusive
and binding upon such Holder and upon all future Holders and owners
of this Note and of any Note issued in exchange herefor or in place
hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or
waiver is made upon this Note.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the
principal of and premium, if any, and interest on this Note at the
time and place and at the rate and in the money herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, this Note is transferable by the
registered holder hereof on the Note Register of the Company, upon
surrender of this Note for registration of transfer at the office
or agency of the Company as may be designated by the Company
accompanied by a written instrument or instruments of transfer in
form satisfactory to the Company or the Trustee duly executed by
the registered Holder hereof or his or her attorney duly authorized
in writing, and thereupon one or more new Notes of authorized
denominations and for the same aggregate principal amount and
series will be issued to the designated transferee or transferees.
No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Note, the Company, the Trustee, any paying agent and any Note
Registrar may deem and treat the registered Holder hereof as the
absolute owner hereof (whether or not this Note shall be overdue
and notwithstanding any notice of ownership or writing hereon made
by anyone other than the Note Registrar) for the purpose of
receiving payment of or on account of the principal hereof and
premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying
agent nor any Note Registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Note, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the
Indenture, against any incorporator, stockholder, officer or
director, past, present or future, as such, of the Company or of
any predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by
the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.
The Notes of this series are issuable only in registered form
without coupons in denominations of $25 and any integral multiple
thereof. As provided in the Indenture and subject to certain
limitations, Notes of this series are exchangeable for a like
aggregate principal amount of Notes of this series of a different
authorized denomination, as requested by the Holder surrendering
the same.
All terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
This Note shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory
for any purpose until the Certificate of Authentication hereon
shall have been signed by or on behalf of the Trustee.
IN WITNESS WHEREOF, the Company has caused this Instrument to
be executed.
APPALACHIAN POWER COMPANY
By:___________________________
Attest:
By:___________________________
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes designated in
accordance with, and referred to in, the within-mentioned
Indenture.
Dated: March 3, 1998
THE BANK OF NEW YORK, as Trustee
By:___________________________
Authorized Signatory
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
(PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE)
_______________________________________
________________________________________________________________
________________________________________________________________
(PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
________________________________________________________________
ASSIGNEE) the within Note and all rights thereunder, hereby
________________________________________________________________
irrevocably constituting and appointing such person attorney to
________________________________________________________________
transfer such Note on the books of the Issuer, with full
________________________________________________________________
power of substitution in the premises.
Dated:________________________ _________________________
NOTICE: The signature to this assignment must correspond with the
name as written upon the face of the within Note in every
particular, without alteration or enlargement or any
change whatever and NOTICE: Signature(s) must be
guaranteed by a financial institution that is a member of
the Securities Transfer Agents Medallion Program
("STAMP"), the Stock Exchange Medallion Program ("SEMP")
or the New York Stock Exchange, Inc. Medallion Signature
Program ("MSP").
Exhibit 4(c)
____________ __, ____
Company Order and Officers' Certificate
[Senior Notes], Series B
The Bank of New York, as Trustee
101 Barclay Street
New York, New York 10286
Attn: Corporate Trust Division
Ladies and Gentlemen:
Pursuant to Article Two of the Indenture, dated as of January 1,
1998 (as it may be amended or supplemented, the "Indenture"), from
Appalachian Power Company (the "Company") to The Bank of New York,
as trustee (the "Trustee"), and the Board Resolutions dated March
26, 1998, a copy of which certified by the Secretary or an
Assistant Secretary of the Company is being delivered herewith
under Section 2.01 of the Indenture, and unless otherwise provided
in a subsequent Company Order pursuant to Section 2.04 of the
Indenture,
1. The Company's [Senior Notes], Series B (the "Notes")
are hereby established. The Notes shall be in substantially
the form attached hereto as Exhibit 1.
2. The terms and characteristics of the Notes shall be
as follows (the numbered clauses set forth below corresponding
to the numbered subsections of Section 2.01 of the Indenture,
with terms used and not defined herein having the meanings
specified in the Indenture):
(i) the aggregate principal amount of Notes which may
be authenticated and delivered under the Indenture shall
be limited to $100,000,000, except as contemplated in
Section 2.01(i) of the Indenture;
(ii) the date on which the principal of the Notes
shall be payable shall be June 30, 2038;
(iii) interest shall accrue from the date of
authentication of the Notes; the Interest Payment Dates
on which such interest will be payable shall be March 31,
June 30, September 30 and December 31, and the Regular
Record Date for the determination of holders to whom
interest is payable on any such Interest Payment Date
shall be the close of business on the business day next
preceding the relevant Interest Payment Date; except that
if the Notes are no longer represented by a Global Note,
as specified in Paragraph 2(vi) below, the Regular Record
Date will be the March 15, June 15, September 15 or
December 15, as the case may be, next preceding such
Interest Payment Date (whether or not a business day);
provided that interest payable on the Stated Maturity
Date or any Redemption Date shall be paid to the Person
to whom principal shall be paid;
(iv) the interest rate at which the Notes shall bear
interest shall be ______%;
(v) the Notes shall be redeemable at the option of
the Company, in whole or in part, at any time on or after
April __, 2003, upon not less than 30 nor more than 60
days' notice, at 100% of the principal amount redeemed
together with accrued and unpaid interest to the
redemption date;
(vi) (a) the Notes shall be issued in the form of a
Global Note; (b) the Depositary for such Global Note
shall be The Depository Trust Company; and (c) the
procedures with respect to transfer and exchange of
Global Notes shall be as set forth in the form of Note
attached hereto;
(vii) the title of the Notes shall be "[Senior Notes],
Series B";
(viii) the form of the Notes shall be as set forth in
Paragraph 1, above;
(ix) not applicable;
(x) the Notes shall not be subject to a Periodic
Offering;
(xi) not applicable;
(xii) not applicable;
(xiii) not applicable;
(xiv) the Notes shall be issuable in denominations of
$25 and any integral multiple thereof;
(xv) not applicable;
(xvi) the Notes shall not be issued as Discount
Securities;
(xvii) not applicable;
(xviii) not applicable; and
(xix) not applicable.
3. You are hereby requested to authenticate
$100,000,000 aggregate principal amount of ______% [Senior
Notes], Series B, due June 30, 2038 in such name as requested
by The Depository Trust Company ("DTC") in the Letter of
Representations dated April __, 1998, from the Company and the
Trustee to DTC in the manner provided by the Indenture.
4. You have been furnished with a supply of Notes
prepared in compliance with the Indenture and the Board
Resolutions referred to above. Before authenticating Notes in
the aggregate principal amount specified herein, you are
requested to complete such Notes as directed by this Company
Order.
5. You are hereby requested to hold the Notes as
custodian for DTC in accordance with the Letter of
Representations.
6. Concurrently with this Company Order, an Opinion of
Counsel under Sections 2.04 and 13.06 of the Indenture is
being delivered to you.
7. The undersigned Armando A. Pena and John F. Di
Lorenzo, Jr., the Treasurer and Secretary, respectively, of
the Company do hereby certify that:
(i) we have read the relevant portions of the
Indenture, including without limitation the conditions
precedent provided for therein relating to the action
proposed to be taken by the Trustee as requested in this
Company Order and Officers' Certificate, and the
definitions in the Indenture relating thereto;
(ii) we have read the Board Resolutions of the Company
and the Opinion of Counsel referred to above;
(iii) we have conferred with other officers of the
Company, have examined such records of the Company and
have made such other investigation as we deemed relevant
for purposes of this certificate;
(iv) in our opinion, we have made such examination or
investigation as is necessary to enable us to express an
informed opinion as to whether or not such conditions
have been complied with; and
(v) on the basis of the foregoing, we are of the
opinion that all conditions precedent provided for in the
Indenture relating to the action proposed to be taken by
the Trustee as requested herein have been complied with.
Kindly acknowledge receipt of this Company Order and Officers'
Certificate, including the documents listed herein, and confirm the
arrangements set forth herein by signing and returning the copy of
this document attached hereto.
Very truly yours,
APPALACHIAN POWER COMPANY
By:___________________________
Treasurer
And:__________________________
Secretary
Acknowledged by Trustee:
By:___________________________
Assistant Vice President
Exhibit 1
[Unless this certificate is presented by an authorized representa-
tive of The Depository Trust Company (55 Water Street, New York,
New York) to the issuer or its agent for registration of transfer,
exchange or payment, and any certificate to be issued is registered
in the name of Cede & Co. or in such other name as is requested by
an authorized representative of The Depository Trust Company and
any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an
interest herein. Except as otherwise provided in Section 2.11 of
the Indenture, this Security may be transferred, in whole but not
in part, only to another nominee of the Depository or to a
successor Depository or to a nominee of such successor Depository.]
No.
APPALACHIAN POWER COMPANY
[Senior Notes], Series B
CUSIP: Original Issue Date:
Maturity Date: Interest Rate:
Principal Amount:
Redeemable: Yes ____ No ____
In Whole: Yes ____ No ____
In Part: Yes ____ No ____
Initial Redemption Date:
Redemption Limitation Date:
Initial Redemption Price:
Reduction Percentage:
APPALACHIAN POWER COMPANY, a corporation duly organized and
existing under the laws of the Commonwealth of Virginia (herein
referred to as the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to CEDE & CO. or registered
assigns, the Principal Amount specified above on the Stated
Maturity Date specified above, and to pay interest on said Prin-
cipal Amount from the Original Issue Date specified above or from
the most recent interest payment date (each such date, an "Interest
Payment Date") to which interest has been paid or duly provided
for, quarterly in arrears on March 31, June 30, September 30 and
December 31 in each year, commencing (except as provided below)
with the Interest Payment Date next succeeding the Original Issue
Date specified above, at the Interest Rate per annum specified
above, until the Principal Amount shall have been paid or duly
provided for. Interest shall be computed on the basis of a 360-day
year of twelve 30-day months.
The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date, as provided in the Indenture, as
hereinafter defined, shall be paid to the Person in whose name this
Note (or one or more Predecessor Securities) shall have been
registered at the close of business on the Regular Record Date with
respect to such Interest Payment Date, which shall be the close of
business on the Business Day next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the Holder on such
Regular Record Date and shall be paid as provided in said
Indenture.
If any Interest Payment Date, any Redemption Date or the
Stated Maturity Date is not a Business Day, then payment of the
amounts due on this Note on such date will be made on the next
succeeding Business Day, and no interest shall accrue on such
amounts for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity Date, as the case may be, except
that, if such Business Day is in the next succeeding calendar year,
such payment shall be made on the immediately preceding Business
Day, with the same force and effect as if made on such date. The
principal of (and premium, if any) and the interest on this Note
shall be payable at the office or agency of the Company maintained
for that purpose in the Borough of Manhattan, the City of New York,
New York, in any coin or currency of the United States of America
which at the time of payment is legal tender for payment of public
and private debts; provided, however, that payment of interest
(other than interest payable on the Stated Maturity Date or any
Redemption Date) may be made at the option of the Company by check
mailed to the registered holder at such address as shall appear in
the Note Register.
This Note is one of a duly authorized series of Notes of the
Company (herein sometimes referred to as the "Notes"), specified in
the Indenture, all issued or to be issued in one or more series
under and pursuant to an Indenture dated as of January 1, 1998 duly
executed and delivered between the Company and The Bank of New
York, a New York banking corporation organized and existing under
the laws of the State of New York, as Trustee (herein referred to
as the "Trustee") (such Indenture, as originally executed and
delivered and as thereafter supplemented and amended being herein-
after referred to as the "Indenture"), to which Indenture and all
indentures supplemental thereto or Company Orders reference is
hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the
Company and the holders of the Notes. By the terms of the
Indenture, the Notes are issuable in series which may vary as to
amount, date of maturity, rate of interest and in other respects as
in the Indenture provided. This Note is one of the series of Notes
designated on the face hereof.
If so specified on the face hereof and subject to the terms of
Article Three of the Indenture, this Note is subject to redemption
at any time on or after the Initial Redemption Date specified on
the face hereof, as a whole or, if specified, in part, at the
election of the Company, at the applicable redemption price (as
described below) plus any accrued but unpaid interest to the date
of such redemption. Unless otherwise specified on the face hereof,
such redemption price shall be the Initial Redemption Price
specified on the face hereof for the twelve-month period commencing
on the Initial Redemption Date and shall decline for the twelve-
month period commencing on each anniversary of the Initial
Redemption Date by a percentage of principal amount equal to the
Reduction Percentage specified on the face hereof until such
redemption price is 100% of the principal amount of this Note to be
redeemed.
Notwithstanding the foregoing, the Company may not, prior to
the Redemption Limitation Date, if any, specified on the face
hereof, redeem any Note of this series as contemplated above as a
part of, or in anticipation of, any refunding operation by the
application, directly or indirectly, of moneys borrowed having an
effective interest cost to the Company (calculated in accordance
with generally accepted financial practice) of less than the
effective interest cost to the Company (similarly calculated) of
this Note.
This Note shall be redeemable to the extent set forth herein
and in the Indenture upon not less than thirty, but not more than
sixty, days previous notice by mail to the registered owner.
The Company shall not be required to (i) issue, exchange or
register the transfer of any Notes during a period beginning at the
opening of business 15 days before the day of the mailing of a
notice of redemption of less than all the outstanding Notes of the
same series and ending at the close of business on the day of such
mailing, nor (ii) register the transfer of or exchange of any Notes
of any series or portions thereof called for redemption. This
Global Note is exchangeable for Notes in definitive registered form
only under certain limited circumstances set forth in the
Indenture.
In the event of redemption of this Note in part only, a new
Note or Notes of this series, of like tenor, for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon
the surrender of this Note.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the
Notes may be declared, and upon such declaration shall become, due
and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time
of the entire indebtedness of this Note upon compliance by the
Company with certain conditions set forth therein.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than a
majority in aggregate principal amount of the Notes of each series
affected at the time outstanding, as defined in the Indenture, to
execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Notes;
provided, however, that no such supplemental indenture shall (i)
extend the fixed maturity of any Notes of any series, or reduce the
principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the
redemption thereof, or reduce the amount of the principal of a
Discount Security that would be due and payable upon a declaration
of acceleration of the maturity thereof pursuant to the Indenture,
without the consent of the holder of each Note then outstanding and
affected; (ii) reduce the aforesaid percentage of Notes, the
holders of which are required to consent to any such supplemental
indenture, or reduce the percentage of Notes, the holders of which
are required to waive any default and its consequences, without the
consent of the holder of each Note then outstanding and affected
thereby; or (iii) modify any provision of Section 6.01(c) of the
Indenture (except to increase the percentage of principal amount of
securities required to rescind and annul any declaration of amounts
due and payable under the Notes), without the consent of the holder
of each Note then outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Notes of all series at the time
outstanding affected thereby, on behalf of the Holders of the Notes
of such series, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established
pursuant to the Indenture with respect to such series, and its
consequences, except a default in the payment of the principal of
or premium, if any, or interest on any of the Notes of such series.
Any such consent or waiver by the registered Holder of this Note
(unless revoked as provided in the Indenture) shall be conclusive
and binding upon such Holder and upon all future Holders and owners
of this Note and of any Note issued in exchange herefor or in place
hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or
waiver is made upon this Note.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the
principal of and premium, if any, and interest on this Note at the
time and place and at the rate and in the money herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, this Note is transferable by the
registered holder hereof on the Note Register of the Company, upon
surrender of this Note for registration of transfer at the office
or agency of the Company as may be designated by the Company
accompanied by a written instrument or instruments of transfer in
form satisfactory to the Company or the Trustee duly executed by
the registered Holder hereof or his or her attorney duly authorized
in writing, and thereupon one or more new Notes of authorized
denominations and for the same aggregate principal amount and
series will be issued to the designated transferee or transferees.
No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Note, the Company, the Trustee, any paying agent and any Note
Registrar may deem and treat the registered Holder hereof as the
absolute owner hereof (whether or not this Note shall be overdue
and notwithstanding any notice of ownership or writing hereon made
by anyone other than the Note Registrar) for the purpose of
receiving payment of or on account of the principal hereof and
premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying
agent nor any Note Registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Note, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the
Indenture, against any incorporator, stockholder, officer or
director, past, present or future, as such, of the Company or of
any predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by
the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.
<PAGE>
The Notes of this series are issuable only in registered form
without coupons in denominations of $25 and any integral multiple
thereof. As provided in the Indenture and subject to certain
limitations, Notes of this series are exchangeable for a like
aggregate principal amount of Notes of this series of a different
authorized denomination, as requested by the Holder surrendering
the same.
All terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
This Note shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory
for any purpose until the Certificate of Authentication hereon
shall have been signed by or on behalf of the Trustee.
IN WITNESS WHEREOF, the Company has caused this Instrument to
be executed.
APPALACHIAN POWER COMPANY
By:___________________________
Attest:
By:___________________________
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes designated in
accordance with, and referred to in, the within-mentioned
Indenture.
Dated:_______________
THE BANK OF NEW YORK, as Trustee
By:___________________________
Authorized Signatory
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
(PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE)
_______________________________________
________________________________________________________________
________________________________________________________________
(PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
________________________________________________________________
ASSIGNEE) the within Note and all rights thereunder, hereby
________________________________________________________________
irrevocably constituting and appointing such person attorney to
________________________________________________________________
transfer such Note on the books of the Issuer, with full
________________________________________________________________
power of substitution in the premises.
Dated:________________________ _________________________
NOTICE: The signature to this assignment must correspond with the
name as written upon the face of the within Note in every
particular, without alteration or enlargement or any
change whatever and NOTICE: Signature(s) must be
guaranteed by a financial institution that is a member of
the Securities Transfer Agents Medallion Program
("STAMP"), the Stock Exchange Medallion Program ("SEMP")
or the New York Stock Exchange, Inc. Medallion Signature
Program ("MSP").
Exhibit 5
March 31, 1998
Appalachian Power Company
40 Franklin Road, S.W.
Roanoke, Virginia 24011
Dear Sirs:
With respect to the Registration Statement on Form S-3 of
Appalachian Power Company (the "Company") relating to the
issuance and sale by the Company of its Senior Notes (the "Senior
Notes") under an Indenture between the Company and The Bank of
New York, as Trustee (the "Indenture"), we wish to advise you as
follows:
We are of the opinion that, when the steps mentioned in the
next paragraph below have been taken, the Senior Notes will be
valid and legally binding obligations of the Company, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing.
The steps to be taken which are referred to in the next
preceding paragraph consist of the following:
(1) Appropriate definitive action by the Board of
Directors of the Company with respect to the proposed
transaction set forth in said Registration Statement;
(2) Appropriate action by and before the Virginia
State Corporation Commission and the Tennessee Regulatory
Authority in respect of the proposed transaction set forth
in said Registration Statement;
(3) Compliance with the Securities Act of 1933, as
amended, and with the Trust Indenture Act of 1939, as
amended; and
(4) Issuance and sale of the Senior Notes by the
Company in accordance with the Indenture and the
governmental and corporate authorizations aforesaid.
Insofar as this opinion relates to matters governed by laws
other than the laws of the State of New York and the Federal law
of the United States, this firm has consulted, and may consult
further, with counsel in which this firm has confidence and will
rely, as to such matters, upon such opinions or advice of such
counsel which will be delivered to this firm prior to the closing
of the sale of the Senior Notes.
We consent to the filing of this opinion as an exhibit to
said Registration Statement and to the use of our name and the
inclusion of the statements in regard to us set forth in said
Registration Statement under the caption "Legal Opinions".
Very truly yours,
/s/ Simpson Thacher & Bartlett
SIMPSON THACHER & BARTLETT
Exhibit 23(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this
Registration Statement of Appalachian Power Company on Form S-3 of
our reports dated February 24, 1998, appearing in and incorporated
by reference in the Annual Report on Form 10-K of Appalachian Power
Company for the year ended December 31, 1997 and to the reference
to us under the heading "Experts" in the Prospectus, which is part
of this Registration Statement.
Deloitte & Touche LLP
Columbus, Ohio
March 31, 1998
Exhibit 24
APPALACHIAN POWER COMPANY
I, Thomas G. Berkemeyer, Assistant Secretary of APPALACHIAN
POWER COMPANY, HEREBY CERTIFY that the following constitutes a true
and exact copy of the resolutions duly adopted by the affirmative
vote of a majority of the Board of Directors of said Company at a
meeting of said Board duly and legally held on March 26, 1998, at
which meeting a quorum of the Board of Directors of said Company was
present and voting throughout. I further certify that said
resolutions have not been altered, amended or rescinded, and that
they are presently in full force and effect.
GIVEN under my hand this 31st day of March, 1998.
_/s/ Thomas G. Berkemeyer_
Assistant Secretary
APPALACHIAN POWER COMPANY
March 26, 1998
The Chairman reminded the Board that it had approved a
financing program through December 31, 1998 of the Company
involving the issuance and sale of up to $250,000,000 aggregate
principal amount of Debt Securities comprised of first mortgage
bonds or secured or unsecured promissory notes, or a combination
of each, in one or more new series, each series to have a
maturity of not more than 42 years ("Debt Securities"). He
further stated that the Company has (i) filed a Form S-3 with the
Securities and Exchange Commission registering $150,000,000 of
Debt Securities and closed a Selling Agency Agreement in the
amount of $150,000,000 to market unsecured medium term notes and
(ii) filed a Form S-3 with the Commission registering
$100,000,000 of Senior Notes, Series A due 2038 and subsequently
issued the entire $100,000,000 of Senior Notes. The Chairman
then explained that in order to provide flexibility, it is
advisable that the Board authorize the Company to file one or
more additional Registration Statements to register up to
$100,000,000 of additional Debt Securities, such as Senior Notes.
In no event, however, will the Company issue and sell more than
$250,000,000 of Debt Securities as currently authorized by the
Virginia State Corporation Commission and the Tennessee
Regulatory Authority, unless further state regulatory authority
is obtained.
Thereupon, on motion duly made and seconded, the
following preambles and resolutions were unanimously adopted:
WHEREAS, Appalachian Power Company proposes to
file with the SEC one or more Registration Statements
for the registration pursuant to the applicable
provisions of the Securities Act of 1933, as amended,
of up to $350,000,000 aggregate principal amount of
Debt Securities, in one or more new series, each series
to have a maturity of not less than nine months and not
more than 42 years; and
WHEREAS, in connection with said Registration
Statement(s), there is to be filed with the SEC a Power
of Attorney, dated March 26, 1998, executed by certain
of the officers and directors of this Company appoint-
ing E. Linn Draper, Jr., G. P. Maloney, Bruce M. Barber
and Armando A. Pena, or any one of them, their true and
lawful attorneys, with the powers and authority set
forth in said Power of Attorney;
NOW, THEREFORE, BE IT
RESOLVED, that each and every one of said officers
and directors be, and they hereby are, authorized to
execute said Power of Attorney; and further
RESOLVED, that any and all action hereafter taken
by any of said named attorneys under said Power of
Attorney be, and the same hereby is, ratified and
confirmed and that said attorneys shall have all the
powers conferred upon them and each of them by said
Power of Attorney; and further
RESOLVED, that said Registration Statement(s) and
any amendments thereto, hereafter executed by any of
said attorneys under said Power of Attorney be, and the
same hereby are, ratified and confirmed as legally
binding upon this Company to the same extent as if the
same were executed by each said officer and director of
this Company personally and not by any of said
attorneys.
APPALACHIAN POWER COMPANY
POWER OF ATTORNEY
Each of the undersigned directors or officers of
APPALACHIAN POWER COMPANY, a Virginia corporation, which is to
file with the Securities and Exchange Commission, Washington,
D.C. 20549, under the provisions of the Securities Act of 1933,
as amended, one or more Registration Statements for the
registration thereunder of up to $350,000,000 aggregate principal
amount of its Debt Securities comprising first mortgage bonds or
secured or unsecured promissory notes, or a combination of each,
in one or more new series, each series to have a maturity not
exceeding 42 years, does hereby appoint E. LINN DRAPER, JR., G.
P. MALONEY, BRUCE M. BARBER and ARMANDO A. PENA his true and
lawful attorneys, and each of them his true and lawful attorney,
with power to act without the others, and with full power of
substitution or resubstitution, to execute for him and in his
name said Registration Statement(s) and any and all amendments
thereto, whether said amendments add to, delete from or otherwise
alter the Registration Statement(s) or the related Prospectus(es)
included therein, or add or withdraw any exhibits or schedules to
be filed therewith and any and all instruments necessary or
incidental in connection therewith, hereby granting unto said
attorneys and each of them full power and authority to do and
perform in the name and on behalf of each of the undersigned, and
in any and all capacities, every act and thing whatsoever
required or necessary to be done in and about the premises, as
fully and to all intents and purposes as each of the undersigned
might or could do in person, hereby ratifying and approving the
acts of said attorneys and each of them.
IN WITNESS WHEREOF the undersigned have hereunto set
their hands and seals this 26th day of March, 1998.
/s/ E. Linn Draper, Jr._____ /s/ G. P. Maloney___________
E. Linn Draper, Jr. L.S. G. P. Maloney L.S.
/s/ P. J. DeMaria___________ /s/ James J. Markowsky______
P. J. DeMaria L.S. James J. Markowsky L.S.
/s/ Henry Fayne_____________ /s/ J. H. Vipperman_________
Henry Fayne L.S. J. H. Vipperman L.S.
/s/ Wm. J. Lhota____________
Wm. J. Lhota L.S.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________
FORM T-1
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(B0 (2) ______________
___________________________________________
THE BANK OF NEW YORK
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip Code)
APPLALACHIAN POWER COMPANY
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
Virginia 54-0124790
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
40 Franklin Road, S.W.
Roanoke, VA 24011
(Address of principal executive offices) (Zip Code)
_________________________________
DEBT SECURITIES
(TITLE OF THE INDENTURE SECURITIES)
<PAGE>
GENERAL
ITEM 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.
Superintendent of Banks of the State of 2 Rector Street, New York, N.Y.
New York 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y.
10045
Federal Deposit Insurance Corporation Washington, D.C. 20549
New York Clearing House Association New York, N.Y.
(b) Whether it is authorized to exercise corporate trust powers:
YES
ITEM 2. Affiliations with Obligor
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
ITEM 16. List of Exhibits:
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29
under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. - A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (See Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to
Form T-1 filed with Registration Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee. (See Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. - The consent of the Trustee required by Section 321(b) of the Act.
(See Exhibit 6 to Form T-1, Registration Statement No. 33-44051.)
7. - A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
Authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a
corporation organized and existing under the laws of the State of New York, has
duly caused this statement of eligibility 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 31st day of March 1998.
The Bank of New York
By:/s/ Michael Culhane
----------------------
Michael Culhane
<PAGE>
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, NY 10286
And Foreign and Domestic Subsidiaries.
a member of the Federal Reserve System, at the close of business September 30,
1997, 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:
Noninterest-bearing balances and currency and coin............. $ 5,004,638
Interest-bearing balances...................................... 1,271,514
Securities:
Held-to-maturity securities.................................... 1,105,782
Available-for-sale securities.................................. 3,164,271
Federal funds sold and Securities purchased under agreements to
resell.......................................................... 5,723,829
Loans and lease financing receivables:
Loans and leases, net of unearned income.............34,916,196
LESS: Allowance for loan and lease losses............ 581,177
LESS: Allocated transfer risk reserve................ 429
Loans and leases, net of unearned income allowance and
reserve....................................................... 34,334,590
Assets held in trading accounts.................................. 2,035,284
Premises and fixed assets (including capitalized leases)......... 671,664
Other real estate owned.......................................... 13,306
Investments in unconsolidated subsidiaries and associated
companies....................................................... 210,685
Customers liability to this bank on acceptances outstanding...... 1,463,446
Intangible assets................................................ 753,190
Other assets..................................................... 1,784,796
-----------
Total assets..................................................... $57,536,995
===========
LIABILITIES
Deposits:
In domestic offices............................................ $27,270,824
Noninterest bearing..................................12,160,977
Interest-bearing.....................................15,109,847
In foreign office. Edge and Agreement subsidiaries
and IBFs............................................14,000,000
Noninterest-bearing.................................. 657,479
Interest-bearing.....................................14,030,327
Federal funds purchased and Securities sold under agreements to
repurchase...................................................... 1,946,099
Demand notes issued to the U.S. Treasury......................... 283,793
Trading liabilities.............................................. 1,553,539
Other borrowed money:
With remaining maturity of one year or less.................... 2,245,014
With remaining maturity of more than one year through
three years................................................... 0
With remaining maturity of more than three years............... 45,664
Bank's liability on acceptances executed and outstanding......... 1,473,588
Subordinated notes and debentures................................ 1,018,940
Other liabilities................................................ 2,193,031
-----------
Total liabilities................................................ 52,718,298
-----------
EQUITY CAPITAL
Common stock..................................................... 1,135,284
Surplus.......................................................... 731,319
Undivided profits and capital reserves........................... 2,943,008
Net unrealized holding gains (losses) on available-for-
sale securities................................................. 25,428
Cumulative foreign currency translation adjustments.............. (16,342)
-----------
Total equity capital............................................. 4,818,697
-----------
Total liabilities and equity capital............................. $57,536,995
===========
I, Robert E. Keilman, Senior Vice President and Comptroller 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.
Robert E. Keilman
We, the undersigned directors attest to 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.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
- --------------------------------------------------------------------------------
