<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 20, 1997
REGISTRATION NO. 333-21091
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
NEVADA POWER COMPANY
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
NEVADA 88-0045330
(State or Other Jurisdiction of Incorporation or (I.R.S. Employer Identification Number)
Organization)
</TABLE>
NVP CAPITAL I AND NVP CAPITAL II
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
DELAWARE TO BE APPLIED FOR
(State or Other Jurisdiction of Incorporation (I.R.S. Employer Identification Number)
or Organization)
</TABLE>
6226 WEST SAHARA AVENUE, LAS VEGAS, NEVADA 89102, TELEPHONE (702) 367-5000
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrants' Principal Executive Offices)
CHARLES A. LENZIE, CHAIRMAN OF THE BOARD, NEVADA POWER COMPANY
P. O. BOX 230, LAS VEGAS, NEVADA 89151, TELEPHONE (702) 367-5000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
------------------------
COPIES TO:
<TABLE>
<S> <C>
Glen E. Stephens, Esq. Robert A. Yolles, Esq.
Best Best & Krieger LLP Jones, Day, Reavis & Pogue
P. O. Box 1028 77 West Wacker Drive
Riverside, California 92502 Chicago, Illinois 60601
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
WHEN MARKET CONDITIONS WARRANT AFTER THIS REGISTRATION STATEMENT BECOMES
EFFECTIVE.
------------------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
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. /X/
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 20, 1997
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.
<PAGE>
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MARCH 20, 1997
4,850,000 PREFERRED SECURITIES
NVP CAPITAL I
% CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES,
SERIES A (QUIPS-SM-)*
(LIQUIDATION PREFERENCE $25 PER PREFERRED SECURITY)
GUARANTEED, AS SET FORTH HEREIN, BY
NEVADA POWER COMPANY
---------
The % Cumulative Quarterly Income Preferred Securities, Series A (the
"Series A QUIPS"), offered hereby represent undivided beneficial interests in
the assets of NVP Capital I, a trust formed under the laws of the State of
Delaware (the "Series A Issuer"). Nevada Power Company, a Nevada corporation
("Nevada Power"), will be the owner of all of the beneficial interests
represented by common securities of the Series A Issuer ("Series A Common
Securities"). IBJ Schroder Bank & Trust Company ("IBJ Schroder") is the Property
Trustee of the Series A Issuer. The Series A Issuer exists for the sole purpose
of issuing the Series A QUIPS and the Series A Common Securities and investing
the proceeds thereof in % Junior Subordinated Deferrable Interest Debentures,
Series A (the "Series A QUIDS"-SM-)*, to be issued by Nevada Power. The Series A
QUIDS will mature on , 2037, which date may be extended to a date
not later than , 2046 if certain conditions are met, and are
redeemable prior to maturity at Nevada Power's option as hereinafter described.
The Series A QUIPS will have a preference under certain circumstances with
respect to cash distributions and amounts payable on liquidation, redemption or
otherwise over the Series A Common Securities. See "Description of QUIPS--
Subordination of Common Securities" in the accompanying Prospectus.
(CONTINUED ON NEXT PAGE)
--------------
SEE "RISK FACTORS" BEGINNING ON PAGE S-4 HEREOF FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE SERIES A QUIPS.
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------
<TABLE>
<CAPTION>
PROCEEDS TO THE
INITIAL PUBLIC UNDERWRITING SERIES A
OFFERING PRICE COMMISSION(1) ISSUER(2)(3)
-------------- ------------------- ----------------
<S> <C> <C> <C>
Per Series A QUIPS............................................... $ (2) $
Total............................................................ $ (2 ) $
</TABLE>
- --------------
(1) The Series A Issuer and Nevada Power have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933. See "Underwriting".
(2) In view of the fact that the proceeds of the sale of the Series A QUIPS will
be used to purchase the Series A QUIDS, the Underwriting Agreement provides
that Nevada Power will pay to the Underwriters, as compensation
("Underwriters' Compensation") for their arranging the investment therein of
such proceeds, $ per Series A QUIPS (or $ in the aggregate). See
"Underwriting".
(3) Expenses of the offering, which are payable by Nevada Power, are estimated
to be $ .
----------------
The Series A QUIPS offered hereby are offered severally by the Underwriters,
as specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that the
Series A QUIPS will be ready for delivery in book-entry form only through the
facilities of The Depository Trust Company in New York, New York, on or about
, 1997, against payment therefor in immediately available funds.
- ----------------
* QUIPS and QUIDS are servicemarks of Goldman, Sachs & Co.
GOLDMAN, SACHS & CO. DEAN WITTER REYNOLDS INC.
LEGG MASON WOOD WALKER MERRILL LYNCH & CO. PAINEWEBBER INCORPORATED
INCORPORATED
------------------
The date of this Prospectus Supplement is , 1997.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SERIES A QUIPS,
INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH
SECURITIES, AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE
OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING".
--------------
(CONTINUED FROM PREVIOUS PAGE)
Holders of the Series A QUIPS will be entitled to receive preferential
cumulative cash distributions accruing from the date of original issuance and
payable quarterly in arrears on the last day of March, June, September and
December of each year, commencing , 1997, at the annual rate of % of
the liquidation preference of $25 per Series A QUIPS ("Distributions"). So long
as no Debenture Event of Default has occurred and is continuing, Nevada Power
has the right to defer payment of interest on the Series A QUIDS at any time or
from time to time for a period not exceeding 20 consecutive quarters (each, an
"Extension Period"), provided that no Extension Period may extend beyond the
Maturity Date (as defined herein) of the Series A QUIDS. Upon the termination of
any such Extension Period and the payment of all amounts then due on any
Interest Payment Date (as defined herein), Nevada Power may elect to begin a new
Extension Period subject to the requirements set forth herein. At the end of
each Extension Period, Nevada Power shall pay all interest then accrued and
unpaid together with interest on all such accrued and unpaid amounts calculated
at the applicable rate. During an Extension Period, Nevada Power may prepay any
deferred interest prior to the end of an Extension Period in whole or in part on
any Interest Payment Date. If interest payments on the Series A QUIDS are so
deferred, Distributions on the Series A QUIPS will also be deferred and Nevada
Power will not be permitted and no subsidiary of Nevada Power will be permitted,
subject to certain exceptions set forth herein, to (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of Nevada Power's capital stock or (ii)
make any payment of principal of, or interest or premium, if any, on, or repay,
repurchase or redeem, or make any sinking fund payment with respect to, any
indebtedness that ranks PARI PASSU with or junior in right of payment to the
Series A QUIDS, or make any guarantee payments with respect to any indebtedness
if such guarantee ranks PARI PASSU with or junior in right of payment to the
Series A QUIDS. During an Extension Period, interest on the Series A QUIDS will
continue to accrue (and the amount of Distributions to which holders of the
Series A QUIPS are entitled will accumulate at the rate of % per annum,
compounded quarterly) and holders of Series A QUIPS will be required to accrue
interest income in the form original issue discount ("OID") for United States
federal income tax purposes as described herein. See "Certain Terms of Series A
QUIDS--Option to Extend Interest Payment Period" and "United States Federal
Income Tax Consequences--Potential Extension of Interest Payment Period and
Original Issue Discount" and "--Payments of Interest".
The Series A Guarantee of Nevada Power guarantees the payment of
Distributions and payments on liquidation or redemption of the Series A QUIPS,
but only in each case to the extent of funds held by the Series A Issuer, as
described herein (the "Series A Guarantee"). See "Description of Guarantees" in
the accompanying Prospectus. If Nevada Power does not make interest payments on
the Series A QUIDS held by the Series A Issuer, the Series A Issuer will have
insufficient funds to pay Distributions on the Series A QUIPS. The Series A
Guarantee does not cover payment of Distributions when the Series A Issuer does
not have sufficient funds to pay such Distributions. In such event, a holder of
Series A QUIPS may institute a legal proceeding directly against Nevada Power to
enforce payment of such Distributions to such holder. The Series A Guarantee,
when taken together with the obligations of Nevada Power under the Series A
QUIDS, the Indenture under which the Series A QUIDS are being issued, the Trust
Agreement creating the Series A Issuer and the Expense Agreement described
herein, provide a full, irrevocable and unconditional guarantee on a
subordinated basis of amounts due on the Series A QUIPS. See "Risk
Factors--Rights Under the Series A Guarantee; Limited Funds Available to Series
A Issuer"; see also "Relationship Among the QUIPS, the Corresponding QUIDS and
the Guarantees" in the accompanying Prospectus. The obligations of Nevada Power
under the Series A Guarantee and the
S-2
<PAGE>
Series A QUIDS are subordinate and junior in right of payment to all Senior Debt
(as defined in "Description of QUIDS--Subordination" in the accompanying
Prospectus) of Nevada Power.
As of December 31, 1996, Nevada Power had approximately $900 million
aggregate principal amount of Senior Debt outstanding. At that date, the amount
of obligations of Nevada Power on a parity with the Series A QUIDS and the
Series A Guarantee aggregated approximately $480 million, consisting primarily
of accounts payable, accrued liabilities, including taxes, interest and
deposits, and deferred credits and other liabilities, all arising in the
ordinary course of business. Such amount excludes commitments or contingencies
in respect of existing or future obligations for (by way of example)
construction expenditures, fuel and purchased power obligations and operating
lease obligations. Neither the terms of the Series A QUIDS nor the Series A
Guarantee place any limitation on the amount of Senior Debt, parity obligations
or other indebtedness that may be incurred by Nevada Power. See "Description of
QUIDS--Subordination" in the accompanying Prospectus.
The Series A QUIPS are subject to mandatory redemption, in whole or in part,
upon repayment of the Series A QUIDS at maturity or their earlier redemption in
an amount equal to the amount of related Series A QUIDS maturing or being
redeemed at a redemption price ("Redemption Price") equal to the aggregate
liquidation preference of such Series A QUIPS plus accumulated and unpaid
Distributions thereon to the date of redemption. See "Description of
QUIPS--Redemption Procedures". The Series A QUIDS are redeemable prior to
maturity at the option of Nevada Power (i) on or after , 2002, in
whole at any time or in part from time to time or (ii) at any time, in whole
(but not in part) upon the occurrence and continuation of a Special Event (as
defined herein), in each case subject to the further conditions described under
"Description of QUIDS--Redemption" and "Description of Corresponding
QUIDS--Optional Redemption" in the accompanying Prospectus. The redemption price
in either such event will equal 100% of the principal amount of Series A QUIDS
to be redeemed plus accrued and unpaid interest thereon to the date of
redemption.
At any time, Nevada Power will have the right to terminate the Series A
Issuer and cause the Series A QUIDS to be distributed to the holders of the
Series A QUIPS in liquidation of the Series A Issuer. If Nevada Power elects to
liquidate the Series A Issuer and thereby causes the Series A QUIDS to be
distributed to holders of the Series A QUIPS in liquidation of the Series A
Issuer, Nevada Power may shorten or extend the maturity of such Series A QUIDS,
except that it can only extend the maturity if certain conditions are met. See
"Certain Terms of Series A QUIPS--Special Event Redemption or Distribution of
Series A QUIDS".
In the event of the liquidation of the Series A Issuer, after satisfaction
of the creditors of the Series A Issuer as provided by applicable law, the
holders of the Series A QUIPS will be entitled to receive a liquidation
preference of $25 per Series A QUIPS plus accumulated and unpaid Distributions
thereon to the date of payment, which may be in the form of a distribution of
such amount in Series A QUIDS, subject to certain exceptions. See "Description
of QUIPS--Liquidation Distribution Upon Termination" in the accompanying
Prospectus.
Application has been made to list the Series A QUIPS on the New York Stock
Exchange (the "NYSE") under the symbol "NVP Pr". Trading of the Series A QUIPS
on the NYSE is expected to commence within 30 days after the initial delivery of
the Series A QUIPS. If the Series A QUIDS are distributed to the holders of
Series A QUIPS upon the liquidation of the Series A Issuer, Nevada Power will
use its best efforts to list the Series A QUIDS on the NYSE or such other stock
exchanges, if any, on which the Series A QUIPS are then listed.
The Series A QUIPS will be represented by global certificates registered in
the name of The Depository Trust Company ("DTC") or its nominee. Beneficial
interests in the Series A QUIPS will be shown on, and transfers thereof will be
effected only through, records maintained by participants in DTC. Except as
described in the accompanying Prospectus, Series A QUIPS in certificated form
will not be issued in exchange for the global certificates. See "Description of
QUIPS--Book-Entry Issuance" in the accompanying Prospectus.
S-3
<PAGE>
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN CONJUNCTION WITH
THE INFORMATION CONTAINED IN THE ACCOMPANYING PROSPECTUS. AS USED HEREIN, (I)
THE "INDENTURE" MEANS THE JUNIOR SUBORDINATED INDENTURE, AS AMENDED AND
SUPPLEMENTED FROM TIME TO TIME, INCLUDING THE FIRST SUPPLEMENTAL INDENTURE
RELATING TO THE SERIES A QUIDS, BETWEEN NEVADA POWER AND IBJ SCHRODER AS TRUSTEE
(THE "DEBENTURE TRUSTEE"), AND (II) THE "TRUST AGREEMENT" MEANS THE AMENDED AND
RESTATED TRUST AGREEMENT AMONG NEVADA POWER, AS DEPOSITOR, IBJ SCHRODER, AS
PROPERTY TRUSTEE (THE "PROPERTY TRUSTEE") AND DELAWARE TRUST CAPITAL MANAGEMENT,
INC., AS DELAWARE TRUSTEE (THE "DELAWARE TRUSTEE"), THE ADMINISTRATIVE TRUSTEES
NAMED THEREIN (COLLECTIVELY, WITH THE PROPERTY TRUSTEE AND DELAWARE TRUSTEE, THE
"ISSUER TRUSTEES") AND THE HOLDERS AS DEFINED THEREIN. EACH OF THE OTHER
CAPITALIZED TERMS USED IN THIS PROSPECTUS SUPPLEMENT AND NOT OTHERWISE DEFINED
IN THIS PROSPECTUS SUPPLEMENT HAS THE MEANING SET FORTH IN THIS PROSPECTUS
SUPPLEMENT OR IN THE ACCOMPANYING PROSPECTUS.
RISK FACTORS
Prospective purchasers of the Series A QUIPS should carefully review the
information contained elsewhere in this Prospectus Supplement and in the
accompanying Prospectus and should particularly consider the following matters.
DEPENDENCE OF SERIES A ISSUER ON NEVADA POWER FOR FUNDS; SUBORDINATION OF THE
SERIES A GUARANTEE AND THE SERIES A QUIDS
The ability of the Series A Issuer to pay amounts due on the Series A QUIPS
is solely dependent upon Nevada Power making payments on the Series A QUIDS as
and when required.
The obligations of Nevada Power under the Series A Guarantee and the Series
A QUIDS issued by Nevada Power for the benefit of the holders of Series A QUIPS
are unsecured and rank subordinate and junior in right of payment to all Senior
Debt of Nevada Power. As of December 31, 1996, Nevada Power had approximately
$900 million aggregate principal amount of Senior Debt outstanding. At that
date, the amount of obligations of Nevada Power on a parity with the Series A
QUIDS and the Series A Guarantee aggregated approximately $480 million,
consisting primarily of accounts payable, accrued liabilities, including taxes,
interest and deposits, and deferred credits and other liabilities, all arising
in the ordinary course of business. Such amount excludes commitments or
contingencies in respect of existing or future obligations for (by way of
example) construction expenditures, fuel and purchased power obligations and
operating lease obligations. Neither the Indenture, the Series A Guarantee nor
the Trust Agreement places any limitation on the amount of secured or unsecured
debt, including Senior Debt, that may be incurred by Nevada Power, whether under
the Indenture or any existing or other indenture that Nevada Power may enter
into in the future or otherwise, including, without limitation, Nevada Power's
Indenture of Mortgage and Deed of Trust dated October 1, 1953 entered into with
Banker's Trust Company, together with supplemental indentures thereto heretofore
or hereafter entered into (the "Mortgage Indenture"). Furthermore, there are no
provisions in the Indenture, the Series A Guarantee or the Trust Agreement, or
any other existing agreement, that afford holders of Series A QUIPS or Series A
QUIDS protection in the event of a highly leveraged or similar transaction
involving Nevada Power, whether or not involving a change in control of Nevada
Power. At December 31, 1996, the aggregate principal amount of indebtedness
outstanding under the Mortgage Indenture was $443 million, all of which is
secured by a first mortgage lien and security interest in substantially all of
the tangible property of Nevada Power. The Series A QUIDS and the Series A
Guarantee also will be effectively subordinated to all obligations of Nevada
Power's subsidiaries. See "Description of Guarantees--Status of the Guarantees"
and "Description of QUIDS--Subordination" in the accompanying Prospectus.
S-4
<PAGE>
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES; POTENTIAL MARKET
VOLATILITY DURING EXTENSION PERIOD
So long as no Event of Default under the Indenture has occurred and is
continuing, Nevada Power has the right under the Indenture to defer the payment
of interest on the Series A QUIDS at any time or from time to time for a period
not exceeding 20 consecutive quarters with respect to each Extension Period,
provided that no Extension Period may extend beyond the Maturity Date of the
Series A QUIDS. At the end of each Extension Period, Nevada Power shall pay all
interest then accrued and unpaid together with interest on all such accrued and
unpaid amounts calculated at the applicable rate. During an Extension Period,
Nevada Power may prepay any deferred interest prior to the end of an Extension
Period in whole or in part on any Interest Payment Date. Upon the termination of
any Extension Period and the payment of all payments then due on any Interest
Payment Date, Nevada Power may elect to begin a new Extension Period subject to
the above requirements. If interest payments on the Series A QUIDS are so
deferred, Distributions on the Series A QUIPS will also be deferred and Nevada
Power will not be permitted, and no subsidiary of Nevada Power will be
permitted, to (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of Nevada
Power's capital stock or (ii) make any payment of principal of, or interest or
premium, if any, on, or repay, repurchase or redeem, or make any sinking fund
payment with respect to, any indebtedness that ranks PARI PASSU with or junior
in right of payment to the Series A QUIDS, or make any guarantee payments with
respect to any indebtedness if such guarantee ranks PARI PASSU with or junior in
right of payment to the Series A QUIDS (other than (a) dividends or
distributions in Common Stock of Nevada Power, (b) redemptions or purchases of
any rights pursuant to Nevada Power's Stock Purchase Rights Plan, or any
successor to such Stock Purchase Rights Plan, and the declaration of a dividend
of such rights or the issuance of Preferred Stock under such plans in the
future, (c) payments under any Guarantee, (d) purchases of Common Stock related
to the issuance of Common Stock under Nevada Power's Stock Purchase and Dividend
Reinvestment Plan and any of Nevada Power's benefit plans for its directors,
officers or employees and (e) purchases of Common Stock required to prevent the
loss or secure the renewal or reinstatement of any government license or
franchise held by Nevada Power or any of its subsidiaries). During an Extension
Period, interest on the Series A QUIDS will continue to accrue (and the amount
of Distributions to which holders of the Series A QUIPS are entitled will
accumulate at the rate of % per annum, compounded quarterly) and holders of
Series A QUIDS will be required to accrued interest income in the form of OID
for the United States federal income tax purposes in advance of receipt of cash
related to such income. See "Certain Terms of Series A QUIDS-- Option to Extend
Interest Payment Period" and "United States Federal Income Tax Consequences--
Potential Extension of Interest Payment Period and Original Issue Discount".
Should an Extension Period occur, a holder of Series A QUIPS will accrue
income (in the form of OID) in respect of its pro rata share of the Series A
QUIDS held by the Series A Issuer for United States federal income tax purposes.
As a result, a holder of Series A QUIPS will include such income in gross income
for United States federal income tax purposes in advance of the receipt of cash,
and will not receive the cash related to such income from the Series A Issuer if
the holder disposes of the Series A QUIPS prior to the record date for the
payment of Distributions. See "United States Federal Income Tax
Consequences--Payments of Interest", "--Potential Extension of Interest Payment
Period and Original Issue Discount" and "--Sale or Redemption of Series A
QUIPS".
Nevada Power has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Series A
QUIDS. However, should Nevada Power elect to exercise such right in the future,
the market price of the Series A QUIPS is likely to be adversely affected. A
holder that disposes of its Series A QUIPS during an Extension Period,
therefore, might not receive the same return on its investment as a holder that
continues to hold its Series A QUIPS. In addition, as a result of the existence
of Nevada Power's right to defer interest payments, the market price of the
Series A QUIPS (which represent preferred undivided beneficial interests in the
Series A QUIDS) may be
S-5
<PAGE>
more volatile than the market prices of other securities on which OID accrues
that are not subject to such deferrals.
RIGHTS UNDER THE SERIES A GUARANTEE; LIMITED FUNDS AVAILABLE TO SERIES A ISSUER
The Series A Guarantee guarantees to the holders of the Series A QUIPS the
following payments to the extent not paid by the Series A Issuer, (i) any
accumulated and unpaid Distributions required to be paid on the Series A QUIPS,
if and to the extent that the Property Trustee has available at such time in the
payment account funds sufficient to make such payment, (ii) the Redemption Price
with respect to any Series A QUIPS called for redemption, but only to the extent
that the Property Trustee has available when due, in the payment account, funds
sufficient to make such payment, and (iii) upon a voluntary or involuntary
dissolution, winding-up or liquidation of the Series A Issuer (unless the Series
A QUIDS are distributed to holders of the Series A QUIPS), the lesser of (a) the
aggregate of the liquidation preference and all accrued and unpaid Distributions
to the date of payment but only to the extent that the Property Trustee has
available when due, in the payment account, funds sufficient to make such
payment (b) the amount of assets of the Series A Issuer remaining available for
distribution to holders of the Series A QUIPS in liquidation of the Series A
Issuer. If Nevada Power were to default on its obligation to pay amounts payable
under the Series A QUIDS, the Series A Issuer would lack funds for the payment
of Distributions or amounts payable on redemption of the Series A QUIPS or
otherwise, and, in such event, holders of the Series A QUIPS would not be able
to rely upon the Series A Guarantee for payment of such amounts. In addition,
the Series A Guarantee will constitute an unsecured obligation of Nevada Power
and will rank subordinate and junior in right of payment to all Senior Debt of
Nevada Power.
SPECIAL EVENT REDEMPTION
Upon the occurrence and continuation of a Special Event (as defined under
"Description of QUIDS--Redemption"), Nevada Power has the right to redeem the
Series A QUIDS in whole (but not in part) within 90 days following the
occurrence of such Special Event and thereby cause a mandatory redemption of the
Series A QUIPS at the Redemption Price.
On February 6, 1997, President Clinton released his fiscal year 1998 budget
proposal, which contains a number of proposed tax law changes (the "Proposed
Legislation"). The Proposed Legislation would, among other things, generally
deny interest deductions for interest on an instrument issued by a corporation
that has a maximum weighted average maturity of more than 40 years. The Proposed
Legislation would also generally deny interest deductions for interest on an
instrument issued by a corporation that has a maximum term of more than 15 years
and that is not shown as indebtedness on the separate balance sheet of the
issuer or, in the case of an instrument with a maximum term of more than 15
years issued to a related party (other than a corporation), if the holder or
some other related party issues a related instrument that is not shown as
indebtedness on the issuer's consolidated balance sheet. For purposes of
determining the weighted average maturity or the term of an instrument, any
right to extend would be treated as exercised. The above-described provisions of
the Proposed Legislation, if enacted into law, are proposed to be effective
generally for instruments issued on or after the date of first committee action
in Congress. Nevada Power has been advised that the date of first committee
action is intended to be the effective date designated by the tax-writing
committees of Congress if the proposals are included in a bill that is adopted
by Congress. Although there can be no assurance, Nevada Power believes that any
such effective date would not be prior to the date on which the Series A QUIPS
are issued. Based on the proposed effective date, if the Proposed Legislation
were to be enacted in the form proposed, the above-described provisions should
not apply to the Series A QUIDS. If either provision were to apply to the Series
A QUIDS, Nevada Power would be unable to deduct interest on the Series A QUIDS.
Nevada Power believes that, under current law, it will be able to deduct
interest on the Series A QUIDS. Although the above-described provisions of the
Proposed Legislation in the form proposed
S-6
<PAGE>
should not apply to the Series A QUIDS, given the proposed effective date, there
can be no assurance that future legislation will not be introduced and enacted
which would adversely affect the ability of Nevada Power to deduct interest on
the Series A QUIDS or otherwise affect the tax treatment of the transaction
described herein. A change in the deductibility of interest and certain other
changes could give rise to a Tax Event, which may permit Nevada Power to cause a
redemption of the Series A QUIPS, as described more fully in the accompanying
Prospectus under "Description of QUIPS--Redemption-- Special Event Redemption or
Distribution of Corresponding QUIDS". See "United States Federal Income Tax
Consequences."
DISTRIBUTION OF SERIES A QUIDS UPON TERMINATION; POTENTIAL ADVERSE EFFECT UPON
MARKET PRICE
Nevada Power has the right to terminate the Series A Issuer at any time and,
after satisfaction of liabilities to creditors of the Series A Issuer, cause the
Series A QUIDS to be distributed to the holders of Series A QUIPS in liquidation
of the Series A Issuer. There can be no assurance as to the market prices for
Series A QUIDS that may be distributed in exchange for Series A QUIPS if a
liquidation of the Series A Issuer occurs. See "Certain Terms of Series A
QUIPS--Special Event Redemption or Distribution of Series A QUIDS". If the
Series A QUIDS are so distributed, Nevada Power will use its best efforts to
have the Series A QUIDS listed on the NYSE or on such other exchange as the
Series A QUIDS are then listed or traded.
Series A QUIDS that a holder of Series A QUIPS may receive on termination
and liquidation of the Series A Issuer may trade at a discount to the price that
the investor paid to purchase the Series A QUIPS offered hereby. Because holders
of Series A QUIPS may receive Series A QUIDS on termination of the Series A
Issuer, prospective purchasers of Series A QUIPS are also making an investment
decision with regard to the Series A QUIDS and should carefully review all the
information regarding the Series A QUIDS contained herein. See "United States
Federal Income Tax Consequences" herein and "Description of
QUIPS--Redemption--Special Event Redemption or Distribution of Corresponding
QUIDS" and "Description of Corresponding QUIDS--General" in the accompanying
Prospectus.
Under current United States federal income tax law and interpretations, a
distribution of the Series A QUIDS upon liquidation of the Series A Issuer
should not be a taxable event to holders of the Series A QUIPS. Should there be
a change in law, a change in legal interpretation, a Tax Event or other
circumstances, however, the distribution could be a taxable event to the holders
of the Series A QUIPS. See "United States Federal Income Tax
Consequences--Distribution of Series A QUIDS to Holders of Series A QUIPS".
LIMITED VOTING RIGHTS
Holders of Series A QUIPS will generally have limited voting rights relating
only to the modification of the Series A QUIPS and the dissolution, winding-up
or liquidation of the Series A Issuer. Holders of Series A QUIPS will not be
entitled to vote to appoint, remove or replace the Property Trustee or the
Delaware Trustee, which voting rights are vested exclusively in the holder of
the Series A Common Securities except upon the occurrence of certain events
described herein. The Issuer Trustees and Nevada Power may amend the Trust
Agreement without the consent of holders of Series A QUIPS to ensure that the
Series A Issuer will be classified for United States federal income tax purposes
as a grantor trust even if such action adversely affects the interests of such
holders. See "Description of QUIPS--Voting Rights; Amendment of Each Trust
Agreement" and "--Removal of Issuer Trustees" in the accompanying Prospectus.
S-7
<PAGE>
NO ESTABLISHED TRADING MARKET FOR THE SERIES A QUIPS; TRADING PRICE; POTENTIAL
ADVERSE INCOME TAX EFFECT
Application has been made to list the Series A QUIPS on the NYSE. If
approved for listing, should an Extension Period occur, the Series A QUIPS may
trade at prices that do not fully reflect the value of accrued but unpaid
interest with respect to the underlying Series A QUIDS. A holder of Series A
QUIPS that disposes of its Series A QUIPS between record dates for payments of
Distributions will nevertheless be required to include in income as ordinary OID
income an amount equal to the accrued but unpaid interest on the Series A QUIDS
through the date of disposition and to add such amount to its adjusted tax basis
in such holder's pro rata share of the underlying Series A QUIDS deemed disposed
of. Such holder will recognize a capital loss to the extent the selling price
(which may not fully reflect the value of accrued but unpaid interest) is less
than its adjusted tax basis (which will include the full amount of any accrued
but unpaid interest). Subject to certain limited exceptions, capital losses
cannot be applied to offset ordinary income for United States federal income tax
purposes. See "United States Federal Income Tax Consequences--Sale or Redemption
of Series A QUIPS".
NVP CAPITAL I
NVP Capital I is a statutory business trust formed under Delaware law
pursuant to (i) the Trust Agreement executed by Nevada Power, as Depositor, IBJ
Schroder, as Property Trustee, and Delaware Trust Capital Management, Inc., as
Delaware Trustee, and the Administrative Trustees named therein, and (ii) the
filing of a certificate of trust with the Secretary of State of the State of
Delaware on January 31, 1997. The Trust Agreement will be qualified under the
Trust Indenture Act of 1939, as amended ("Trust Indenture Act"). The Series A
Issuer's business and affairs are conducted by the Issuer Trustees: IBJ
Schroder, as Property Trustee, and Delaware Trust Capital Management, Inc., as
Delaware Trustee, and two individual Administrative Trustees who are employees
or officers of or affiliated with Nevada Power. The Series A Issuer exists for
the exclusive purposes of (i) issuing and selling the Series A QUIPS and Series
A Common Securities, (ii) using the proceeds from the sale of Series A QUIPS and
Series A Common Securities to acquire Series A QUIDS issued by Nevada Power,
(iii) receiving payments to be made with respect to the Series A QUIDS and
disbursing such payments in accordance with the terms of the Trust Agreement and
(iv) engaging in only those other activities necessary, convenient or incidental
thereto. Accordingly, the Series A QUIDS will be the sole assets of the Series A
Issuer, and payments under the Series A QUIDS will be the sole revenue of the
Series A Issuer. All of the Series A Common Securities will be owned by Nevada
Power. The Series A Common Securities will rank PARI PASSU, and payments will be
made thereon pro rata, with the Series A QUIPS, except that upon the occurrence
and continuance of an event of default under the Trust Agreement resulting from
a Debenture Event of Default, the rights of Nevada Power as holder of the Series
A Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise will be subordinated to the rights of the
holders of the Series A QUIPS. See "Description of QUIPS--Subordination of
Common Securities" in the accompanying Prospectus. Nevada Power will acquire
Series A Common Securities in an aggregate liquidation amount equal to 3% of the
total capital of the Series A Issuer. The Series A Issuer has a term of 55
years, but may terminate earlier as provided in the Trust Agreement. The
principal executive office of the Series A Issuer is 6226 West Sahara Avenue,
Las Vegas, Nevada 89102, Attention: Secretary, and its telephone number is (702)
367-5000. See "The Issuers" in the accompanying Prospectus.
NEVADA POWER COMPANY
Nevada Power, incorporated under the laws of Nevada in 1929, is an operating
public utility engaged in the electric utility business in the City of Las Vegas
and vicinity in Southern Nevada. As of December 31, 1996, Nevada Power served
approximately 487,100 customers in its service area which has a population of
approximately 1,211,000. For the year 1996, Nevada Power's electric energy
S-8
<PAGE>
requirements were obtained from the following sources: coal generation--38%, oil
and natural gas-- 12%, and purchased power, including hydroelectric--50%.
Growth in Nevada Power's service territory is continuing at a rapid pace.
Nevada Power's customer base grew at annual rates of 7.2%, 6.0% and 6.0% during
1996, 1995 and 1994, respectively. Kilowatthour sales increased 13.1%, 1.4% and
7.1% during 1996, 1995 and 1994, respectively.
The principal executive offices of Nevada Power are located in Las Vegas,
Nevada, and its mailing address is P.O. Box 230, Las Vegas, Nevada 89151,
telephone number (702) 367-5000.
RECENT DEVELOPMENTS
In January 1997, the Public Service Commission of Nevada ("PSCN") approved
Nevada Power's request to reduce customers' rates by nearly $45 million on an
annual basis. Nevada Power's reductions of its own fuel costs, combined with its
ability to take advantage of low fuel prices for purchased power in wholesale
markets resulted in the largest single rate reduction in Nevada Power's history.
In January 1997, the PSCN also rendered its decision in a separate matter
involving a long-standing dispute between Nevada Power, the PSCN Staff and the
Office of Consumer Advocate, involving various coal contracting matters, and
ordered a one-time reduction in customer rates of $8.4 million. The decision on
the coal contracting matters resulted in a $5.5 million after tax reduction in
fourth quarter 1996 earnings available to common shareholders or approximately
$0.11 per average common share.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges for
Nevada Power for the periods indicated:
<TABLE>
<CAPTION>
DECEMBER 31,
- -----------------------------------------------------
1996 1995 1994 1993 1992
- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
2.92 2.84 3.11 2.90 2.42
</TABLE>
In computing the ratio, earnings represent income before interest expense,
plus income taxes; fixed charges represent the total of interest on long-term
debt, amortization of debt discount, premiums and expenses, other interest, plus
one-third annual rentals.
USE OF PROCEEDS
All of the proceeds from the sale of the Series A QUIPS will be invested by
the Series A Issuer in Series A QUIDS. Nevada Power intends that the proceeds
from the sale will be used for general corporate utility purposes, which may
include the purchase or redemption of one or more series of its preferred stock,
capital expenditures, the reduction of short-term borrowings and working
capital.
ACCOUNTING TREATMENT
For financial reporting purposes, the Series A Issuer will be treated as a
subsidiary of Nevada Power and, accordingly, the accounts of the Series A Issuer
will be included in the financial statements of Nevada Power. The Series A QUIPS
will be presented as a separate line item in the balance sheet of Nevada Power
and appropriate disclosures about the Series A QUIPS, the Series A Guarantee and
the Series A QUIDS will be included in the notes to the financial statements.
For financial reporting purposes, Nevada Power will record Distributions payable
on the Series A QUIPS as an expense.
S-9
<PAGE>
CAPITALIZATION
The following tables set forth the capitalization of Nevada Power and Nevada
Power's subsidiary, NVP Capital I, as of December 31, 1996 and as adjusted to
give effect to the sale of $121.25 million Series A QUIPS and the $3.75 million
Common Securities, and the assumed application of a portion of the proceeds
therefrom to redeem all of Nevada Power's outstanding preferred stock. The
following data should be read in conjunction with the financial statements and
notes thereto and Management's Discussion and Analysis of Financial Condition
and Results of Operation of Nevada Power incorporated herein by reference to
Nevada Power's Annual Report on Form 10-K for the year ended December 31, 1996.
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
----------------------------
ACTUAL AS ADJUSTED
------------- -------------
(IN THOUSANDS)
<S> <C> <C>
DEBT:
Short-Term Debt and Current Maturities.............................................. $ 5,714 $ 5,714
Secured Debt:
Capital Leases.................................................................... 97,629 97,629
Other Secured..................................................................... 436,985 436,985
------------- -------------
Total Secured Debt.............................................................. 534,614 534,614
------------- -------------
Unsecured Debt:
Pollution Control Revenue Bonds................................................... 53,300 53,300
Industrial Development Bonds...................................................... 253,050 253,050
------------- -------------
Total Unsecured Debt............................................................ 306,350 306,350
------------- -------------
Total Debt.................................................................... 846,678 846,678
------------- -------------
GUARANTEED PREFERRED BENEFICIAL INTERESTS IN COMPANY'S SUBORDINATED DEBENTURES:..... -- 117,162*
SHAREHOLDERS' EQUITY:
Cumulative Preferred Stock with Mandatory Sinking Funds and Redeemable Cumulative
Preferred Stock................................................................... 41,663 --
Common Shareholders' Equity......................................................... 800,154 800,154
------------- -------------
Total Shareholders' Equity...................................................... 841,817 800,154
------------- -------------
Total Capitalization.......................................................... $ 1,688,495 $ 1,763,994
------------- -------------
------------- -------------
</TABLE>
* Net of Issuance Costs
The following table sets forth the capitalization of the Series A Issuer
giving effect to the sale of $121.25 million Series A QUIPS and the $3.75
million Common Securities. Upon consummation of the sale of the Series A QUIPS
and the Common Securities and the simultaneous issuance of the Series A QUIDS,
the Series A Issuer will have no liquid assets, the assets of the Series A
Issuer will consist solely of the Series A QUIDS and all payments on the Series
A QUIPS will be derived solely from payments received from Nevada Power.
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
----------------------------
ACTUAL AS ADJUSTED
------------- -------------
(IN THOUSANDS)
<S> <C> <C>
Common Securities................................................................... -- $ 3,750
Quarterly Income Preferred Securities............................................... -- 121,250
------------- -------------
Total Capitalization............................................................ -- $ 125,000
------------- -------------
------------- -------------
</TABLE>
S-10
<PAGE>
SELECTED FINANCIAL AND OPERATING INFORMATION
The following selected financial data for the five years ended December 31,
1996 are derived from the audited financial statements of Nevada Power for the
respective years in the five-year period then ended. This financial information
should be read in conjunction with the financial statements and related notes
thereto incorporated herein by reference to Nevada Power's Annual Report on Form
10-K for the year ended December 31, 1996.
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
INCOME STATEMENT DATA: 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Electric revenues................................. $ 805,374 $ 749,981 $ 764,158 $ 651,772 $ 600,915
Operating expenses................................ 608,616 579,105 593,907 489,624 456,725
---------- ---------- ---------- ---------- ----------
Earnings before income taxes...................... 196,758 170,876 170,251 162,148 144,190
Interest expense.................................. 49,486 46,936 43,015 39,305 41,466
Taxes............................................. 64,528 53,318 56,454 53,679 44,068
Other income (expenses)........................... (3,876) 6,349 11,088 4,384 (1,876)
---------- ---------- ---------- ---------- ----------
Net Income........................................ 78,868 76,971 81,870 73,548 56,780
Dividend requirements on preferred stock.......... 3,956 3,966 3,976 3,986 4,262
---------- ---------- ---------- ---------- ----------
Earnings available for common stock............... $ 74,912 $ 73,005 $ 77,894 $ 69,562 $ 52,518
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Weighted average common shares outstanding........ 47,976 46,288 42,784 39,482 35,652
Earnings per average common share................. $ 1.56 $ 1.58 $ 1.82 $ 1.76 $ 1.47
Dividends declared per common share............... $ 1.60 $ 1.60 $ 1.60 $ 1.60 $ 1.60
BALANCE SHEET DATA:
Net property, plant & equipment................... $1,818,930 $1,701,120 $1,584,003 $1,450,146 $1,328,670
Total assets...................................... 2,162,824 2,073,050 1,907,389 1,809,337 1,557,040
Long-term debt.................................... 840,964 799,999 712,571 716,589 715,451
Shareholders' equity.............................. 841,817 806,224 773,813 688,188 574,937
CASH FLOW DATA:
Cash from operating activities.................... $ 154,990 $ 185,919 $ 144,270 $ 130,945 $ 107,378
Cash from investing activities.................... (180,801) (160,828) (184,349) (165,858) (175,200)
Cash from financing activities.................... 2,848 293 40,057 34,898 67,828
---------- ---------- ---------- ---------- ----------
Net increase (decrease) during the period......... $ (22,963) $ 25,384 $ (22) $ (15) $ 6
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
</TABLE>
SELECTED OPERATING INFORMATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Electric sales (megawatt hours, in thousands)..... 13,697,059 12,109,355 11,942,724 11,155,270 10,541,204
</TABLE>
S-11
<PAGE>
CERTAIN TERMS OF SERIES A QUIPS
The following summary of certain terms and provisions of the Series A QUIPS
and the Trust Agreement supplements the description of the terms and provisions
of the QUIPS set forth in the accompanying Prospectus under the heading
"Description of QUIPS", to which description reference is hereby made. This
summary of certain terms and provisions of the Series A QUIPS and the Trust
Agreement does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the Trust Agreement and the Trust Indenture Act.
The form of the Trust Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus Supplement and accompanying Prospectus is a
part.
GENERAL
The Series A QUIPS and Series A Common Securities represent undivided
beneficial interests in the assets of the Series A Issuer. The Series A QUIPS
and Series A Common Securities will have a liquidation preference of $25 per
unit. Approximately 97% of the total liquidation preference amount will be
represented by Series A QUIPS and the remainder by Series A Common Securities.
All of the Series A Common Securities will be owned by Nevada Power. The Series
A Common Securities rank PARI PASSU, and payment will be made thereon pro rata
with the Series A QUIPS based on the liquidation preference of the Series A
QUIPS and the Series A Common Securities, except that, if an Event of Default
under the Trust Agreement resulting from a Debenture Event of Default shall have
occurred and be continuing, the Series A QUIPS will have a preference over the
Series A Common Securities. The Series A QUIDS will be held by the Property
Trustee in trust for the benefit of the holders of the Series A QUIPS and Series
A Common Securities. Nevada Power has agreed in an Agreement as to Expenses and
Liabilities (the "Expense Agreement") to provide funds to the Series A Issuer as
needed to pay obligations of the Series A Issuer to parties other than the
holders of the Series A QUIPS and Series A Common Securities. The Series A QUIDS
and the Series A Guarantee, together with the obligations of Nevada Power with
respect to the Series A QUIPS under the Indenture, the Trust Agreement and the
Expense Agreement, constitute a full and unconditional guarantee, on a
subordinated basis, by Nevada Power of payments on the Series A QUIPS in
accordance with their terms. See "Description of Guarantees".
DISTRIBUTIONS
Distributions on each Series A QUIPS will be payable at the annual rate of
% of the stated liquidation preference of $25, payable quarterly in arrears on
the last day of March, June, September and December of each year. Distributions
will accumulate from , 1997, the date of original issuance. The first
Distribution payment date for the Series A QUIPS will be , 1997. The
amount of Distributions payable for any period will be computed on the basis of
a 360-day year of twelve 30-day months. In the event that any date on which
Distributions are payable on the Series A QUIPS is not a Business Day, then
payment of the Distributions payable on such date will be made on the next
succeeding day that is a Business Day (and without any additional Distributions
or other payment in respect of any such delay), except that, if such Business
Day is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on the date such payment was originally payable. See "Description of
QUIPS--Distributions" in the accompanying Prospectus.
So long as no Debenture Event of Default has occurred and is continuing,
Nevada Power has the right under the Indenture to defer the payment of interest
on the Series A QUIDS at any time or from time to time for a period not
exceeding 20 consecutive quarters with respect to each Extension Period,
provided that no Extension Period may extend beyond the Maturity Date of the
Series A QUIDS. At the end of each Extension Period, Nevada Power shall pay all
interest then accrued and unpaid together with interest on all such accrued and
unpaid amounts calculated at the applicable rate. During an Extension Period,
Nevada Power may prepay any deferred interest prior to the end of an Extension
S-12
<PAGE>
Period in whole or in part on any Interest Payment Date. Upon the termination of
any Extension Period and the payment of all payments then due on any Interest
Payment Date, Nevada Power may elect to begin a new Extension Period subject to
the above requirements. If interest payments on the Series A QUIDS are so
deferred, Distributions on the Series A QUIPS will also be deferred and Nevada
Power will not be permitted, and no subsidiary of Nevada Power will be
permitted, to (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of Nevada
Power's capital stock or (ii) make any payment of principal of, or interest or
premium, if any, on, or repay, repurchase or redeem, or make any sinking fund
payment with respect to, any indebtedness that ranks PARI PASSU with or junior
in right of payment to the Series A QUIDS, or make any guarantee payments with
respect to any indebtedness if such guarantee ranks PARI PASSU with or junior in
right of payment to the Series A QUIDS (other than (a) dividends or
distributions in Common Stock of Nevada Power, (b) redemptions or purchases of
any rights pursuant to Nevada Power's Stock Purchase Rights Plan, or any
successor to such Stock Purchase Rights Plan, and the declaration of a dividend
of such rights or the issuance of Preferred Stock under such plans in the
future, (c) payments under any Guarantee, (d) purchases of Common Stock related
to the issuance of Common Stock under Nevada Power's Stock Purchase and Dividend
Reinvestment Plan and any of Nevada Power's benefit plans for its directors,
officers or employees and (e) purchases of Common Stock required to prevent the
loss or secure the renewal or reinstatement of any government license or
franchise held by Nevada Power or any of its subsidiaries). During an Extension
Period, interest on the Series A QUIDS will continue to accrue (and the amount
of Distributions to which holders of the Series A QUIPS are entitled will
accumulate at the rate of % per annum, compounded quarterly) and holders of
Series A QUIDS will be required to accrue interest income in the form of OID for
United States federal income tax purposes in advance of receipt of cash related
to such income as described herein. See "Certain Terms of Series A QUIDS--Option
to Extend Interest Payment Period" and "United States Federal Income Tax
Consequences--Potential Extension of Interest Payment Period and Original Issue
Discount".
Nevada Power has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Series A
QUIDS.
REDEMPTION
Upon the repayment or redemption, in whole or in part, of the Series A
QUIDS, whether at Stated Maturity or upon earlier redemption as provided in the
Indenture, the proceeds from such repayment or redemption shall be applied by
the Property Trustee to redeem a Like Amount (as defined in the accompanying
Prospectus) of the Series A QUIPS and Series A Common Securities, upon not less
than 30 or more than 60 days notice prior to the date fixed for repayment or
redemption, at a redemption price (the "Redemption Price"), with respect to the
Series A QUIPS, equal to the aggregate liquidation preference of such Series A
QUIPS plus accumulated and unpaid Distributions thereon to the date of
redemption (the "Redemption Date"). See "Description of QUIPS--Redemption" in
the accompanying Prospectus and "Certain Terms of Series A QUIDS--Redemption".
Nevada Power will have the right to redeem the Series A QUIDS (i) on or
after , 2002, in whole at any time or in part from time to time, at a
redemption price equal to the accrued and unpaid interest on the Series A QUIDS
so redeemed to the date fixed for redemption, plus 100% of the principal amount
thereof or (ii) at any time, in whole (but not in part), upon the occurrence and
continuation of a Tax Event or an Investment Company Event (each as defined in
the accompanying Prospectus, and as so collectively defined, a "Special Event"),
at a redemption price equal to the accrued and unpaid interest on the Series A
QUIDS so redeemed to the date fixed for redemption, plus 100% of the principal
amount thereof, in each case subject to conditions described under "Description
of QUIDS--Redemption" and "Description of Corresponding QUIDS--Optional
Redemption" in the accompanying Prospectus.
S-13
<PAGE>
SPECIAL EVENT REDEMPTION OR DISTRIBUTION OF SERIES A QUIDS
If a Special Event shall have occurred and be continuing, Nevada Power will
have the right to redeem the Series A QUIDS in whole (but not in part) and
thereby cause a mandatory redemption of the Series A QUIPS in whole (but not in
part) at the Redemption Price within 90 days following the occurrence of such
Special Event. At any time, Nevada Power will have the right to terminate the
Series A Issuer and, after satisfaction of the liabilities of creditors of the
Series A Issuer as provided by applicable law, cause the Series A QUIDS to be
distributed to the holders of the Series A QUIPS in liquidation of the Series A
Issuer. Under current United States federal income tax law and interpretations
and assuming, as expected, the Series A Issuer is treated as a grantor trust, a
distribution of the Series A QUIDS should not be a taxable event to holders of
the Series A QUIPS. See "United States Federal Income Tax
Consequences--Distribution of Series A QUIDS to Holders of Series A QUIPS". If
Nevada Power does not elect either option described above, the Series A QUIPS
will remain outstanding until the repayment of the Series A QUIDS.
If Nevada Power elects to liquidate the Series A Issuer and thereby causes
the Series A QUIDS to be distributed to holders of the Series A QUIPS in
liquidation of the Series A Issuer, Nevada Power may shorten or extend the
maturity of such Series A QUIDS, except that it can extend the maturity only if
certain conditions are met. See "Description of QUIPS--Redemption--Extension of
Maturity of Corresponding QUIDS" in the accompanying Prospectus and "Certain
Terms of Series A QUIDS--General".
LIQUIDATION VALUE
The amount payable on the Series A QUIPS in the event of any liquidation of
the Series A Issuer is $25 per Series A QUIPS plus accumulated and unpaid
Distributions, which may be in the form of a distribution of such amount in
Series A QUIDS, subject to certain exceptions. See "Description of
QUIPS--Liquidation Distribution Upon Termination" in the accompanying
Prospectus.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Series A QUIPS will be made by the Underwriters in
immediately available funds. All payments of principal and interest will be made
by the Series A Issuer in immediately available funds. Secondary trading in
preferred securities of corporate issuers is generally settled in clearinghouse
or next-day funds. In contrast, the Series A QUIPS will trade in DTC's Same-Day
Funds Settlement System until maturity or until the Series A QUIPS are issued in
certificated form, and secondary market trading activity in the Series A QUIPS
will therefore be required by DTC to settle in immediately available funds. No
assurance can be given as to the effect, if any, of settlement in immediately
available funds on trading activity in the Series A QUIPS.
CERTAIN TERMS OF SERIES A QUIDS
The following summary of certain terms and provisions of the Series A QUIDS
supplements the description of the terms and provisions of the Corresponding
QUIDS set forth in the accompanying Prospectus under the headings "Description
of QUIDS" and "Description of Corresponding QUIDS", to which description
reference is hereby made. The summary of certain terms and provisions of the
Series A QUIDS set forth below does not purport to be complete and is subject
to, and qualified in its entirety by reference to, the Indenture. The Indenture
has been filed as an exhibit to the Registration Statement of which this
Prospectus Supplement and accompanying Prospectus is a part.
GENERAL
Concurrently with the issuance of the Series A QUIPS, the Series A Issuer
will invest the proceeds thereof and the consideration paid by Nevada Power for
the Series A Common Securities in the Series A QUIDS issued by Nevada Power. The
Series A QUIDS will bear interest at the annual rate of % of the
S-14
<PAGE>
principal amount thereof, payable quarterly in arrears on the last day of March,
June, September and December of each year (each, an "Interest Payment Date"),
commencing , 1997, to the person in whose name each Series A QUIDS is
registered, subject to certain exceptions, at the close of business on the
Business Day next preceding such Interest Payment Date. It is anticipated that,
until the liquidation, if any, of the Series A Issuer, each Series A QUIDS will
be held in the name of the Property Trustee in trust for the benefit of the
holders of the Series A QUIPS. The amount of interest payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months. In the
event that any date on which interest is payable on the Series A QUIDS is not a
Business Day, then payment of the interest payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on the date such payment was originally payable. Accrued interest
that is not paid on the applicable Interest Payment Date will bear additional
interest on the amount thereof (to the extent permitted by law) at the rate per
annum of % thereof, compounded quarterly. The term "interest" as used herein
shall include quarterly interest payments, interest on quarterly interest
payments not paid on the applicable Interest Payment Date and Additional Sums
(as defined below), as applicable.
The Series A QUIDS will be issued as a series of QUIDS under the Indenture.
The Series A QUIDS will mature on , 2037, which date may be extended
at any time at the election of Nevada Power for one or more periods, but in no
event to a date later than , 2046 (such date, as it may be extended,
the "Maturity Date"), provided that at the time such election is made and at the
time of extension (i) Nevada Power is not in bankruptcy, otherwise insolvent or
in liquidation, (ii) Nevada Power is not in default in the payment of any
interest or principal on the Series A QUIDS and no deferred interest payments
thereon have accrued and remain unpaid, (iii) the Series A Issuer is not in
arrears on payments of Distributions on the Series A QUIPS and no deferred
Distributions are accumulated, (iv) the Series A QUIDS are rated not less than
BBB- by Standard & Poor's Ratings Services or Baa3 by Moody's Investors Service,
Inc. or the equivalent by any other nationally recognized statistical rating
organization and (v) the extended Maturity Date is no later than the 49th
anniversary of the initial issuance of the Series A QUIPS; PROVIDED, HOWEVER,
that, if Nevada Power exercises its right to liquidate the Series A Issuer and
exchange the Series A QUIDS for the Series A QUIPS, effective upon such exercise
the Stated Maturity of the Series A QUIDS may be changed to any date elected by
Nevada Power that is (i) no earlier than the date five years after the initial
issuance of the Series A QUIPS and (ii) no later than the date 40 years (plus an
extended term of up to an additional 9 years if the above-referenced conditions
are satisfied) after the date of the initial issuance of the Series A QUIPS.
The Series A QUIDS will be unsecured and will rank junior and be subordinate
in right of payment to all Senior Debt of Nevada Power. The Indenture does not
limit the incurrence or issuance of other secured or unsecured debt of Nevada
Power, whether under the Indenture or any existing or other indenture that
Nevada Power may enter into in the future or otherwise, including, without
limitation, Nevada Power's Indenture of Mortgage and Deed of Trust dated October
1, 1953 entered into with Banker's Trust Company, together with supplemental
indentures thereto heretofore or hereafter entered into (the "Mortgage
Indenture"). At December 31, 1996, the aggregate principal amount of
indebtedness outstanding under the Mortgage Indenture was $443 million, all of
which is secured by a first mortgage lien and security interest in substantially
all of the tangible property of Nevada Power. See "Description of
QUIDS--Subordination" in the accompanying Prospectus.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Debenture Event of Default has occurred and is continuing,
Nevada Power has the right under the Indenture to defer the payment of interest
at any time or from time to time for a period not exceeding 20 consecutive
quarters with respect to each Extension Period, provided that no Extension
Period may extend beyond the Maturity Date of the Series A QUIDS. At the end of
such Extension Period,
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<PAGE>
Nevada Power must pay all interest then accrued and unpaid (together with
interest thereon at the annual rate of %, compounded quarterly, to the extent
permitted by applicable law). During an Extension Period, Nevada Power may
prepay any deferred interest prior to the end of an Extension Period in whole or
in part on any Interest Payment Date. During an Extension Period, interest will
continue to accrue and holders of Series A QUIDS (or holders of Series A QUIPS
while such series is outstanding) will be required to accrue interest income in
the form of OID for United States federal income tax purposes as described
herein. See "United States Federal Income Tax Consequences-- Payments of
Interest" and "Potential Extension of Interest Payment Period and Original Issue
Discount".
During any such Extension Period, Nevada Power may not, and may not permit
any subsidiary of Nevada Power to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of Nevada Power's capital stock or (ii) make any payment of
principal of, or interest or premium, if any, on or repay, repurchase or redeem,
or make any sinking fund payment with respect to, any indebtedness (including
other QUIDS) that ranks PARI PASSU with or junior in right of payment, to the
Series A QUIDS or make any guarantee payments with respect to any indebtedness
if such guarantee ranks PARI PASSU with or junior in right of payment to the
Series A QUIDS (other than (a) dividends or distributions in Common Stock of
Nevada Power, (b) redemptions or purchases of any rights pursuant to Nevada
Power's Stock Purchase Rights Plan, or any successor to such Stock Purchase
Rights Plan, and the declaration of a dividend of such rights or the issuance of
Preferred Stock under such plans in the future, (c) payments under any
Guarantee, (d) purchases of Common Stock related to the issuance of Common Stock
under Nevada Power's Stock Purchase and Dividend Reinvestment Plan and any of
Nevada Power's benefit plans for its directors, officers or employees and (e)
purchases of Common Stock required to prevent the loss or secure the renewal or
reinstatement of any government license or franchise held by Nevada Power or any
of its subsidiaries). Prior to the termination of any such Extension Period,
Nevada Power may further extend the interest payment period, provided that no
Extension Period may exceed 20 consecutive quarters or extend beyond the
Maturity Date of the Series A QUIDS. Upon the termination of any such Extension
Period and the payment of all amounts then due on any Interest Payment Date,
Nevada Power may elect to begin a new Extension Period subject to the above
requirements. No interest shall be due and payable during an Extension Period,
except at the end thereof. Nevada Power must give the Property Trustee, the
Administrative Trustees and the Debenture Trustee notice of its election of such
Extension Period at least one Business Day prior to the earlier of (i) the date
the Distributions on the Series A QUIPS would have been payable except for the
election to begin or continue such Extension Period or (ii) the date the
Administrative Trustees are required to give notice to the NYSE, the Nasdaq
Stock Market or other applicable interdealer quotation system or self-regulatory
organization or to holders of such Series A QUIPS of the record date or the date
such Distributions are payable, but in any event not less than one Business Day
prior to such record date. The Debenture Trustee shall give notice of Nevada
Power's election to begin or continue a new Extension Period to the holders of
the Series A QUIPS. See "Description of QUIDS-- Option to Extend Interest
Payment Date" in the accompanying Prospectus.
ADDITIONAL SUMS
If the Series A Issuer is required to pay any additional taxes, duties or
other governmental charges ("Additional Sums") as a result of a Tax Event,
Nevada Power will pay as additional amounts on the Series A QUIDS such amounts
as shall be required so that the Distributions payable by the Series A Issuer
shall not be reduced as a result of any such additional taxes, duties or other
governmental charges, subject to the conditions described under "Description of
QUIPS--Redemption--Special Event Redemption or Distribution of Corresponding
QUIDS" in the accompanying Prospectus.
REDEMPTION
The Series A QUIDS are redeemable prior to maturity at the option of Nevada
Power (i) on or after , 2002, in whole at any time or in part from
time to time, at a redemption price equal to the
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accrued and unpaid interest on the Series A QUIDS so redeemed to the date fixed
for redemption, plus 100% of the principal amount thereof or (ii) at any time in
whole (but not in part), upon the occurrence and continuation of a Special
Event, at a redemption price equal to the accrued and unpaid interest on the
Series A QUIDS so redeemed to the date fixed for redemption, plus 100% of the
principal amount thereof, in each case subject to the further conditions
described under "Description of QUIDS-- Redemption" and "Description of
Corresponding QUIDS--Optional Redemption" in the accompanying Prospectus.
DISTRIBUTIONS OF SERIES A QUIDS
Under certain circumstances involving the termination of the Series A
Issuer, Series A QUIDS may be distributed to the holders of the Series A QUIPS
in liquidation of the Series A Issuer after satisfaction of liabilities to
creditors of the Series A Issuer as provided by applicable law. If distributed
to holders of Series A QUIPS in liquidation, the Series A QUIDS will initially
be issued in the form of one or more global securities and DTC, or any successor
depositary for the Series A QUIPS, will act as depositary for the Series A
QUIDS. It is anticipated that the depositary arrangements for the Series A QUIDS
would be substantially identical to those in effect for the Series A QUIPS. If
the Series A QUIDS are distributed to the holders of Series A QUIPS upon the
liquidation of the Series A Issuer, Nevada Power will use its best efforts to
list the Series A QUIDS on the NYSE or such other stock exchanges, if any, on
which the Series A QUIPS are then listed. There can be no assurance as to the
market price of any Series A QUIDS that may be distributed to the holders of
Series A QUIPS. For a description of DTC and the terms of the depositary
matters, see "Description of QUIPS--Book-Entry Issuance" in the accompanying
Prospectus.
REGISTRATION OF SERIES A QUIDS
A global security shall be exchangeable for Series A QUIDS registered in the
names of persons other than DTC or its nominee only if (i) DTC notifies Nevada
Power that it is unwilling or unable to continue as a depository for such global
security and no successor depository shall have been appointed, or if at any
time DTC ceases to be a clearing agency registered under the Securities Exchange
Act of 1934, as amended, at a time when DTC is required to be so registered to
act as such depository, (ii) Nevada Power in its sole discretion determines that
such global security shall be so exchangeable, or (iii) there shall have
occurred and be continuing an Event of Default with respect to such global
security. Any global security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for definitive certificates registered in such
names as DTC shall direct. It is expected that such instructions will be based
upon directions received by DTC from its Participants (as defined in the
accompanying Prospectus) with respect to ownership of beneficial interests in
such global security. In the event that Series A QUIDS are issued in definitive
form, such Series A QUIDS will be in denominations of $25 and integral multiples
thereof and may be transferred or exchanged at the offices described below.
Payments on Series A QUIDS represented by a global security will be made to
DTC, as the depositary for the Series A QUIDS. In the event Series A QUIDS are
issued in definitive form, principal and interest will be payable, the transfer
of the Series A QUIDS will be registrable, and Series A QUIDS will be
exchangeable for Series A QUIDS of other denominations of a like aggregate
principal amount, at the corporate office of the Debenture Trustee in New York,
New York, or at the offices of any paying agent or transfer agent appointed by
Nevada Power, provided that payment of interest may be made at the option of
Nevada Power by check mailed to the address of the persons entitled thereto or
by wire transfer. In addition, if the Series A QUIDS are issued in certificated
form, the record dates for payment of interest will be the date which is 15 days
prior to the relevant Distribution Date. For a description of DTC and the terms
of the depositary arrangements relating to payments, transfers, voting rights,
redemptions and other notices and other matters, see "Description of
QUIPS--Book-Entry Issuance" in the accompanying Prospectus.
S-17
<PAGE>
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The statements of law or legal conclusion set forth under this caption
constitute the opinion of Jones, Day, Reavis & Pogue, special tax counsel to
Nevada Power and the Series A Issuer, of the material United States federal
income tax consequences of the purchase, ownership and disposition of Series A
QUIPS to the extent applicable to a person that acquires Series A QUIPS on their
original issue at their original offering price and that is (i) an individual
citizen or resident of the United States, (ii) a corporation or partnership
organized in or under the laws of the United States or any state thereof or the
District of Columbia or (iii) an estate or trust the income of which is subject
to United States federal income tax regardless of source (a "United States
Person"). Jones, Day, Reavis & Pogue is also acting as counsel to the
Underwriters named herein. This opinion and the description of United States
federal income tax consequences contained herein do not address the tax
consequences to (i) persons that are not United States Persons, (ii) persons
that may be subject to special treatment under United States federal income tax
law, such as banks, insurance companies, thrift institutions, regulated
investment companies, real estate investment trusts, tax-exempt organizations
and dealers in securities or currencies, (iii) persons that will hold Series A
QUIPS as part of a position in a "straddle" or as part of a "hedging",
"conversion" or other integrated investment transaction for federal income tax
purposes, (iv) persons whose functional currency is not the United States dollar
or (v) persons that do not hold Series A QUIPS as capital assets. Furthermore,
it does not address the effect of any state, local or foreign laws.
This opinion of special tax counsel and description are based upon the
Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations,
Internal Revenue Service rulings and pronouncements and judicial decisions now
in effect, all of which are subject to change at any time. Such changes may be
applied retroactively in a manner that could cause the tax consequences to vary
substantially from the consequences described below, possibly adversely
affecting a beneficial owner of Series A QUIPS. In particular, President
Clinton's fiscal year 1998 budget proposal contains a number of proposed tax law
changes that could adversely affect the ability of an issuer to deduct interest
on certain types of long-term debt instruments, such as the Series A QUIDS. The
proposed changes, however, should not apply to the Series A QUIDS as a result of
the proposed effective date of any such tax law changes. See "--Possible Tax Law
Changes". The authorities on which this opinion and description are based are
subject to various interpretations and it is therefore possible that the federal
income tax treatment of the purchase, ownership and disposition of Series A
QUIPS may differ from the treatment described below.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS IN
LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX CONSEQUENCES
OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF SERIES A QUIPS, AS WELL AS THE
EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
CLASSIFICATION OF THE SERIES A ISSUER
Under current law and assuming compliance with the terms of the Trust
Agreement and certain other documents, the Series A Issuer will be classified as
a grantor trust and not as an association taxable as a corporation for United
States federal income tax purposes. As a result, each beneficial owner of Series
A QUIPS (a "Securityholder") will be treated as owning an undivided beneficial
interest in the Series A QUIDS. Accordingly, each Securityholder will be
required to include in its gross income its PRO RATA share of the interest
income, including any original issue discount ("OID"), paid or accrued with
respect to the Series A QUIDS whether or not cash is actually distributed to the
Securityholders. See "--Payments of Interest" and "--Potential Extension of
Interest Payment Period and Original Issue Discount".
S-18
<PAGE>
PAYMENTS OF INTEREST
Except as set forth below, stated interest on Series A QUIDS will generally
be taxable to a United States Person as ordinary income at the time it is paid
or accrued in accordance with the United States Person's method of accounting
for tax purposes.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE DISCOUNT
Under recently issued Treasury regulations (the "Regulations"), a "remote"
contingency that stated interest will not be timely paid will be ignored in
determining whether a debt instrument is issued with OID. Nevada Power believes
that the likelihood of it exercising its option to defer interest payments is
remote. Based on the foregoing, Nevada Power believes that the Series A QUIDS
will not be considered to be issued with OID at the time of their original
issuance and, accordingly, each Securityholder will be required to include
interest payments in taxable income at the time accrued or received in
accordance with its own method of accounting.
However, if Nevada Power were to exercise its right to defer payments of
interest thereon, the Series A QUIDS would be considered to be retired and
reissued for their adjusted issue price at such time, and the Series A QUIDS
thereafter would be considered to have been issued with OID. Securityholders
would include that discount in income on an economic accrual basis before the
receipt of cash attributable to the interest, regardless of their method of tax
accounting, and actual distributions of stated interest would not be reported as
taxable income. Accordingly, a Securityholder of Series A QUIPS would be
required to include in gross income OID even if Nevada Power did not make any
actual cash payments during an Extension Period.
As of the date of this Prospectus Supplement, the Regulations have not been
addressed in any rulings or other interpretations by the Internal Revenue
Service (the "IRS"), and it is possible that the IRS could take a position
contrary to the interpretation herein.
Because income on the Series A QUIPS will constitute interest or OID,
corporate Securityholders will not be entitled to a dividends-received deduction
with respect to any income recognized with respect to the Series A QUIPS.
Subsequent uses of the term "interest" in this summary include income in the
form of OID.
DISTRIBUTION OF SERIES A QUIDS TO HOLDERS OF SERIES A QUIPS
As described under the caption "Certain Terms of Series A QUIPS--
Redemption--Special Event Redemption or Distribution of Series A QUIDS", Series
A QUIDS may be distributed to Securityholders in exchange for Series A QUIPS and
in liquidation of the Series A Issuer. Under current law, for United States
federal income tax purposes, such a distribution will be non-taxable and will
result in the Securityholder receiving directly his PRO RATA share of the Series
A QUIDS previously held indirectly through the Series A Issuer, with a holding
period and aggregate tax basis equal to the holding period and aggregate tax
basis such Securityholder had in its Series A QUIPS before such distribution. A
Securityholder will be considered to receive interest in respect of Series A
QUIDS received from the Series A Issuer in the manner described above under
"--Payments of Interest" and "--Potential Extension of Interest Payment Period
and Original Issue Discount".
SALES OR REDEMPTION OF SERIES A QUIPS
A Securityholder that sells (including a redemption for cash) Series A QUIPS
will recognize gain or loss equal to the difference between its adjusted tax
basis in the Series A QUIPS and the amount realized on the sale of such Series A
QUIPS. Assuming that Nevada Power does not exercise its option to defer payment
of interest on the Series A QUIDS, a Securityholder's adjusted tax basis in the
Series A QUIPS generally will be its initial purchase price. If the Series A
QUIDS are deemed to be issued with OID as a result of Nevada Power's deferral of
any interest payment, a Securityholder's tax basis in the Series A QUIPS
generally will be its initial purchase price, increased by OID previously
includible in such Securityholder's gross income to the date of disposition and
decreased by distributions or other
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<PAGE>
payments received on the Series A QUIPS since and including the date of the
first Extension Period. Such gain or loss generally will be a capital gain or
loss (except to the extent any amount realized is treated as a payment of
accrued interest with respect to such holder's pro rata share of Series A QUIDS
required to be included in income) and generally will be a long-term capital
gain or loss if the Series A QUIPS have been held for more than one year.
Should Nevada Power exercise its option to defer any payment of interest on
the Series A QUIPS, the Series A QUIPS may trade at a price that does not
accurately reflect the value of accrued but unpaid interest with respect to the
underlying Series A QUIDS. Should an Extension Period occur, a Securityholder
that disposes of its Series A QUIPS between record dates for payments of
Distributions will nevertheless be required to include in income as ordinary
income accrued but unpaid interest on such holder's pro rata share of the
underlying Series A QUIDS to the date of disposition as OID and to add such
amount to its adjusted tax basis in its pro rata share of the underlying Series
A QUIDS deemed disposed of. Such Securityholder will recognize a capital loss on
the disposition of its Series A QUIPS to the extent the selling price is less
than the Securityholder's adjusted tax basis in the Series A QUIPS. Subject to
certain limited exceptions, capital losses cannot be applied to offset ordinary
income for federal income tax purposes.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of OID accrued on the Series A QUIPS held of record by United
States Persons (other than corporations and other exempt Securityholders) will
be reported to the Internal Revenue Service. "Backup" withholding at a rate of
31% will apply to payments of interest to non-exempt United States Persons
unless the Securityholder furnishes its taxpayer identification number in the
manner prescribed in applicable Treasury Regulations, certifies that such number
is correct, certifies as to no loss of exemption from backup withholding and
meets certain other conditions.
Payment of the proceeds from the disposition of Series A QUIPS to or through
the United States office of a broker is subject to information reporting and
backup withholding unless the holder or beneficial owner establishes an
exemption from information reporting and backup withholding.
Any amounts withheld from a Securityholder under the backup withholding
rules will be allowed as a refund or a credit against such Securityholder's
United States federal income tax liability, provided the required information is
furnished to the Internal Revenue Service.
POSSIBLE TAX LAW CHANGES
On February 6, 1997, President Clinton released his fiscal year 1998 budget
proposal, which contains a number of proposed tax law changes (the "Proposed
Legislation"). The Proposed Legislation would, among other things, generally
deny interest deductions for interest on an instrument issued by a corporation,
that has a maximum weighted average maturity of more than 40 years. The Proposed
Legislation would also generally deny interest deductions for interest on an
instrument issued by a corporation that has a maximum term of more than 15 years
and that is not shown as indebtedness on the separate balance sheet of the
issuer or, in the case of an instrument with a maximum term of more than 15
years issued to a related party (other than a corporation), if the holder or
some other related party issues a related instrument that is not shown as
indebtedness on the issuer's consolidated balance sheet. For purposes of
determining the weighted average maturity or the term of an instrument, any
right to extend would be treated as exercised. The above-described provisions of
the Proposed Legislation, if enacted into law, are proposed to be effective
generally for instruments issued on or after the date of first committee action
in Congress. Nevada Power has been advised that the date of first committee
action is intended to be the effective date designated by the tax-writing
committees of Congress if the proposals are included in a revenue bill that is
adopted by Congress. Although there can be no assurance, Nevada Power believes
that any such effective date would not be prior to the date on which the Series
A QUIPS are issued. Based on the proposed effective date, if the Proposed
Legislation were to be enacted in the form proposed, the above-described
provisions should not apply to the Series A QUIDS. If either
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<PAGE>
provision were to apply to the Series A QUIDS, Nevada Power would be unable to
deduct interest on the Series A QUIDS.
Nevada Power believes that, under current law, it will be able to deduct
interest on the Series A QUIDS. Although the above-described provisions of the
Proposed Legislation should not apply to the Series A QUIDS, given the proposed
effective date, there can be no assurance that future legislation will not be
introduced and enacted which would adversely affect the ability of Nevada Power
to deduct interest on the Series A QUIDS or otherwise affect the tax treatment
of the transaction described herein. A change in the deductibility of interest
and certain other changes could give rise to a Tax Event, which may permit
Nevada Power to cause a redemption of the Series A QUIPS, as described more
fully in the accompanying Prospectus under "Description of
QUIPS--Redemption--Special Event Redemption or Distribution of Corresponding
QUIDS".
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
Nevada Power and the Series A Issuer have agreed that the Series A Issuer will
sell to each of the Underwriters named below, and each of such Underwriters, for
whom Goldman, Sachs & Co., Dean Witter Reynolds Inc., Legg Mason Wood Walker,
Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated and PaineWebber
Incorporated are acting as representatives, has severally agreed to purchase
from the Series A Issuer, the respective number of Series A QUIPS set forth
opposite its name below:
<TABLE>
<CAPTION>
NUMBER OF
SERIES A
UNDERWRITER QUIPS
- ------------------------------------------------------------------------------------------- -----------
<S> <C>
Goldman, Sachs & Co........................................................................
Dean Witter Reynolds Inc...................................................................
Legg Mason Wood Walker, Incorporated.......................................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.....................................................................
PaineWebber Incorporated...................................................................
-----------
Total.................................................................................. 4,850,000
-----------
-----------
</TABLE>
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Underwriters are committed to take and pay for all such Series A QUIPS
offered hereby, if any are taken.
The Underwriters propose to offer the Series A QUIPS in part directly to the
public at the initial public offering price set forth on the cover page of this
Prospectus Supplement and in part to certain securities dealers at such price
less a concession of $ per Series A QUIPS. The Underwriters may allow, and
such dealers may reallow, a concession not to exceed $ per Series A QUIPS
to certain brokers and dealers. After the Series A QUIPS are released for sale
to the public, the offering price and other selling terms may from time to time
be varied by the representatives.
In view of the fact that the proceeds from the sale of the Series A QUIPS
will be used to purchase the Series A QUIDS issued by Nevada Power, the
Underwriting Agreement provides that Nevada Power will pay as Underwriters'
Compensation for the Underwriters' arranging the investment therein of such
proceeds an amount of $ per Series A QUIPS for the accounts of the several
Underwriters.
Nevada Power and the Series A Issuer have agreed that, during the period
beginning from the date of the Underwriting Agreement and continuing to and
including the earlier of (i) the termination of trading
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<PAGE>
restrictions on the Series A QUIPS, as determined by the Underwriters, and (ii)
30 days after the closing date, they will not offer, sell, contract to sell or
otherwise dispose of any QUIPS, any other beneficial interests in the assets of
the Series A Issuer, or any preferred securities or any other securities of the
Series A Issuer or Nevada Power which are substantially similar to the Series A
QUIPS, including any guarantee of such securities, or any securities convertible
into or exchangeable for or representing the right to receive Series A QUIPS,
other beneficial interests of the Series A Issuer, preferred securities or any
such substantially similar securities of either the Series A Issuer or Nevada
Power, without the prior written consent of the representatives, except for the
Series A QUIPS and the Series A Guarantee offered in connection with the
offering.
Prior to this offering, there has been no public market for the Series A
QUIPS. Application has been made to list the Series A QUIPS on the NYSE under
the symbol "NVP Pr". In order to meet one of the requirements for listing the
Series A QUIPS on the NYSE, the Underwriters will undertake to sell lots of 100
or more Series A QUIPS to a minimum of 400 beneficial holders. Trading of the
Series A QUIPS on the NYSE is expected to commence within 30 days after the
initial delivery of the Series A QUIPS. The representatives of the Underwriters
have advised Nevada Power that they intend to make a market in the Series A
QUIPS prior to commencement of trading on the NYSE, but are not obligated to do
so and may discontinue market making at any time without notice. No assurance
can be given as to the liquidity of the trading market for the Series A QUIPS.
In connection with the offering, the Underwriters may purchase and sell the
Series A QUIPS in the open market. These transactions may include over-allotment
and stabilizing transactions and purchases to cover syndicate short positions
created in connection with the offering. The Underwriters also may impose a
penalty bid, whereby selling concessions allowed to syndicate members or other
broker-dealers in respect of the Series A QUIPS sold in the offering for their
account may be reclaimed by the syndicate if such Series A QUIPS are repurchased
by the syndicate in stabilizing or covering transactions. These activities may
stabilize, maintain or otherwise affect the market price of the Series A QUIPS,
which may be higher than the price that might otherwise prevail in the open
market; and these activities, if commenced, may be discontinued at any time.
These transactions may be effected on the NYSE, in the over-the-counter market
or otherwise.
Nevada Power and the Series A Issuer have agreed to indemnify the several
Underwriters against and contribute toward certain liabilities, including
liabilities under the Securities Act of 1933, as amended.
Certain of the Underwriters or their affiliates have provided from time to
time, and expect to provide in the future, investment or commercial banking
services to Nevada Power and its affiliates, for which such Underwriters or
their affiliates have received or will receive customary fees and commissions.
LEGAL MATTERS
Certain matters of Delaware law relating to the legality of the Series A
QUIPS, the validity of the Trust Agreement and the formation of the Series A
Issuer will be passed upon by Richards, Layton & Finger, special Delaware
Counsel to Nevada Power and the Series A Issuer. The legality of the Series A
Guarantee and the Series A QUIDS will be passed upon for Nevada Power by Mr.
Richard L. Hinckley, Vice President, Secretary and Chief Counsel for Nevada
Power and by Best Best & Krieger LLP. Certain legal matters will be passed upon
for the Underwriters by Jones, Day, Reavis & Pogue, Chicago, Illinois. Certain
matters relating to United States federal income tax considerations will be
passed upon for Nevada Power and the Series A Issuer by their special tax
counsel, Jones, Day, Reavis & Pogue, Chicago, Illinois. For the purposes of
their opinions, Best Best & Krieger LLP and Jones Day Reavis & Pogue may rely on
the opinion of Mr. Hinckley as to matters governed by the laws of the State of
Nevada.
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<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 20, 1997
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.
<PAGE>
$125,000,000
<TABLE>
<S> <C>
NEVADA POWER COMPANY NVP CAPITAL I
JUNIOR SUBORDINATED DEFERRABLE NVP CAPITAL II
INTEREST DEBENTURES PREFERRED SECURITIES GUARANTEED,
AS SET FORTH HEREIN, BY
</TABLE>
NEVADA POWER COMPANY
Nevada Power Company, a Nevada corporation ("Nevada Power"), may from time
to time offer in one or more series or issuances its junior subordinated
deferrable interest debentures (the "QUIDS"). The QUIDS will be unsecured and
subordinate and junior in right of payment to Senior Debt (as defined in
"Description of QUIDS Subordination") of Nevada Power. If provided in an
accompanying Prospectus Supplement, Nevada Power will have the right to defer
payments of interest on any series of QUIDS at any time or from time to time for
such number of consecutive interest payment periods (which shall not extend
beyond the maturity of the QUIDS) with respect to each deferral period as may be
specified in such Prospectus Supplement (each, an "Extension Period"). See
"Description of QUIDS--Option to Extend Interest Payment Date".
NVP Capital I and NVP Capital II, each a trust formed under the laws of the
State of Delaware (each, an "Issuer", and collectively, the "Issuers"), may
severally offer, from time to time, preferred securities (the "QUIPS")
representing preferred undivided beneficial interests in the assets of such
Issuer. Nevada Power will be the owner of the common securities (the "Common
Securities") of each Issuer. The payment of periodic cash distributions
("Distributions") with respect to the QUIPS of each Issuer and payments on
liquidation or redemption with respect to such QUIPS, in each case to the extent
of funds held by such Issuer, are each irrevocably guaranteed by Nevada Power as
described herein (each, a "Guarantee"). See "Description of Guarantees". The
obligations of Nevada Power under each Guarantee will be subordinate and junior
in right of payment to all Senior Debt (as defined in "Description of
QUIDS--Subordination") of Nevada Power. Concurrently with the issuance by an
Issuer of its QUIPS, such Issuer will invest the proceeds thereof and any
contributions made by Nevada Power in respect of Nevada Power's purchase of the
Common Securities in a corresponding series of Nevada Power's QUIDS (the
"Corresponding QUIDS") with terms corresponding to the terms of that Issuer's
QUIPS. The Corresponding QUIDS will be the sole assets of each Issuer, and
payments under the Corresponding QUIDS and the Expense Agreement (as defined
herein) will be the only revenue of each Issuer. Nevada Power may redeem the
Corresponding QUIDS (and cause the redemption of the related QUIPS) or may
terminate each Issuer and cause the Corresponding QUIDS to be distributed to the
holders of QUIPS in liquidation of their interests in such Issuer. See
"Description of QUIPS--Liquidation Distribution Upon Termination".
Holders of the QUIPS will be entitled to receive preferential cumulative
cash Distributions accumulating from the date of original issuance and payable
periodically as specified in an accompanying Prospectus Supplement. If provided
in an accompanying Prospectus Supplement, Nevada Power will have the right to
defer payments of interest on any series of Corresponding QUIDS at any time or
from time to time for one or more Extension Periods (which shall not extend
beyond the Maturity Date of the Corresponding QUIDS). If interest payments are
so deferred, Distributions on the corresponding series of QUIPS will also be
deferred, and Nevada Power will not be permitted, and its subsidiaries will not
be
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is March , 1997.
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(CONTINUED FROM PREVIOUS PAGE)
permitted, subject to certain exceptions set forth herein, to declare or pay any
cash distributions with respect to Nevada Power's capital stock or indebtedness
that ranks PARI PASSU with or junior to the Corresponding QUIDS. During an
Extension Period, interest on the Corresponding QUIDS will continue to accrue
(and the amount of Distributions to which holders of the QUIPS are entitled will
accumulate at the rate per annum set forth in the related Prospectus
Supplement). See "Description of QUIPS-- Distributions".
Taken together, Nevada Power's obligations under each series of QUIDS, the
Indenture, the related Trust Agreement, the related Expense Agreement and the
related Guarantee (each, as defined herein), in the aggregate, provide a full,
irrevocable and unconditional guarantee, on a subordinated basis, of payments of
distributions and other amounts due on the related series of QUIPS. See
"Relationship Among the QUIPS, the Corresponding QUIDS and the Guarantees".
As of December 31, 1996, Nevada Power had approximately $900 million
aggregate principal amount of Senior Debt outstanding. At that date, the amount
of obligations of Nevada Power on a parity with any QUIDS and any accompanying
Guarantee aggregated approximately $480 million, consisting primarily of
accounts payable, accrued liabilities, including taxes, interest and deposits,
and deferred credits and other liabilities, all arising in the ordinary course
of business. Such amount excludes commitments or contingencies in respect of
existing or future obligations for (by way of example) construction
expenditures, fuel and purchased power obligations and operating lease
obligations. Neither the terms of the Series A QUIDS nor the Series A Guarantee
place any limitation on the amount of Senior Debt that may be incurred by Nevada
Power. See "Description of QUIDS--Subordination" in the accompanying Prospectus.
The QUIDS and QUIPS may be offered in amounts, at prices and on terms to be
determined at the time of offering, provided that the aggregate initial public
offering price of all QUIDS (other than Corresponding QUIDS) and QUIPS issued
pursuant to the Registration Statement of which this Prospectus forms a part
shall not exceed $125,000,000. Certain specific terms of the QUIDS or QUIPS in
respect of which this Prospectus is being delivered will be described in an
accompanying Prospectus Supplement, including without limitation and where
applicable and to the extent not set forth herein, (a) in the case of QUIDS, the
specific designation, aggregate principal amount, denominations, maturity
(including any extension thereof), interest payment dates, interest rate (which
may be fixed or variable) or method of calculating interest, if any, applicable
Extension Period or interest deferral terms, if any, place or places where
principal, premium, if any, and interest, if any, will be payable, terms of
redemption, if any, sinking fund provisions, if any, terms for conversion or
exchange, if any, into other securities, initial offering or purchase price,
methods of distribution and any other special terms, and (b) in the case of
QUIPS, the identity of the Issuer, specific title, aggregate amount, stated
liquidation preference, number of securities, Distribution rate or method of
calculating such rate, applicable Extension Period or Distribution deferral
terms, if any, Distribution dates, place or places where Distributions will be
payable, any terms of redemption, exchange, initial offering or purchase price,
methods of distribution and any other special terms.
The Prospectus Supplement also will contain information, as applicable,
about certain United States federal income tax consequences relating to the
QUIDS and QUIPS.
The QUIDS and QUIPS may be sold to or through underwriters, through dealers,
remarketing firms or agents or directly to purchasers. See "Plan of
Distribution". The names of any underwriters, dealers, remarketing firms or
agents involved in the sale of QUIDS or QUIPS in respect of which this
Prospectus is being delivered and any applicable fee, commission or discount
arrangements with them will be set forth in a Prospectus Supplement. The
Prospectus Supplement will state whether the QUIDS or QUIPS will be listed on
any national securities exchange. If the QUIDS or QUIPS are not listed on any
national securities exchange, there can be no assurance that there will be a
liquid secondary market for the QUIDS or QUIPS.
This Prospectus may not be used to consummate sales of QUIDS or QUIPS unless
accompanied by a Prospectus Supplement.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR
ANY ACCOMPANYING PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY NEVADA
POWER, ANY OF THE ISSUERS OR ANY UNDERWRITER, DEALER OR AGENT. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS SUPPLEMENT NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR IN ANY ACCOMPANYING
PROSPECTUS SUPPLEMENT IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF OR
THEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF NEVADA POWER SINCE
THE DATE HEREOF OR THEREOF. NEITHER THIS PROSPECTUS NOR ANY ACCOMPANYING
PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS
NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
AVAILABLE INFORMATION
Nevada Power is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by Nevada Power with the Commission pursuant to the informational
requirements of the Exchange Act may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the following
Regional Offices of the Commission: Suite 1400, 500 West Madison Street,
Chicago, Illinois 60661; and 7 World Trade Center, 13th Floor, New York, New
York 10048. Copies of such material can be obtained at prescribed rates from the
Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549. The Commission maintains a Web Site that contains
reports, proxy and information statements and other information regarding
registrants, including Nevada Power, that file electronically with the
Commission and that is located at http://www.sec.gov.
Nevada Power's common stock is listed on the New York Stock Exchange
(Symbol: "NVP") and the Pacific Stock Exchange. Reports, proxy statements and
other information concerning Nevada Power may be inspected at the offices of
such exchanges.
Nevada Power and the Issuers have filed with the Commission a Registration
Statement on Form S-3 (together with all amendments and exhibits thereto, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the securities offered hereby. This
Prospectus and the accompanying Prospectus Supplement omit, in accordance with
the rules and regulations of the Commission, certain of the information
contained in the Registration Statement. Reference is hereby made to the
Registration Statement and the exhibits and the financial statements, notes and
schedules filed as a part thereof or incorporated by reference therein for
further information with respect to Nevada Power, the Issuers and the securities
offered hereby. Statements contained herein concerning the provisions of any
document are not necessarily complete and, in each instance, where a copy of
such document has been filed as an exhibit to the Registration Statement or
otherwise has been filed with the Commission, reference is made to the copy so
filed. Each such statement is qualified in its entirety by such reference.
No separate financial statements of either Issuer have been included herein.
Nevada Power and the Issuers do not consider that such financial statements
would be material to holders of the QUIPS because each Issuer is a newly formed
special purpose entity, has no operating history or independent operations and
is not engaged in and does not propose to engage in any activity other than
holding as trust assets the Corresponding QUIDS of Nevada Power and issuing the
QUIPS and Common Securities. See "The Issuers", "Description of QUIPS",
"Description of Guarantees" and "Description of Corresponding QUIDS".
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
Nevada Power's Annual Report on Form 10-K for the fiscal year ended December
31, 1996, previously filed by Nevada Power with the Commission, is incorporated
by reference in this Prospectus and shall be deemed to be a part hereof.
Each document filed by Nevada Power with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of any offering of securities made by
this Prospectus shall be deemed to be incorporated herein by reference and to be
a part hereof from the date of filing such document. Any statement contained
herein, or in a document all or a portion of which is incorporated or deemed to
be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of the Registration Statement and this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus.
Nevada Power will provide without charge to any person to whom a copy of
this Prospectus is delivered, upon written or oral request of such person, a
copy of any and all of the documents that have been or may be incorporated by
reference herein (other than exhibits to such documents which are not
specifically incorporated by reference into such documents). Such requests
should be directed by mail to: Richard C. Schmalz, Director, Treasury, Nevada
Power Company, P.O. Box 230, Las Vegas, Nevada 89151 or by telephone (702)
367-5608.
USE OF PROCEEDS
Except as otherwise specified in the related Prospectus Supplement, the net
proceeds from the sale of the QUIDS will be added to the general funds of Nevada
Power and will be used for general corporate utility purposes, which may include
the purchase or redemption of one or more series of its preferred stock, capital
expenditures, the reduction of short-term borrowings and working capital.
THE ISSUERS
Each Issuer is a statutory business trust formed under Delaware law pursuant
to (i) a trust agreement executed by Nevada Power, as sponsor of the Issuer, and
the Delaware Trustee (as defined herein) of such Issuer and (ii) the filing of a
certificate of trust with the Secretary of State of the State of Delaware. Each
trust agreement will be amended and restated in its entirety (each, as so
amended and restated, a "Trust Agreement") substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
Each Trust Agreement will be qualified as an indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). Each Issuer exists for the
exclusive purposes of (i) issuing and selling its QUIPS and Common Securities,
(ii) using the proceeds from the sale of such QUIPS and Common Securities to
acquire a corresponding series of Corresponding QUIDS issued by Nevada Power,
(iii) receiving payments to be made with respect to the QUIDS and disbursing
such payments in accordance with the terms of the Trust Agreements and (iv)
engaging in only those other activities necessary, convenient or incidental
thereto. Accordingly, the Corresponding QUIDS will be the sole assets of each
Issuer, and payments under the Corresponding QUIDS and the Expense Agreement
will be the sole revenue of each Issuer.
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All of the Common Securities will be owned by Nevada Power. The Common
Securities of an Issuer will rank PARI PASSU, and payments will be made thereon
pro rata, with the QUIPS of such Issuer, except that upon the occurrence and
continuance of an event of default under a Trust Agreement resulting from a
Debenture Event of Default (as defined herein), the rights of Nevada Power as
holder of the Common Securities to payment in respect of Distributions and
payments upon liquidation, redemption and otherwise will be subordinated to the
rights of the holders of the QUIPS of such Issuer. See "Description of
QUIPS--Subordination of Common Securities." Nevada Power will acquire Common
Securities in an aggregate liquidation amount equal to not less than 3% of the
total capital of each Issuer.
Unless otherwise specified in the applicable Prospectus Supplement, each
Issuer has a term of approximately 55 years, but may terminate earlier as
provided in the applicable Trust Agreement. Each Issuer's business and affairs
are conducted by its trustees, which will be appointed by Nevada Power as holder
of the Common Securities.
Unless otherwise specified in the applicable Prospectus Supplement, the
trustees shall be IBJ Schroder Bank & Trust Company ("IBJ Schroder"), as the
Property Trustee (the "Property Trustee") and Delaware Trust Capital Management,
Inc., as the Delaware Trustee (the "Delaware Trustee"), and two individual
trustees (the "Administrative Trustees") who are employees or officers of or
affiliated with Nevada Power (collectively, the "Issuer Trustees"). IBJ
Schroder, as Property Trustee, will act as sole indenture trustee under each
Trust Agreement for purposes of compliance with the Trust Indenture Act. IBJ
Schroder will also act as trustee under the Guarantees and the Indenture (each
as defined herein). See "Description of Guarantees" and "Description of QUIDS."
The holder of the Common Securities, or the holders of a majority in liquidation
preference of the QUIPS if any Debenture Event of Default has occurred and is
continuing, will be entitled to appoint, remove or replace the Delaware Trustee
or the Property Trustee. The holder of the Common Securities will be entitled to
appoint, remove or replace the Administrative Trustees. The duties and
obligations of each Issuer Trustee are governed by the applicable Trust
Agreement. Nevada Power will pay all fees and expenses related to each Issuer
and the offering of the QUIPS and will pay, directly or indirectly, all ongoing
costs, expenses and liabilities of each Issuer. The principal executive office
of each Issuer is 6226 West Sahara Avenue, Las Vegas, Nevada 89102, Attention:
Secretary, and its telephone number is (702) 367-5000.
DESCRIPTION OF QUIDS
The QUIDS are to be issued in one or more series under a Junior Subordinated
Indenture, as supplemented from time to time (as so supplemented, the
"Indenture"), between Nevada Power and IBJ Schroder, as trustee (the "Debenture
Trustee"). This summary of certain terms and provisions of the QUIDS and the
Indenture does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, the Indenture, the form of which is filed as an
exhibit to the Registration Statement of which this Prospectus forms a part, and
to the Trust Indenture Act. Whenever particular defined terms of the Indenture
(as supplemented or amended from time to time) are referred to herein or in a
Prospectus Supplement, such defined terms are incorporated herein or therein by
reference.
GENERAL
Each series of QUIDS will rank PARI PASSU with all other series of QUIDS,
and will be unsecured and subordinate and junior in right of payment to the
extent and in the manner set forth in the Indenture to all Senior Debt (as
defined below) of Nevada Power. See "--Subordination." Unless otherwise
specified in the applicable Prospectus Supplement, the Indenture does not limit
the incurrence or issuance of other secured or unsecured debt, including Senior
Debt, of Nevada Power, whether under the Indenture or any existing or other
indenture that Nevada Power may enter into in the future or otherwise,
including, without limitation, Nevada Power's Indenture of Mortgage and Deed of
Trust dated October 1, 1953 entered into with Bankers Trust Company, together
with supplemental indentures thereto heretofore or hereafter entered into.
Furthermore, unless otherwise stated in the applicable Prospectus Supplement,
there are no
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provisions in the Indenture, any Guarantee or any Trust Agreement, or any other
agreement, that afford holders of QUIDS or QUIPS protection in the event of a
highly leveraged or similar transaction involving Nevada Power, whether or not
involving a change in control of Nevada Power. See "--Subordination" and the
Prospectus Supplement relating to any offering of securities.
The QUIDS will be issuable in one or more series pursuant to an indenture
supplemental to the Indenture or a resolution of Nevada Power's board of
directors or a committee thereof.
The applicable Prospectus Supplement or Prospectus Supplements will describe
the following terms of the QUIDS: (1) the title of the QUIDS; (2) any limit upon
the aggregate principal amount of the QUIDS; (3) the date or dates on which the
principal of the QUIDS is payable or the method of determination thereof; (4)
the rate or rates, if any, at which the QUIDS shall bear interest, the Interest
Payment Dates on which any such interest shall be payable, the right, if any, of
Nevada Power to defer or extend an Interest Payment Date, and the Regular Record
Date for any interest payable on any Interest Payment Date or the method by
which any of the foregoing shall be determined; (5) the place or places where,
subject to the terms of the Indenture as described below under "Payment and
Paying Agents", the principal of and premium, if any, and interest on the QUIDS
will be payable and where, subject to the terms of the Indenture as described
below under "Denominations; Registration of Transfer", the QUIDS may be
presented for registration of transfer or exchange and the place or places where
notices and demands to or upon Nevada Power in respect of the QUIDS and the
Indentures may be made ("Place of Payment"); (6) any period or periods within or
date or dates on which, the price or prices at which and the terms and
conditions upon which QUIDS may be redeemed, in whole or in part, at the option
of Nevada Power or a holder thereof; (7) the obligation or the right, if any, of
Nevada Power or a holder thereof to redeem, purchase or repay the QUIDS and the
period or periods within which, the price or prices at which, the currency or
currencies (including currency unit or units) in which and the other terms and
conditions upon which the QUIDS shall be redeemed, repaid or purchased, in whole
or in part, pursuant to such obligation; (8) the denominations in which any
QUIDS shall be issuable if other than denominations of $25 and any integral
multiple thereof; (9) if other than in U.S. Dollars, the currency or currencies
(including currency unit or units) in which the principal of and premium, if
any, and interest, if any, on the QUIDS shall be payable, or in which the QUIDS
shall be denominated; (10) any additions, modifications or deletions in the
Debenture Events of Default or covenants of Nevada Power specified in the
Indenture with respect to the QUIDS; (11) if other than the principal amount
thereof, the portion of the principal amount of QUIDS that shall be payable upon
declaration of acceleration of the maturity thereof; (12) any additions or
changes to the Indenture with respect to a series of QUIDS as shall be necessary
to permit or facilitate the issuance of such series in bearer form, registrable
or not registrable as to principal, and with or without interest coupons; (13)
any index or indices used to determine the amount of payments of principal of
and premium, if any, on the QUIDS and the manner in which such amounts will be
determined; (14) the terms and conditions relating to the issuance of a
temporary Global Security representing all of the QUIDS of such series and the
exchange of such temporary Global Security for definitive QUIDS of such series;
(15) subject to the terms described under "Global QUIDS," whether the QUIDS of
the series shall be issued in whole or in part in the form of one or more Global
Securities and, in such case, the Depositary for such Global Securities, which
Depositary shall be a clearing agency registered under the Exchange Act; (16)
the appointment of any Paying Agent or Agents; (17) the terms and conditions of
any obligation or right of Nevada Power or a holder to convert or exchange the
QUIDS into QUIPS or other securities; and (18) any other terms of the QUIDS not
inconsistent with the provisions of the Indenture.
QUIDS may be sold at a substantial discount below their stated principal
amount, bearing no interest or interest at a rate which at the time of issuance
is below market rates. The material United States federal income tax
consequences and special considerations applicable to any such QUIDS will be
described in the applicable Prospectus Supplement.
If the purchase price of any of the QUIDS is payable in one or more foreign
currencies or currency units or if any QUIDS are denominated in one or more
foreign currencies or currency units or if the
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principal of, premium, if any, or interest, if any, on any QUIDS is payable in
one or more foreign currencies or currency units, the restrictions, elections,
the material United States federal income tax consequences, specific terms and
other information with respect to such issue of QUIDS and such foreign currency
or currency units will be set forth in the applicable Prospectus Supplement.
If any index is used to determine the amount of payments of principal of,
premium, if any, or interest on any series of QUIDS, special United States
federal income tax, accounting and other considerations applicable thereto will
be described in the applicable Prospectus Supplement.
DENOMINATIONS; REGISTRATION OF TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement, the
QUIDS will be issuable only in registered form without coupons in denominations
of $25 and any integral multiple thereof. QUIDS of any series will be
exchangeable for other QUIDS of the same issue and series, of any authorized
denominations, of a like aggregate principal amount, of the same original issue
date and stated maturity and bearing the same interest rate.
QUIDS may be presented for exchange as provided above, and may be presented
for registration of transfer (with the form of transfer endorsed thereon, or a
satisfactory written instrument of transfer, duly executed), at the office of
the appropriate Securities Registrar or at the office of any transfer agent
designated by Nevada Power for such purpose with respect to any series of QUIDS
and referred to in the applicable Prospectus Supplement, without service charge
and upon payment of any taxes and other governmental charges as described in the
Indenture. Nevada Power will appoint the Debenture Trustee as Securities
Registrar under the Indenture. If the applicable Prospectus Supplement refers to
any transfer agents (in addition to the Securities Registrar) initially
designated by Nevada Power with respect to any series of QUIDS, Nevada Power may
at any time rescind the designation of any such transfer agent or approve a
change in the location through which any such transfer agent acts, provided that
Nevada Power maintains a transfer agent in each Place of Payment for such
series. Nevada Power may at any time designate additional transfer agents with
respect to any series of QUIDS.
In the event of any redemption, neither Nevada Power nor the Debenture
Trustee shall be required to (i) issue, register the transfer of or exchange
QUIDS of any series during a period beginning at the opening of business 15 days
before the day of selection for redemption of QUIDS of that series and ending at
the close of business on the day of mailing of the relevant notice of redemption
or (ii) transfer or exchange any QUIDS so selected for redemption, except, in
the case of any QUIDS being redeemed in part, any portion thereof not to be
redeemed.
GLOBAL QUIDS
The QUIDS of a series may be issued in whole or in part in the form of one
or more Global QUIDS that will be deposited with, or on behalf of, a depositary
(the "Depositary") identified in the Prospectus Supplement relating to such
series. Global QUIDS may be issued only in fully registered form and in either
temporary or permanent form. Unless and until it is exchanged in whole or in
part for the individual QUIDS represented thereby, a Global QUIDS may not be
transferred except as a whole by the Depositary for such Global QUIDS to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by the Depositary or any nominee to a
successor Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series of
QUIDS will be described in the Prospectus Supplement relating to such series.
Nevada Power anticipates that the following provisions will generally apply to
depositary arrangements.
Upon the issuance of a Global QUIDS and the deposit of such Global QUIDS
with or on behalf of the Depositary, the Depositary for such Global QUIDS or its
nominee will credit on its book-entry
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registration and transfer system the respective principal amounts of the
individual QUIDS represented by such Global QUIDS to the accounts of persons
that have accounts with such Depositary ("Participants"). Such accounts shall be
designated by the dealers, underwriters or agents with respect to such QUIDS or
by Nevada Power if such QUIDS are offered and sold directly by Nevada Power.
Ownership of beneficial interests in a Global QUIDS will be limited to
Participants or persons that may hold interests through Participants. Ownership
of beneficial interests in such Global QUIDS will be shown on, and the transfer
of that ownership will be effected only through, records maintained by the
applicable Depositary or its nominee (with respect to interests of Participants)
and the records of Participants (with respect to interests of persons who hold
through Participants). The laws of some states require that certain purchasers
of securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global QUIDS.
So long as the Depositary for a Global QUIDS, or its nominee, is the
registered owner of such Global QUIDS, such Depositary or such nominee, as the
case may be, will be considered the sole owner or holder of the QUIDS
represented by such Global QUIDS for all purposes under the Indenture governing
such QUIDS. Except as provided below, owners of beneficial interests in a Global
QUIDS will not be entitled to have any of the individual QUIDS of the series
represented by such Global QUIDS registered in their names, will not receive or
be entitled to receive physical delivery of any such QUIDS of such series in
definitive form and will not be considered the owners or holders thereof under
the Indenture.
Payments of principal of and premium, if any, and interest on individual
QUIDS represented by a Global QUIDS registered in the name of a Depositary or
its nominee will be made to the Depositary or its nominee, as the case may be,
as the registered owner of the Global QUIDS representing such QUIDS. None of
Nevada Power, the Debenture Trustee, any Paying Agent or the Securities
Registrar for such QUIDS will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of the Global QUIDS representing such QUIDS or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
Nevada Power expects that the Depositary for a series of QUIDS or its
nominee, upon receipt of any payment of principal, premium, if any, or interest
in respect of a permanent Global QUIDS representing any of such QUIDS,
immediately will credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interest in the principal amount of
such Global QUIDS representing such QUIDS as shown on the records of such
Depositary or its nominee. Nevada Power also expects that payments by
Participants to owners of beneficial interests in such Global QUIDS held through
such Participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of customers
in bearer form or registered in "street name." Such payments will be the
responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of QUIDS is at any time unwilling, unable or ineligible
to continue as depositary and a successor depositary is not appointed by Nevada
Power within 90 days, Nevada Power will issue individual QUIDS of such series in
exchange for the Global QUIDS representing such series of QUIDS. In addition,
Nevada Power may at any time and in its sole discretion, subject to any
limitations described in the Prospectus Supplement relating to such QUIDS,
determine not to have any QUIDS of such series represented by one or more Global
QUIDS and, in such event, will issue individual QUIDS of such series in exchange
for the Global QUIDS representing such series of QUIDS. Further, if Nevada Power
so specifies with respect to the QUIDS of a series, an owner of a beneficial
interest in a Global QUIDS representing QUIDS of such series may, on terms
acceptable to Nevada Power, the Debenture Trustee and the Depositary for such
Global QUIDS, receive individual QUIDS of such series in exchange for such
beneficial interests, subject to any limitations described in the Prospectus
Supplement relating to such QUIDS. In any such instance, an owner of a
beneficial interest in a Global QUIDS will be entitled to physical delivery of
individual QUIDS of the series represented by such Global QUIDS equal in
principal amount to such beneficial interest and to have such QUIDS registered
in its name. Individual QUIDS of such series so issued will be
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issued in denominations, unless otherwise specified by Nevada Power, of $25 and
integral multiples thereof.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of and premium, if any, and any interest on QUIDS will be made at
the office of the Debenture Trustee in New York, New York or at the office of
such Paying Agent or Paying Agents as Nevada Power may designate from time to
time in the applicable Prospectus Supplement, except that at the option of
Nevada Power payment of any interest may be made (i) by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Securities Register or (ii) by transfer to an account maintained by the Person
entitled thereto as specified in the Securities Register, provided that proper
transfer instructions have been received by the Regular Record Date. Unless
otherwise indicated in the applicable Prospectus Supplement, payment of any
interest on QUIDS will be made to the Person in whose name such QUIDS is
registered at the close of business on the Regular Record Date for such
interest, except in the case of Defaulted Interest. Nevada Power may at any time
designate additional Paying Agents or rescind the designation of any Paying
Agent; however Nevada Power will at all times be required to maintain a Paying
Agent in each Place of Payment for each series of QUIDS.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or then
held by Nevada Power in trust, for the payment of the principal of and premium,
if any, or interest on any QUIDS and remaining unclaimed for two years after
such principal and premium, if any, or interest has become due and payable
shall, at the request of Nevada Power, be repaid to Nevada Power and the holder
of such QUIDS shall thereafter look, as a general unsecured creditor, only to
Nevada Power for payment thereof.
REDEMPTION
Unless otherwise indicated in the applicable Prospectus Supplement, QUIDS
will not be subject to any sinking fund.
Unless otherwise indicated in the applicable Prospectus Supplement, Nevada
Power may, at its option, redeem the QUIDS of any series in whole at any time or
in part from time to time. QUIDS in denominations larger than $25 may be
redeemed in part but only in integral multiples of $25. Except as otherwise
specified in the applicable Prospectus Supplement, the redemption price for any
QUIDS so redeemed shall equal any accrued and unpaid interest thereon to the
redemption date, plus the principal amount thereof.
Except as otherwise specified in the applicable Prospectus Supplement, if a
Special Event (as defined under "Description of QUIPS--Redemption") in respect
of a series of QUIDS has occurred and is continuing, Nevada Power may, at its
option, redeem such series of QUIDS in whole (but not in part) at any time
within 90 days of the occurrence of such Special Event, at a redemption price
equal to 100% of the principal amount of such QUIDS then outstanding plus
accrued and unpaid interest to the date fixed for redemption.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of QUIDS to be redeemed at its
registered address. Unless Nevada Power defaults in payment of the redemption
price, on and after the redemption date interest ceases to accrue on such QUIDS
or portions thereof called for redemption.
OPTION TO EXTEND INTEREST PAYMENT DATE
If provided in the applicable Prospectus Supplement, Nevada Power shall have
the right at any time and from time to time during the term of any series of
QUIDS to defer payment of interest for such number of consecutive interest
payment periods as may be specified in the applicable Prospectus
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Supplement (each, an "Extension Period"), subject to the terms, conditions and
covenants, if any, specified in such Prospectus Supplement, provided that such
Extension Period may not extend beyond the Maturity Date of such series of
QUIDS. Certain United States federal income tax consequences and special
considerations applicable to any such QUIDS will be described in the applicable
Prospectus Supplement.
During such Extension Period, Nevada Power may not, and may not permit any
subsidiary of Nevada Power to, (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of Nevada Power's capital stock or (ii) make any payment of principal of, or
interest or premium, if any, on or repay, repurchase or redeem, or make any
sinking fund payment with respect to, any indebtedness that ranks PARI PASSU
with or junior in right of payment to the QUIDS or make any guarantee payments
with respect to any guarantee by Nevada Power of any indebtedness if such
guarantee ranks PARI PASSU with or junior in right of payment to the QUIDS
(other than (a) dividends or distributions in Common Stock of Nevada Power, (b)
redemption or purchases of any rights pursuant to Nevada Power's Stock Purchase
Rights Plan, or any successor to such Stock Purchase Rights Plan, and the
declaration of a dividend of such rights or the issuance of Preferred Stock
under such plans in the future, (c) payments under any Guarantee, (d) purchases
of Common Stock related to the issuance of Common Stock under Nevada Power's
Stock Purchase and Dividend Reinvestment Plan and any of Nevada Power's benefit
plans for its directors, officers or employees and (e) purchases of Common Stock
required to prevent the loss or secure the renewal or reinstatement of any
government license or franchise held by Nevada Power or any of its
subsidiaries).
MODIFICATION OF INDENTURE
From time to time Nevada Power and the Debenture Trustee may, without the
consent of or notice to the holders of any series of QUIDS, amend, waive or
supplement the Indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies (provided that any such action
does not materially adversely affect the interest of the holders of any series
of QUIDS or, in the case of Corresponding QUIDS, the holders of the
corresponding series of QUIPS so long as they remain outstanding) and
qualifying, or maintaining the qualification of, the Indenture under the Trust
Indenture Act. The Indenture contains provisions permitting Nevada Power and the
Debenture Trustee, with the consent of the holders of a majority in principal
amount of QUIDS or each series affected, to modify the Indenture in a manner
affecting the rights of the holders of such series; provided that no such
modification may, among other things, without the consent of the holder of each
outstanding QUIDS so affected, (i) change the stated maturity of any series of
QUIDS, or reduce the principal amount thereof, reduce the rate of interest or
premium, or extend the time of payment of interest thereon (except such change
or extension as is contemplated hereby), (ii) reduce the percentage of principal
amount of QUIDS of any series, the holders of which are required to consent to
any such modification of the Indenture, (iii) modify any of the provisions
described in this sentence or the provisions of the Indenture regarding waivers
of past defaults and waivers of covenants or conditions therein or (iv) modify
any of the provisions described under "--Subordination" in a manner adverse to
the holders of outstanding QUIDS, provided that, in the case of Corresponding
QUIDS, so long as any of the related series of QUIPS remain outstanding, no such
modification may be made that adversely affects the holders of such QUIPS in any
material respect, and no termination of the Indenture may occur, and no waiver
of any Debenture Event of Default or compliance with any covenant under the
Indenture may be effective, without the prior consent of the holders of a
majority of the aggregate liquidation preference of such QUIPS unless and until
the principal of the Corresponding QUIDS and all accrued and unpaid interest
thereon have been paid in full and certain other conditions are satisfied.
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In addition, Nevada Power and the Debenture Trustee may execute, without the
consent of or notice to any holder of QUIDS, any supplemental indenture for the
purpose of creating any new series of QUIDS.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to a series of QUIDS that has occurred and is continuing
constitutes a "Debenture Event of Default" with respect to such series of QUIDS:
(i) failure for 30 days to pay any interest on such series of QUIDS,
when due (subject to the deferral of any due date in the case of an
Extension Period); or
(ii) failure to pay any principal of, or premium, if any, on such series
of QUIDS when due whether at maturity, upon redemption, by declaration of
acceleration or otherwise; or
(iii) failure to observe or perform, or a breach of, in any material
respect certain other covenants or warranties contained in the Indenture for
90 days after written notice to Nevada Power from the Debenture Trustee or
to Nevada Power and the Debenture Trustee from the holders of at least 25%
in aggregate outstanding principal amount of such series of QUIDS; or
(iv) certain events of bankruptcy, insolvency or reorganization of
Nevada Power.
The holders of a majority in aggregate outstanding principal amount of such
series of QUIDS have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee. The
Debenture Trustee or the holders of not less than 25% in aggregate outstanding
principal amount of such series of QUIDS may declare the principal due and
payable immediately upon a Debenture Event of Default, and, in the case of
Corresponding QUIDS, should the Debenture Trustee or such holders of such
Corresponding QUIDS fail to make such declaration, the holders of at least 25%
in aggregate liquidation preference of the related series of QUIPS shall have
such right. The holders of a majority in aggregate outstanding principal amount
of such series of QUIDS may annul such declaration and waive the default if the
default (other than the non-payment of the principal of such series of QUIDS
which has become due solely by such acceleration) has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee
and, in the case of Corresponding QUIDS, should the holders of such
Corresponding QUIDS fail to annul such declaration and waive such default, the
holders of a majority in aggregate liquidation preference of the related series
of QUIPS shall have such right.
The holders of a majority in aggregate outstanding principal amount of the
QUIDS affected thereby may, on behalf of the holders of all the QUIDS, waive any
past default, except a default in the payment of principal or interest (unless
such default has been cured and a sum sufficient to pay all matured installments
of interest and principal due otherwise than by acceleration has been deposited
with the Debenture Trustee) or a default in respect of a covenant or provision
which under the Indenture cannot be modified or amended without the consent of
the holder of each outstanding QUIDS and, in the case of Corresponding QUIDS,
should the holders of such Corresponding QUIDS fail to annul such declaration
and waive such default, the holders of a majority in aggregate liquidation
preference of the related series of QUIPS shall have such right. Nevada Power is
required to file annually with the Debenture Trustee a certificate as to whether
or not Nevada Power is in compliance with all the conditions and covenants
applicable to it under the Indenture.
In case a Debenture Event of Default has occurred and is continuing as to a
series of Corresponding QUIDS, the Property Trustee will have the right to
declare the principal of and the interest on such Corresponding QUIDS and any
other amounts payable under the Indenture, to be forthwith due and payable and
to enforce its other rights as a creditor with respect to such Corresponding
QUIDS.
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ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF QUIPS
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of Nevada Power to pay interest or
principal on the related QUIDS on the date such interest or principal is
otherwise payable, a holder of QUIPS may institute a Direct Action (as defined
below under "Description of QUIPS--Enforcement of Certain Rights by Holders of
QUIPS") for payment after the respective due date specified in the related
QUIDS. Nevada Power may not amend the Indenture to remove the foregoing right to
bring a Direct Action without the prior written consent of the holders of all of
the QUIPS. Notwithstanding any payment made to such holder of QUIPS by Nevada
Power in connection with a Direct Action, Nevada Power shall remain obligated to
pay the principal of or interest on the related QUIDS held by the Issuer or the
Property Trustee and Nevada Power shall be subrogated to the rights of the
holder of such QUIPS with respect to payments on the QUIPS to the extent of any
payments made by Nevada Power to such holder in any Direct Action. The holders
of QUIPS will not be able to exercise directly any other remedy available to the
holders of the related QUIDS.
The holders of the QUIPS would not be able to exercise directly any remedies
other than those set forth in the preceding paragraph available to the holders
of the QUIDS unless the Property Trustee or the Debenture Trustee, acting for
the benefit of the Property Trustee, fails to do so for 60 days. In such event,
the holders of at least 25% in aggregate liquidation preference of the
outstanding QUIPS would have such right to institute proceedings.
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that Nevada Power shall not consolidate with or merge
into any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and no Person shall consolidate with
or merge into Nevada Power or convey, transfer or lease its properties and
assets substantially as an entirety to Nevada Power, unless (i) in case Nevada
Power consolidates with or merges into another Person or conveys, transfers or
leases its properties and assets substantially as an entirety to any Person, the
successor Person is organized under the laws of the United States or any state
or the District of Columbia, and such successor Person expressly assumes Nevada
Power's obligations on the QUIDS issued under the Indenture; (ii) immediately
after giving effect thereto, no Debenture Event of Default, and no event which,
after notice or lapse of time or both, would become a Debenture Event of
Default, shall have happened and be continuing; (iii) in the case of
Corresponding QUIDS, such transaction is permitted under the related Trust
Agreement or Guarantee and does not give rise to any breach or violation of the
related Trust Agreement and Guarantees; and (iv) certain other conditions as
prescribed in the Indenture are met.
The general provisions of the Indenture do not afford holders of the QUIDS
protection in the event of a highly leveraged or other transaction involving
Nevada Power that may adversely affect holders of the QUIDS.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all QUIDS not
previously delivered to the Debenture Trustee for cancellation (i) have become
due and payable or (ii) will become due and payable at their Stated Maturity
within one year, and Nevada Power deposits or causes to be deposited with the
Debenture Trustee funds or Government Obligations, in trust, for the purpose and
in an amount in the currency or currencies in which the QUIDS are payable
sufficient to pay and discharge the entire indebtedness on the QUIDS not
previously delivered to the Debenture Trustee for cancellation, for the
principal and premium, if any, and interest to the date of the deposit or
applicable redemption date or to the Stated Maturity, as the case may be, then
the Indenture will cease to be of further effect (except as to Nevada Power's
obligations to pay all other sums due pursuant to the Indenture and to provide
the
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officers' certificates and opinions of counsel described therein), and Nevada
Power will be deemed to have satisfied and discharged the Indenture.
CONVERSION OR EXCHANGE
Unless otherwise indicated in the applicable Prospectus Supplement, the
QUIDS of any series may be convertible or exchangeable into QUIPS or other
securities. The specific terms on which QUIDS of any series may be so converted
or exchanged will be set forth in the applicable Prospectus Supplement. Such
terms may include provisions for conversion or exchange, either mandatory, at
the option of the holder, or at the option of Nevada Power, in which case the
number of shares of QUIPS or other securities to be received by the Holders of
QUIDS would be calculated as of a time and in the manner stated in the
applicable Prospectus Supplement.
SUBORDINATION
Any QUIDS issued under the Indenture, by the express terms thereof, will be
subordinate and junior in right of payment to all Senior Debt to the extent
provided in the Indenture. Upon any payment or distribution of assets to
creditors upon any liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any bankruptcy,
insolvency, debt restructuring or similar proceedings in connection with any
insolvency or bankruptcy proceeding of Nevada Power, the holders of Senior Debt
will first be entitled to receive payment in full of principal of and premium,
if any, and interest, if any, on such Senior Debt before the holders of QUIDS
or, in the case of Corresponding QUIDS, the Property Trustee on behalf of the
holders, will be entitled to receive or retain any payment in respect of the
principal of and premium, if any, or interest, if any, on the QUIDS.
In the event of the acceleration of the maturity of any QUIDS, the holders
of all Senior Debt outstanding at the time of such acceleration will first be
entitled to receive payment in full of all amounts due thereon (including any
amounts due upon acceleration) before the holders of QUIDS will be entitled to
receive or retain any payment in respect of the principal of or premium, if any,
or interest, if any, on the QUIDS.
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the QUIDS may be made if there has occurred and is continuing
a default in any payment with respect to Senior Debt, or an event of default
with respect to any Senior Debt resulting in the acceleration of the maturity
thereof, or if any judicial proceeding shall be pending with respect to any such
default.
"Debt" means with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; and (vi) every
obligation of the type referred to in clauses (i) through (v) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable for, directly or indirectly,
as obligor or otherwise.
"Senior Debt" means the principal of and premium and interest, if any
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to Nevada Power whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of the Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the QUIDS or to other Debt which is PARI PASSU
with, or subordinated to, the
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QUIDS; provided, however, that Senior Debt shall not be deemed to include (i)
any Debt of Nevada Power which when incurred and without respect to any election
under Section 1111 (b) of the Bankruptcy Code, was without recourse to Nevada
Power, (ii) any Debt of Nevada Power to any of its subsidiaries, (iii) Debt to
any employee of Nevada Power, (iv) any liability for taxes, (v) Debt or monetary
obligations to trade creditors created or assumed by Nevada Power or any of its
subsidiaries in the ordinary course of business in connection with the obtaining
of goods, materials or services and (vi) the QUIDS.
The Indenture places no limitation on the amount of additional Senior Debt,
parity obligations or other indebtedness that may be incurred by Nevada Power.
Furthermore, there are no provisions in the Indenture that afford holders of any
QUIDS protection in the event of a highly leveraged or similar transaction
involving Nevada Power, whether or not involving a change in control of Nevada
Power. The electric utility business is capital intensive. Nevada Power has
substantial amounts of outstanding indebtedness constituting Senior Debt and
anticipates that it will in the future incur substantial amounts of additional
indebtedness constituting Senior Debt.
The Indenture provides that the foregoing subordination provisions, insofar
as they relate to any particular issue of QUIDS, may be changed prior to such
issuance. Any such change would be described in the applicable Prospectus
Supplement.
GOVERNING LAW
The Indenture and the QUIDS will be governed by and construed in accordance
with the laws of the State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of QUIDS, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be incurred
thereby. The Debenture Trustee is not required to expend or risk its own funds
or otherwise incur personal financial liability in the performance of its duties
if the Debenture Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it.
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DESCRIPTION OF QUIPS
Pursuant to the terms of the Trust Agreement for each Issuer, the Issuer
Trustees on behalf of such Issuer will issue the QUIPS and the Common
Securities. The QUIPS of a particular issue will represent preferred undivided
beneficial interests in the assets of the related Issuer and the holders thereof
will be entitled to a preference in certain circumstances with respect to
Distributions and amounts payable on redemption or liquidation over the Common
Securities of such Issuer, as well as other benefits as described in the
corresponding Trust Agreement. This summary of certain provisions of the QUIPS
and each Trust Agreement does not purport to be complete and is subject to, and
is qualified in its entirety by reference to, all the provisions of each Trust
Agreement, including the definitions therein of certain terms, and the Trust
Indenture Act. Wherever particular defined terms of a Trust Agreement (as
supplemented or amended from time to time) are referred to herein or in a
Prospectus Supplement, such defined terms are incorporated herein or therein by
reference. The form of each Trust Agreement has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. Each of the
Issuers is a legally separate entity and the assets of one are not available to
satisfy the obligations of any of the others.
GENERAL
The QUIPS of an Issuer will rank PARI PASSU, and payments will be made
thereon pro rata, with the Common Securities of that Issuer except as described
under "--Subordination of Common Securities." Legal title to the Corresponding
QUIDS will be held by the Property Trustee in trust for the benefit of the
holders of the related QUIPS and Common Securities. Each Guarantee Agreement
executed by Nevada Power for the benefit of the holders of an Issuer's QUIPS
(each, the "Guarantee") will be a guarantee on a subordinated basis with respect
to the related QUIPS but will not guarantee payment of Distributions or amounts
payable on redemption or liquidation of such QUIPS when the related Issuer does
not have funds on hand available to make such payments. See "Description of
Guarantees."
DISTRIBUTIONS
Each Issuer's QUIPS represent preferred undivided beneficial interests in
the assets of such Issuer, and the Distributions on each QUIPS will be payable
at a rate specified in the Prospectus Supplement for such QUIPS. The amount of
Distributions payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months unless otherwise specified in the applicable
Prospectus Supplement. Distributions to which holders of QUIPS are entitled will
accumulate additional Distributions at the rate per annum if and as specified in
the applicable Prospectus Supplement. The term "Distributions" as used herein
includes any such additional Distributions unless otherwise stated.
Distributions on the QUIPS will be cumulative, will accrue from the date of
original issuance and will be payable on such dates as specified in the
applicable Prospectus Supplement. In the event that any date on which
Distributions are payable on the QUIPS is not a Business Day (as defined below),
payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, payment of such Distribution shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date (each date on which Distributions are payable in
accordance with the foregoing, a "Distribution Date"). A "Business Day" means
any day other than a Saturday or a Sunday, or a day on which banking
institutions in The City of New York are authorized or required by law or
executive order to remain closed or a day on which the corporate trust office of
the Property Trustee or the Debenture Trustee (as defined herein) is closed for
business.
If provided in the applicable Prospectus Supplement, Nevada Power has the
right under the Indenture, pursuant to which it will issue the Corresponding
QUIDS, to defer the payment of interest at any time or from time to time on any
series of the Corresponding QUIDS for a period which will be specified
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in such Prospectus Supplement relating to such series (each, an "Extension
Period"), provided that no Extension Period may extend beyond the Maturity Date
of such series of QUIDS. As a consequence of any such extension, Distributions
on the corresponding QUIPS would be deferred (but the QUIPS would continue to
accumulate additional Distributions thereon at the rate per annum set forth in
the Prospectus Supplement for such QUIPS) by the Issuer of such QUIPS during any
such Extension Period. During such Extension Period Nevada Power may not, and
may not permit any subsidiary of Nevada Power to, (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of Nevada Power's capital stock or (ii)
make any payment of principal of, or interest or premium, if any, on or repay,
repurchase or redeem, or make any sinking fund payment with respect, to any
indebtedness of Nevada Power that ranks PARI PASSU with or junior in right of
payment to the Corresponding QUIDS or make any guarantee payments with respect
to any guarantee by Nevada Power of any indebtedness if such guarantee ranks
PARI PASSU with or junior in right of payment to the Series A QUIDS (other than
(a) dividends or distributions in Common Stock of Nevada Power, (b) redemption
or purchases of any rights pursuant to Nevada Power's Stock Purchase Rights
Plan, or any successor to such Stock Purchase Rights Plan, and the declaration
of a dividend of such rights or the issuance of Preferred Stock under such plans
in the future, (c) payments under any Guarantee, (d) purchases of Common Stock
related to the issuance of Common Stock under Nevada Power's Stock Purchase and
Dividend Reinvestment Plan and any of Nevada Power's benefit plans for its
directors, officers or employees and (e) purchases of Common Stock required to
prevent the loss or secure the renewal or reinstatement of any government
license or franchise held by Nevada Power or any of its subsidiaries).
The revenue of each Issuer available for distribution to holders of its
QUIPS will be limited to payments under the Corresponding QUIDS in which the
Issuer will invest the proceeds from the issuance and sale of its QUIPS and its
Common Securities. See "Description of Corresponding QUIDS." If Nevada Power
does not make interest payments on such Corresponding QUIDS, the Property
Trustee will not have funds available to pay Distributions on the related QUIPS.
The payment of Distributions (if and to the extent the Issuer has funds legally
available for the payment of such Distributions and cash sufficient to make such
payments) is guaranteed by Nevada Power on a limited basis as set forth herein
under "Description of Guarantees."
Distributions on the QUIPS will be payable to the holders thereof as they
appear on the register of such Issuer on the relevant record dates, which, as
long as the QUIPS remain in book-entry form, will be one Business Day prior to
the relevant Distribution Date. Subject to any applicable laws and regulations
and the provisions of the applicable Trust Agreement, each such payment will be
made as described under "--Book-Entry Issuance." In the event any QUIPS are not
in book-entry form, the relevant record date for such QUIPS shall be the date
which is 15 days prior to the relevant Distribution Date.
REDEMPTION
MANDATORY REDEMPTION. Upon the repayment or redemption, in whole or in
part, of any Corresponding QUIDS, whether at maturity or upon earlier redemption
as provided in the Indenture, the proceeds from such repayment or redemption
shall be applied by the Property Trustee to redeem a Like Amount (as defined
below) of the related QUIPS and the Common Securities, upon not less than 30 or
more than 60 days notice, at a redemption price (the "Redemption Price"), with
respect to such QUIPS and the Common Securities, equal to the aggregate
liquidation preference of such QUIPS plus accumulated and unpaid Distributions
thereon to the date of redemption (the "Redemption Date") and the related amount
of the premium, if any, paid by Nevada Power upon the concurrent redemption of
such Corresponding QUIDS. See "Description of Corresponding QUIDS--Optional
Redemption." If less than all of any series of Corresponding QUIDS are to be
repaid or redeemed on a Redemption Date, then the proceeds from such repayment
or redemption shall be allocated to the redemption pro rata of the related QUIPS
and the Common Securities. The amount of premium, if any, paid by Nevada Power
upon the redemption of all or
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any part of any series of any Corresponding QUIDS to be repaid or redeemed on a
Redemption Date shall be allocated to the redemption pro rata of the related
QUIPS and the Common Securities.
Nevada Power will have the right to redeem any series of Corresponding QUIDS
(i) in whole at any time or in part from time to time, subject to the conditions
described under "Description of Corresponding QUIDS--Optional Redemption," (ii)
at any time, in whole (but not in part), upon the occurrence of a Tax Event or
an Investment Company Event (each as defined below, a "Special Event") and
subject to the further conditions described under "Description of Corresponding
QUIDS--Optional Redemption," or (iii) as may be otherwise specified in the
applicable Prospectus Supplement.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION OF CORRESPONDING QUIDS. If a
Special Event in respect of a series of QUIPS and Common Securities has occurred
and is continuing, Nevada Power has the right to redeem the Corresponding QUIDS
in whole (but not in part) and thereby cause a mandatory redemption of such
QUIPS and Common Securities in whole (but not in part) at the Redemption Price
within 90 days following the occurrence of such Special Event. At any time,
Nevada Power has the right to terminate the related Issuer and, after
satisfaction of liabilities to creditors of such Issuer as provided by
applicable law, cause such Corresponding QUIDS to be distributed to the holders
of such QUIPS and Common Securities in liquidation of the Issuer. If Nevada
Power does not elect either option described above, the applicable series of
QUIPS will remain outstanding and, in the event a Tax Event has occurred and is
continuing, Additional Sums (as defined below) may be payable on the
Corresponding QUIDS.
EXTENSION OF MATURITY OF CORRESPONDING QUIDS. If provided in the applicable
Prospectus Supplement, Nevada Power shall have the right to extend or shorten
the maturity of any series of Corresponding QUIDS at the time that Nevada Power
exercises its right to elect to liquidate the related Issuer and cause such
Corresponding QUIDS to be distributed to the holders of such QUIPS and Common
Securities in liquidation of the Issuer, provided that it can extend the
maturity only if certain conditions specified in the applicable Prospectus
Supplement are met at the time such election is made and at the time of such
extension.
"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by an Issuer on the
outstanding QUIPS and Common Securities of the Issuer shall not be reduced as a
result of any additional taxes, duties and other governmental charges to which
the Issuer has become subject as a result of a Tax Event.
"Investment Company Event" means the receipt by the applicable Issuer of an
opinion of counsel, rendered by a law firm having a recognized national tax and
securities practice, to the effect that, as a result of the occurrence of a
change in law or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), the applicable Issuer is or will be
considered an "investment company" that is required to be registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act"), which
Change in 1940 Act Law becomes effective on or after the date of original
issuance of the series of QUIPS issued by the applicable Issuer.
"Like Amount" means (i) with respect to a redemption of any series of QUIPS,
QUIPS of such series and the Common Securities having a Liquidation Amount (as
defined below) equal to that portion of the principal amount of Corresponding
QUIDS to be contemporaneously redeemed in accordance with the Indenture
allocated 3% to the Common Securities and 97% to the QUIPS of such series and
the proceeds of which will be used to pay the Redemption Price of such QUIPS and
to redeem such Common Securities, and (ii) with respect to a distribution of
Corresponding QUIDS to holders of any series of QUIPS and the Common Securities
in connection with a dissolution or liquidation of the related Issuer,
Corresponding QUIDS having a principal amount equal to the Liquidation Amount of
the QUIPS and the Common Securities of the holder to whom such Corresponding
QUIDS are distributed.
"Liquidation Amount" means the stated amount of $25 per QUIPS and Common
Security.
"Tax Event" means the receipt by the applicable Issuer of an opinion of
counsel, rendered by a law firm having a national tax and securities practice,
to the effect that, as a result of any amendment to, or
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change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of issuance of the
QUIPS under the related Trust Agreement, there is more than an insubstantial
risk that (i) the applicable Issuer is, or will be within 90 days of the date of
such opinion, subject to United States federal income tax with respect to income
received or accrued on the Corresponding QUIDS, (ii) interest payable by Nevada
Power on the Corresponding QUIDS is not, or within 90 days of the date of such
opinion, will not be, deductible by Nevada Power, in whole or in part, for
United States federal income tax purposes, or (iii) the applicable Issuer is, or
will be within 90 days of the date of such opinion, subject to more than a DE
MINIMIS amount of other taxes, duties or other governmental charges.
In certain circumstances involving the termination of an Issuer,
Corresponding QUIDS may be distributed in exchange for QUIPS. After the
liquidation date fixed for any distribution of Corresponding QUIDS for any
series of QUIPS (i) such series of QUIPS will no longer be deemed to be
outstanding, (ii) The Depository Trust Company ("DTC") or its nominee, as the
record holder of such series of QUIPS, will receive a registered global
certificate or certificates representing the Corresponding QUIDS to be delivered
upon such distribution and (iii) any certificates representing such series of
QUIPS not held by DTC or its nominee will be deemed to represent the
Corresponding QUIDS having a principal amount equal to the stated liquidation
preference of such series of QUIPS, and bearing accrued and unpaid interest in
an amount equal to the accrued and unpaid Distributions on such series of QUIPS
until such certificates are presented to the Administrative Trustees or their
agent for transfer or reissuance.
There can be no assurance as to the market prices for the QUIPS or the
Corresponding QUIDS that may be distributed in exchange for QUIPS if a
dissolution and liquidation of an Issuer were to occur. Accordingly, the QUIPS
that an investor may purchase, or the Corresponding QUIDS that the investor may
receive on dissolution and liquidation of an Issuer, may trade at a discount to
the price that the investor paid to purchase the QUIPS.
REDEMPTION PROCEDURES
QUIPS redeemed on each Redemption Date shall be redeemed at the Redemption
Price with the applicable proceeds from the contemporaneous redemption of the
Corresponding QUIDS. Redemptions of the QUIPS shall be made and the Redemption
Price shall be payable on each Redemption Date only to the extent that the
related Issuer has funds on hand available for the payment of such Redemption
Price. See "--Subordination of Common Securities."
If an Issuer gives a notice of redemption in respect of its QUIPS, then, by
2:00 p.m., New York City time, on the Redemption Date, to the extent funds are
available, the Property Trustee will deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Price and will give DTC irrevocable
instructions and authority to pay the Redemption Price to the beneficial owners
of the QUIPS in book entry only form. See "--Book-Entry Issuance." If such QUIPS
are no longer in book-entry form, the Issuer, to the extent funds are available,
will irrevocably deposit with the paying agent for such QUIPS funds sufficient
to pay the applicable Redemption Price and will give such paying agent
irrevocable instructions and authority to pay the Redemption Price to the
holders thereof upon surrender of their certificates evidencing such QUIPS.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any QUIPS called for redemption shall be payable to the
holders of such QUIPS on the relevant record dates for the related Distribution
Dates. If notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of the holders of such
QUIPS so called for redemption will cease, except the right of the holders of
such QUIPS to receive the Redemption Price, but without interest on such
Redemption Price, and such QUIPS will cease to be outstanding. In the event that
any date fixed for redemption of QUIPS is not a Business Day, then payment of
the Redemption Price payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such
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Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day. In the event that payment of the Redemption
Price in respect of QUIPS called for redemption is improperly withheld or
refused and not paid either by the Issuer or by Nevada Power pursuant to the
Guarantee as described under "Description of Guarantees," Distributions on such
QUIPS will continue to accrue at the then applicable rate, from the Redemption
Date originally established by the Issuer for such QUIPS to the date such
Redemption Price is actually paid, in which case the actual payment date will be
the date fixed for redemption for purposes of calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), Nevada Power or its subsidiaries may at any time and
from time to time purchase outstanding QUIPS by tender, in the open market or by
private agreement.
Payment of the Redemption Price on the QUIPS and any distribution of
Corresponding QUIDS to holders of QUIPS shall be made to the applicable record
holders thereof as they appear on the register for such QUIPS on the relevant
record date, which shall be one Business Day prior to the relevant Redemption
Date or liquidation date, as applicable; provided, however, that in the event
that any QUIPS are not in book-entry form, the relevant record date for such
QUIPS shall be the date which is 15 days prior to the Redemption Date or
liquidation date, as applicable.
If less than all of the QUIPS and Common Securities issued by an Issuer are
to be redeemed on a Redemption Date, then the aggregate Liquidation Amount of
such QUIPS and Common Securities to be redeemed shall be allocated pro rata
among the QUIPS and the Common Securities. The particular QUIPS to be redeemed
shall be selected on a pro rata basis not more than 75 days prior to the
Redemption Date by the Property Trustee from the outstanding QUIPS not
previously called for redemption, by such method as the Property Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $25 or an integral multiple of $25 in excess thereof) of
the liquidation preference of QUIPS of a denomination larger than $25. The
Property Trustee shall promptly notify the trust registrar in writing of the
QUIPS selected for redemption and, in the case of any QUIPS selected for partial
redemption, the liquidation preference thereof to be redeemed. For all purposes
of each Trust Agreement, unless the context otherwise requires, all provisions
relating to the redemption of QUIPS shall relate, in the case of any QUIPS
redeemed or to be redeemed only in part, to the portion of the aggregate
liquidation preference of QUIPS which has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder of QUIDS to be redeemed at its
registered address. Unless Nevada Power defaults in payment of the Redemption
Price, on and after the Redemption Date interest will cease to accrue on such
QUIDS or portions thereof called for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, each Issuer's
QUIPS and Common Securities, as applicable, shall be made pro rata based on the
Liquidation Amount of such QUIPS and Common Securities; provided, however, that
if on any Distribution Date or Redemption Date a Debenture Event of Default
shall have occurred and be continuing, no payment of any Distribution on, or
Redemption Price of, any of the Issuer's Common Securities, and no other payment
on account of the redemption, liquidation or other acquisition of such Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions on all of the Issuer's outstanding QUIPS for all
Distribution periods terminating on or prior thereto, or in the case of payment
of the Redemption Price the full amount of such Redemption Price on all of the
Issuer's outstanding QUIPS then called for redemption, shall have been made or
provided for, and all funds available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions on, or Redemption
Price of, the Issuer's QUIPS then due and payable.
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In the case of any Event of Default under the Trust Agreement resulting from
a Debenture Event of Default, Nevada Power as holder of such Issuer's Common
Securities will be deemed to have waived any right to act with respect to any
such Event of Default under the applicable Trust Agreement until the effect of
all such Events of Default with respect to the Issuer's QUIPS have been cured,
waived or otherwise eliminated. Until any such Events of Default under the
applicable Trust Agreement with respect to the QUIPS have been so cured, waived
or otherwise eliminated, the Property Trustee shall act solely on behalf of the
holders of such QUIPS and not on behalf of Nevada Power as holder of the
Issuer's Common Securities, and only the holders of such QUIPS will have the
right to direct the Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
Pursuant to each Trust Agreement, each Issuer shall automatically terminate
upon expiration of its term and shall terminate on the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of Nevada Power; (ii)
the distribution of a Like Amount of the Corresponding QUIDS to the holders of
its QUIPS and Common Securities, if Nevada Power, as Depositor, has given
written direction to the Property Trustee to terminate such Issuer (which
direction is optional and wholly within the discretion of Nevada Power, as
Depositor); (iii) the redemption of all of the Issuer's QUIPS following a
redemption of all the Corresponding QUIDS as described under "Description of
QUIPS-- Redemption--Mandatory Redemption" and "--Special Event Redemption or
Distribution of Corresponding QUIDS;" and (iv) the entry by a court of competent
jurisdiction of an order for the dissolution of the Issuer.
Upon the expiration of the Issuer's term or an early termination as
described in clause (i), (ii) or (iv) above, the Issuer shall be liquidated by
the Issuer Trustees as expeditiously as the Issuer Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors of such
Issuer as provided by applicable law, to the holders of such QUIPS and Common
Securities a Like Amount of the Corresponding QUIDS, unless such distribution is
determined by the Property Trustee not to be practical, in which event such
holders will be entitled to receive out of the assets of the Issuer available
for distribution to holders, after satisfaction of liabilities to creditors of
such Issuer as provided by applicable law, an amount equal to, in the case of
holders of QUIPS, the aggregate of the liquidation preference plus accrued and
unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such Liquidation Distribution can be paid only
in part because such Issuer has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by such
Issuer on its QUIPS shall be paid on a pro rata basis. The holder of such
Issuer's Common Securities will be entitled to receive distributions upon any
such liquidation pro rata with the holders of its QUIPS, except that if a
Debenture Event of Default has occurred and is continuing, the QUIPS shall have
a priority over the Common Securities.
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under each
Trust Agreement (an "Event of Default") with respect to the QUIPS issued
thereunder (whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default (see "Description of
QUIDS--Debenture Events of Default"); or
(ii) default by the Property Trustee in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a
period of 30 days; or
(iii) default by the Property Trustee in the payment of any Redemption
Price of any QUIPS or Common Security when it becomes due and payable; or
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(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Issuer Trustees in such Trust Agreement
(other than a covenant or warranty a default in the performance of which or
the breach of which is dealt with in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 90 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Trustees by the holders of at least 25% in aggregate liquidation
preference of the outstanding QUIPS of the applicable Issuer, a written
notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" under such Trust
Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Trust or the Property Trustee and, in the case of the
Property Trustee, the failure by Nevada Power to appoint a successor
Property Trustee within 60 days thereof.
Within fifteen Business Days after the occurrence of any Event of Default
known to the Property Trustee, the Property Trustee shall transmit notice of
such Event of Default to the holders of such Issuer's QUIPS, the Administrative
Trustees and Nevada Power, as Depositor, unless such Event of Default shall have
been cured or waived or unless, except for a default in the payment of principal
of (or premium if any) or interest on any of the QUIPS or QUIDS, the Property
Trustee in good faith determines that the withholding of such notice is in the
interests of the holders of the QUIPS. Nevada Power, as Depositor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under each Trust Agreement.
If, in the event of a Debenture Event of Default, the Debenture Trustee
fails, or the holders of not less than 25% in principal amount of the
outstanding QUIDS fail, to declare the principal of all of the QUIDS to be
immediately due and payable, the holders of at least 25% in aggregate
liquidation preference of the QUIPS then outstanding shall have such right.
If a Debenture Event of Default has occurred and is continuing, the QUIPS
shall have a preference over the Common Securities upon termination of each
Issuer as described above. See "--Liquidation Distribution Upon Termination."
The existence of an Event of Default does not entitle the holders of QUIPS to
accelerate the maturity thereof.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF QUIPS
If an Event of Default has occurred and is continuing, then the holders of
QUIPS would rely on the enforcement by the Debenture Trustee of its rights as a
holder of the related QUIDS against Nevada Power. Notwithstanding the foregoing,
if an Event of Default has occurred and is continuing and such event is
attributable to the failure of Nevada Power to pay interest or principal (or
premium) on the related QUIDS on the date such interest or principal (or
premium) is otherwise payable (or in the case of redemption, on the redemption
date), then a holder of QUIPS may directly institute a proceeding against Nevada
Power for enforcement of payment to such holder of the principal of or interest
or premium on the related QUIDS having a principal amount equal to the aggregate
liquidation preference of the QUIPS of such holder (a "Direct Action") after the
respective due date specified in the related QUIDS. In connection with such
Direct Action, Nevada Power will be subrogated to the rights of such holder of
QUIPS under the Trust Agreement to the extent of any payment made by Nevada
Power to such holder of QUIPS in such Direct Action.
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default has occurred and is continuing, any
Issuer Trustee may be removed at any time by Nevada Power as the holder of the
Common Securities. If a Debenture Event of Default has occurred and is
continuing, the Delaware Trustee or the Property Trustee may be removed at such
time by the holders of a majority in Liquidation Amount of the outstanding
QUIPS. No resignation or
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removal of an Issuer Trustee and no appointment of a successor trustee shall be
effective until the acceptance of appointment by the successor trustee in
accordance with the provisions of the applicable Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default has occurred and is continuing, at any time or
times, for the purpose of meeting the legal requirements of the Trust Indenture
Act or of any jurisdiction in which any part of the Trust Property may at the
time be located, Nevada Power, as the holder of the Common Securities, and the
Administrative Trustees shall have power to appoint one or more persons approved
by the Property Trustee either to act as a co-trustee, jointly with the Property
Trustee, of all or any part of such Trust Property, or to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the applicable Trust Agreement. In case a Debenture
Event of Default has occurred and is continuing, the Property Trustee alone
shall have power to make such appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any corporation into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which such Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of such Trustee, shall be the successor of such Trustee under each
Trust Agreement, provided such corporation shall be otherwise qualified and
eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE ISSUERS
An Issuer may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except as
described below. An Issuer may, at the request of Nevada Power, with the consent
of the Administrative Trustees and without the consent of or notice to the
holders of the QUIPS, merge with or into, consolidate, amalgamate, be replaced
by or convey, transfer or lease its properties and assets substantially as an
entirety to a trust organized as such under the laws of any State; provided that
(i) such successor entity either (a) expressly assumes all of the obligations of
such Issuer with respect to the QUIPS or (b) substitutes for the QUIPS other
securities having substantially the same terms as the QUIPS (the "Successor
Securities") so long as the Successor Securities rank the same as the QUIPS rank
in priority with respect to distributions and payments upon liquidation,
redemption and otherwise, (ii) Nevada Power expressly appoints a trustee of such
successor entity possessing the same powers and duties as the Property Trustee
as the holder of the Corresponding QUIDS, (iii) the Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or other organization on which the
QUIPS are then listed, if any, (iv) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the QUIPS (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the QUIPS (including any Successor
Securities) in any material respect, (vi) such successor entity has a purpose
identical to that of the Issuer, (vii) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer, or lease, Nevada Power has
received an opinion of counsel experienced in such matters to the effect that
(a) such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not adversely affect the rights, preferences and privileges of the
holders of the QUIPS (including any Successor Securities) in any material
respect and (b) following such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, neither the Issuer nor such successor entity will
be required to register as an investment company under
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the Investment Company Act, and (viii) Nevada Power or any permitted successor
or assignee owns all of the Common Securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding the
foregoing, an Issuer shall not, except with the consent of holders of 100% in
aggregate liquidation preference of the QUIPS, consolidate, amalgamate, merge
with or into, be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to any other entity or permit any other
entity to consolidate, amalgamate, merge with or into, or replace it or acquire
or lease its properties and assets substantially as an entirety if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Issuer or the successor entity to be classified as other than a
grantor trust for United States federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF EACH TRUST AGREEMENT
Except as provided below and under "Description of Guarantees--Amendments
and Assignment" and as otherwise required by law and the applicable Trust
Agreement, the holders of the QUIPS will have no voting rights.
Each Trust Agreement may be amended from time to time by Nevada Power and
the Issuer Trustees, without the consent of the holders of the QUIPS (i) to cure
any ambiguity, correct or supplement any provisions in such Trust Agreement that
may be inconsistent with any other provision, or to make any other provisions
with respect to matters or questions arising under such Trust Agreement that
shall not be inconsistent with the other provisions of such Trust Agreement, or
(ii) to modify, eliminate or add to any provisions of such Trust Agreement to
such extent as shall be necessary to ensure that the Issuer will be classified
for United States federal income tax purposes as a grantor trust at all times
that any QUIPS and Common Securities are outstanding or to ensure that the
Issuer will not be required to register as an "investment company" under the
Investment Company Act, provided, however, that in the case of clause (i), such
action shall not adversely affect in any material respect the interests of any
holder of QUIPS or Common Securities, and any amendments of such Trust Agreement
shall become effective when notice thereof is given to the holders of QUIPS and
Common Securities. Each Trust Agreement may be amended by the Issuer Trustees
and Nevada Power with (i) the consent of holders representing a majority (based
upon Liquidation Amounts) of the outstanding QUIPS and Common Securities and
(ii) receipt by the Issuer Trustees of an opinion of counsel experienced in such
matters to the effect that such amendment or the exercise of any power granted
to the Issuer Trustees in accordance with such amendment will not affect the
Issuer's status as a grantor trust for United States federal income tax purposes
or the Issuer's exemption from status of an "investment company" under the
Investment Company Act, provided, further that without the consent of each
holder of QUIPS and Common Securities, such Trust Agreement may not be amended
to (i) change the amount or timing of any Distribution on the QUIPS and Common
Securities or otherwise adversely affect the amount of any Distribution required
to be made in respect of the QUIPS and Common Securities as of a specified date
or (ii) restrict the right of a holder of QUIPS and Common Securities to
institute suit for the enforcement of any such payment on or after such date.
So long as any Corresponding QUIDS are held by the Property Trustee, the
Issuer Trustees shall not (i) direct the time, method and place of conducting
any proceeding for any remedy available to the Debenture Trustee or executing
any trust or power conferred on the Property Trustee with respect to such
Corresponding QUIDS, (ii) waive any past default that is waiveable under the
Indenture, (iii) exercise any right to rescind or annul a declaration that the
principal of all the QUIDS shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or such Corresponding
QUIDS, where such consent shall be required, without, in each case, obtaining
the prior approval of the holders of a majority in aggregate liquidation
preference of all outstanding corresponding QUIPS; provided, however, that where
a consent under the Indenture would require the consent of each holder of
Corresponding QUIDS affected thereby, no such consent shall be given by the
Property Trustee without the prior consent of each holder of the corresponding
QUIPS. The Issuer Trustees shall not revoke any action previously authorized or
approved by a vote of the holders of the QUIPS except by subsequent vote
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of the holders of the QUIPS. The Property Trustee shall notify each holder of
record of the QUIPS of any notice of default with respect to the Corresponding
QUIDS. In addition to obtaining the foregoing approvals of the holders of the
QUIPS, prior to taking any of the foregoing actions, the Issuer Trustees shall
obtain an opinion of counsel experienced in such matters to the effect that the
Issuer will not be classified as a corporation for United States federal income
tax purposes on account of such action.
Any required approval of holders of QUIPS may be given at a meeting of
holders of QUIPS convened for such purpose or pursuant to written consent. The
Property Trustee will cause a notice of any meeting at which holders of QUIPS
are entitled to vote, or of any matter upon which action by written consent of
such holders is to be taken, to be given to each holder of record of QUIPS in
the manner set forth in the applicable Trust Agreement.
No vote or consent of the holders of QUIPS will be required for an Issuer to
redeem and cancel its QUIPS in accordance with the applicable Trust Agreement.
Notwithstanding that holders of QUIPS are entitled to vote or consent under
any of the circumstances described above, any of the QUIPS that are owned by
Nevada Power, the Issuer Trustees or any affiliate of Nevada Power or any Issuer
Trustees, shall, for purposes of such vote or consent, be treated as if they
were not outstanding.
PAYMENT AND PAYING AGENCY
Payments in respect of the QUIPS shall be made to DTC, which shall credit
the relevant accounts at DTC on the applicable Distribution Dates or, if any
Issuer's QUIPS are not held by DTC, such payments shall be made by check mailed
to the address of the holder entitled thereto as such address shall appear on
the Register. Unless otherwise specified in the applicable Prospectus
Supplement, the paying agent (the "Paying Agent") shall initially be the
Property Trustee and any co-paying agent chosen by the Property Trustee and
acceptable to the Administrative Trustees and Nevada Power. The Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Administrative Trustees, the Property Trustee and Nevada Power. In the event
that the Property Trustee shall no longer be the Paying Agent, the
Administrative Trustees shall appoint a successor (which shall be a bank or
trust company acceptable to the Property Trustee and Nevada Power) to act as
Paying Agent.
BOOK-ENTRY ISSUANCE
DTC will act as securities depositary for all of the QUIPS. The QUIPS will
be issued only as fully-registered securities registered in the name of Cede &
Co. (DTC's nominee). One or more fully-registered global certificates will be
issued for the QUIPS of each Issuer, representing in the aggregate the total
number of such Issuer's QUIPS, and will be deposited with DTC.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange,
Inc., the American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. Access to the DTC system is also available to others
such as securities brokers and dealers, banks and trust companies that clear
through or maintain custodial relationships with Direct Participants, either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC
and its Participants are on file with the Commission.
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Purchases of QUIPS within the DTC system must be made by or through Direct
Participants, which will receive a credit for the QUIPS on DTC's records. The
ownership interest of each actual purchaser of each QUIPS ("Beneficial Owner")
is in turn to be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from DTC of their
purchases, but Beneficial Owners are expected to receive written confirmations
providing details of the transactions, as well as periodic statements of their
holdings, from the Direct or Indirect Participants through which the Beneficial
Owners purchased QUIPS. Transfers of ownership interests in the QUIPS 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 QUIPS, except in the event that use of the
book-entry system for the QUIPS of such Issuer is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the QUIPS; DTC's
records reflect only the identity of the Direct Participants to whose accounts
such QUIPS 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.
Redemption notices shall be sent to Cede & Co. as the registered holder of
the QUIPS. If less than all of an Issuer's QUIPS are being redeemed, DTC's
current practice is to determine by lot the amount of the interest of each
Direct Participant to be redeemed.
Although voting with respect to the QUIPS is limited, in those instances in
which a vote is required, neither DTC nor Cede & Co. will itself consent or vote
with respect to QUIPS. Under its usual procedures, DTC would mail an omnibus
proxy (the "Omnibus Proxy") to the Property Trustee 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 such QUIPS are credited on
the record date (identified in a listing attached to the Omnibus Proxy).
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 and the voting
rights of Direct Participants, Indirect Participants and 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.
Distribution payments on the QUIPS will be made by the Property Trustee to
DTC. DTC's practice is to credit Direct Participants' accounts on the relevant
payment date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payments on such
payment date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices and will be the responsibility of
such Participant and not of DTC, the Property Trustee, the Issuer or Nevada
Power, subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of Distributions to DTC is the responsibility of the
Property Trustee, disbursement of such payments to Direct Participants is the
responsibility of DTC, and disbursements of such payments to the Beneficial
Owners is the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depositary with
respect to any of the QUIPS at any time by giving reasonable notice to the
Property Trustee and Nevada Power. In the event that a successor securities
depositary is not obtained, definitive QUIPS certificates representing such
QUIPS are required to be printed and delivered. Nevada Power, at its option, may
decide to discontinue use of the system of book-entry transfers through DTC (or
a successor depositary). After a Debenture Event of Default, the holders of a
majority in liquidation preference of QUIPS may determine to discontinue the
system of book-entry transfers through DTC. In any such event, definitive
certificates for such Issuer's QUIPS 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 Issuers and Nevada Power believe to be
accurate, but the Issuers and Nevada Power assume no responsibility for the
accuracy thereof. Neither the Issuers nor Nevada Power has any
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responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
REGISTRAR AND TRANSFER AGENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Property Trustee will act as registrar and transfer agent for the QUIPS.
Registration of transfers of QUIPS will be effected without charge by or on
behalf of each Issuer, but upon payment of any tax or other governmental charges
that may be imposed in connection with any transfer or exchange. The Issuers
will not be required to register or cause to be registered the transfer of their
QUIPS after such QUIPS have been called for redemption.
THE TRUSTEES
The Delaware Trustee will act as the resident trustee in the State of
Delaware and will have no other significant duties. The Property Trustee will
hold the QUIDS on behalf of the Issuers and will maintain a payment account with
respect to the QUIPS and the Common Securities, and will also act as trustee
under the Trust Agreements for the purposes of the Trust Indenture Act. See
"Events of Default; Notice." The Administrative Trustees will administer the day
to day operations of the Issuers. The Property Trustee, other than during the
occurrence and continuance of an Event of Default, undertakes to perform only
such duties as are specifically set forth in each Trust Agreement and, after
such Event of Default, must exercise the same degree of care and skill as a
prudent person would exercise or use in the conduct of his or her own affairs.
Subject to this provision, the Property Trustee is under no obligation to
exercise any of the powers vested in it by the applicable Trust Agreement at the
request of any holder of QUIPS unless it is offered reasonable indemnity against
the costs, expenses and liabilities that might be incurred thereby. If no Event
of Default has occurred and is continuing and the Property Trustee is required
to decide between alternative causes of action, construe ambiguous provisions in
the applicable Trust Agreement or is unsure of the application of any provision
of the applicable Trust Agreement, and the matter is not one on which holders of
QUIPS are entitled under such Trust Agreement to vote, then the Property Trustee
shall take such action as is directed by Nevada Power and if not so directed,
shall take such action as it deems advisable and in the best interests of the
holders of the QUIPS and the Common Securities and will have no liability except
for its own bad faith, negligence or willful misconduct.
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Issuers in such a way that no Issuer will be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association taxable as a corporation
for United States federal income tax purposes and so that the Corresponding
QUIDS will be treated as indebtedness of Nevada Power for United States federal
income tax purposes. In this connection, Nevada Power and the Administrative
Trustees are authorized to take any action, not inconsistent with applicable
law, the certificate of trust of each Issuer or each Trust Agreement, that
Nevada Power and the Administrative Trustees determine in their discretion to be
necessary or desirable for such purposes, as long as such action does not
materially adversely affect the interests of the holders of the related QUIPS.
GOVERNING LAW
Each Trust Agreement and the QUIPS will be governed by and construed in
accordance with the laws of the State of Delaware.
MISCELLANEOUS
Holders of the QUIPS have no preemptive or similar rights.
No Issuer may borrow money or issue debt or mortgage or pledge any of its
assets.
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DESCRIPTION OF GUARANTEES
Each Guarantee will be executed and delivered by Nevada Power concurrently
with the issuance by each Issuer of its QUIPS for the benefit of the holders
from time to time of such QUIPS. IBJ Schroder will act as indenture trustee
("Guarantee Trustee") under each Guarantee for the purposes of compliance with
the Trust Indenture Act and each Guarantee will be qualified as an indenture
under the Trust Indenture Act. This summary of certain provisions of the
Guarantees does not purport to be complete and is subject to, and qualified in
its entirety by reference to, all of the provisions of each Guarantee, including
the definitions therein of certain terms, and the Trust Indenture Act. The form
of the Guarantee has been filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. Reference in this summary to QUIPS means
that Issuer's QUIPS to which a Guarantee relates. The Guarantee Trustee will
hold each Guarantee for the benefit of the holders of the related Issuer's
QUIPS.
GENERAL
Nevada Power will irrevocably agree to pay in full on a subordinated basis,
to the extent described herein, the Guarantee Payments (as defined below) to the
holders of the QUIPS, as and when due, regardless of any defense, right of
set-off or counterclaim that such Issuer may have or assert other than the
defense of payment. The following payments with respect to the QUIPS, to the
extent not paid by or on behalf of the related Issuer (the "Guarantee
Payments"), will be subject to the Guarantee: (i) any accumulated and unpaid
Distributions required to be paid on such QUIPS, if and to the extent that the
Property Trustee has available at such time in the payment account funds
sufficient to make such payment, (ii) the Redemption Price with respect to any
QUIPS called for redemption but only to the extent that the Property Trustee has
available when due, in the payment account, funds sufficient to make such
payment, or (iii) upon a voluntary or involuntary dissolution, winding up or
liquidation of such Issuer (unless the Corresponding QUIDS are distributed to
holders of such QUIPS), the lesser of (a) the Liquidation Distribution but only
to the extent the Property Trustee has available when due, in the payment
account, funds sufficient to make such payment and (b) the amount of assets of
such Issuer remaining available for distribution to holders of QUIPS. Nevada
Power's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by Nevada Power to the holders of the applicable
QUIPS or by causing the Issuer to pay such amounts to such holders.
Each Guarantee will be an irrevocable guarantee on a subordinated basis of
payment of the related Issuer's obligations under the QUIPS, but will apply only
to the extent that such related Issuer has funds sufficient to make such
payments, and is not a guarantee of collection.
If Nevada Power does not make interest payments on the Corresponding QUIDS
held by the Issuer, the Issuer will not be able to pay Distributions on the
QUIPS and will not have funds legally available therefor. Each Guarantee will
rank subordinate and junior in right of payment to all Senior Debt of Nevada
Power. See "--Status of the Guarantees." Except as otherwise provided in the
applicable Prospectus Supplement, the Guarantees do not limit the incurrence or
issuance of other secured or unsecured debt of Nevada Power, whether under the
Indenture or any existing or other indenture that Nevada Power may enter into in
the future or otherwise, including, without limitation, Nevada Power's Indenture
of Mortgage and Deed of Trust dated October 1, 1953 entered into with Bankers
Trust Company, together with supplemental indentures heretofore or hereafter
entered into.
Nevada Power has, through the applicable Guarantee, the applicable Trust
Agreement, the QUIDS, the Indenture and the Expense Agreement, taken together,
fully, irrevocably and unconditionally guaranteed all of the Issuer's
obligations under the QUIPS. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Issuer's obligations under the QUIPS. See "Relationship Among the QUIPS, the
Corresponding QUIDS and the Guarantees."
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STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of Nevada Power and
will rank subordinate and junior in right of payment to all Senior Debt.
Each Guarantee will rank PARI PASSU with all other Guarantees issued by
Nevada Power. Each Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding directly
against the Guarantor to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). Each
Guarantee will be held for the benefit of the holders of the related QUIPS. Each
Guarantee will not be discharged except by payment of the Guarantee Payments in
full to the extent not paid by the Issuer or upon distribution to the holders of
the QUIPS of the Corresponding QUIDS. None of the Guarantees places a limitation
on the amount of additional Senior Debt, parity obligations or other
indebtedness that may be incurred by Nevada Power. There are no provisions in
any Guarantee that afford holders of any QUIDS protection in the event of a
highly leveraged or similar transaction involving Nevada Power, whether or not
involving a change in control of Nevada Power. The electric utility business is
capital intensive and Nevada Power anticipates that from time to time it will
incur substantial additional indebtedness constituting Senior Debt.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the related QUIPS (in which case no vote will be
required), no Guarantee may be amended without the prior approval of the holders
of a majority of the aggregate liquidation preference of such outstanding QUIPS.
The manner of obtaining any such approval will be as set forth under
"Description of QUIPS--Voting Rights; Amendment of Each Trust Agreement." All
guarantees and agreements contained in each Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of Nevada Power and shall inure
to the benefit of the holders of the related QUIPS then outstanding.
EVENTS OF DEFAULT
An event of default under each Guarantee will occur upon the failure of
Nevada Power to perform any of its payment or other obligations thereunder
provided, however, that, except with respect to a default in payment of any
Guarantee Payments, Nevada Power shall have received notice of default and shall
not have cured such default within 60 days after receipt of such notice. The
holders of a majority in aggregate Liquidation Amount of the related QUIPS may
waive, on behalf of all holders, any event of default and its consequences. The
holders of a majority in aggregate Liquidation Amount of the related QUIPS have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Guarantee Trustee in respect of such Guarantee or to
direct the exercise of any trust or power conferred upon the Guarantee Trustee
under such Guarantee.
Any holder of the QUIPS may institute a legal proceeding directly against
Nevada Power to enforce its rights under such Guarantee without first
instituting a legal proceeding against the Issuer, the Guarantee Trustee or any
other person or entity.
Nevada Power, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not Nevada Power is in compliance with
all the conditions and covenants applicable to it under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of a
default by Nevada Power in performance of any Guarantee, undertakes to perform
only such duties as are specifically set forth in each Guarantee and, after
default with respect to any Guarantee, must exercise the same degree of care and
skill as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the Guarantee Trustee is under no obligation
to exercise any of the powers vested in it by
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any Guarantee at the request of any holder of any QUIPS unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
TERMINATION OF THE GUARANTEE
Each Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the related QUIPS, upon full payment of
the amounts payable upon liquidation of the related Issuer or upon distribution
of Corresponding QUIDS to the holders of the related QUIPS. Each Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of the related QUIPS must restore payment of any sums paid under
such QUIPS or such Guarantee.
GOVERNING LAW
Each Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
THE EXPENSE AGREEMENT
Pursuant to an Expense Agreement entered into by Nevada Power under each
Trust Agreement (the "Expense Agreement"), Nevada Power will irrevocably and
unconditionally guarantee, to each person or entity to whom the Issuer becomes
indebted or liable, the full payment of any indebtedness, costs, expenses or
liabilities of the Issuer, other than obligations of the Issuer to pay to the
holders of any QUIPS or other similar interests in the Issuer the amounts due
such holders pursuant to the terms of the QUIPS or such other similar interests,
as the case may be.
DESCRIPTION OF CORRESPONDING QUIDS
The Corresponding QUIDS are to be issued in one or more series under the
Indenture with terms corresponding to the terms of the related QUIPS. See
"Description of QUIDS." This summary of certain terms and provisions of, or
relating to, Corresponding QUIDS and the Indenture does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
the Indenture, the form of which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part, and to the Trust Indenture Act.
Whenever particular defined terms of the Indenture (as supplemented or amended
from time to time) are referred to herein or in a Prospectus Supplement, such
defined terms are incorporated herein or therein by reference.
GENERAL
Concurrently with the issuance of each Issuer's QUIPS, such Issuer will
invest the proceeds thereof and the consideration paid by Nevada Power for the
Common Securities in a series of Corresponding QUIDS issued by Nevada Power to
such Issuer. Each series of Corresponding QUIDS will be in the principal amount
equal to the aggregate stated Liquidation Amount of the related QUIPS plus
Nevada Power's concurrent investment in the Common Securities and will rank PARI
PASSU with all other series of QUIDS. The Corresponding QUIDS will be unsecured
and subordinate and junior in right of payment to the extent and in the manner
set forth in the Indenture to all Senior Debt of Nevada Power. See "Description
of QUIDS--Subordination" and the Prospectus Supplement relating to any offering
of related QUIPS.
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OPTIONAL REDEMPTION
Unless otherwise specified in the applicable Prospectus Supplement, Nevada
Power may, at its option, redeem the Corresponding QUIDS of any series in whole
at any time or in part from time to time. Except as otherwise set forth in the
applicable Prospectus Supplement, the redemption price for any Corresponding
QUIDS so redeemed shall be equal to any accrued and unpaid interest thereon to
the date fixed for redemption, plus the principal amount thereof. See
"Description of QUIDS--Redemption."
If a Special Event in respect of an Issuer shall occur and be continuing,
Nevada Power may, at its option, redeem the Corresponding QUIDS at any time
within 90 days of the occurrence of such Special Event, in whole but not in
part, subject to the provisions of the Indenture. The redemption price for any
Corresponding QUIDS shall be equal to 100% of the principal amount of such
Corresponding QUIDS then outstanding plus accrued and unpaid interest to the
date fixed for redemption.
For so long as the applicable Issuer is the holder of all the outstanding
series of Corresponding QUIDS, the proceeds of any such redemption will be used
by the Issuer to redeem the Corresponding QUIPS in accordance with their terms.
Nevada Power may not redeem a series of Corresponding QUIDS in part unless all
accrued and unpaid interest has been paid in full on all outstanding
Corresponding QUIDS of such series for all interest periods terminating on or
prior to the Redemption Date.
CERTAIN COVENANTS OF NEVADA POWER
Nevada Power covenants in the Indenture as to each series of Corresponding
QUIDS that if and so long as (i) the Issuer of the related series of QUIPS and
Common Securities is the holder of all such Corresponding QUIDS, (ii) a Tax
Event in respect of such Issuer has occurred and is continuing and (iii) Nevada
Power has not redeemed such Corresponding QUIDS and has not terminated such
Issuer, Nevada Power will pay to such Issuer such Additional Sums. Nevada Power
also covenants, as to each series of Corresponding QUIDS, that it will not, and
will not permit any subsidiary of Nevada Power to, (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of Nevada Power's capital stock or (ii)
make any payment of principal of, or interest or premium, if any, on or repay or
repurchase or redeem, or make any sinking fund payment with respect to, any
indebtedness (including other Corresponding QUIDS) that ranks PARI PASSU with or
junior in right of payment to the Corresponding QUIDS or make any guarantee
payments with respect to any guarantee of any indebtedness if such guarantee
ranks PARI PASSU or junior in right of payment to the Corresponding QUIDS (other
than (a) dividends or distributions in Common Stock of Nevada Power, (b)
redemptions or purchases of rights pursuant to Nevada Power's Stock Purchase
Rights Plan or any successor to such Stock Purchase Rights Plan, and the
declaration of a dividend of such rights or the issuance of Preferred Stock
under such plans in the future, (c) payments under any Guarantee, (d) purchases
of Common Stock related to the issuance of Common Stock under the Stock Purchase
and Dividend Reinvestment Plan and any of Nevada Power's benefit plans for its
directors, officers or employees, and (e) purchases of Common Stock required to
prevent the loss or secure the renewal or reinstatement of any government
license or franchise held by Nevada Power or any of its subsidiaries) if at such
time (i) there shall have occurred (A) any Debenture Event of Default or (B) any
event that with the giving of notice or the lapse of time, or both, would
constitute, a Debenture Event of Default with respect to Corresponding QUIDS of
such series and in the case of (B), in respect of which Nevada Power shall not
have taken reasonable steps to cure, (ii) Nevada Power shall be in default with
respect to its payment of any obligations under the related Guarantee or (iii)
Nevada Power shall have given notice of its election to begin an Extension
Period as provided in the Indenture with respect to Corresponding QUIDS of such
series and shall not have rescinded such notice, or such Extension Period, or
any extension thereof, shall be continuing. Nevada Power will also covenant, as
to each series of Corresponding QUIDS, (i) to maintain directly or indirectly
100% ownership of the Common Securities of the Issuer to which Corresponding
QUIDS have been issued, provided that certain successors which are permitted
pursuant to the Indenture may succeed to Nevada Power's ownership of the Common
Securities, (ii) not to voluntarily terminate,
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wind-up or liquidate any Issuer, except (a) in connection with a distribution of
Corresponding QUIDS to the holders of the QUIPS in liquidation of such Issuer or
(b) in connection with certain mergers, consolidations or amalgamations
permitted by the related Trust Agreement, (iii) remain the sole Depositor under
each Trust Agreement and timely perform in all material respects all of its
duties as Depositor and (iv) to use its reasonable efforts, consistent with the
terms and provisions of the related Trust Agreement, to cause such Issuer to
remain classified as a grantor trust and not as an association taxable as a
corporation for United States federal income tax purposes.
RELATIONSHIP AMONG THE QUIPS,
THE CORRESPONDING QUIDS AND THE GUARANTEES
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the QUIPS (to the extent
the Issuer has funds available for the payment of such Distributions) are
irrevocably guaranteed by Nevada Power, on a subordinated basis, as and to the
extent set forth under "Description of Guarantees." Taken together, Nevada
Power's obligations under each series of QUIDS, the Indenture, the related Trust
Agreement, the related Expense Agreement and the related Guarantee provide, in
the aggregate, a full, irrevocable and unconditional guarantee of payments of
distributions and other amounts due on the related series of QUIPS. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Issuer's obligations under the QUIPS. If and to
the extent that Nevada Power does not make payments on any series of
Corresponding QUIDS, such Issuer will not pay Distributions or other amounts due
on related QUIPS. The Guarantees do not cover payment of Distributions when the
related Issuer does not have sufficient funds to pay such Distributions. In such
event, a holder of a series of QUIPS may institute a legal proceeding directly
against Nevada Power to enforce payment of such Distributions to such holder
after the respective due dates. The obligations of Nevada Power under each
Guarantee are subordinate and junior in right of payment to all Senior Debt of
Nevada Power.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due (taking
account of any Extension Period) on each series of Corresponding QUIDS, such
payments will be sufficient to cover Distributions and other payments due on the
related QUIPS, primarily because (i) the aggregate principal amount of each
series of Corresponding QUIDS will be equal to the sum of the aggregate stated
liquidation amount of the related QUIPS and related Common Securities; (ii) the
interest rate and interest and other payment dates on each series of
Corresponding QUIDS will match the Distribution rate and Distribution and other
payment dates for the related QUIPS; (iii) Nevada Power shall pay for all and
any costs, expenses and liabilities of such Issuer except the Issuer's
obligations to holders of its QUIPS under such QUIPS; and (iv) each Trust
Agreement further provides that the Issuer will not engage in any activity that
is not consistent with the limited purposes of such Issuer.
Notwithstanding anything to the contrary in the Indenture, Nevada Power has
the right to set-off any payment it is otherwise required to make thereunder
with and to the extent Nevada Power has theretofore made, or is concurrently on
the date of such payment making, a payment under the related Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF QUIPS
A holder of any related QUIPS may institute a legal proceeding directly
against Nevada Power to enforce its rights under the related Guarantee without
first instituting a legal proceeding against the Guarantee Trustee, the related
Issuer or any other person or entity.
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A default or event of default under any Senior Debt of Nevada Power will not
constitute a default or Event of Default under the Indenture. However, in the
event of payment defaults under, or acceleration of, Senior Debt of Nevada
Power, the subordination provisions of the Indenture provide that no payments
may be made in respect of the Corresponding QUIDS until such Senior Debt has
been paid in full or any payment default thereunder has been cured or waived.
Failure to make required payments on any series of Corresponding QUIDS would
constitute an Event of Default under the Indenture.
LIMITED PURPOSE OF ISSUERS
Each Issuer's QUIPS evidence a beneficial interest in such Issuer, and each
Issuer exists for the exclusive purpose of (i) issuing and selling its QUIPS and
Common Securities, (ii) using the proceeds from the sale of such QUIPS and
Common Securities to acquire a corresponding series of Corresponding QUIDS
issued by Nevada Power, (iii) receiving payments to be made with respect to the
QUIDS and disbursing such payments in accordance with the terms of the Trust
Agreements and (iv) engaging in only those other activities necessary,
convenient or incidental thereto. A principal difference between the rights of a
holder of a QUIPS and a holder of a Corresponding QUIDS is that a holder of a
Corresponding QUIDS is entitled to receive from Nevada Power the principal
amount of and interest accrued on Corresponding QUIDS held, while a holder of
QUIPS is entitled to receive Distributions from such Issuer (or from Nevada
Power under the applicable Guarantee) if and to the extent such Issuer has funds
available for the payment of such Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or liquidation of
any Issuer involving the liquidation of the Corresponding QUIDS, the holders of
the related QUIPS will be entitled to receive, out of assets held by such
Issuer, the Liquidation Distribution in cash. See "Description of QUIPS--
Liquidation Distribution Upon Termination." Upon any voluntary or involuntary
liquidation or bankruptcy of Nevada Power, the Property Trustee, as holder of
the Corresponding QUIDS, would be a subordinated creditor of Nevada Power,
subordinated in right of payment to all Senior Debt, but entitled to receive
payment in full of principal and interest before any stockholders of Nevada
Power receive payments or distributions. Because Nevada Power is the guarantor
under each Guarantee and has agreed to pay for all costs, expenses and
liabilities of each Issuer (other than the Issuer's obligations to the holders
of its QUIPS), the positions of a holder of such QUIPS and a holder of such
Corresponding QUIDS relative to other creditors and to stockholders of Nevada
Power in the event of liquidation or bankruptcy of Nevada Power would be
substantially the same.
PLAN OF DISTRIBUTION
The QUIDS and the QUIPS may be sold in a public offering to or through
underwriters or dealers designated from time to time. Nevada Power and each
Issuer may sell its QUIDS and QUIPS as soon as practicable after effectiveness
of the Registration Statement of which the Prospectus is a part. The names of
any underwriters or dealers involved in the sale of the QUIDS and QUIPS in
respect of which this Prospectus is delivered, the amount or number of QUIDS and
QUIPS to be purchased by any such underwriters and any applicable commissions or
discounts will be set forth in the Prospectus Supplement.
Underwriters may offer and sell QUIDS and QUIPS at a fixed price or prices,
which may be changed, or from time to time at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. In connection with the sale of QUIPS, underwriters may be
deemed to have received compensation from Nevada Power and/or the applicable
Issuer in the form of underwriting discounts or commissions and may also receive
commissions. Underwriters may sell QUIDS and QUIPS to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters.
Any underwriting compensation paid by Nevada Power and/or the applicable
Issuer to underwriters in connection with the offering of QUIDS and QUIPS, and
any discounts, concessions or commissions
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allowed by such underwriters to participating dealers, will be described in a
Prospectus Supplement. Underwriters and dealers participating in the
distribution of QUIDS and QUIPS may be deemed to be underwriters, and any
discounts and commissions received by them and any profit realized by them on
resale of such QUIDS and QUIPS may be deemed to be underwriting discounts and
commissions, under the Securities Act. Underwriters and dealers may be entitled,
under agreement with Nevada Power and the applicable Issuer, to indemnification
against and contribution toward certain civil liabilities, including liabilities
under the Securities Act, and to reimbursement by Nevada Power for certain
expenses.
In connection with the offering of the QUIPS of any Issuer, such Issuer may
grant to the underwriters an option to purchase additional QUIPS to cover
over-allotments, if any, at the initial public offering price (with an
additional underwriting commission), as may be set forth in the accompanying
Prospectus Supplement. If such Issuer grants any over-allotment option, the
terms of such over-allotment option will be set forth in the Prospectus
Supplement for such QUIPS.
Underwriters and dealers may engage in transactions with, or perform
services for, Nevada Power and/or the applicable Issuer and/or any of their
affiliates in the ordinary course of business.
The QUIDS and the QUIPS will be new issues of securities and will have no
established trading market. Any underwriters to whom QUIDS and QUIPS are sold
for public offering and sale may make a market in such QUIDS and QUIPS, but such
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. Such QUIDS and QUIPS may or may not be listed
on a national securities exchange, as set forth in the applicable Prospectus
Supplement. No assurance can be given as to the liquidity of or the existence of
trading markets for any QUIDS or QUIPS.
LEGAL MATTERS
Unless otherwise set forth in the applicable Prospectus Supplement, certain
matters of Delaware law relating to the legality of the QUIPS, the validity of
the Trust Agreement and the formation of the Issuer will be passed upon by
Richards, Layton & Finger, special Delaware counsel to Nevada Power and the
Issuer. The legality of the Guarantee and QUIDS will be passed upon for Nevada
Power by Richard L. Hinckley, Vice President, Secretary and Chief Counsel for
Nevada Power and by Best Best & Krieger LLP. Certain legal matters will be
passed upon for the Underwriters by Jones, Day, Reavis & Pogue, Chicago,
Illinois. Certain matters relating to United States federal income tax
considerations will be passed upon for Nevada Power and the Series A Issuer by
their special tax counsel, Jones, Day, Reavis & Pogue, Chicago, Illinois. For
the purposes of their opinions, Best, Best & Krieger LLP and Jones, Day, Reavis
& Pogue may rely on the opinion of Mr. Hinckley as to matters governed by the
laws of the State of Nevada.
EXPERTS
The financial statements and financial statement schedule of Nevada Power
incorporated in this Prospectus by reference to Nevada Power's Annual Report on
Form 10-K for the year ended December 31, 1996 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 auditing and
accounting.
33
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF NEVADA POWER COMPANY
SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PROSPECTUS SUPPLEMENT
PAGE
----
<S> <C>
Risk Factors.............................................................. S-4
NVP Capital I............................................................. S-8
Nevada Power Company...................................................... S-8
Ratio of Earnings to Fixed Charges........................................ S-9
Use of Proceeds........................................................... S-9
Accounting Treatment...................................................... S-9
Capitalization............................................................ S-10
Selected Financial and Operating Information.............................. S-11
Certain Terms of Series A QUIPS........................................... S-12
Certain Terms of Series A QUIDS........................................... S-14
United States Federal Income Tax Consequences............................. S-18
Underwriting.............................................................. S-21
Legal Matters............................................................. S-22
PROSPECTUS
Available Information..................................................... 3
Incorporation of Certain Information by Reference......................... 4
Use of Proceeds........................................................... 4
The Issuers............................................................... 4
Description of QUIDS...................................................... 5
Description of QUIPS...................................................... 15
Description of Guarantees................................................. 27
Description of Corresponding QUIDS........................................ 29
Relationship Among the QUIPS, the Corresponding QUIDS and the
Guarantees.............................................................. 31
Plan of Distribution...................................................... 32
Legal Matters............................................................. 33
Experts................................................................... 33
</TABLE>
4,850,000 PREFERRED SECURITIES
NVP CAPITAL I
% CUMULATIVE QUARTERLY
INCOME PREFERRED SECURITIES,
SERIES A (QUIPS)-SM-
GUARANTEED, AS SET FORTH HEREIN, BY
NEVADA POWER
COMPANY
---------
[LOGO]
---------
GOLDMAN, SACHS & CO.
DEAN WITTER REYNOLDS INC.
LEGG MASON WOOD WALKER
INCORPORATED
MERRILL LYNCH & CO.
PAINEWEBBER INCORPORATED
REPRESENTATIVES OF THE UNDERWRITERS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the issuance and distribution of
the Securities covered by this Registration Statement, other than underwriting
discounts and commissions, are as follows:
<TABLE>
<S> <C> <C>
(a) SEC registration fee (actual)...................................... $37,878.79
(b) Printing fees and expenses......................................... $115,000.00
(c) Legal fees and expenses............................................ $100,000.00
(d) Accounting fees and expenses....................................... $70,000.00
(e) Blue Sky fees and expenses......................................... $ 5,000.00
(f) New York Stock Exchange Listing Fee................................ $50,000.00
(g) Rating Agency Fees................................................. $35,000.00
(h) Trustees' Fee...................................................... $15,000.00
(i) Other.............................................................. $22,121.21
----------
Total.............................................................. $450,000.00
----------
----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Section 78.037 of the Nevada General Corporation Law, Nevada
Power has included in its Restated Articles of Incorporation a provision which
states that a director or officer of Nevada Power shall not be liable to Nevada
Power or its shareholders for monetary damages for breach of fiduciary duty as a
director or officer, except to the extent such limitation of liability is
prohibited by Nevada General Corporation Law as the same exists or may hereafter
be amended. Section 78.037 currently provides that any such provision may not
eliminate or limit the liability of a director or officer for (a) acts or
omissions which involve intentional misconduct, fraud or a knowing violation of
law; or (b) the payment of dividends in violation of the Nevada General
Corporation Law.
As permitted by Section 78.751 of the Nevada General Corporation Law,
Article VIII of Nevada Power's Bylaws provides for the indemnification by Nevada
Power, including suits brought by or on behalf of Nevada Power, of each
director, officer, employee or agent thereof to the fullest extent permitted by
Nevada law.
As permitted by the Nevada General Corporation Law and Article VIII of
Nevada Power's Bylaws, Nevada Power has entered into indemnity agreements with
its directors and officers that provide for indemnification of such individuals
to the fullest extent permitted under Nevada law, and Nevada Power maintains
director's and officer's liability for its directors and officers against
certain liabilities.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- --------- ---------------------------------------------------------------------------------------------------------
<C> <S>
*1.01 Proposed form of Underwriting Agreement Basic Provisions for Preferred Securities.
*4.01 Junior Subordinated Indenture between Nevada Power and IBJ Schroder Bank & Trust Company, as Debenture
Trustee.
*4.02 Certificate of Trust of NVP Capital I.
*4.03 Trust Agreement of NVP Capital I.
*4.04 Certificate of Trust of NVP Capital II (substantially identical to Exhibit 4.02 except for names and
dates).
*4.05 Trust Agreement of NVP Capital II (substantially identical to Exhibit 4.03 except for names and dates).
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
*4.10 Form of Amended and Restated Trust Agreement (Agreements for NVP Capital I and NVP Capital II, are
substantially identical except for names and dates).
*4.11 Form of Preferred Security Certificate for NVP Capital I and NVP Capital II (included as Exhibit E of
Exhibit 4.10 hereto).
*4.12 Form of Guarantee Agreement (Agreements in respect of NVP Capital I and NVP Capital II, are substantially
identical except for names and dates).
*4.13 Form of Supplemental Indenture between Nevada Power and IBJ Schroder Bank & Trust Company, as Debenture
Trustee (Supplemental Indentures for NVP Capital I and NVP Capital II are substantially identical except
for names and dates).
*4.14 Form of Agreement as to Expenses and Liabilities between Nevada Power and NVP Capital I (Agreement in
respect of NVP Capital II is substantially identical except for names and dates)
*5.01 Opinion of Best Best & Krieger LLP, relating to the legality of the Junior Subordinated Debentures and
the Guarantees.
*5.02 Opinion of Richards, Layton & Finger, special Delaware counsel, relating to the legality of the Preferred
Securities of NVP Capital I and NVP Capital II.
8.01 Opinion of Jones, Day, Reavis & Pogue, as to certain United States federal income tax matters.
12.01 Statement regarding Computation of Ratio of Earnings to Fixed Charges.
23.01 Consent of Deloitte & Touche LLP (included in Part II of this Amendment No. 2 to Registration Statement).
23.02 Consent of Best Best & Krieger LLP (included in Part II of this Amendment No. 2 to Registration
Statement).
23.03 Consent of Richard L. Hinckley, Esq. (included in Part II of this Amendment No. 2 to Registration
Statement).
*23.04 Consent of Richards, Layton & Finger, special Delaware counsel (included in Exhibit 5.02 hereto).
23.05 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 8.01 hereto).
*25.01 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of IBJ Schroder Bank &
Trust Company, as Trustee for the Junior Subordinated Indenture.
*25.02 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of IBJ Schroder Bank &
Trust Company, as Property Trustee for the Amended and Restated Trust Agreement of NVP Capital I.
*25.03 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of IBJ Schroder Bank &
Trust Company, as Guarantee Trustee for the Guarantee for NVP Capital I.
</TABLE>
* Previously filed.
In addition to those Exhibits shown above, Nevada Power hereby incorporates
the following Exhibits pursuant to Exchange Act Rule 12b-32 and Regulation
#201.24 by reference to the filings set forth below:
<TABLE>
<CAPTION>
EXHIBIT ORIGINALLY FILED
NO. DESCRIPTION AS EXHIBIT FILE NO.
- ----------- ------------------------------------------------------------------- --------------------- -----------
<C> <S> <C> <C>
4.1 Certificate of Designation of Cumulative Preferred Stock as
follows:
5.40% Series..................................................... 2.1 to Form S-1 2-16968
5.20% Series..................................................... 2.1 to Form S-1 2-20618
4.70% Series..................................................... 3.2 to Form 8-K 1-4698
July 1965
8% Series........................................................ 2.1 to Form S-7 2-44513
8.70% Series..................................................... 2.1 to Form S-7 2-49622
11.50% Series.................................................... 2.1 to Form S-7 2-52238
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT ORIGINALLY FILED
NO. DESCRIPTION AS EXHIBIT FILE NO.
- ----------- ------------------------------------------------------------------- --------------------- -----------
<C> <S> <C> <C>
9.75% Series..................................................... 2.1 to Form S-7 2-56788
Auction Series A................................................. 4.6 to Form S-3 33-15554
Auction Series A as amended November 14, 1991.................... 4.9 to Form S-3 33-44460
Auction Series A as amended December 12, 1991.................... 4.1 to Form 10-K 1-4698
Year 1992
9.90% Series..................................................... 4.1 to Form 10-K 1-4698
Year 1992
4.2 Indenture of Mortgage and Deed of Trust Providing for First
Mortgage Bonds, dated October 1, 1953 and Twenty-Six Supplemental
Indentures as follows: 4.2 to Form S-1 2-10932
First Supplemental Indenture, dated August 1, 1954............... 4.2 to Form S-1 2-11440
Second Supplemental Indenture, dated September 1, 1956........... 4.9 to Form S-1 2-12566
Third Supplemental Indenture, dated May 1, 1959.................. 4.13 to Form S-1 2-14949
Fourth Supplemental Indenture, dated October 1, 1960............. 4.5 to Form S-1 2-16968
Fifth Supplemental Indenture, dated December 1, 1961............. 4.6 to Form S-16 2-74929
Sixth Supplemental Indenture, dated October 1, 1963.............. 4.6A to Form S-1 2-21689
Seventh Supplemental Indenture, dated August 1, 1964............. 4.6B to Form S-1 2-22560
Eighth Supplemental Indenture, dated April 1, 1968............... 4.6C to Form S-9 2-28348
Ninth Supplemental Indenture, dated October 1, 1969.............. 4.6D to Form S-1 2-34588
Tenth Supplemental Indenture, dated October 1, 1970.............. 4.6E to Form S-7 2-38314
Eleventh Supplemental Indenture, dated November 1, 1972.......... 2.12 to Form S-7 2-45728
Twelfth Supplemental Indenture, dated December 1, 1974........... 2.13 to Form S-7 2-52350
Thirteenth Supplemental Indenture, dated October 1, 1976......... 4.14 to Form S-16 2-74929
Fourteenth Supplemental Indenture, dated May 1, 1977............. 4.15 to Form S-16 2-74929
Fifteenth Supplemental Indenture, dated September 1, 1978........ 4.16 to Form S-16 2-74929
Sixteenth Supplemental Indenture, dated December 1, 1981......... 4.17 to Form S-16 2-74929
Seventeenth Supplemental Indenture, dated August 1, 1982......... 4.2 to Form 10-K 1-4698
Year 1982
Eighteenth Supplemental Indenture, dated November 1, 1986........ 4.6 to Form S-3 33-9537
Nineteenth Supplemental Indenture, dated October 1, 1989......... 4.2 to Form 10-K 1-4698
Year 1989
Twentieth Supplemental Indenture, dated May 1, 1992.............. 4.21 to Form S-3 33-53034
Twenty-First Supplemental Indenture, dated June 1, 1992.......... 4.22 to Form S-3 33-53034
Twenty-Second Supplemental Indenture, dated June 1, 1992......... 4.23 to Form S-3 33-53034
Twenty-Third Supplemental Indenture, dated October 1, 1992....... 4.23 to Form S-3 33-53034
Twenty-Fourth Supplemental Indenture, dated October 1, 1992...... 4.23 to Form S-3 33-53034
Twenty-Fifth Supplemental Indenture, dated January 1, 1993....... 4.23 to Form S-3 33-53034
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT ORIGINALLY FILED
NO. DESCRIPTION AS EXHIBIT FILE NO.
- ----------- ------------------------------------------------------------------- --------------------- -----------
<C> <S> <C> <C>
Twenty-Sixth Supplemental Indenture dated May 1, 1995............ 4.2 to Form 10-K 1-4698
Year 1995
4.3 Instrument of Further Assurance dated April 1, 1956 to Indenture of
Mortgage and Deed of Trust dated October 1, 1953.................. 4.8 to Form S-1 2-12566
4.4 Rights Agreement dated October 15, 1990 between Manufacturers
Hanover Trust Company and Nevada Power Company.................... 4.1 to Form 8-A 1-4698
Year 1990
</TABLE>
ITEM 17. UNDERTAKINGS
The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement; provided,
however, that paragraphs (1)(i) and (1)(ii) do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by
the Registrant pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 (the "Exchange Act") that are incorporated by reference in the
Registration Statement.
(2) That, 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.
(3) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(4) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
II-4
<PAGE>
(5) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a) or
15(d) of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in the Registration Statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling persons 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 securities being
registered, 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 the Act and will be governed by the final adjudication of
such issue.
For the purposes 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.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Act.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 2 to
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Las Vegas and State of Nevada on the 20th day of
March, 1997.
NEVADA POWER COMPANY
By: /s/ STEVEN W. RIGAZIO
-----------------------------------------
(Steven W. Rigazio, Vice President
and Treasurer, Chief Financial Officer)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 2 TO REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS
IN THE CAPACITIES AND ON THE DATE INDICATED:
<TABLE>
<C> <S> <C>
(1) PRINCIPAL EXECUTIVE OFFICER
* CHARLES A. LENZIE
- ---------------------------------------- Chairman of the Board and Chief March 20, 1997
Charles A. Lenzie Executive Officer
(2) PRINCIPAL FINANCIAL AND
PRINCIPAL ACCOUNTING OFFICER
/s/ STEVEN W. RIGAZIO
- ---------------------------------------- Vice President and Treasurer, March 20, 1997
Steven W. Rigazio Chief Financial Officer
(3) DIRECTORS
* MARY LEE COLEMAN
- ---------------------------------------- Director March 20, 1997
Mary Lee Coleman
* FRED D. GIBSON, JR.
- ---------------------------------------- Director March 20, 1997
Fred D. Gibson, Jr.
* JOHN L. GOOLSBY
- ---------------------------------------- Director March 20, 1997
John L. Goolsby
* JERRY HERBST
- ---------------------------------------- Director March 20, 1997
Jerry Herbst
</TABLE>
II-6
<PAGE>
<TABLE>
<C> <S> <C>
* CONRAD L. RYAN
- ---------------------------------------- Director March 20, 1997
Conrad L. Ryan
* FRANK E. SCOTT
- ---------------------------------------- Director March 20, 1997
Frank E. Scott
* A. M. SMITH
- ---------------------------------------- Director March 20, 1997
A. M. Smith
* J.A. TIBERTI
- ---------------------------------------- Director March 20, 1997
J.A. Tiberti
* JOHN F. O'REILLY
- ---------------------------------------- Director March 20, 1997
John F. O'Reilly
*By STEVEN W. RIGAZIO
- ----------------------------------------
(Steven W. Rigazio, Attorney-in-fact)
</TABLE>
II-7
<PAGE>
INDEPENDENT AUDITORS' CONSENT
NEVADA POWER COMPANY
We consent to the incorporation by reference in this Amendment No. 2 to
Registration Statement No. 333-21091 of Nevada Power Company on Form S-3 of our
reports dated February 14, 1997 appearing in and incorporated by reference in
the Annual Report on Form 10-K of Nevada Power Company for the year ended
December 31, 1996 and to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Las Vegas, Nevada
March 17, 1997
II-8
<PAGE>
CONSENT OF COUNSEL
I hereby consent to the use of my name as Vice President, Secretary and
Chief Counsel of Nevada Power wherever it appears in this Amendment No. 2 to
Registration Statement, including the Prospectus constituting a part thereof,
and all amendments thereof.
RICHARD L. HINCKLEY, Esq.
Las Vegas, Nevada
March 20, 1997
------------------------
CONSENT OF COUNSEL
We hereby consent to all references to our Firm included in or made a part
of this Amendment No. 2 to Registration Statement, including the Prospectus
constituting a part thereof, and all amendments thereof.
BEST BEST & KRIEGER LLP
Riverside, California
March 20, 1997
II-9
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, NVP Capital I
and NVP Capital II certify that they have reasonable grounds to believe that
they meet all of the requirements for filing on Form S-3 and have duly caused
this Amendment No. 2 to Registration Statement to be signed on their behalf by
the undersigned, thereunto duly authorized, in the City of Las Vegas, State of
Nevada, on March 19, 1997.
NVP CAPITAL I
(Registrant)
By: Nevada Power Company, as Depositor
By: /s/ STEVEN W. RIGAZIO
--------------------------------------
Steven W. Rigazio, Vice President and
Treasurer, Chief Financial Officer
NVP CAPITAL II
(Registrant)
By: Nevada Power Company, as Depositor
By: /s/ STEVEN W. RIGAZIO
--------------------------------------
Steven W. Rigazio, Vice President and
Treasurer, Chief Financial Officer
II-10
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NUMBERING
NO. PAGE NO.
- --------- ---------------
<C> <S> <C>
1.01 Proposed form of Underwriting Agreement Basic Provisions for Preferred Securities
(previously filed)
4.01 Junior Subordinated Indenture between Nevada Power and IBJ Schroder Bank & Trust Company, as
Debenture Trustee (previously filed)
4.02 Certificate of Trust of NVP Capital I (previously filed)....................................
4.03 Trust Agreement of NVP Capital I (previously filed).........................................
4.04 Certificate of Trust of NVP Capital II (substantially identical to Exhibit 4.02 (previously
filed) except for names and dates).........................................................
4.05 Trust Agreement of NVP Capital II (substantially identical to Exhibit 4.02 (previously
filed) except for names and dates).........................................................
4.10 Form of Amended and Restated Trust Agreement (Agreements for NVP Capital I and NVP Capital
II are substantially identical except for names and dates) (previously filed)
4.11 Form of Preferred Security Certificate for NVP Capital I and NVP Capital II (included as
Exhibit E of Exhibit 4.10 (previously filed) hereto)
4.12 Form of Guarantee Agreement (Agreements in respect of NVP Capital I and NVP Capital II are
substantially identical except for names and dates) (previously filed)
4.13 Form of Supplemental Indenture between Nevada Power and IBJ Schroder Bank & Trust Company,
as Debenture Trustee (Supplemental Indentures for NVP Capital I and NVP Capital II are
substantially identical except for names and dates) (previously filed)
4.14 Form of Agreement as to Expenses and Liabilities between Nevada Power and NVP Capital I
(Agreement in respect of NVP Capital II is substantially identical except for names and
dates) (previously filed)
5.01 Opinion of Best Best & Krieger LLP, relating to the legality of the Junior Subordinated
Debentures and the Guarantees (previously filed)
5.02 Opinion of Richards, Layton & Finger, special Delaware counsel, relating to the legality of
the Preferred Securities NVP Capital I and NVP Capital II (previously filed)
8.01 Opinion of Jones, Day, Reavis & Pogue as to certain United States federal income tax matters
12.01 Statement regarding Computation of Ratio of Earnings to Fixed Charges
23.01 Consent of Deloitte & Touche LLP (included in Part II of this Amendment No. 2 to
Registration Statement)....................................................................
23.02 Consent of Best Best & Krieger LLP (included in Part II of this Amendment No. 2 to
Registration Statement)....................................................................
23.03 Consent of Richard L. Hinckley, Esq. (included in Part II of this Amendment No. 2 to
Registration Statement)....................................................................
</TABLE>
II-11
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NUMBERING
NO. PAGE NO.
- --------- ---------------
<C> <S> <C>
23.04 Consent of Richards, Layton & Finger, special Delaware counsel (included in Exhibit 5.02
hereto (previously filed))
23.05 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 8.01 hereto)
25.01 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of IBJ
Schroder Bank & Trust Company, as Trustee for the Junior Subordinated Indenture (previously
filed).....................................................................................
25.02 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of IBJ
Schroder Bank & Trust Company, as Property Trustee for the Amended and Restated Trust
Agreement of NVP Capital I (previously filed)..............................................
25.03 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of IBJ
Schroder Bank & Trust Company, as Guarantee Trustee for the Guarantee for NVP Capital I
(previously filed).........................................................................
</TABLE>
In addition to those Exhibits shown above, Nevada Power hereby incorporates
the following Exhibits pursuant to Exchange Act Rule 12b-32 and Regulation
#201.24 by reference to the filings set forth below:
<TABLE>
<CAPTION>
EXHIBIT ORIGINALLY FILED
NO. DESCRIPTION AS EXHIBIT FILE NO.
- ----------- ------------------------------------------------------------------- --------------------- -----------
<C> <S> <C> <C>
4.1 Certificate of Designation of Cumulative Preferred Stock as
follows:
5.40% Series..................................................... 2.1 to Form S-1 2-16968
5.20% Series..................................................... 2.1 to Form S-1 2-20618
4.70% Series..................................................... 3.2 to Form 8-K 1-4698
July 1965
8% Series........................................................ 2.1 to Form S-7 2-44513
8.70% Series..................................................... 2.1 to Form S-7 2-49622
11.50% Series.................................................... 2.1 to Form S-7 2-52238
9.75% Series..................................................... 2.1 to Form S-7 2-56788
Auction Series A................................................. 4.6 to Form S-3 33-15554
Auction Series A as amended November 14, 1991.................... 4.9 to Form S-3 33-44460
Auction Series A as amended December 12, 1991.................... 4.1 to Form 10-K 1-4698
Year 1992
9.90% Series..................................................... 4.1 to Form 10-K 1-4698
Year 1992
4.2 Indenture of Mortgage and Deed of Trust Providing for First
Mortgage Bonds, dated October 1, 1953 and Twenty-Six Supplemental
Indentures as follows: 4.2 to Form S-1 2-10932
First Supplemental Indenture, dated August 1, 1954............... 4.2 to Form S-1 2-11440
Second Supplemental Indenture, dated September 1, 1956........... 4.9 to Form S-1 2-12566
Third Supplemental Indenture, dated May 1, 1959.................. 4.13 to Form S-1 2-14949
Fourth Supplemental Indenture, dated October 1, 1960............. 4.5 to Form S-1 2-16968
Fifth Supplemental Indenture, dated December 1, 1961............. 4.6 to Form S-16 2-74929
Sixth Supplemental Indenture, dated October 1, 1963.............. 4.6A to Form S-1 2-21689
Seventh Supplemental Indenture, dated August 1, 1964............. 4.6B to Form S-1 2-22560
Eighth Supplemental Indenture, dated April 1, 1968............... 4.6C to Form S-9 2-28348
Ninth Supplemental Indenture, dated October 1, 1969.............. 4.6D to Form S-1 2-34588
Tenth Supplemental Indenture, dated October 1, 1970.............. 4.6E to Form S-7 2-38314
</TABLE>
II-12
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT ORIGINALLY FILED
NO. DESCRIPTION AS EXHIBIT FILE NO.
- ----------- ------------------------------------------------------------------- --------------------- -----------
<C> <S> <C> <C>
Eleventh Supplemental Indenture, dated November 1, 1972.......... 2.12 to Form S-7 2-45728
Twelfth Supplemental Indenture, dated December 1, 1974........... 2.13 to Form S-7 2-52350
Thirteenth Supplemental Indenture, dated October 1, 1976......... 4.14 to Form S-16 2-74929
Fourteenth Supplemental Indenture, dated May 1, 1977............. 4.15 to Form S-16 2-74929
Fifteenth Supplemental Indenture, dated September 1, 1978........ 4.16 to Form S-16 2-74929
Sixteenth Supplemental Indenture, dated December 1, 1981......... 4.17 to Form S-16 2-74929
Seventeenth Supplemental Indenture, dated August 1, 1982......... 4.2 to Form 10-K 1-4698
Year 1982
Eighteenth Supplemental Indenture, dated November 1, 1986........ 4.6 to Form S-3 33-9537
Nineteenth Supplemental Indenture, dated October 1, 1989......... 4.2 to Form 10-K 1-4698
Year 1989
Twentieth Supplemental Indenture, dated May 1, 1992.............. 4.21 to Form S-3 33-53034
Twenty-First Supplemental Indenture, dated June 1, 1992.......... 4.22 to Form S-3 33-53034
Twenty-Second Supplemental Indenture, dated June 1, 1992......... 4.23 to Form S-3 33-53034
Twenty-Third Supplemental Indenture, dated October 1, 1992....... 4.23 to Form S-3 33-53034
Twenty-Fourth Supplemental Indenture, dated October 1, 1992...... 4.23 to Form S-3 33-53034
Twenty-Fifth Supplemental Indenture, dated January 1, 1993....... 4.23 to Form S-3 33-53034
Twenty-Sixth Supplemental Indenture dated May 1, 1995............ 4.2 to Form 10-K 1-4698
Year 1995
4.3 Instrument of Further Assurance dated April 1, 1956 to Indenture of
Mortgage and Deed of Trust dated October 1, 1953.................. 4.8 to Form S-1 2-12566
4.4 Rights Agreement dated October 15, 1990 between Manufacturers
Hanover Trust Company and Nevada Power Company.................... 4.1 to Form 8-A 1-4698
Year 1990
</TABLE>
II-13
<PAGE>
Amended Exhibit 8.01
JONES, DAY, REAVIS & POGUE
77 West Wacker
Chicago, Illinois 60601-1692
March 20, 1997
Nevada Power Company
6226 West Sahara Avenue
Las Vegas, Nevada 89102
NVP Capital I
c/o Nevada Power Company
6226 West Sahara Avenue
Las Vegas, Nevada 89102
Ladies and Gentlemen:
We have acted as special tax counsel to Nevada Power Company ("Nevada
Power") and NVP Capital I (the "Series A Issuer"), in connection with the
preparation and filing with the Securities and Exchange Commission (the
"Commission") of a Registration Statement on Form S-3 (Registration No.
333-21091), as amended by Amendments No. 1 and No. 2 thereto (the
"Registration Statement"), under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the proposed issuance of $125,000,000 of
Cumulative Quarterly Income Preferred Securities, Series A (the "Series A
QUIPS"), the proceeds of which will be used by the Series A Issuer to purchase
from Nevada Power the Junior Subordinated Deferrable Interest Debentures,
Series A (the "Series A QUIDS"). Capitalized terms not otherwise defined
herein shall have the same meanings as they have in documents listed in the
paragraph below (the "Transaction Documents").
In delivering this opinion, we have reviewed the Registration Statement
and have reviewed and relied upon: (i) the form of the Amended and Restated
Trust Agreement among Nevada Power and the several trustees named therein,
(ii) the form of the Junior Subordinated Indenture between Nevada Power and
IBJ Schroder Bank & Trust Company, as Trustee, (iii) the form of the
Guarantee Agreement between Nevada Power and IBJ Schroder Bank and Trust
Company, as Guarantee Trustee, (iv) the form of the Series A QUIPS, and (v)
<PAGE>
Nevada Power Company
NVP Capital I
March 20, 1997
Page 2
the form of the Series A QUIDS, each as filed as exhibits to the Registration
Statement. In addition, we have examined such other documents, statutes and
authorities, and have made such other and further investigations, as we have
deemed relevant and necessary as a basis for the opinion hereinafter set
forth.
Based on the foregoing, we hereby confirm our opinion under the caption
"United States Federal Income Tax Consequences" in the prospectus forming a
part of the Registration Statement.
We express no opinion with respect to the transactions referred to herein
and in the Registration Statement other than as expressly set forth herein.
Our opinions are not binding on the IRS and the IRS could disagree with the
opinions expressed herein. Although we believe that the opinions we express
herein would be sustained if challenged, there can be no assurance that this
will be the case.
Our opinions are based upon the Code, the Treasury regulations promulgated
thereunder and other relevant authorities and law, all as in effect on the
date hereof. Consequently, future changes in the law may cause the tax treatment
of the transactions referred to herein to be materially different from that
described above.
We do not express any opinion herein concerning any law other than the
federal income tax law of the United States.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement and to the use of our name under the captions "United
States Federal Income Tax Consequences" and "Legal Opinions" contained in the
prospectus forming a part of the Registration Statement.
Very truly yours,
/s/ JONES, DAY, REAVIS & POGUE
JONES, DAY, REAVIS & POGUE
<PAGE>
NEVADA POWER COMPANY
Computation of Ratios of Earnings to Fixed Charges
(In Thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- --------- ------- --------
<S> <C> <C> <C> <C> <C>
EARNINGS:
Net Income 78,868 76,971 81,870 73,546 56,780
Taxes on Income 44,970 37,790 44,716 39,665 29,223
Net income Before income Taxes 123,838 114,761 126,586 113,213 86,003
Fixed Charges 64,500 162,504 170,804 153,256 128,430
-------- -------- -------- -------- --------
Total 188,347 162,504 170,804 153,258 126,430
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
FIXED CHARGES:
Interest Charges 63,548 46,936 43,015 39,306 41,466
One-third Annual Rentals 961 807 1,203 735 961
-------- -------- -------- -------- --------
Total 64,509 47,743 44,218 40,043 42,427
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
12 MONTHS RATIO OF EARNINGS TO FIXED CHARGES 2.92 3.40 3.86 3.83 3.03
</TABLE>
