As filed with the Securities and Exchange Commission on November 30, 1999
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) November 30, 1999
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NIAGARA MOHAWK POWER CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
New York
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(State or Other Jurisdiction of Incorporation)
1-02987 15-0265555
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(Commission file Number) (IRS Employer Identification No.)
300 Erie Boulevard West, Syracuse, New York 13202
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(Address of Principal Executive Offices) (Zip Code)
(315) 474-1511
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On November 22, 1999, Niagara Mohawk Power Corporation (the "Company")
entered into an underwriting agreement with Salomon Smith Barney Inc.,
Donaldson, Lufkin & Jenrette Securities Corporation, Paine Webber Incorporated,
Banc One Capital Markets, Inc. and Robert W. Baird & Co., Incorporated (the
"Underwriters"), related to the issuance and sale by the Company of 3,000,000
shares of FixedAdjustable Rate Cumulative Preferred Stock, Series D ($50
Liquidation Preference), $25 par value (the "Stock") for a purchase price of
$150,000,000. The issuance and sale of the stock was consummated on November 30,
1999, with the total proceeds to the Company being approximately $148,125,000.
Expenses payable by the Company in connection with the offering of the stock are
estimated at approximately $250,000. The Underwriters will reimburse the Company
for all these expenses.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Exhibits
1.1 Underwriting Agreement, dated November 22, 1999, among
Salomon Smith Barney Inc., Donaldson, Lufkin & Jenrette
Securities Corporation, Banc One Capital Markets, Inc. and
Robert W. Baird & Co., Incorporated.
3.1 Certificate of Amendment of the Certificate of
Incorporation of Niagara Mohawk Power Corporation,
dated November 29, 1999.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, as amended, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
NIAGARA MOHAWK
POWER CORPORATION
Dated: November 30, 1999 By: /s/ Kapua A. Rice
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Name: Kapua A. Rice
Title: Secretary
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INDEX TO EXHIBITS
EXHIBIT NO. EXHIBIT
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1.1 Underwriting Agreement, dated November 22, 1999, among
Salomon Smith Barney Inc., Donaldson, Lufkin & Jenrette
Securities Corporation, Banc One Capital Markets, Inc. and
Robert W. Baird & Co., Incorporated.
3.1 Certificate of Amendment of the Certificate of
Incorporation of Niagara Mohawk Power Corporation,
dated November 29, 1999.
NIAGARA MOHAWK POWER CORPORATION
3,000,000 Shares
FIXED ADJUSTABLE RATE CUMULATIVE PREFERRED STOCK,
SERIES D ($50 liquidation preference)
$50 per share
New York, New York
November 22, 1999
Salomon Smith Barney Inc.
Donaldson, Lufkin & Jenrette
Securities Corporation
PaineWebber Incorporated
Banc One Capital Markets, Inc.
Robert W. Baird & Co., Incorporated
As Representatives of the several Underwriters
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Niagara Mohawk Power Corporation, a New York corporation (the
"Company"), proposes to sell to the several underwriters listed in Schedule I
hereto (the "Underwriters"), for whom you (the "Representatives") are acting as
representatives, 3,000,000 shares of Fixed adjustable Rate Cumulative Preferred
Stock, Series D ($25 par value) (the "Securities"), of the Company. To the
extent there are no additional Underwriters listed on Schedule I other than you,
the term Representatives as used herein shall mean you, as Underwriters, and the
terms Representatives and Underwriters shall mean either the singular or plural
as the context requires.
1. REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company
represents and warrants to, and agrees with, each Underwriter that:
(a) The Company, except to the extent waived by the staff of the
Securities and Exchange Commission, meets the requirements for use of Form
S-3 under the Act and has prepared and filed with the Commission a
registration statement (file number 33- 51073) on Form S-3, including a
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related preliminary prospectus, for registration under the Act of the
offering and sale of the Securities. Such registration statement, including
all of the exhibits thereto and documents incorporated by reference therein
at the date hereof pursuant to Item 12 of Form S-3 under the Act, is
hereinafter referred to as the "Registration Statement." The Company has
filed with, or transmitted for filing to, the Commission, pursuant to Rule
424 under the Act, a preliminary prospectus supplement dated November 12,
1999 (the "Preliminary Prospectus Supplement") to the base prospectus dated
June 1, 1998 (the "Base Prospectus") included in the Registration Statement
(such Preliminary Prospectus Supplement relating to the Securities in the
form so filed or transmitted, together with the Base Prospectus and the
documents incorporated by reference thereon pursuant to Item 12 of Form S-3
under the Act, is hereinafter referred to as the "Preliminary Prospectus").
The Company will next file with the Commission a prospectus supplement
dated November 22, 1999 the ("Prospectus Supplement") to the Base
Prospectus (such prospectus supplement relating to the Securities on the
form so filed or transmitted, together with the Base Prospectus and the
documents incorporated by reference therein pursuant to item 12 of Form S-3
under the Act, is hereinafter referred to as the "Prospectus") in
accordance with Rule 424(b).
(b) (i) Each part of the Registration Statement, at the time such part
became effective and at the date of this Agreement, and the Prospectus, at
the date of this Agreement and at the Closing Date (as hereinafter
defined), any amendments thereof and supplements thereto, complied or will
comply in all material respects with the Act and the Exchange Act and the
respective rules thereunder and (ii) the Registration Statement, at the
time it became effective and at the date of this Agreement did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein (iii) the Prospectus, and any amendment or
supplement thereto at the date of this Agreement and at the Closing Date,
did not contain and will not contain any untrue statement of a material
fact or omit or will omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they are made, not misleading; provided,
however, that the Company makes no representations or warranties as to the
information contained in or omitted from the Registration Statement or the
Prospectus or any amendment thereof or supplement thereto in reliance upon
and in conformity with information furnished in writing to the Company by
or on behalf of the Underwriters, for use in the Registration Statement or
Prospectus.
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(c) The documents incorporated by reference in the Prospectus, at the
time of the filing of such incorporated documents, conformed in all
material respects to the requirements of the Act or the Exchange Act and
the rules and regulations of the Commission thereunder and any documents so
filed and incorporated by reference subsequent to the date of this
Agreement will, when they are filed with the Commission, conform in all
material respects to the requirements of the Act and the Exchange Act, and
the rules and regulations of the Commission thereunder; and none of such
documents include or will include any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they are made, not
misleading.
(d) PricewaterhouseCoopers LLP, who certified or shall certify the
audited financial statements incorporated by reference as part of the
Registration Statement and the Prospectus are independent accountants with
respect to the Company as required by the Act and the rules under the Act.
(e) The financial statements and information included or incorporated
by reference in the Registration Statement present fairly the financial
position, results of operations and changes in financial position of the
Company at the respective dates and for the respective periods indicated,
all in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved except as therein
stated. The Company has no material contingent obligation which is not
disclosed in the Registration Statement and Prospectus.
(f) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as set forth in
the Registration Statement and the Prospectus, (1) there has not been any
material adverse change in the condition (financial or other), earnings,
business or properties of the Company, whether or not arising in the
ordinary course of business, (2) there has been no transaction entered into
by the Company which is material to the Company, other than transactions in
the ordinary course of business, and (3) no dividend or distribution of any
kind has been declared, paid or made by the Company on any series of its
capital stock which is preferred as to the payment of dividends, or as to
the distribution of assets upon any liquidation or dissolution of the
Company, over shares of any other class of capital stock of the Company
other than regular quarterly dividends.
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(g) The authorized, issued and outstanding capital stock of the Company
is as set forth in the Prospectus; the shares of issued and outstanding
capital stock of the Company set forth therein have been duly and validly
issued and are fully paid and nonassessable and not subject to any
preemptive or similar rights; the Securities have been duly authorized and,
following the filing of a certificate of amendment (the "Certificate") to
the Company's certificate of incorporation and when issued and delivered to
the Underwriters against payment of the consideration specified herein,
will be duly authorized and validly issued and fully paid and
nonassessable; stockholders of the Company will have no preemptive rights
with respect to the issuance of the Securities; the issuance of the
Securities is not subject to any vote or consent of any holder of the
Company's securities; and the Securities conform in all material respects
to all statements relating thereto contained in the Registration Statement
and Prospectus.
(h) The Company is a duly organized and validly existing corporation in
good standing under the laws of the State of New York; the Company and each
of its subsidiaries holds all material licenses, certificates and permits
from governmental authorities necessary for the conduct of the business of
the Company substantially as described in the Prospectus; and the Company
has the corporate power and authority to own or lease, as the case may be,
its properties and conduct its business as described in the Prospectus.
(i) The execution, delivery and performance of this Agreement by the
Company, the filing of the Certificate, the issuance and sale of the
Securities, the compliance by the Company with all the provisions hereof
and the consummation of the transactions contemplated hereby will not (a)
conflict with or constitute a breach of any of the terms or provisions of,
or a default under, the Company's certificate of incorporation or by-laws
or (b) conflict with or constitute a breach of any bond, debenture, note,
indenture, loan agreement, mortgage, lease or any other evidence of
indebtedness or any other agreement or instrument, in each case filed as an
exhibit to the Company's Registration Statement or 1998 annual report on
Form 10-K, (c) violate or conflict with any applicable law, statute, rule,
regulation, judgment, order or decree of any court or any governmental body
or agency having jurisdiction over the Company, or any of its subsidiaries
or property, (d) result in the imposition or creation of (or the obligation
to create or impose) a lien, encumbrance or security interest under any
agreement or instrument filed as an exhibit to the Company's Registration
Statement or 1998 annual report on Form 10-K, or (e) result in the
suspension, termination or revocation of any Authorization
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(as defined below) of the Company or any of its subsidiaries or any other
impairment of the rights of the holder of any such Authorization, except,
other than with respect to subsection (a) above, cases as would not
reasonably be expected, either individually or in the aggregate, to have a
material adverse effect on the business, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Effect"). Authorization shall mean the possession of
certain permits, licenses, exemptions, franchises, authorizations and other
approvals (each, an "Authorization").
(j) The Company has filed a petition with the Public Service Commission
of the State of New York ("PSC") with respect to the issuance and sale of
the Securities. The PSC has authorized or is expected to authorize the
issue on or prior to the Closing Date and sale thereof but upon the express
condition that the Company shall file with the PSC for its consideration a
copy of this Agreement and a statement setting forth (i) the dividend rate
for the Securities, (ii) the initial public offering price thereof, (iii)
the price to be paid to the Company for the Securities, (iv) the
underwriting commissions and (v) the redemption prices and dates with
respect to redemption of the Securities at the option of the Company. No
other consent, waiver, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with, any court or
governmental agency, body or administrative agency or other person is
required for the execution, delivery and performance by the Company of this
Agreement, the filing of the Certificate, the issuance and sale of the
Securities, and the consummation of the transactions contemplated hereby,
except (i) such as are required under state securities or Blue Sky laws and
regulations, and (ii) such as to which the failure to be obtained or made
would not reasonably be expected, either individually or in the aggregate,
to have a Material Adverse Effect.
(k) No person or corporation which is a "holding company" or a
"subsidiary of a holding company," within the meaning of such terms as
defined in the Public Utility Holding Company Act of 1935, directly or
indirectly owns, controls or holds with power to vote 10% or more of the
outstanding voting securities of the Company; and the Company and Holdings
are each presently exempt from the provisions of the Public Utility Holding
Company Act of 1935 that would require registration thereunder.
(l) The Company and each "significant subsidiary" as defined under Rule
405 under the Act of the Company have good and valid title to all or
substantially all of their permanent fixed properties (including the
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specified undivided interests in generating units and plants referred to in
the Prospectus), except as otherwise indicated in the Prospectus, subject
only to the respective liens of the indentures securing their mortgage
debt. Each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires
such qualification, except where the failure to be so qualified would not
have a Material Adverse Effect.
(m) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and the
Certificate and to consummate the transactions contemplated hereby and
thereby, including, without limitation, the corporate power and authority
to issue, sell and deliver the Securities as provided herein and therein.
(n) This Agreement has been duly authorized and validly executed by the
Company.
(o) As of the date hereof, the Company is authorized to issue and sell
up to $208,000,000 of its securities, which may include the Securities,
under the Registration Statement. The issuance and sale of the Securities
will not cause the Company to exceed the limitations as to the aggregate
amount of its securities that may be issued and sold under the Registration
Statement.
(p) There is no legal or administrative proceeding, statute, rule or
regulation, contract or document concerning the Company or any of their
respective subsidiaries of a character required to be described in the
Registration Statement or Prospectus or to be filed as an exhibit to the
Registration Statement that is not so described or filed as required.
(q) Except as otherwise set forth in the Prospectus and subject to such
qualifications as may be set forth therein, neither Holdings or the Company
nor any of their respective subsidiaries has violated any provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
the rules and regulations promulgated thereunder, which in each case would
reasonably be expected to result in a Material Adverse Effect. Except as
otherwise set forth in the Prospectus, Holdings, the Company and their
respective subsidiaries are in compliance with and have no costs or
liability under any and all applicable existing federal, state and foreign
laws (including statutes and the common law) and regulations relating to
protection of human health or the environment or
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imposing liability or standards of conduct concerning any Hazardous
Material ("Environmental Laws"), except for such costs or liabilities or
instances of noncompliance which, either singly or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect. The term
"Hazardous Material" means (i) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, (ii) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act, as amended, (iii) any petroleum or petroleum
product, (iv) any polychlorinated biphenyl and (v) any pollutant or
contaminant or hazardous, dangerous or toxic chemical, material, waste or
substance regulated under or within the meaning of any other Environmental
Law.
(r) There is (i) no significant unfair labor practice complaint pending
against Holdings or the Company or any of their respective subsidiaries or,
to the best knowledge of the Company, threatened against Holdings or the
Company or their respective subsidiaries before the National Labor
Relations Board or any state or local labor relations board, and no
significant grievance or significant arbitration proceeding arising out of
or under any collective bargaining agreement is so pending against Holdings
or the Company or their respective subsidiaries or, to the best knowledge
of the Company, threatened against any of them and (ii) no significant
strike, labor dispute, slowdown or stoppage pending against the Company or
its subsidiaries or, to the best knowledge of the Company, threatened
against them except for such actions specified in clause (i) or (ii) above,
which, either individually or in the aggregate would reasonably be expected
to have a Material Adverse Effect.
(s) There are no holders of securities of the Company who, by reason of
the execution of this Agreement, the filing of the Certificate, the
issuance and sale of the Securities and the consummation of the
transactions contemplated thereby, have the right to request or demand that
the Company register under the Act, in the Registration Statement,
securities held by them who have not waived such right.
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by the Company,
as to matters covered thereby, to each Underwriter.
2. PURCHASE AND SALE. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company agrees to
sell to each Underwriter, and each Underwriter agrees to purchase from
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the Company, at a purchase price of $__ per share, plus accumulated dividends,
if any, with respect to the Securities from November 30, 1999, to the Closing
Date, the amount of Securities set forth opposite such Underwriter's name in
Schedule I hereto. The Underwriters propose to offer the Securities for sale
upon the terms and conditions set forth in the Prospectus.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Securities shall
be made at 10:00 a.m., New York City time, on November 30, 1999 (or such other
place, date and time not later than three Business Days thereafter as the
Representatives and the Company shall designate), which date and time may be
postponed by agreement between the Representatives and the Company (such date
and time being herein called the "Closing Date"). Delivery of the Securities
shall be made to the Representatives for the respective accounts of the several
Underwriters through the facilities of the Depository Trust Company unless the
Representatives shall otherwise instruct, against payment by the several
Underwriters of the purchase price thereof to or upon the order of the Company
by wire transfer.
4. AGREEMENTS. The Company agrees with the several Underwriters that:
(a) With your consent, the Company will cause the Prospectus to be
filed or transmitted for filing pursuant to Rule 424 under the Act and will
notify you promptly of such filing or transmission. During the period for
which a prospectus relating to the Securities is required to be delivered
under the Act, the Company will promptly advise the Representatives and, if
requested confirm in writing, (i) when any amendment to the Registration
Statement shall have become effective, (ii) when any subsequent supplement
to the Base Prospectus has been filed (if required), (iii) of any request
by the Commission for any amendment of or supplement to the Registration
Statement or the Prospectus or for any additional information, (iv) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the institution or threatening of any
proceedings for that purpose and (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such qualification and, if issued, to obtain as
soon as possible the withdrawal thereof.
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(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it shall be necessary, at
any time to amend or supplement the Prospectus to comply with the Act or
the Exchange Act or the respective rules and regulations of the Commission
thereunder, the Company promptly will (1) notify the Representatives of
such event, (2) prepare and file with the Commission, subject to paragraph
(i) of this Section 4, an amendment or supplement that will correct such
statement or omission or an amendment or supplement that will effect such
compliance and (3) supply any supplemented Prospectus to the
Representatives in such quantities as they may reasonably request.
(c) The Company will make generally available to its security holders
and to the Representatives a consolidated earnings statement (which need
not be audited) of the Company, for a twelve-month period beginning after
the date hereof, as soon as is reasonably practicable after the end of such
period, which will satisfy the provisions of Section 11(a) of the Act and,
at the Company's option, Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for the
Underwriters, without charge upon request, conformed copies of the
Registration Statement, the Prospectus (including all documents
incorporated by reference therein) and, so long as delivery of a prospectus
by an Underwriter or a dealer may be required by the Act, all amendments of
and supplements to such documents, in each case as soon as available and in
such quantities as the Representatives may reasonably request.
(e) The Company will furnish such information, execute such instruments
and take such action as may be required to qualify the Securities for sale
under the laws of such jurisdictions as the Representatives may designate
and will maintain such qualifications in effect so long as required for the
distribution of the Securities and will pay any fee of the National
Association of Securities Dealers, Inc. in connection with its review of
the offering; provided, however, that the Company shall not be required to
qualify to do business in any jurisdiction where it is not now so qualified
or to take any action that would subject it to general or unlimited service
of process in any jurisdiction where it is not now so subject.
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(f) So long as the Securities are outstanding, the Company will furnish
(or cause to be furnished) to the Underwriters, upon request, copies of (i)
all reports to stockholders of the Company and (ii) all reports and
financial statements filed with the Commission or any national securities
exchange.
(g) The Company will not, without the prior written consent of Salomon
Smith Barney Inc., offer, sell, contract to sell, pledge, or otherwise
dispose of, (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company) directly or
indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act,
(i) any debt securities issued or guaranteed by the Company or (ii) shares
of any class of capital stock of the Company (other than the Securities)
which is preferred as to the payment of dividends, or as to the
distribution of assets upon any liquidation or dissolution of the Company,
over shares of any other class of capital stock of the Company or publicly
announce an intention to effect any such transaction, between the Execution
Time and the Closing Date.
(h) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(i) The Company will not file any amendment to the Registration
Statement or any amendment or supplement to the Prospectus (other than any
prospectus supplement relating to the offering of securities registered
under the Registration Statement other than the Securities and permitted by
subsection (g) of this Section 4, or any document required to be filed
under the Exchange Act which upon filing is deemed to be incorporated by
reference in the Registration Statement or the Base Prospectus) to which
you shall object in writing or which shall be disapproved in writing by
counsel for the Underwriters. The Company will furnish to you prior to the
filing thereof a copy of any such prospectus supplement and any document
which upon filing is deemed to be
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incorporated by reference in the Registration Statement or the Base
Prospectus.
5. EXPENSES. Whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, the Company will pay all costs and
expenses incident to the performance of the obligations of the Company
hereunder, including, without limiting the generality of the foregoing, all
costs, taxes and expenses incident to the issue and delivery of the Securities
to the Underwriters, all fees and expenses of the Company's counsel and
accountants, all costs and expenses incident to the preparing, printing and
filing of the Registration Statement (including all exhibits thereto), the
Prospectus and any amendments thereof or supplements thereto, all costs and
expenses (including fees of counsel not exceeding $5,000 and their
disbursements) incurred in connection with "blue sky" qualifications, the
legality of the Securities for investment, the rating of the Securities and all
costs and expenses of the printing and distribution of all documents in
connection with this underwriting. Except as provided in this Section 5 and
Section 8 hereof, the Underwriter will pay all of its own costs and expenses,
including the fees of its counsel and any advertising expenses in connection
with any offer it may make, and up to $375,000 of the expenses incurred by the
Company in connection with this underwriting.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the Underwriters to purchase the Securities shall be subject to the accuracy in
all material respects of the representations and warranties on the part of the
Company contained herein as of the date hereof and the Closing Date, to the
accuracy of the statements of officers of the Company made in any certificates
given pursuant to the provisions hereof, to the performance by the Company of
its obligations hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been instituted or, to the knowledge of the Company or the
Underwriters, threatened.
(b) The Company shall have requested and caused Sullivan & Cromwell,
special counsel for the Company, and Leslie E. LoBaugh, Jr., the Company's
Vice President Law & General Counsel, counsel for the Company, to have
furnished to the Representatives their opinions, dated the Closing Date and
addressed to the Representatives, substantially in the form of Exhibits 1A
and 1B hereto, respectively.
(c) The Representatives shall have received from Davis Polk & Wardwell,
counsel for the Underwriters, such opinion dated the Closing
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Date and addressed to the Representatives with respect to the issuance and
sale of the Securities, the Registration Statement, the Prospectus
(together with any supplement thereto) and other related matters as the
Underwriters may reasonably require, and the Company shall have furnished
to such counsel such documents as they reasonably request for the purpose
of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Chief Executive Officer of the Company and the Chief
Financial Officer of the Company, dated the Closing Date, to the effect
that the signers of such certificate have carefully examined the
Registration Statement, the Prospectus, any supplements to the Prospectus
and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date with the
same effect as if made on the Closing Date, and the Company has
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for that
purpose have been instituted, or, to their knowledge, threatened; and
(iii) since the date of the most recent financial statements
included or incorporated by reference in the Prospectus (exclusive of
any supplement thereto), there has been no material adverse effect on
the condition (financial or otherwise), prospects, earnings, business
or properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(e) The Company shall have requested and caused PricewaterhouseCoopers
LLP to have furnished to the Representatives, at the Execution Time and at
the Closing Date, letters, dated respectively as of the Execution Time and
as of the Closing Date, in form and substance satisfactory to the
Representatives and PricewaterhouseCoopers LLP, confirming that they are
independent accountants with respect to the Company within the meaning of
the Act and the Exchange Act
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and the respective applicable rules and regulations adopted by the
Commission thereunder and that they have performed a review of the
unaudited interim financial information of the Company for the nine-month
period ended September 30, 1999 and as at September 30, 1999 in accordance
with Statement on Auditing Standards No. 71, and stating in effect that:
(i) the audited consolidated financial statements and financial
statement schedules included or incorporated by reference in the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the Act and the Exchange Act
and the related rules and regulations adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; their
limited review, in accordance with standards established under
Statement on Auditing Standards No. 71, of the unaudited interim
financial information for the nine-month period ended September 30,
1999, and as at September 30, 1999, incorporated by reference in the
Registration Statement and the Prospectus; carrying out certain
specified procedures (but not an examination in accordance with
generally accepted auditing standards) which would not necessarily
reveal matters of significance with respect to the comments set forth
in such letter; a reading of the minutes of the meetings of the
stockholders, directors and audit committees of the Company and its
subsidiaries; and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters of the Company
and its subsidiaries as to transactions and events subsequent to
December 31, 1998 nothing came to their attention which caused them to
believe that:
(1) any unaudited financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus do not comply as to form in all material respects with
applicable accounting requirements of the Act and with the related
rules and regulations adopted by the Commission with respect to
financial statements included or incorporated by reference in
quarterly reports on Form 10-Q under the Exchange Act; and said
unaudited financial statements are not in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements
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<PAGE>
included or incorporated by reference in the Registration
Statement and the Prospectus;
(2) with respect to the period subsequent to September 30,
1999, there were any changes, at a specified date not more than
five days prior to the date of the letter, in the long-term debt
of the Company and its subsidiaries or capital stock of the
Company or decreases in the stockholders' equity of the Company as
compared with the amounts shown on the September 30, 1999,
consolidated balance sheet included or incorporated by reference
in the Registration Statement and the Prospectus, or for the
period from October 1, 1999, to such specified date there were any
decreases, as compared with the corresponding period in the
preceding year; in net revenues or income before income taxes or
in total or per share amounts of net income of the Company, except
in all instances for changes or decreases set forth in such
letter, in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof unless
said explanation is not deemed necessary by the Representatives;
or
(3) the information included or incorporated by reference in
the Registration Statement and Prospectus in response to
Regulation S-K, Item 301 (Selected Financial Data), Item 302
(Supplementary Financial Information), Item 402 (Executive
Compensation) and Item 503(d) (Ratio of Earnings to Fixed Charges)
is not in conformity with the applicable disclosure requirements
of Regulation S-K;
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statement and the Prospectus and in Exhibit
12 to the Registration Statement, the information included or
incorporated by reference in Items 1, 2, 6, 7 and 11 of the Company's
Annual Report on Form 10-K, incorporated by reference in the
Registration Statement and the Prospectus, and the information included
in the "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included or incorporated by reference in the
14
<PAGE>
Company's Quarterly Reports on Form 10-Q, incorporated by reference in
the Registration Statement and the Prospectus, agrees with the
accounting records of the Company and its subsidiaries, excluding any
questions of legal interpretation.
References to the Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been any change, or any development
involving a prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Prospectus (exclusive of any supplement thereto) the effect of which
is, in the sole judgment of the Representatives, so material and adverse as
to make it impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of any
supplement thereto).
(g) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
(h) Prior to the Closing Date, the Company shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives may reasonably request.
(i) The PSC shall have issued a written order or orders (the "PSC
Orders") authorizing the issuance by the Company of the Securities, the PSC
Orders shall remain in full force and effect on the Closing Date.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance
15
<PAGE>
to the Representatives and counsel for the Underwriters, this Agreement and all
obligations of the Underwriters hereunder may be canceled at, or at any time
prior to, the Closing Date by the Representatives. Notice of such cancellation
shall be given to the Company in writing or by telephone or facsimile confirmed
in writing.
The documents required to be delivered by this Section 6 shall be delivered
at the office of Davis Polk & Wardwell, counsel for the Underwriters, at 450
Lexington Avenue, New York, NY 10017, on the Closing Date.
7. CONDITIONS OF COMPANY'S OBLIGATIONS. The obligations of the Company to
sell and deliver the Securities are subject to the following conditions:
(a) Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of the Company or the Representatives, threatened.
(b) The PSC shall have granted authorization, and on the Closing Date
such authorization shall be in full force and effect, permitting the
issuance and sale of the Securities upon the terms and conditions hereunder
set forth or contemplated and containing no provision unacceptable to the
Company.
If any of the conditions specified in this Section 7 shall not have been
fulfilled, this Agreement and all obligations of the Company hereunder may be
canceled on or at any time prior to the Closing Date by the Company. Notice of
such cancellation shall be given to the Underwriter in writing or by telephone
or telex or facsimile transmission confirmed in writing.
8. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the Securities
provided for herein is not consummated because any condition to the
Underwriter's obligations set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 11 hereof, or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof, other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally through Salomon Smith Barney Inc. on demand for all out-of-pocket
expenses (including fees and disbursements of counsel) that shall have been
reasonably incurred by them in connection with the proposed purchase and sale of
the Securities.
9. INDEMNIFICATION.
16
<PAGE>
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person who controls any Underwriter within the meaning of either
the Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state statutory
law or regulation, at common law or otherwise insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or arising out of any untrue statement
or alleged untrue statement of a material fact contained in the Prospectus
(or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and agrees to reimburse each such indemnified party for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided , however , that the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and
in conformity with written information furnished to the Company by or on
behalf of any Underwriter through the Representatives specifically for
inclusion therein; and provided further that such indemnity with respect to
any untrue statement or alleged untrue statement of a material fact in the
Preliminary Prospectus, or the omission or alleged omission therefrom of a
material fact necessary to make the statements included therein, in light
of the circumstances under which they were made, not misleading, shall not
inure to any Underwriter's benefit (or any person controlling any
Underwriter) from whom the person asserting any such loss, claim, damage or
liability purchased the Securities which are the subject thereof, if such
person did not receive a copy of the Prospectus as amended or supplemented
(but without the documents incorporated by reference therein) at or prior
to the confirmation of the sale of such Securities to such person in any
case where such delivery is required by the Act and the untrue statement or
omission of a material fact contained in such Prospectus was corrected in
the Prospectus as amended or supplemented. This indemnity agreement will be
in addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Company, each of its directors, each of
17
<PAGE>
its officers who has signed the Registration Statement and each person, if
any, who controls the Company within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the
Company to each Underwriter but only with reference to written information
furnished to the Company by or on behalf of such Underwriter through the
Representatives specifically for use in the preparation of the documents
referred to in the foregoing indemnity, and agrees to reimburse each such
indemnified party for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action. This indemnity agreement will be in addition
to any liability which any Underwriter may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the
cover page regarding delivery of the Securities and, under the heading
"Underwriting" or "Plan of Distribution", (i) the list of Underwriters and
their respective participation in the sale of the Securities, (ii) the
sentences related to concessions and reallowances and (iii) the paragraph
related to stabilization, syndicate covering transactions and penalty bids
in any Preliminary Prospectus and the Prospectus constitute the only
information furnished in writing by or on behalf of the several
Underwriters for inclusion in any Preliminary Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 9
of notice of the commencement of any action, such indemnified party will,
if a claim in respect hereof is to be made against the indemnifying party
under this Section 9, notify the indemnifying party in writing of the
commencement thereof; but the omission to so notify the indemnifying party
will not relieve it from any liability that it may have to any indemnified
party otherwise than under this Section 9. In case any such action is
brought against any indemnified party, and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled
to participate therein, and, to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from
18
<PAGE>
the indemnifying party to such indemnified party of its election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified
party under this Section 9 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof
unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the
proviso to the next preceding sentence (it being understood, however, that
the indemnifying party shall not be liable for the expenses of more than
one separate counsel, approved by the Underwriter in the case of paragraph
(a), representing the indemnified parties under paragraphs (a) or (b), as
the case may be, who are parties to such action), (ii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized
the employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (i) or (iii). In any case to which an exception set forth in (i),
(ii) or (iii) above applies, the fees and expenses of counsel shall be at
the expense of the indemnifying party.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) is
due in accordance with its terms but is for any reason unavailable from the
Company or insufficient to hold the Underwriter harmless in respect of any
losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, the Company and the Underwriter shall contribute to
the aggregate losses, claims, damages and liabilities (or actions in
respect thereof) to which the Company and the Underwriter may be subject,
as a result of such losses, claims, damages or liabilities (or actions in
respect thereof), in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Underwriter on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other equitable considerations, including relative benefit. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriter on
the
19
<PAGE>
other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The relative benefits received by the Company on the one hand and
the Underwriter on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering of the Securities (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriter with respect to the
offering of the Securities, in each case as set forth in the table on the
cover page of the Prospectus. Notwithstanding the foregoing, no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Company and the
Underwriter agree that it would not be just and equitable if contribution
pursuant to this paragraph (d) were determined by pro rata allocation or by
any other method of allocation which does not take account of the equitable
considerations referred to above in this paragraph (d). The amount paid or
payable by a party entitled to contribution as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this paragraph (d) shall be deemed to include any legal or other
expenses reasonably incurred by such party in connection with investigating
or defending any such action or claim. For purposes of this paragraph (d),
each person, if any, who controls any Underwriter within the meaning of
either the Act or the Exchange Act shall have the same rights to
contribution as such Underwriter, and each person, if any, who controls the
Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and
each director of the Company shall have the same rights to contribution as
the Company, subject to the fourth sentence of this paragraph (d).
10. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall fail
to purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided , however , that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company. In
21
<PAGE>
the event of a default by any Underwriter as set forth in this Section 9, the
Closing Date shall be postponed for such period, not exceeding five Business
Days, as the Representatives shall determine in order that the required changes
in the Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Company and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
11. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, (a) if at any time prior to such
time trading in the Common Stock of Niagara Mohawk Holdings Inc. ("HOLDINGS")
shall have been suspended by the Commission or the New York Stock Exchange or
trading in securities generally on the New York Stock Exchange or limited or
minimum prices shall have been established on such exchange, or (b) if a banking
moratorium shall have been declared either by Federal or New York State
authorities, or (c) if trading in any securities of the Company or Holdings
shall have been suspended or halted, or (d) if there shall have occurred any
outbreak or material escalation of hostilities or other calamity or crisis the
effect of which on the financial markets in the United States is such as to make
it, in the sole judgment of the Representatives, impracticable or inadvisable to
market the Securities or to enforce contracts for the sale of the Securities.
12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
its officers, directors, employees, agents or any controlling person within the
meaning of the Act, and will survive delivery of and payment for the Securities.
The provisions of Sections 5, 8 and 9 hereof shall survive the termination or
cancellation of this Agreement.
13. NOTICES. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Representatives, will be mailed, delivered
or telefaxed to the Salomon Smith Barney Inc. General Counsel (fax no.: (212)
816-7912) and confirmed to the General Counsel, Salomon Smith Barney Inc., at
388 Greenwich Street, New York, New York, 10013, Attention: General Counsel; or,
if sent to the Company, will be mailed, delivered or telefaxed to Jim Donnelly
(315) 428-5194 and confirmed to it at 300 Erie Boulevard, West, B2, Syracuse, NY
13202, attention of the Legal Department.
22
<PAGE>
14. SUCCESSORS. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 9 hereof, and no other
person will have any right or obligation hereunder.
15. APPLICABLE LAW. The Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
16. COUNTERPARTS. This Agreement may be executed in counterparts, all of
which, taken together, shall constitute a single agreement among the parties to
such counterparts.
17. HEADING. The section headings used herein are for convenience only and
shall not affect the construction hereof.
18. DEFINITIONS. The terms which follow, when used in this Agreement, shall
have the meanings indicated.
"ACT" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"COMMISSION" shall mean the Securities and Exchange Commission.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"EXECUTION TIME" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
22
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed duplicate hereof, whereupon
this letter and the Underwriters' acceptance shall represent a binding agreement
between the Company and the Underwriters in accordance with its terms.
Very truly yours,
NIAGARA MOHAWK POWER CORPORATION
By:/s/ Arthur W. Roos
------------------------------------
Name: Arthur W. Roos
Title: Vice President-Treasurer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Smith Barney Inc.
Donaldson, Lufkin & Jenrette
Securities Corporation
Paine Webber Incorporated
Banc One Capital Markets, Inc.
Robert W. Baird & Co., Incorporated
By: Salomon Smith Barney Inc.
By:/s/ Howard Miller
---------------------------------
Name: Howard Miller
Title: Managing Director
For themselves and the other several
Underwriters named in Schedule I to
the foregoing Agreement.
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<PAGE>
SCHEDULE I
NUMBER OF SHARES
TO BE
UNDERWRITERS PURCHASED
------------ ---------
Salomon Smith Barney Inc.................................. 1,875,000
Donaldson, Lufkin & Jenrette Securities Corporation....... 375,000
PaineWebber Incorporated.................................. 375,000
Banc One Capital Markets, Inc............................. 187,500
Robert W. Baird & Co., Incorporated....................... 187,500
---------
Total................................... 3,000,000
<PAGE>
EXHIBIT 1A
November 30, 1999
Salomon Smith Barney Inc.
Donaldson, Lufkin & Jenrette
Securities Corporation
PaineWebber Incorporated
Banc One Capital Markets, Inc.
Robert W. Baird & Co., Incorporated
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
This is with reference to the registration under the Securities Act of
1933 (the "Act") and offering of 3,000,000 shares of FixedAdjustable Rate
Cumulative Preferred Stock, Series D, par value $25 per share (the
"Securities"), of Niagara Mohawk Power Corporation (the "Company"). The
Registration Statement was filed on Form S-3 in accordance with procedures of
the Securities and Exchange Commission (the "Commission") permitting a delayed
or continuous offering of securities pursuant thereto and, if appropriate, a
post-effective amendment or prospectus supplement that provides information
relating to the terms of the securities and the manner of their distribution.
The Securities have been offered by the Prospectus dated June 1, 1998 (the "Base
Prospectus"), as supplemented by the Prospectus Supplement dated November 22,
1999 (the "Prospectus Supplement"), which updates or supplements certain
information contained in the Base Prospectus. The Base Prospectus as so
supplemented does not necessarily contain a current description of the Company's
business and affairs since, pursuant to Form S-3, it incorporates by reference
certain documents filed with the Commission which contain information as of
various dates.
As special counsel for the Company, we reviewed the Registration
Statement, the Base Prospectus and the Prospectus Supplement, participated in
discussions with your representatives and those of the Company and its
accountants, and advised the Company as to the requirements of the Act and the
applicable rules and regulations thereunder. Between the date of the Prospectus
1-A
<PAGE>
Supplement and the time of delivery of this letter, we participated in further
discussions with representatives of the Company and its accountants regarding
the contents of certain portions of the Base Prospectus, as supplemented by the
Prospectus Supplement, and certain related matters, and reviewed certificates of
certain officers of the Company, and a letter addressed to you from the
Company's independent accountants. On the basis of the information that we
gained in the course of the performance of the services referred to above,
considered in the light of our understanding of the applicable law (including
the requirements of Form S-3 and the character of the prospectus contemplated
thereby) and the experience we have gained through our practice under the Act,
we confirm to you that, in our opinion, each part of the Registration Statement,
when such part became effective, and the Base Prospectus, as supplemented by the
Prospectus Supplement, as of the date of the Prospectus Supplement, appeared on
their face to be appropriately responsive, in all material respects relevant to
the offering of the Securities, to the requirements of the Act and the
applicable rules and regulations of the Commission thereunder. Further, nothing
that came to our attention in the course of such review has caused us to believe
that, insofar as relevant to the offering of the Securities, any part of the
Registration Statement, when such part became effective, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that, insofar as relevant to the offering of the Securities, the Base
Prospectus, as supplemented by the Prospectus Supplement, as of the date of the
Prospectus Supplement contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. Also, nothing that has come to our attention in the course of the
procedures described in the second sentence of this paragraph has caused us to
believe that, insofar as relevant to the offering of the Securities, the Base
Prospectus, as supplemented by the Prospectus Supplement, as of the date and
time of the delivery of this letter, contained any untrue statement of a
material fact or omitted to state any material fact any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
The limitations inherent in the independent verification of factual
matters and the character of determinations involved in the registration process
are such, however, that we do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement, the Base Prospectus or the Prospectus Supplement except for those
made under the captions "Description of Additional Preferred Stock" in the Base
Prospectus and "Description of Preferred Stock" and "United States Taxation" in
the Prospectus Supplement insofar as they relate to provisions of documents
therein described. Also, we do not express any opinion or belief as to the
financial statements or
2-A
<PAGE>
other financial data contained in the Registration Statement, the Base
Prospectus or the Prospectus Supplement.
This letter is furnished by us as special counsel for the Company to
you as Representatives of the several Underwriters of the Securities and is
solely for the benefit of the several Underwriters.
Very truly yours,
3-A
<PAGE>
EXHIBIT 1A
November 30, 1999
Salomon Smith Barney Inc.
Donaldson, Lufkin & Jenrette
Securities Corporation
PaineWebber Incorporated
Banc One Capital Markets, Inc.
Robert W. Baird & Co., Incorporated
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
In connection with the purchase today by you pursuant to the
Underwriting Agreement, dated November 22, 1999 (the "Underwriting Agreement"),
between Niagara Mohawk Power Corporation, a New York corporation (the
"Company"), and you (the "Underwriters"), of 3,000,000 shares (the "Securities")
of the Company's FixedAdjustable Rate Preferred Stock, Series D, par value $25
per share (the "Securities") we, as special counsel for the Company, have
examined such corporate records, certificates and other documents, and such
questions of law, as we have considered necessary or appropriate for the
purposes of this opinion. Upon the basis of such examination, it is our opinion
that:
(1) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of New York.
(2) The Securities have been duly authorized and validly issued and are
fully paid and nonassessable, and the issuance of the Securities will
not be subject to any vote or consent of the holders of any of the
Company's securities or any preemptive or similar rights under the
Company's certificate of incorporation or the New York Business
Corporation Law. A certificate of amendment to the Company's
certificate of incorporation providing for the issuance of the
Securities has been duly filed pursuant to the New York Business
Corporation Law.
1-A-1
<PAGE>
(3) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(4) All regulatory consents, authorizations, approvals and filings
required to be obtained or made by the Company under the Federal laws
of the United States and the laws of the State of New York for the
issuance, sale and delivery of the Securities by the Company to you
have been obtained or made; provided that we are expressing no opinion
as to any such regulatory consents, authorizations, approvals or
filings arising out of, relating to, or required to be taken pursuant
to, those regulatory regimes that govern the Company in its capacity as
an electric and gas utility and as an operator and owner of nuclear
powered generating facilities, including the New York Public Service
Law, the Federal Power Act, the Public Utility Holding Company Act of
1935, as amended (the "Holding Company Act"), the Atomic Energy Act of
1954 and the rules and regulations of the New York Public Service
Commission, and solely with respect to jurisdiction granted by the
Holding Company Act, the Securities and Exchange Commission, and the
Nuclear Regulatory Commission ("Utility Related Approvals").
(5) The issuance and sale of the Securities pursuant to the
Underwriting Agreement do not, and the performance by the Company of
its obligations under the Underwriting Agreement will not, (i) violate
the Company's Certificate of Incorporation or By-Laws or (ii) result in
a default or a breach of the Company's (a) Mortgage Trust Indenture
dated as of October 1, 1937, (b) Revolving Credit Agreement and Term
Loan Agreement each dated as of March 20, 1996, (c) Indenture dated as
of June 30, 1998 between the Company and IBJ Schroder Bank & Trust
Company, (d) agreement dated April 1, 1999 with NRG Energy, Inc.
regarding the sale of the Company's 88% interest in the Oswego Steam
Station, (e) agreement dated December 2, 1998 as amended on February 4,
1999 with Erie Boulevard Hydropower, L.P. regarding the sale of 72
hydroelectric generating plants, (f) agreement dated December 23, 1998
and amended on May 31, 1999 with NRG Energy, Inc. regarding the sale of
the Company's Huntley and Dunkirk generating facilities, (g) agreement
dated October 6, 1999 with PSEG Power, L.L.C. regarding the sale of the
Company's Albany Steam Station, and (h) agreements both dated June 23,
1999 with AmerGen Energy Company, Inc. regarding the sale of the
Company's interest in the Nine Mile 1 and 2 facilities,
1-A-2
<PAGE>
in each case as in effect at the date hereof (which have been
identified to us by the Company as the relevant indentures, loan
agreements, mortgages, leases or other evidence of indebtedness or
other agreements or instruments), provided that for purposes of this
paragraph we express no opinion with respect to Federal or state
securities laws, other antifraud laws and fraudulent transfer laws or
Utility Related Approvals; provided further that insofar as performance
by the Company of its obligations under the Underwriting Agreement is
concerned, we express no opinion as to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights.
As contemplated by the qualification set forth in paragraphs (4) and
(5) above, in rendering the foregoing opinion, we are expressing no opinion as
to Federal or state laws relating to fraudulent transfers.
The foregoing opinion is limited to the Federal laws of the United
States and the laws of the State of New York, and we are expressing no opinion
as to the effect of the laws of any other jurisdiction.
With your approval, we have relied as to certain matters on information
obtained from public officials, officers of the Company and other sources
believed by us to be responsible, and we have assumed that the certificates for
the Securities conform to the specimen thereof examined by us and have been duly
countersigned by a transfer agent of the Securities and that the signatures on
all documents examined by us are genuine, assumptions which we have not
independently verified.
Very truly yours,
1-A-3
<PAGE>
EXHIBIT 1B
[Niagara Mohawk Letterhead]
November 30, 1999
Salomon Smith Barney Inc.
Donaldson, Lufkin & Jenrette
Securities Corporation
PaineWebber Incorporated
Banc One Capital Markets, Inc.
Robert W. Baird & Co., Incorporated
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
This opinion is being rendered to you pursuant to section 6(b) of the
Underwriting Agreement (the "Underwriting Agreement") dated November 22, 1999,
among the Company and you. Except as otherwise specified herein, terms defined
in the Underwriting Agreement and used herein are used as defined therein.
In that connection, I have examined executed counterparts of each of
the Underwriting Agreement and the Certificate as well as the Registration
Statement and the Prospectus contained therein.
I have also examined such corporate records, certificates and other
documents, and such questions of law, as I have considered necessary or
appropriate for the purposes of this opinion. Upon the basis of such examination
it is my opinion that:
(1) The Company has all requisite corporate power and authority to own
or lease and operate its properties and to carry on its business as now
conducted.
(2) To my knowledge, no consent, waiver, approval, authorization or
order of, or filing, registration, qualification, license or permit of or
with, any federal or New York State court or governmental
1-B-1
<PAGE>
agency, body or administrative agency is required for the execution,
delivery and performance by the Company of the Underwriting Agreement, the
issuance and sale of the Securities, and the consummation of the
transactions contemplated thereby, except (i) such as have been obtained
and made under the Securities Act and from the PSC, (ii) such as are
required under state securities or Blue Sky laws and regulations, and (iii)
such as to which the failure to be obtained or made would not reasonably be
expected, either individually or in the aggregate, to have a material
adverse effect on the business, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole.
(3) To my knowledge, there is no action, suit, investigation,
litigation or proceeding affecting the Company or any of its subsidiaries
pending or threatened before any court, governmental authority,
governmental agency, regulatory body or arbitrator that would be reasonably
likely to have a Material Adverse Effect.
(4) To my knowledge, there are no holders of securities of the Company
who, by reason of the execution of the Underwriting Agreement, the issuance
and sale of the Securities and consummation of the transactions
contemplated thereby, have the right to request or demand that the Company
register under the Act, in the Registration Statement securities held by
them who have not waived such right.
(5) The Company's preferred stock, par value $25 per share, conforms in
all material respects relating to the descriptions thereof and the
statements relating thereto contained in the Registration Statement and
Prospectus insofar as such descriptions and statements constitute summaries
of legal matters.
(6) The statements in the Prospectus under the caption "Risk Factors -
Regulatory Matters" and incorporated by reference in the Prospectus from
the Company's annual Report on Form 10-K under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Master Restructuring Agreement and the PowerChoice Agreement" insofar as
such statements constitute summaries of legal matters, documents, or
proceedings referred to therein, conform in all material respects to such
legal matters, documents, or proceedings, as the case may be.
1-B-2
<PAGE>
The foregoing opinion is limited to the Federal laws of the United
States and the laws of the State of New York and I am expressing no opinion as
to the effect of the laws of any other jurisdiction.
This letter is delivered solely for your benefit.
Very truly yours,
1-B-3
<PAGE>
EXHIBIT 3.1
================================================================================
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
NIAGARA MOHAWK POWER CORPORATION
UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW
------------
STATE OF NEW YORK
DEPARTMENT OF STATE
FILED: NOVEMBER 29, 1999
TAX: # NONE
DATED: NOVEMBER 29, 1999
================================================================================
SULLIVAN & CROMWELL
1701 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, D.C. 20006-5805
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
NIAGARA MOHAWK POWER CORPORATION
UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW
-----------
Pursuant to the provisions of Section 805 of the BUSINESS CORPORATION
LAW, the undersigned, being the Vice President-Treasurer and the Secretary of
NIAGARA MOHAWK POWER CORPORATION, hereby certify:
I.
The name of the Corporation is Niagara Mohawk Power Corporation. It was
originally incorporated under the name of Niagara Hudson Public Service
Corporation.
II.
The Certificate of Consolidation forming the Corporation was filed in
the Department of State on July 31, 1937.
A Certificate of Change of Name of Niagara Hudson Public Service
Corporation to Central New York Power Corporation was filed in the Department of
State on September 15, 1937.
A "Certificate of Consolidation of New York Power and Light Corporation
and Buffalo Niagara Electric Corporation and Central New York Power Corporation
into Central New York Power Corporation which is to survive the consolidation
and be named Niagara Mohawk Power Corporation" was filed in the Department of
State on January 5, 1950. Said Certificate of Consolidation is hereinafter
sometimes referred to as the "1950 Certificate of Consolidation".
Pursuant to Sections 26-a and 36 of the Stock Corporation Law, a
Certificate of Amendment was filed in the Department of State on January 5, 1950
to effect certain changes authorized in subdivision 2 of Section 35 of the Stock
Corporation
<PAGE>
Law. Said Certificate of Amendment is hereinafter sometimes referred to as the
"1950 Certificate of Amendment".
In accordance with the provisions of Subdivision (I) of Paragraph (5)
of Part D of Article IV, under the heading "General Provisions Applicable to All
Series of Preferred Stock", of the 1950 Certificate of Consolidation, the
holders of record of at least a majority of votes which may be cast by the
holders of shares of Preferred Stock of all series then outstanding consented in
writing, as requested by a Consent Statement first mailed by the Corporation on
or about October 28, 1997, to permit the Corporation to incur up to $5 billion
in unsecured indebtedness in excess of the unsecured indebtedness otherwise
permitted by the provisions of Subdivision (E) of Paragraph (5) of Part D of
Article IV of the 1950 Certificate of Amendment, as modified by the resolution
of the holders of Preferred Stock adopted on December 5, 1956.
III
The Certificate of Incorporation, as heretofore amended, is hereby
further amended by the addition of the following provisions stating the number,
designation, relative rights, preferences, and limitations of a twenty-seventh
additional series of Preferred Stock, to consist of 3,000,000 shares of
Preferred Stock of the Corporation of the par value of $25 per share of the
authorized 19,600,000 shares of Preferred Stock of the Corporation of the par
value of $25 per share, as fixed by the Board of Directors before the issuance
of such series, such provisions so added to be designated as paragraph (4AA) (of
Part D of Article IV of the Certificate of Consolidation as amended by Article V
of the 1950 Certificate of Amendment and subsequent amendments).
Particular Provisions Applicable to FixedAdjustable Rate Cumulative Preferred
Stock, Series D
(4AA) The number, designation, relative rights, preferences and
limitations of the additional series of Preferred Stock of the Corporation as
fixed by the Board of Directors (in addition to those set forth under the
heading "Provisions Applicable to All Series of Preferred Stock" in Paragraph
(5) of Part D of Article IV of the 1950 Certificate of Consolidation as amended
by Article V of the 1950 Certificate of Amendment and subsequent amendments) are
as follows:
(A) The number of shares to constitute the twenty-seventh series shall
be 3,000,000 shares, and the designation of such series shall be
"FixedAdjustable Rate Cumulative Preferred Stock, Series D" (hereinafter called,
for purposes of this paragraph 4AA only, the "Series D Preferred Stock").
Defined terms used in this paragraph 4AA shall have the meanings ascribed to
them in this paragraph only for purposes of this paragraph 4AA.
<PAGE>
(B) a. Cumulative cash dividends will be payable on each share of
Series D Preferred Stock when, as, and if declared by the Board of Directors or
a duly authorized committee thereof, out of assets legally available therefor.
The initial dividend for the dividend period commencing on November 30,
1999 to December 31, 1999 will be $0.2877 per share and will be payable, as if
and when declared by the Board of Directors of the Corporation on December 31,
1999. Thereafter, dividends on the Series D Preferred Stock will be payable
quarterly, as, if and when declared by the Board of Directors of the Corporation
on March 31, June 30, September 30 and December 31 of each year (each a
"Dividend Payment Date") at the annual rate of $3.4525 per share through
December 31, 2004. After December 31, 2004, dividends on the Series D Preferred
Stock will be payable on each Dividend Payment Date, as, if and when declared by
the Board of Directors of the Corporation at the Applicable Rate from time to
time in effect.
If a Dividend Payment Date is not a business day, dividends (if
declared) on the Series D Preferred Stock will be paid on the next business day,
without interest. Dividends will be payable to holders of record as they appear
on the stock books of the Corporation on the record date fixed by the Board of
Directors of the Corporation, which will not be more than 60 days nor less than
10 days preceding the payment date thereof.
Accrued but unpaid dividends on the Series D Preferred Stock shall
cumulate as of the Dividend Payment Date on which they first become payable, but
no interest shall accrue on accumulated but unpaid dividends on the Series D
Preferred Stock.
b. The "Applicable Rate" per annum for each dividend period beginning
after December 31, 2004 will be equal to 1.625% plus the Effective Rate (as
defined below) for such dividend period, but not less than 7.655% nor greater
than 13.655% except as provided below in this paragraph. The "Effective Rate"
for each dividend period beginning after December 31, 2004 will be equal to the
highest of the Treasury Bill Rate, the Ten Year Constant Maturity Rate and the
Thirty Year Constant Maturity Rate (each as defined below) for such dividend
period. In the event that the Corporation determines in good faith that for any
reason: (A) any one of the Treasury Bill Rate, the Ten Year Constant Maturity
Rate or the Thirty Year Constant Maturity Rate cannot be determined for any
dividend period, then the Effective Rate for such dividend period will be equal
to the higher of whichever two of such rates can be so determined; (B) only one
of the Treasury Bill Rate, the Ten Year Constant Maturity Rate or the Thirty
Year Constant Maturity Rate can be determined for any dividend period, then the
Effective Rate for such dividend period will be equal to whichever such rate can
be so determined; or (C) none of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate or the Thirty Year Constant Maturity Rate can be determined for
any dividend period,
<PAGE>
then the Effective Rate for the preceding dividend period will be continued for
the succeeding dividend period.
The "Treasury Bill Rate" will be the arithmetic average of the two most
recent weekly per annum market discount rates (or the one weekly per annum
market discount rate, if only one such rate is published during the relevant
Calendar Period (as defined below)) for three-month U.S. Treasury bills, as
published weekly by the Federal Reserve Board (as defined below) during the
Calendar Period immediately preceding the last ten calendar days preceding the
dividend period for which the dividend rate on the Series D Preferred Stock is
being determined, except as described below in this paragraph. In the event that
the Federal Reserve Board does not publish such a weekly per annum market
discount rate during any such Calendar Period, then the Treasury Bill Rate for
such dividend period will be the arithmetic average of the two most recent
weekly per annum market discount rates (or the one weekly per annum market
discount rate, if only one such rate is published during the relevant Calendar
Period) for three-month U.S. Treasury bills, as published weekly during such
Calendar Period by any Federal Reserve Bank or by any U.S. Government department
or agency selected by the Corporation. In the event that a per annum market
discount rate for three-month U.S. Treasury bills is not published by the
Federal Reserve Board or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the Treasury Bill Rate
for such dividend period will be the arithmetic average of the two most recent
weekly per annum market discount rates (or the one weekly per annum market
discount rate, if only one such rate is published during the relevant Calendar
Period) for all of the U.S. Treasury bills then having remaining maturities of
not less than 80 nor more than 100 days, as published during such Calendar
Period by the Federal Reserve Board or, if the Federal Reserve Board does not
publish such rates, by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Corporation. In the event that the
Corporation determines in good faith that for any reason no such U.S. Treasury
Bill Rates are published as provided above during such Calendar Period, then the
Treasury Bill Rate for such dividend period will be the arithmetic average of
the per annum market discount rates based upon the closing bids during such
Calendar Period for each of the issues of marketable non-interest-bearing U.S.
Treasury securities with a remaining maturity of not less than 80 nor more than
100 days from the date of each such quotation, as chosen and quoted daily for
each business day in New York City (or less frequently if daily quotations are
not generally available) to the Corporation by at least three recognized dealers
in U.S. Government securities selected by the Corporation. In the event that the
Corporation determines in good faith that for any reason the Corporation cannot
determine the Treasury Bill Rate for any dividend period as provided above in
this paragraph, the Treasury Bill Rate for such dividend period will be the
arithmetic average of the per annum market discount rates based upon the closing
bids during such Calendar Period for each of the issues of marketable
interest-bearing U.S. Treasury securities with a remaining maturity of not less
than 80 nor more than 100 days, as chosen and quoted daily for each business day
in New
<PAGE>
York City (or less frequently if daily quotations are not generally available)
to the Corporation by at least three recognized dealers in U.S. Government
securities selected by the Corporation.
The "Ten Year Constant Maturity Rate" will be the arithmetic average of
the two most recent weekly per annum Ten Year Average Yields (as defined below)
(or the one weekly per annum Ten Year Average Yield, if only one such yield is
published during the relevant Calendar Period), as published weekly by the
Federal Reserve Board during the Calendar Period immediately preceding the last
ten calendar days preceding the dividend period for which the dividend rate on
the Series D Preferred Stock is being determined, except as described below in
this paragraph. In the event that the Federal Reserve Board does not publish
such a weekly per annum Ten Year Average Yield during such Calendar Period, then
the Ten Year Constant Maturity Rate for such dividend period will be the
arithmetic average of the two most recent weekly per annum Ten Year Average
Yields (or the one weekly per annum Ten Year Average Yield, if only one such
yield is published during the relevant Calendar Period), as published weekly
during such Calendar Period by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Corporation. In the event that a
per annum Ten Year Average Yield is not published by the Federal Reserve Board
or by any Federal Reserve Bank or by any U.S. Government department or agency
during such Calendar Period, then the Ten Year Constant Maturity Rate for such
dividend period will be the arithmetic average of the two most recent weekly per
annum average yields to maturity (or the one weekly per annum average yield to
maturity, if only one such yield is published during the relevant Calendar
Period) for all of the actively traded marketable U.S. Treasury fixed interest
rate securities (other than Special Securities (as defined below)) then having
remaining maturities of not less than eight nor more than twelve years, as
published during such Calendar Period by the Federal Reserve Board or, if the
Federal Reserve Board does not publish such yields, by any Federal Reserve Bank
or by any U.S. Government department or agency selected by the Corporation. In
the event that the Corporation determines in good faith that for any reason the
Corporation cannot determine the Ten Year Constant Maturity Rate for any
dividend period as provided above in this paragraph, then the Ten Year Constant
Maturity Rate for such dividend period will be the arithmetic average of the per
annum average yields to maturity based upon the closing bids during such
Calendar Period for each of the issues of actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities) with a
final maturity date not less than eight nor more than twelve years from the date
of each such quotation, as chosen and quoted daily for each business day in New
York City (or less frequently if daily quotations are not generally available)
to the Corporation by at least three recognized dealers in U.S. Government
securities selected by the Corporation.
The "Thirty Year Constant Maturity Rate" will be the arithmetic average
of the two most recent weekly per annum Thirty Year Average Yields (as defined
below) (or the one weekly per annum Thirty Year Average Yield, if only one such
yield is
<PAGE>
published during the relevant Calendar Period), as published weekly by the
Federal Reserve Board during the Calendar Period immediately preceding the
dividend period for which the dividend rate on the Series D Preferred Stock is
being determined except as described below in this paragraph. In the event that
the Federal Reserve Board does not publish such a weekly per annum Thirty Year
Average Yield during such Calendar Period, then the Thirty Year Constant
Maturity Rate for such dividend period will be the arithmetic average of the two
most recent weekly per annum Thirty Year Average Yields (or the one weekly per
annum Thirty Year Average Yield, if only one such yield is published during the
relevant Calendar Period), as published weekly during such Calendar period by
any Federal Reserve Bank or by any U.S. Government department or agency selected
by the Corporation. In the event that a per annum Thirty Year Average Yield is
not published by the Federal Reserve Board or by any Federal Reserve Bank or by
any U.S. Government department or agency during such Calendar Period, then the
Thirty Year Constant Maturity Rate for such dividend period will be the
arithmetic average of the two most recent weekly per annum average yields to
maturity (or the one weekly per annum average yield to maturity, if only one
such yield is published during the relevant Calendar Period) for all of the
actively traded marketable U.S. Treasury fixed interest rate securities (other
than Special Securities) then having remaining maturities of not less than
twenty-eight nor more than thirty years, as published during such Calendar
Period by the Federal Reserve Board or, if the Federal Reserve Board does not
publish such yields, by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Corporation. In the event that the
Corporation determines in good faith that for any reason the Corporation cannot
determine the Thirty Year Constant Maturity Rate for any applicable dividend
period as provided above in this paragraph, then the Thirty Year Constant
Maturity Rate for such dividend period will be the arithmetic average of the per
annum average yields to maturity based upon the closing bids during such
Calendar Period for each of the issues of actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities) with a
final maturity date not less than twenty-eight nor more than thirty years from
the date of each such quotation, as chosen and quoted daily for each business
day in New York City (or less frequently if daily quotations are not generally
available) to the Corporation by at least three recognized dealers in U.S.
Government securities selected by the Corporation.
The Treasury Bill Rate, the Ten Year Constant Maturity Rate and the
Thirty Year Constant Maturity Rate will each be rounded to the nearest five
hundredths of a percent.
The Applicable Rate with respect to each dividend period beginning
after December 31, 2004 will be calculated as promptly as practicable by the
Corporation according to the appropriate method described above. The Corporation
will cause notice of the Applicable Rate for the next dividend period to be
enclosed with the dividend payment to the holders of Series D Preferred Stock.
<PAGE>
As used above, the term "Calendar Period" means a period of fourteen
calendar days; the term "Federal Reserve Board" means the Board of Governors of
the Federal Reserve System; the term "Special Securities" means securities which
can, at the option of the holder, be surrendered at face value in payment of any
Federal estate tax or which provide tax benefits to the holder and are priced to
reflect such tax benefits or which were originally issued at a deep or
substantial discount; the term "Ten Year Average Yield" means the average yield
to maturity for actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of ten years); and the term "Thirty
Year Average Yield" means the average yield to maturity for actively traded
marketable U.S. Treasury fixed interest rate securities (adjusted to constant
maturities of thirty years).
c. If, prior to May 30, 2001, one or more amendments to the Internal
Revenue Code of 1986, as amended (the "Code"), are enacted which change the
percentage of the dividends received deduction as specified in Section 243(a)
(1) of the Code or any successor provision (the "Dividends Received
Percentage"), the amount of each dividend on each share of the Series D
Preferred Stock for dividend payments made on or after the date of enactment of
such change will be adjusted by multiplying the amount of the dividend payable
determined as described above (before adjustment) by a factor, which will be the
number determined in accordance with the following formula (the "DRD Formula"),
and rounding the result to the nearest cent:
1 - [.35 (1 - .70)]
---------------------------
1 - [.35 (1 - DRP)]
For the purposes of the DRD Formula, "DRP" means the new Dividends
Received Percentage applicable to the dividend in question; provided however,
that if the Dividends Received Percentage applicable to the dividend in question
shall be less than 50%, then the DRP shall equal .50. No amendment to the Code,
other than a change in the percentage of the dividends received deduction set
forth in Section 243(a) (1) of the Code or any successor provision, will give
rise to an adjustment. Notwithstanding the foregoing provisions, in the event
that, with respect to any such amendment, the Corporation shall receive either
an unqualified opinion of nationally recognized independent tax counsel selected
by the Corporation or a private letter ruling or similar form of authorization
from the Internal Revenue Service to the effect that such an amendment does not
apply to dividends payable on the Series D Preferred Stock, then any such
amendment shall not result in the adjustment provided for pursuant to the DRD
Formula. The opinion referenced in the previous sentence must be based upon a
specific exception in the legislation amending the DRP or upon a published
pronouncement of the Internal Revenue Service addressing such legislation.
Unless the context otherwise requires, references to dividends herein shall mean
dividends as adjusted by the DRD Formula. The Corporation's calculation of the
dividends payable as so adjusted and as certified accurate as to calculation and
reasonable as to method by the independent
<PAGE>
certified public accountants then regularly engaged by the Corporation, shall be
final and not subject to review.
If any amendment to the Code which reduces the Dividends Received
Percentage is enacted after a record date and before the next Dividend Payment
Date, the amount of dividend payable on such Dividend Payment Date will not be
increased, but instead, an amount equal to the excess of (x) the product of the
dividends paid by the Corporation on such Dividend Payment Date and the DRD
Formula (where the DRP used in the DRD Formula would be equal to the greater of
the Dividends Received Percentage applicable to the dividend in question and
.50) over (y) the dividends paid by the Corporation on such Dividend Payment
Date, will be payable (if declared) to holders of record on the next succeeding
Dividend Payment Date in addition to any other amounts payable on such date.
In addition, if any such amendment to the Code is enacted that reduces
the Dividends Received Percentage and such reduction retroactively applies to a
Dividend Payment Date as to which the Corporation previously paid dividends on
the Series D Preferred Stock (each an "Affected Dividend Payment Date"), the
Corporation will pay (if declared), additional dividends (the "Additional
Dividends") on the next succeeding Dividend Payment Date (or if such amendment
is enacted after the dividend payable on such Dividend Payment Date has been
declared, on the second succeeding Dividend Payment Date following the date of
enactment) to holders of record on such succeeding Dividend Payment Date in an
amount equal to the excess of (x) the product of the dividends paid by the
Corporation on each Affected Dividend Payment Date and the DRD Formula (where
the DRP used in the DRD Formula would be equal to the greater of the Dividends
Received Percentage and .50 applied to each Affected Dividend Payment Date) over
(y) the dividends paid by the Corporation on each Affected Dividend Payment
Date.
Notwithstanding the foregoing, Additional Dividends will not be paid as
a result of the enactment of any amendment to the Code 18 months or more after
the date of original issuance of the Series D Preferred Stock which
retroactively reduces the Dividends Received Percentage, or if such amendment
would not result in an adjustment due to the Corporation having received either
an opinion of counsel or tax ruling referred to in the third preceding
paragraph. The Corporation will make only one payment of Additional Dividends.
In the event that the amount of dividend payable per share of the
Series D Preferred Stock will be adjusted pursuant to the DRD Formula and/or
Additional Dividends are to be paid, the Corporation will cause notice of each
such adjustment and, if applicable, any Additional Dividends, to be sent to the
holders of the Series D Preferred Stock with the payment of dividends on the
next Dividend Payment Date after the date of such adjustment.
<PAGE>
(C) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of Series D
Preferred Stock will be entitled to receive out of the assets of the Corporation
available for distribution to stockholders, before any distribution of assets is
made on the Corporation's Common Stock or any other class or series of stock of
the Corporation ranking junior to the Series D Preferred Stock upon liquidation,
liquidating distributions in the amount of $50 per share, plus an amount equal
to the sum of all accrued and unpaid dividends including any increase in
dividends payable due to changes in the Dividends Received Percentage and
Additional Dividends (whether or not earned or declared) for the then current
dividend period and all dividend periods prior thereto.
(D) Except as provided under the heading "Provisions Applicable to All
Series of Preferred Stock" in Paragraph (5) of Part D of Article IV of the 1950
Certificate of Consolidation as amended by Article V of the 1950 Certificate of
Amendment and subsequent amendments, the Series D Preferred Stock shall have no
voting rights whatsoever.
(E) Prior to December 31, 2004, the Series D Preferred Stock is not
redeemable. On or after such date, each share of Series D Preferred Stock will
be redeemable, in whole or in part at the option of the Corporation at any time
and from time to time upon not less than thirty nor more than sixty days'
notice, at a redemption price of $50 per share, together in each case with
accrued and unpaid dividends (whether or not declared) to the date fixed for
redemption including any increase in dividends payable due to changes in the
Dividends Received Percentage and Additional Dividends. If fewer than all the
outstanding shares of Series D Preferred Stock are to be redeemed, the
Corporation will select those to be redeemed by lot or pro rata or by any other
method as may be determined by the Board of Directors to be equitable, and such
redemption shall otherwise be in the manner prescribed under the heading
"Provisions Applicable to All Series of Preferred Stock" in Paragraph (5) of
Part D of Article IV of the 1950 Certificate of Consolidation as amended by
Article V of the 1950 Certificate of Amendment and subsequent amendments.
(F) Shares of Series D Preferred Stock redeemed, purchased or otherwise
acquired by the Corporation shall be cancelled and restored to the status of
authorized but unissued shares of Preferred Stock of the par value $25 per share
without serial designation and may be reissued by the Corporation from time to
time as Preferred Stock of any other series of the par value of $25 per share as
may be fixed from time to time by the Board of Directors.
(G) The shares of the Series D Preferred Stock shall be subject to the
consent set forth in the last subparagraph of Paragraph II of this Certificate
to the same
<PAGE>
extent and with the same effect as all series of Preferred Stock outstanding on
October 28, 1997 are so subject.
IV
The amendments of the Certificate of Incorporation effected by this
Certificate were authorized by action of the Board of Directors of the
Corporation, pursuant to Section 502 of the Business Corporation Law.
IN WITNESS WHEREOF, we have made and subscribed this Certificate this
23rd day of November, 1999.
By:/s/ Arthur W. Roos
------------------------------------
Name: Arthur W. Roos
Title: Vice President-Treasurer
By:/s/ Kapua A. Rice
------------------------------------
Name: Kapua A. Rice
Title: Secretary
[Corporate Seal]
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF ONODAGA )
Arthur W. Roos, being duly sworn, deposes and says that
he is Vice President-Treasurer of Niagara Mohawk Power Corporation, the
corporation named in and described in the foregoing Certificate, that he has
read and executed the foregoing Certificate and knows the contents thereof and
that the statements contained therein are true.
By:/s/ Arthur W. Roos
------------------------------------
Name: Arthur W. Roos
Title: Vice President-Treasurer
By:/s/ Kapua A. Rice
------------------------------------
Name: Kapua A. Rice
Title: Secretary
Sworn to before me this
23rd day of November, 1999
/s/ Kapua A. Rice
- --------------------------
Notary Public
