<PAGE>
As filed with the Securities and Exchange Commission on June 3, 1996
Registration No. 333-03357
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PACIFICORP PACIFICORP CAPITAL I
(Exact name of Registrant PACIFICORP CAPITAL II
as specified in charter) (Exact names of Registrants
as specified in Trust Agreements)
OREGON DELAWARE
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
93-0246090 EACH TO BE APPLIED FOR
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
RICHARD T. O'BRIEN
Senior Vice President
and Chief Financial Officer
PacifiCorp
700 NE Multnomah, Suite 1600
Portland, Oregon 97232
503-731-2000
(Address, including zip code, and telephone
number, including area code, of Registrants'
principal executive offices and agent for service)
------------
It is respectfully requested that the Commission send copies of all notices,
orders and communications to:
STOEL RIVES LLP WINTHROP, STIMSON, PUTNAM & ROBERTS
700 NE Multnomah, Suite 950 One Battery Park Plaza
Portland, Oregon 97232-4109 New York, New York 10004-1490
Attention of John M. Schweitzer Attention of C. Payson Coleman, Jr.
(503) 872-4821 (212) 858-1426
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APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO TIME AFTER
THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. | |
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. | |
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. | |
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. | |
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
SECURITIES BEING REGISTERED REGISTERED PRICE PER UNIT (1) PRICE (1) REGISTRATION FEE (2)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PacifiCorp Junior Subordinated
Deferrable Interest Debentures. . . .
- ---------------------------------------------------------------------------------------------------------------------------
Company Obligated Mandatorily
Redeemable Preferred Securities of
PacifiCorp Capital I and II
holding solely Junior Subordinated
Deferrable Interest Debentures . . . .
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PacifiCorp Guarantee with respect to
Preferred Securities (3)(4). . . . . .
- ---------------------------------------------------------------------------------------------------------------------------
Total. . . . . . . . . . . . . . . . . $220,000,000(5) 100% $220,000,000(5) $75,863 (6)
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee.
(2) The amount of the registration fee has been calculated in accordance with
Rule 457(o) under the Securities Act of 1933.
(3) No separate consideration will be received for the PacifiCorp Guarantee.
(4) This Registration Statement is deemed to include the obligations of
PacifiCorp under the PacifiCorp Guarantee and certain back-up undertakings as
described herein.
(5) Represents (a) the principal amount of the Junior Subordinated Deferrable
Interest Debentures issued at their principal amount and (b) the initial
public offering price of PacifiCorp Capital I and II Preferred Securities. No
separate consideration will be received for any PacifiCorp Guarantees or
PacifiCorp Junior Subordinated Deferrable Interest Debentures in connection
with an issuance of Preferred Securities by PacifiCorp Capital I and II. The
amount to be registered, the proposed maximum offering price per unit and the
proposed maximum aggregate offering price for each class of securities being
registered have been omitted in accordance with General Instruction II.D. of
Form S-3.
(6) Previously paid.
------------
Pursuant to Rule 429 under the Securities Act of 1933, the prospectus
filed as part of this Registration Statement will be used as a combined
prospectus in connection with this Registration Statement and registration
statement No. 33-55309.
------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE PROSPECTUS TO WHICH IT
RELATES SHALL CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY JURISDICTION IN WHICH
SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.
<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 3, 1996
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JUNE , 1996
8,680,000 PREFERRED SECURITIES
PACIFICORP CAPITAL I
% CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES, SERIES A (QUIPSSM)*
(LIQUIDATION PREFERENCE $25 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT PACIFICORP CAPITAL I HAS FUNDS AS SET FORTH HEREIN BY
[LOGO]
-------------------
The % Cumulative Quarterly Income Preferred Securities, Series A (the
"Series A Preferred Securities"), offered hereby represent undivided beneficial
interests in the assets of PacifiCorp Capital I, a trust created under the laws
of the State of Delaware ("PacifiCorp Capital I"). PacifiCorp, an Oregon
corporation ("PacifiCorp"), will be the owner of all of the beneficial interests
represented by common securities of PacifiCorp Capital I ("Series A Common
Securities"). The Bank of New York is the Property Trustee of PacifiCorp Capital
I. PacifiCorp Capital I exists for the sole purpose of issuing the Series A
Preferred Securities and the Series A Common Securities and investing the
(CONTINUED ON NEXT PAGE)
-------------------
SEE "RISK FACTORS" BEGINNING ON PAGE S-4 HEREOF FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE SERIES A PREFERRED SECURITIES.
-----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS
TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-------------------
<TABLE>
<CAPTION>
PROCEEDS TO
INITIAL PUBLIC UNDERWRITING PACIFICORP
OFFERING PRICE COMMISSION(1) CAPITAL I(2)(3)
------------------ ------------------ ------------------
<S> <C> <C> <C>
Per Series A Preferred Security................................... $ (2) $
Total............................................................. $ (2) $
</TABLE>
- -------
(1) PacifiCorp Capital I and PacifiCorp have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(2) In view of the fact that the proceeds of the sale of the Series A Preferred
Securities will be used to purchase the Series C Debentures, the
Underwriting Agreement provides that PacifiCorp will pay to the
Underwriters, as compensation ("Underwriters' Compensation") for their
arranging the investment therein of such proceeds, $ per Series A
Preferred Security; PROVIDED, that such compensation will be $ per Series
A Preferred Security sold to certain institutions. Accordingly, the maximum
aggregate amount of Underwriters' Compensation will be $ , but the
actual amount of Underwriters' Compensation will be less than such amount to
the extent that Series A Preferred Securities are sold to such institutions.
See "Underwriting."
(3) Expenses of the offering, which are payable by PacifiCorp, are estimated to
be $400,000.
-------------------
The Series A Preferred Securities offered hereby are offered severally by
the Underwriters, as specified herein, subject to receipt and acceptance by them
and subject to their right to reject any order in whole or in part. It is
expected that the Series A Preferred Securities will be ready for delivery in
book-entry form only through the facilities of The Depository Trust Company in
New York, New York, on or about June , 1996, against payment therefor in
immediately available funds.
- -------
*QUIPS is a servicemark of Goldman, Sachs & Co.
GOLDMAN, SACHS & CO. SMITH BARNEY INC.
DEAN WITTER REYNOLDS INC.
A.G. EDWARDS & SONS, INC.
MERRILL LYNCH & CO.
------------
The date of this Prospectus Supplement is June , 1996.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES A
PREFERRED SECURITIES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
-------------------
(CONTINUED FROM PREVIOUS PAGE)
proceeds thereof in ____% Junior Subordinated Deferrable Interest Debentures,
Series C (the "Series C Debentures") to be issued by PacifiCorp. The Series C
Debentures will mature on June , 2036 and are redeemable prior to maturity at
the option of PacifiCorp as described below. The Series A Preferred Securities
will have a preference under certain circumstances with respect to cash
distributions and amounts payable on liquidation, redemption or otherwise over
the Series A Common Securities. See "Description of Preferred Securities --
Subordination of Common Securities" in the accompanying Prospectus.
Holders of the Series A Preferred Securities will be entitled to receive
preferential cumulative cash distributions accruing from the date of original
issuance and payable quarterly in arrears on the last day of March, June,
September and December of each year, commencing June 30, 1996, at the annual
rate of % of the liquidation preference of $25 per Series A Preferred
Security ("Distributions"). PacifiCorp has the right to defer the payment of
interest on the Series C Debentures at any time or from time to time for one or
more periods (each, an "Extension Period"), PROVIDED that such Extension Period,
together with all previous and further extensions thereof prior to its
termination, does not exceed 20 consecutive quarters and does not extend beyond
the maturity of the Series C Debentures. Upon the termination of any such
Extension Period and the payment of all amounts then due on any Interest Payment
Date (as defined herein), PacifiCorp may elect to begin a new Extension Period
subject to the requirements set forth herein. If interest payments on the Series
C Debentures are so deferred, Distributions on the Series A Preferred Securities
will also be deferred and PacifiCorp will not be permitted, subject to certain
exceptions set forth herein, to declare or pay any cash distributions with
respect to PacifiCorp's capital stock or debt securities that rank PARI PASSU
with or junior to the Series C Debentures. During an Extension Period, interest
on the Series C Debentures will continue to accrue (and the amount of
Distributions to which holders of the Series A Preferred Securities are entitled
will accumulate at the rate of % per annum, compounded quarterly) and holders
of Series A Preferred Securities will be required to accrue interest income for
United States federal income tax purposes in advance of receipt of cash related
to such interest income. See "Certain Terms of Series C Debentures -- Option to
Extend Interest Payment Period" and "Certain Federal Income Tax Considerations
- -- Potential Extension of Interest Payment Period and Original Issue Discount."
PacifiCorp has, through the Series A Guarantee, the Trust Agreement, the
Series C Debentures, the Indenture and the Expense Agreement (each as defined
herein), taken together, fully, irrevocably and unconditionally guaranteed all
of PacifiCorp Capital I's obligations under the Series A Preferred Securities.
The Series A Guarantee of PacifiCorp guarantees the payment of Distributions and
payments on liquidation or redemption of the Series A Preferred Securities, but
only in each case to the extent of funds held by PacifiCorp Capital I, as
described herein (the "Series A Guarantee"). See "Description of Guarantees" in
the accompanying Prospectus. If PacifiCorp does not make interest payments on
the Series C Debentures held by PacifiCorp Capital I, PacifiCorp Capital I will
have insufficient funds to pay Distributions on the Series A Preferred
Securities. The Series A Guarantee does not cover payment of Distributions when
PacifiCorp Capital I does not have sufficient funds to pay such Distributions.
In such event, a holder of Series A Preferred Securities may have the right to
institute a legal proceeding directly against PacifiCorp to enforce payment to
such holder of the principal of or interest on the Corresponding Junior
Subordinated Debentures as described in "Description of Preferred Securities --
Enforcement of Certain Rights by Holders of Preferred Securities" in the
accompanying Prospectus. The obligations of
S-2
<PAGE>
PacifiCorp under the Series A Guarantee and the Series C Debentures are
subordinate and junior in right of payment to all Senior Indebtedness (as
defined in "Description of Junior Subordinated Debentures -- Subordination" in
the accompanying Prospectus) of PacifiCorp.
The Series A Preferred Securities are subject to mandatory redemption, in
whole or in part, upon repayment of the Series C Debentures at maturity or their
earlier redemption in an amount equal to the amount of related Series C
Debentures maturing or being redeemed at a redemption price equal to the
aggregate liquidation preference of such Series A Preferred Securities plus
accumulated and unpaid Distributions thereon to the date of redemption. The
Series C Debentures are redeemable prior to maturity at the option of PacifiCorp
(i) on or after June __, 2001, in whole at any time or in part from time to
time, at a redemption price equal to the accrued and unpaid interest on the
Series C Debentures so redeemed to the date fixed for redemption, plus 100% of
the principal amount thereof, or (ii) at any time, in whole (but not in part),
upon the occurrence and continuation of a Special Event (as defined herein), at
a redemption price equal to the accrued and unpaid interest on the Series C
Debentures so redeemed to the date fixed for redemption, plus 100% of the
principal amount thereof, in each case subject to the further conditions
described under "Description of Junior Subordinated Debentures -- Redemption"
and "Description of Corresponding Junior Subordinated Debentures -- Optional
Redemption" in the accompanying Prospectus.
At any time, PacifiCorp will have the right to terminate PacifiCorp Capital
I and cause the Series C Debentures to be distributed to the holders of the
Series A Preferred Securities in liquidation of PacifiCorp Capital I. See
"Certain Terms of Series A Preferred Securities -- Distribution of Series C
Debentures."
The Series C Debentures are subordinate and junior in right of payment to
all Senior Indebtedness of PacifiCorp. As of March 31, 1996, PacifiCorp had
approximately $3.7 billion aggregate principal amount of Senior Indebtedness
outstanding. The terms of the Series C Debentures place no limitation on the
amount of Senior Indebtedness that may be incurred by PacifiCorp. In addition,
the Series C Debentures will be effectively subordinated to all existing and
future liabilities of PacifiCorp's subsidiaries, and holders of Series C
Debentures should look only to the assets of PacifiCorp for payments on Series C
Debentures. See "Description of Junior Subordinated Debentures -- Subordination"
in the accompanying Prospectus.
In the event of the termination of PacifiCorp Capital I, after satisfaction
of creditors of PacifiCorp Capital I as provided by applicable law, the holders
of the Series A Preferred Securities will be entitled to receive a liquidation
preference of $25 per Series A Preferred Security plus accumulated and unpaid
Distributions thereon to the date of payment, which may be in the form of a
distribution of such amount in Series C Debentures, subject to certain
exceptions. See "Description of Preferred Securities -- Liquidation Distribution
Upon Termination" in the accompanying Prospectus.
The Series A Preferred Securities have been approved for listing, subject to
notice of issuance, on the New York Stock Exchange (the "NYSE"). If the Series C
Debentures are distributed to the holders of Series A Preferred Securities upon
the liquidation of PacifiCorp Capital I, PacifiCorp will use its best efforts to
list the Series C Debentures on the NYSE or such other stock exchanges or other
organizations, if any, on which the Series A Preferred Securities are then
listed.
The Series A Preferred Securities will be represented by global certificates
registered In the name of The Depository Trust Company ("DTC") or its nominee.
Beneficial interests in the Series A Preferred Securities will be shown on, and
transfers thereof will be effected only through, records maintained by
participants in DTC. Except as described in the accompanying Prospectus, Series
A Preferred Securities in certificated form will not be issued in exchange for
the global certificates. See "Description of Preferred Securities -- Book-entry
Issuance" in the accompanying Prospectus.
S-3
<PAGE>
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN CONJUNCTION WITH
THE INFORMATION CONTAINED IN THE ACCOMPANYING PROSPECTUS. AS USED HEREIN, (I)
THE "INDENTURE" MEANS THE INDENTURE, AS AMENDED AND SUPPLEMENTED FROM TIME TO
TIME, INCLUDING THE THIRD SUPPLEMENTAL INDENTURE RELATING TO THE SERIES C
DEBENTURES, BETWEEN PACIFICORP AND THE BANK OF NEW YORK, AS TRUSTEE (THE
"DEBENTURE TRUSTEE"), AND (II) THE "TRUST AGREEMENT" MEANS THE AMENDED AND
RESTATED TRUST AGREEMENT AMONG PACIFICORP, AS DEPOSITOR, THE BANK OF NEW YORK,
AS PROPERTY TRUSTEE (THE "PROPERTY TRUSTEE"), THE BANK OF NEW YORK (DELAWARE),
AS DELAWARE TRUSTEE (THE "DELAWARE TRUSTEE"), AND THE ADMINISTRATIVE TRUSTEES
NAMED THEREIN (COLLECTIVELY, WITH THE PROPERTY TRUSTEE AND THE DELAWARE TRUSTEE,
THE "ISSUER TRUSTEES"). EACH OF THE OTHER CAPITALIZED TERMS USED IN THIS
PROSPECTUS SUPPLEMENT AND NOT OTHERWISE DEFINED IN THIS PROSPECTUS SUPPLEMENT
HAS THE MEANING SET FORTH IN THIS PROSPECTUS SUPPLEMENT OR IN THE ACCOMPANYING
PROSPECTUS.
RISK FACTORS
Prospective purchasers of the Series A Preferred Securities should carefully
review the information contained elsewhere in this Prospectus Supplement and in
the accompanying Prospectus and should particularly consider the following
matters.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE SERIES A GUARANTEE AND THE SERIES
C DEBENTURES
The obligations of PacifiCorp under the Series A Guarantee issued by
PacifiCorp for the benefit of the holders of Series A Preferred Securities are
unsecured and rank subordinate and junior in right of payment to all Senior
Indebtedness of PacifiCorp. The obligations of PacifiCorp under the Series C
Debentures are subordinate and junior in right of payment to all such Senior
Indebtedness. At March 31, 1996, the Senior Indebtedness of PacifiCorp
aggregated approximately $3.7 billion. In addition, the Series C Debentures will
be effectively subordinated to all existing and future liabilities of
PacifiCorp's subsidiaries, and holders of Series C Debentures should look only
to the assets of PacifiCorp for payments on the Series C Debentures. None of the
Indenture, the Series A Guarantee or the Trust Agreement place any limitation on
the amount of secured or unsecured debt, including Senior Indebtedness that may
be incurred by PacifiCorp. See "Description of Guarantees -- Status of the
Guarantee" and "Description of Junior Subordinated Debentures -- Subordination"
in the accompanying Prospectus.
The ability of PacifiCorp Capital I to pay amounts due on the Series A
Preferred Securities is solely dependent upon PacifiCorp making payments on the
Series C Debentures as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES; POTENTIAL MARKET
VOLATILITY DURING EXTENSION PERIOD
PacifiCorp has the right under the Indenture to defer the payment of
interest on the Series C Debentures at any time or from time to time for one or
more Extension Periods, each of which, together with all previous and further
extensions of such Extension Period prior to its termination, does not exceed 20
consecutive quarters and does not extend beyond the maturity of the Series C
Debentures. As a consequence of any such election, quarterly Distributions on
the Series A Preferred Securities by PacifiCorp Capital I will be deferred (and
the amount of Distributions to which holders of the Series A Preferred
Securities are entitled will continue to accumulate at the rate of % per
annum, compounded quarterly) during any such Extension Period. During any such
Extension Period, PacifiCorp may not, and may not permit any subsidiary of
PacifiCorp to, (i) declare, set aside or pay any dividend or distribution on, or
repurchase, redeem, or otherwise acquire or make any sinking fund payment with
respect to, any shares of PacifiCorp's capital stock or (ii) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities (including other Junior Subordinated Debentures) that rank PARI
PASSU with or junior in interest to the Series C Debentures or make any
guarantee payments with respect to the foregoing (other than (a) dividends or
distributions in shares of its capital stock or in rights to acquire shares of
its capital stock, (b) conversions into or exchanges for shares of its capital
stock, (c) redemptions, purchases or other acquisitions of shares of its capital
stock
S-4
<PAGE>
made for the purpose of an employee incentive plan or benefit plan of PacifiCorp
or any of its subsidiaries and mandatory redemptions or sinking fund payments
with respect to any series of Preferred Stock of PacifiCorp that are subject to
mandatory redemption or sinking fund requirements, PROVIDED that the aggregate
stated value of all such series outstanding at the time of any such payment does
not exceed five percent of the aggregate of (1) the total principal amount of
all bonds or other securities representing secured indebtedness issued or
assumed by PacifiCorp and then outstanding and (2) the capital and surplus of
PacifiCorp to be stated on the books of account of PacifiCorp after giving
effect to such payment, PROVIDED, HOWEVER, that any moneys deposited in any
sinking fund and not in violation of this provision may thereafter be applied to
the purchase or redemption of such Preferred Stock in accordance with the terms
of such sinking fund without regard to the restrictions contained in this
provision, and (d) payments under any guarantee by PacifiCorp with respect to
any securities of a subsidiary of PacifiCorp, provided that the proceeds from
the issuance of such securities were used to purchase Junior Subordinated
Debentures of any series under the Indenture). Upon the termination of any
Extension Period and the payment of all amounts then due on any Interest Payment
Date, PacifiCorp may elect to begin a new Extension Period subject to the above
requirements. Consequently, there could be multiple Extension Periods of varying
lengths throughout the term of the Series C Debentures. See "Certain Terms of
the Series A Preferred Securities -- Distributions" and "Certain Terms of the
Series C Debentures -- Option to Extend Interest Payment Period."
Should an Extension Period occur, a holder of Series A Preferred Securities
will continue to accrue interest income in respect of its PRO RATA share of the
Series C Debentures held by PacifiCorp Capital I for United States federal
income tax purposes. As a result, a holder of Series A Preferred Securities will
include such interest in gross income (as original issue discount) for United
States federal income tax purposes in advance of the receipt of cash, and will
not receive the cash related to such income from PacifiCorp Capital I if the
holder disposes of the Series A Preferred Securities prior to the record date
for the payment of Distributions. See "Certain Federal Income Tax Considerations
- -- Potential Extension of Interest Payment Period and Original Issue Discount"
and " -- Sale or Redemption of Series A Preferred Securities."
PacifiCorp has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Series C
Debentures. However, should PacifiCorp elect to exercise such right in the
future, the market price of the Series A Preferred Securities is likely to be
affected. A holder that disposes of its Series A Preferred Securities during an
Extension Period, therefore, might not receive the same return on its investment
as a holder that continues to hold its Series A Preferred Securities. In
addition, as a result of the existence of PacifiCorp's right to defer interest
payments, the market price of the Series A Preferred Securities (which represent
a preferred undivided beneficial interest in the Series C Debentures) may be
more volatile than the market prices of other securities on which original issue
discount accrues that are not subject to such deferrals.
SPECIAL EVENT REDEMPTION
Upon the occurrence and continuation of a Special Event, as described in
"Description of Preferred Securities -- Redemption or Exchange -- Special Event
Redemption or Distribution of Corresponding Junior Subordinated Debentures" in
the accompanying Prospectus, PacifiCorp has the right to redeem the Series C
Debentures in whole (but not in part) within 90 days following the occurrence of
such Special Event and thereby cause a mandatory redemption of the Series A
Preferred Securities at the applicable redemption price. See "Description of
Preferred Securities -- Redemption or Exchange -- Special Event Redemption or
Distribution of Corresponding Junior Subordinated Debentures" in the
accompanying Prospectus.
Under current United States federal income tax law, such a redemption of the
Series A Preferred Securities would constitute a taxable event to the holders
thereof. See "Certain Federal Income Tax Consequences -- Sale or Redemption of
Series A Preferred Securities."
There can be no assurance as to the market prices for Series A Preferred
Securities or Series C Debentures that may be distributed in exchange for Series
A Preferred Securities if a liquidation of
S-5
<PAGE>
PacifiCorp Capital I occurs. Accordingly, the Series A Preferred Securities that
an investor may purchase, whether pursuant to the offer made hereby or in the
secondary market, or the Series C Debentures that a holder of Series A Preferred
Securities may receive on liquidation of PacifiCorp Capital I, may trade at a
discount to the price that the investor paid to purchase the Series A Preferred
Securities offered hereby. Holders of Series A Preferred Securities may receive
Series C Debentures upon liquidation of PacifiCorp Capital I and prospective
purchasers of Series A Preferred Securities are also making an investment
decision with regard to the Series C Debentures and should carefully review all
the information regarding the Series C Debentures contained herein. See
"Description of the Preferred Securities -- Redemption or Exchange -- Special
Event Redemption or Distribution of Corresponding Junior Subordinated
Debentures" and "Description of the Corresponding Junior Subordinated Debentures
- -- General" in the accompanying Prospectus.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, President Clinton released the proposed Revenue
Reconciliation Bill of 1996 (the "Bill"). The Bill would, among other things,
generally deny interest deductions for interest on an instrument, issued by a
corporation, that has a maximum weighted average maturity of more than 40 years.
The Bill also would generally deny interest deductions for interest on an
instrument, issued by a corporation, that has a maximum term of more than 20
years and that is not shown as indebtedness on the separate balance sheet of the
issuer or, where the instrument is issued to a related party (other than a
corporation), where the holder or some other related party issues a related
instrument that is not shown as indebtedness on the issuer's consolidated
balance sheet. The above-described provisions of the Bill were proposed to be
effective generally for instruments issued on or after December 7, 1995. If
either provision were to apply to the Series C Debentures, PacifiCorp would be
unable to deduct interest on the Series C Debentures.
On March 29, 1996, the Chairmen of the Senate Finance and the House Ways and
Means Committees issued a joint statement to the effect that it was their
intention that the effective date of the President's legislative proposals, if
adopted, would be no earlier than the date of "appropriate Congressional
action." As discussed below under "Certain Federal Income Tax Considerations --
Classification of the Series C Debentures", PacifiCorp believes and intends to
take the position that interest on the Series C Debentures is deductible for
United States federal income tax purposes. There can be no assurance, however,
that current or future legislative proposals or final legislation will not
affect the ability of PacifiCorp to deduct interest on the Series C Debentures.
If legislation were enacted limiting, in whole or in part, deductibility by
PacifiCorp of interest on the Series C Debentures for United States federal
income tax purposes, such enactment would give rise to a Tax Event, which would
permit PacifiCorp to cause a redemption of the Series A Preferred Securities or
a distribution of the Series C Debentures, as described more fully in the
accompanying Prospectus under "Description of Preferred Securities -- Redemption
or Exchange -- Special Event Redemption or Distribution of Corresponding Junior
Subordinated Debentures."
RIGHTS UNDER THE SERIES A GUARANTEE
The Series A Guarantee will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). The Bank of New
York will act as the indenture trustee under the Series A Guarantee (the
"Guarantee Trustee") for the purposes of compliance with the Trust Indenture Act
and will hold the Series A Guarantee for the benefit of the holders of the
Series A Preferred Securities. The Bank of New York also will act as Debenture
Trustee for the Series C Debentures and as Property Trustee under the Trust
Agreement. The Series A Guarantee guarantees to the holders of the Series A
Preferred Securities the following payments, to the extent not paid by
PacifiCorp Capital I: (i) any accumulated and unpaid Distributions required to
be paid on the Series A Preferred Securities, to the extent that PacifiCorp
Capital I has funds on hand available therefor, (ii) the redemption price with
respect to any Series A Preferred Securities called for redemption to the extent
that PacifiCorp Capital I has funds on hand available therefor, and (iii) upon a
voluntary or involuntary dissolution, winding up or liquidation of PacifiCorp
Capital I (unless the Series C Debentures are distributed to holders of the
Series A Preferred Securities), the lesser of (a) the aggregate of the
liquidation preference and all
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<PAGE>
accumulated and unpaid Distributions to the date of payment to the extent
PacifiCorp Capital I has funds on hand available therefor and (b) the amount of
assets of PacifiCorp Capital I remaining available for distribution to holders
of the Series A Preferred Securities. If PacifiCorp were to default on its
obligation to pay amounts payable under the Series C Debentures, PacifiCorp
Capital I would lack funds for the payment of Distributions or amounts payable
on redemption of the Series A Preferred Securities or otherwise, and, in such
event, holders of the Series A Preferred Securities would not be able to rely
upon the Series A Guarantee for payment of such amounts. Instead, holders of the
Series A Preferred Securities would have the limited enforcement rights
described under "Description of Preferred Securities -- Events of Default;
Notice" in the accompanying Prospectus. See "Description of Guarantees" and
"Description of Corresponding Junior Subordinated Debentures" in the
accompanying Prospectus. The Trust Agreement provides that each holder of Series
A Preferred Securities by acceptance thereof agrees to the provisions of the
Series A Guarantee and the Indenture.
LIMITED VOTING RIGHTS
Holders of Series A Preferred Securities will generally have limited voting
rights relating only to the modification of the Series A Preferred Securities
and the dissolution, winding-up or liquidation of PacifiCorp Capital I. Holders
of Series A Preferred Securities will not be entitled to vote to appoint, remove
or replace the Property Trustee or the Delaware Trustee, which voting rights are
vested exclusively in the holder of the Series A Common Securities except upon
the occurrence of certain events. The Issuer Trustees and PacifiCorp may amend
the Trust Agreement without the consent of holders of Series A Preferred
Securities to ensure that PacifiCorp Capital I will be classified for United
States federal income tax purposes as a grantor trust, even if such action
adversely affects the interests of such holders in a material respect. See
"Description of Preferred Securities -- Voting Rights; Amendment of Trust
Agreement" and " -- Removal of Issuer Trustees" in the accompanying Prospectus.
TRADING CHARACTERISTICS OF SERIES A PREFERRED SECURITIES
PacifiCorp Capital I intends to list the Series A Preferred Securities on
the NYSE. The Series A Preferred Securities may trade at prices that do not
fully reflect the value of accrued but unpaid interest with respect to the
underlying Series C Debentures. A holder of Series A Preferred Securities that
disposes of its Series A Preferred Securities between record dates for payments
of Distributions (and consequently does not receive a Distribution from
PacifiCorp Capital I for the period prior to such disposition) will nevertheless
be required to include as ordinary income, accrued but unpaid interest on the
Series C Debentures through the date of disposition and to add such amount to
its adjusted tax basis in the Series A Preferred Securities disposed of. Such
holder will recognize a capital loss to the extent the selling price (which may
not fully reflect the amount of accrued but unpaid interest) is less than its
adjusted tax basis (which will reflect accrued but unpaid interest). Subject to
certain limited exceptions, capital losses cannot be applied to offset ordinary
income for United States federal income tax purposes. See "Certain Federal
Income Tax Considerations -- Sale or Redemption of Series A Preferred
Securities."
PACIFICORP CAPITAL I
PacifiCorp Capital I is a statutory business trust created under Delaware
law pursuant to (i) a trust agreement executed by PacifiCorp, as Depositor, The
Bank of New York, as Property Trustee, The Bank of New York (Delaware), as
Delaware Trustee, and the Administrative Trustee named therein (which trust
agreement was later amended and restated in the form of the Trust Agreement) and
(ii) the filing of a certificate of trust with the Delaware Secretary of State
on May 7, 1996. PacifiCorp Capital I's business and affairs are conducted by the
Issuer Trustees: The Bank of New York, as Property Trustee, The Bank of New York
(Delaware), as Delaware Trustee, and two individual Administrative Trustees who
are employees or officers of or affiliated with PacifiCorp. PacifiCorp Capital I
exists for the exclusive purposes of (i) issuing and selling the Series A
Preferred Securities and Series A Common Securities, (ii) using the proceeds
from the sale of Series A Preferred Securities and the Series A Common
Securities to acquire Series C Debentures issued by PacifiCorp and (iii)
engaging in only those other activities necessary, convenient or incidental
thereto. Accordingly, the Series C Debentures will be the sole assets of
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PacifiCorp Capital I, and payments under the Series C Debentures will be the
sole revenue of PacifiCorp Capital I. All of the Series A Common Securities will
be owned by PacifiCorp. The Series A Common Securities will rank PARI PASSU, and
payments will be made thereon PRO RATA, with the Series A Preferred Securities,
except that upon the occurrence and continuance of an event of default under the
Trust Agreement resulting from an Event of Default under the Indenture, the
rights of PacifiCorp as holder of the Series A Common Securities to payment in
respect of Distributions and payments upon liquidation, redemption or otherwise
will be subordinated to the rights of the holders of the Series A Preferred
Securities. See "Description of Preferred Securities -- Subordination of Common
Securities" in the accompanying Prospectus. PacifiCorp will acquire Series A
Common Securities having an aggregate liquidation amount equal to 3% of the
total capital of PacifiCorp Capital I. PacifiCorp Capital I has a term of 45
years, but may terminate earlier as provided in the Trust Agreement. The
principal executive office of PacifiCorp Capital I is 700 NE Multnomah, Suite
1600, Portland, OR 97232, Attention: Secretary, and its telephone number is
(503) 731-2000. See "The Issuer Trusts" in the accompanying Prospectus.
PACIFICORP
PacifiCorp is an electric utility headquartered in Portland, Oregon that
conducts a retail electric utility business through Pacific Power & Light
Company and Utah Power & Light Company, and engages in power production and
sales on a wholesale basis under the name PacifiCorp. PacifiCorp is the indirect
owner, through PacifiCorp Holdings, Inc. (a wholly-owned subsidiary)
("Holdings"), of 100% of each of Powercor Australia Limited ("Powercor"), an
Australian electric distribution company, and Pacific Telecom, Inc. ("Pacific
Telecom"), a leading provider of local telephone exchange service to rural and
suburban markets.
PacifiCorp furnishes electric service to approximately 1,300,000 customers
in portions of seven western states: California, Idaho, Montana, Oregon, Utah,
Washington and Wyoming. Powercor serves approximately 570,000 customers in
suburban Melbourne and the western and central regions of the State of Victoria
in southeast Australia. Pacific Telecom, through its subsidiaries, provides
local telephone service and access to the long-distance network in Alaska, seven
other western states and three midwestern states, provides cellular mobile
telephone services in six states and is engaged in sales of capacity in and
operation of a submarine fiber optic cable between the United States and Japan.
Holdings also has interests in the independent power and cogeneration business
through its wholly-owned subsidiary, Pacific Generation Company, and continues
to liquidate portions of the loan, leasing and real estate investment portfolio
of its wholly-owned subsidiary, PacifiCorp Financial Services, Inc. ("PFS"). PFS
expects to retain only its tax advantaged investments in leveraged lease assets
(primarily aircraft) and affordable housing, and is limiting its pursuit of
tax-advantaged investment opportunities to affordable housing.
The principal executive offices of PacifiCorp are located at 700 NE
Multnomah, Suite 1600, Portland, Oregon 97232; the telephone number is (503)
731-2000.
USE OF PROCEEDS
All of the proceeds from the sale of Series A Preferred Securities will be
invested by PacifiCorp Capital I in Series C Debentures. The proceeds from the
sale of such Series C Debentures will initially become part of the general funds
of PacifiCorp and will be used to repay all or a portion of PacifiCorp's
short-term borrowings outstanding at the time of issuance. PacifiCorp is
considering the retirement of long-term debt and other senior securities in
connection with which it may incur additional short-term indebtedness.
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<PAGE>
SELECTED FINANCIAL INFORMATION
(DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
The selected financial data of PacifiCorp for the years ended December 31,
1993, 1994 and 1995 and the three-months ended March 31, 1995 and 1996 set forth
below were derived from and should be read in conjunction with the consolidated
financial statements and related notes of PacifiCorp and subsidiaries
incorporated by reference in the accompanying Prospectus. The consolidated
financial statements for the three-year period ended December 31, 1995 have been
audited by Deloitte & Touche LLP, independent auditors, and the reports of
Deloitte & Touche LLP thereon are incorporated by reference in the accompanying
Prospectus.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED DECEMBER THREE MONTHS ENDED
31, MARCH 31,
------------------------------- -------------------
1993 1994 1995 1995 1996
-------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Revenues
Electric.................. $ 2,507 $ 2,648 $ 2,616 $ 649 $ 705
Pacific Telecom........... 702 705 649 182 125
Powercor.................. -- -- 26 -- 140
Other(1)(2)............... 196 154 134 28 35
-------- -------- --------- -------- --------
Total................... 3,405 3,507 3,425 859 1,005
Income from Operations(3)
Electric.................. 784 819 801 209 220
Pacific Telecom........... 141 165 165 40 35
Powercor.................. -- -- 6 -- 36
Other(1)(2)............... 44 38 84 17 21
-------- -------- --------- -------- --------
Total................... 969 1,022 1,056 266 312
Income from Continuing
Operations................. 423 468 505 115 130
Discontinued Operations
(4)........................ 52 -- -- -- --
Cumulative Effect on Prior
Years of a Change in
Accounting for Income
Taxes...................... 4 -- -- -- --
Net Income.................. 479 468 505 115 130
Preferred Stock Dividend
Requirements............... 39 40 39 10 9
Earnings Contribution on
Common Stock
Electric.................. 323 340 276(5) 81 86
Pacific Telecom........... 51 70 103 14 16
Powercor.................. -- -- 1 -- 11
Other (1)................. 10 18 86(5) 10 8
Discontinued Operations
(4)........................ 52 -- -- -- --
Cumulative Effect on Prior
Years of a Change in
Accounting for Income
Taxes...................... 4 -- -- -- --
-------- -------- --------- -------- --------
Total................... $ 440 $ 428 $ 466 $ 105 $ 121
-------- -------- --------- -------- --------
-------- -------- --------- -------- --------
Average Common Shares
Outstanding (Thousands).... 274,551 282,912 284,272 284,260 286,490
Earnings per Common Share:
Continuing Operations..... $ 1.40 $ 1.51 $ 1.64 .37 .42
Discontinued Operations
(4)...................... .19 -- -- -- --
Cumulative Effect on Prior
Years of a Change in
Accounting for Income
Taxes.................... .01 -- -- -- --
-------- -------- --------- -------- --------
Total................... $ 1.60 $ 1.51 $ 1.64 .37 .42
-------- -------- --------- -------- --------
-------- -------- --------- -------- --------
Dividends Declared per
Common Share............... $ 1.08 $ 1.08 $ 1.08 .27 .27
-------- -------- --------- -------- --------
-------- -------- --------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 1996
----------------------------------------
ACTUAL AS ADJUSTED (6)
------------------- ------------------
AMOUNT % AMOUNT %
--------- ------- -------- -------
<S> <C> <C> <C> <C>
(UNAUDITED) (UNAUDITED)
Capital Structure:
Long-Term Debt and Capital Lease
Obligations.......................... $5,170 54% $5,170 53%
Company Obligated Mandatorily
Redeemable Preferred Securities of
Subsidiary Trust Holding Solely
Parent Junior Subordinated Debentures
(7).................................. -- -- 217 2
Preferred Stock....................... 312 4 312 3
Preferred Stock Subject to Mandatory
Redemption........................... 219 2 219 2
Common Equity......................... 3,861 40 3,861 40
--------- ------- -------- -------
Total............................... $9,562 100% $9,779 100%
Short-Term Debt......................... $ 515 $ 305
Long-term Debt and Capital Lease
Obligations Currently Maturing......... $ 236 $ 236
</TABLE>
- ------------------------------
(1) Other includes the operations of Pacific Generation Company and PFS, as well
as the activities of Holdings.
S-9
<PAGE>
(2) Certain amounts from prior years have been reclassified to conform with the
1996 method of presentation. These reclassifications had no effect on
previously reported consolidated net income.
(3) Income before income taxes, interest, other nonoperating items, discontinued
operations and cumulative effect of a change in an accounting principle.
(4) Discontinued operations represents PacifiCorp's interests in an
international communications subsidiary of Pacific Telecom, the disposition
of which was completed in September 1993.
(5) PacifiCorp reached a tax settlement with the U.S. Internal Revenue Service
for the tax years 1983-1988, including the issues relating to the 1983
abandonment of PacifiCorp's interest in Washington Public Power Supply
System Unit 3. The settlement had no effect on consolidated net income,
although it had the effect of reducing Electric earnings contribution by $32
million and increasing Other earnings contribution by $32 million.
(6) Adjusted to give effect to the consummation of the offering of 8,680,000
Preferred Securities and the application of the estimated net proceeds
therefrom to repay short-term debt.
(7) As described herein, the assets of PacifiCorp Capital I will consist solely
of approximately $224 million of Series C Debentures, issued by PacifiCorp
to PacifiCorp Capital I, and certain rights under the Series A Guarantee.
The Series C Debentures will bear interest at the annual rate of % of
the principal amount thereof and will mature on June , 2036. PacifiCorp
owns all of the Series A Common Securities of PacifiCorp Capital I.
ACCOUNTING TREATMENT
For financial reporting purposes, PacifiCorp Capital I will be treated as a
subsidiary of PacifiCorp and, accordingly, the accounts of PacifiCorp Capital I
will be included in the consolidated financial statements of PacifiCorp. The
Series A Preferred Securities will be presented as a separate line item in the
consolidated balance sheet of PacifiCorp and appropriate disclosures about the
Series A Preferred Securities, the Series A Guarantee and the Series C
Debentures will be included in the notes to the consolidated financial
statements. For financial reporting purposes, PacifiCorp will record
Distributions payable on the Series A Preferred Securities as an expense.
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<PAGE>
CERTAIN TERMS OF SERIES A PREFERRED SECURITIES
GENERAL
The following summary of certain terms and provisions of the Series A
Preferred Securities supplements the description of the terms and provisions of
the Preferred Securities set forth in the accompanying Prospectus under the
heading "Description of Preferred Securities," to which description reference is
hereby made. This summary of certain terms and provisions of the Series A
Preferred Securities does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the Trust Agreement. The form of the
Trust Agreement has been filed as an exhibit to the Registration Statement of
which this Prospectus Supplement and accompanying Prospectus is a part.
DISTRIBUTIONS
The Series A Preferred Securities represent undivided beneficial interests
in the assets of PacifiCorp Capital I, and Distributions on each Series A
Preferred Security will be payable at the annual rate of % of the stated
liquidation preference of $25, payable quarterly in arrears on March 31, June
30, September 30 and December 31 of each year. Distributions will accumulate
from June , 1996, the date of original issuance. The first Distribution
payment date for the Series A Preferred Securities will be June 30, 1996. The
amount of Distributions payable for any period will be computed on the basis of
a 360-day year of twelve 30-day months and, for any period shorter than a full
calendar month, on the basis of the actual number of days elapsed in such
period. In the event that any date on which Distributions are payable on the
Series A Preferred Securities is not a Business Day, then payment of the
Distributions payable on such date will be made on the next succeeding day that
is a Business Day (and without any additional Distributions or other payment in
respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date such payment was originally payable. Accrued and unpaid
distributions will accumulate additional Distributions thereon ("Additional
Amounts") after the payment date therefor in an amount equal to the additional
interest accrued on interest in arrears on the Series C Debentures. See "Certain
Terms of Series C Debentures -- General." The term "Distributions" as used
herein shall include any such Additional Amounts. See "Description of Preferred
Securities -- Distributions" in the accompanying Prospectus.
So long as no Event of Default under the Indenture has occurred and is
continuing, PacifiCorp has the right under the Indenture to defer the payment of
interest on the Series C Debentures at any time or from time to time for one or
more Extension Periods, each of which, together with all previous and further
extensions of such Extension Period prior to its termination, does not exceed 20
consecutive quarters and does not extend beyond the maturity of the Series C
Debentures. As a consequence of any such election, quarterly Distributions on
the Series A Preferred Securities will be deferred by PacifiCorp Capital I
during any such Extension Period. Distributions to which holders of the Series A
Preferred Securities are entitled will accumulate additional Distributions
thereon at the rate of % per annum thereof, compounded quarterly from the
relevant payment date for such Distributions. During any such Extension Period,
PacifiCorp may not, and may not permit any subsidiary of PacifiCorp to, (i)
declare, set aside or pay any dividend or distribution on, or repurchase,
redeem, or otherwise acquire or make any sinking fund payment with respect to,
any shares of PacifiCorp's capital stock or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities that rank PARI PASSU with or junior in interest to the Corresponding
Junior Subordinated Debentures or make any guarantee payments with respect to
the foregoing (other than (a) dividends or distributions in shares of its
capital stock or in rights to acquire shares of its capital stock, (b)
conversions into or exchanges for shares of its capital stock, (c) redemptions,
purchases or other acquisitions of shares of its capital stock made for the
purpose of an employee incentive plan or benefit plan of PacifiCorp or any of
its subsidiaries and mandatory redemptions or sinking fund payments with respect
to any series of Preferred Stock of PacifiCorp that are subject to mandatory
redemption or sinking fund requirements, PROVIDED that the aggregate stated
value of all such series outstanding at the time of any such payment does not
exceed five percent of the aggregate of (1) the total principal amount of all
bonds or other securities representing secured indebtedness issued or assumed by
PacifiCorp and then outstanding and (2) the capital and
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<PAGE>
surplus of PacifiCorp to be stated on the books of account of PacifiCorp after
giving effect to such payment, PROVIDED, HOWEVER, that any moneys deposited in
any sinking fund and not in violation of this provision may thereafter be
applied to the purchase or redemption of such Preferred Stock in accordance with
the terms of such sinking fund without regard to the restrictions contained in
this provision, and (d) payments under any guarantee by PacifiCorp with respect
to any securities of a subsidiary of PacifiCorp, provided that the proceeds from
the issuance of such securities were used to purchase Junior Subordinated
Debentures of any series under the Indenture). Upon the termination of any such
Extension Period and the payment of all amounts then due on any Interest Payment
Date, PacifiCorp may elect to begin a new Extension Period, subject to the above
requirements. See "Certain Terms of the Series C Debentures -- Option to Extend
Interest Payment Period" and "Certain Federal Income Tax Consequences --
Potential Extension of Interest Payment Period and Original Issue Discount."
PacifiCorp has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Series C
Debentures.
REDEMPTION
Upon the repayment or redemption, in whole or in part, of the Series C
Debentures, whether at maturity or upon earlier redemption as provided in the
Indenture, the proceeds from such repayment or redemption shall be applied by
the Property Trustee to redeem a Like Amount of the Series A Preferred
Securities, upon not less than 30 nor more than 60 days notice prior to the date
fixed for repayment or redemption (the "Redemption Date"), at a redemption price
equal to the aggregate liquidation preference of such Series A Preferred
Securities plus accumulated and unpaid Distributions thereon to the Redemption
Date (the "Redemption Price"). See "Description of Preferred Securities --
Redemption or Exchange" in the accompanying Prospectus and "Certain Terms of
Series C Debentures -- Redemption".
PacifiCorp will have the right to redeem the Series C Debentures (i) on or
after June , 2001, in whole at any time or in part from time to time, at a
redemption price equal to the accrued and unpaid interest on the Series C
Debentures so redeemed to the date fixed for redemption, plus 100% of the
principal amount thereof or (ii) at any time, in whole (but not in part), upon
the occurrence of and continuation of a Tax Event or an Investment Company Event
(each as defined in the accompanying Prospectus, and as so collectively defined,
a "Special Event"), at a redemption price equal to the accrued and unpaid
interest on the Series C Debentures so redeemed to the date fixed for
redemption, plus 100% of the principal amount thereof, in each case subject to
conditions described under "Description of Junior Subordinated Debentures --
Redemption or Exchange" and "Description of Corresponding Junior Subordinated
Debentures -- Optional Redemption" in the accompanying Prospectus.
DISTRIBUTION OF SERIES C DEBENTURES
At any time, PacifiCorp will have the right to terminate PacifiCorp Capital
I and, after satisfaction of the liabilities of creditors of PacifiCorp Capital
I as provided by applicable law, cause the Series C Debentures to be distributed
to the holders of the Series A Preferred Securities in liquidation of PacifiCorp
Capital I. See "Certain Terms of Series C Debentures -- Distribution of Series C
Debentures." Under current United States federal income tax law, provided
PacifiCorp Capital I is treated as a grantor trust at the time of such
distribution, such distribution would not be a taxable event to holders of the
Series A Preferred Securities. Following the occurrence of a Special Event
pursuant to which PacifiCorp Capital I was determined to be an association
taxable as a corporation, however, such a distribution would be a taxable event
to such holders. See "Certain Federal Income Tax Consequences -- Distribution of
Series C Debentures to Holders of Series A Preferred Securities." If PacifiCorp
does not elect to redeem or distribute the Series C Debentures as described
above, the Series A Preferred Securities will remain outstanding until the
repayment of the Series C Debentures.
LIQUIDATION VALUE
The amount payable on the Series A Preferred Securities in the event of any
liquidation of PacifiCorp Capital I is $25 per Series A Preferred Security plus
accumulated and unpaid Distributions, which may be
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<PAGE>
in the form of a distribution of such amount in Series C Debentures, subject to
certain exceptions. See "Description of Preferred Securities -- Liquidation
Distribution Upon Termination" in the accompanying Prospectus.
CERTAIN TERMS OF SERIES C DEBENTURES
GENERAL
The following summary of certain terms and provisions of the Series C
Debentures supplements the description of the terms and provisions of the
Corresponding Junior Subordinated Debentures set forth in the accompanying
Prospectus under the headings "Description of Junior Subordinated Debentures"
and "Description of Corresponding Junior Subordinated Debentures," to which
description reference is hereby made. The summary of certain terms and
provisions of the Series C Debentures set forth below does not purport to be
complete and is subject to, and qualified in its entirety by reference to, the
Indenture. The Indenture has been filed as an exhibit to the Registration
Statement of which this Prospectus Supplement and accompanying Prospectus is a
part.
Concurrently with the issuance of the Series A Preferred Securities,
PacifiCorp Capital I will invest the proceeds thereof and the consideration paid
by PacifiCorp for the Series A Common Securities in the Series C Debentures
issued by PacifiCorp. The Series C Debentures will bear interest at the annual
rate of % of the principal amount thereof, payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year (each, an "Interest
Payment Date"), commencing June 30, 1996, to the person in whose name each
Series C Debenture is registered, subject to certain exceptions, at the close of
business on the fifteenth day of the last month of each calendar quarter.
It is anticipated that, until the liquidation, if any, of PacifiCorp Capital
I, each Series C Debenture will be held in the name of the Property Trustee in
trust for the benefit of the holders of the Series A Preferred Securities. The
amount of interest payable for any period will be computed on the basis of a
360-day year of twelve 30-day months and, for any period shorter than a full
calendar month, on the basis of the actual number of days elapsed in such
period. In the event that any date on which interest is payable on the Series C
Debentures is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay), except that, if
such Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on the date such payment was originally payable. Accrued
interest that is not paid on the applicable Interest Payment Date will bear
additional interest on the amount thereof (to the extent permitted by law) at
the rate per annum of % thereof, compounded quarterly. The term "interest"
as used herein shall include quarterly interest payments, interest on quarterly
interest payments not paid on the applicable Interest Payment Date and
Additional Sums (as defined below), as applicable.
The Series C Debentures will be issued as a series of Junior Subordinated
Debentures under the Indenture. The Series C Debentures will mature on June ,
2036. The Series C Debentures will be unsecured and will rank junior and be
subordinate in right of payment to all Senior Indebtedness of PacifiCorp. In
addition, the Series C Debentures will be effectively subordinated to all
existing and future liabilities of PacifiCorp's subsidiaries, and holders of
Series C Debentures should look only to the assets of PacifiCorp for payments on
the Series C Debentures. The Indenture does not limit the incurrence or issuance
of other secured or unsecured debt of PacifiCorp, whether under the Indenture,
any other existing or other indenture that PacifiCorp may enter into in the
future or otherwise. See "Description of Junior Subordinated Debentures --
Subordination" in the accompanying Prospectus.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Event of Default under the Indenture has occurred and is
continuing, PacifiCorp has the right under the Indenture at any time during the
term of the Series C Debentures to defer the payment of interest at any time or
from time to time for one or more Extension Periods, each of which, together
with all previous and further extensions of such Extension Period prior to its
termination, does not exceed
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<PAGE>
20 consecutive quarters and does not extend beyond the maturity of the Series C
Debentures. At the end of such Extension Period, PacifiCorp must pay all
interest then accrued and unpaid (together with interest thereon at the annual
rate of %, compounded quarterly, to the extent permitted by applicable law).
During an Extension Period, interest will continue to accrue and holders of
Series C Debentures (or holders of Series A Preferred Securities while such
series is outstanding) will be required to accrue interest income for United
States federal income tax purposes. See "Certain Federal Income Tax
Considerations -- Potential Extension of Interest Payment Period and Original
Issue Discount."
During any such Extension Period, PacifiCorp may not, and may not permit any
subsidiary of PacifiCorp to, (i) declare, set aside or pay any dividend or
distribution on, or repurchase, redeem, or otherwise acquire or make any sinking
fund payment with respect to, any shares of PacifiCorp's capital stock or (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities (including other Junior Subordinated
Debentures) that rank PARI PASSU with or junior in interest to the Series C
Debentures or make any guarantee payments with respect to the foregoing (other
than (a) dividends or distributions in shares of its capital stock or in rights
to acquire shares of its capital stock, (b) conversions into or exchanges for
shares of its capital stock, (c) redemptions, purchases or other acquisitions of
shares of its capital stock made for the purpose of an employee incentive plan
or benefit plan of PacifiCorp or any of its subsidiaries and mandatory
redemptions or sinking fund payments with respect to any series of Preferred
Stock of PacifiCorp that are subject to mandatory redemption or sinking fund
requirements, PROVIDED that the aggregate stated value of all such series
outstanding at the time of any such payment does not exceed five percent of the
aggregate of (1) the total principal amount of all bonds or other securities
representing secured indebtedness issued or assumed by PacifiCorp and then
outstanding and (2) the capital and surplus of PacifiCorp to be stated on the
books of account of PacifiCorp after giving effect to such payment, PROVIDED,
HOWEVER, that any moneys deposited in any sinking fund and not in violation of
this provision may thereafter be applied to the purchase or redemption of such
Preferred Stock in accordance with the terms of such sinking fund without regard
to the restrictions contained in this provision, and (d) payments under any
guarantee by PacifiCorp with respect to any securities of a subsidiary of
PacifiCorp, provided that the proceeds from the issuance of such securities were
used to purchase Junior Subordinated Debentures of any series under the
Indenture). Upon the termination of any such Extension Period and the payment of
all amounts then due on any Interest Payment Date, PacifiCorp may elect to begin
a new Extension Period, subject to the above requirements. No interest shall be
due and payable during an Extension Period, except at the end thereof.
PacifiCorp must give the Property Trustee, the Administrative Trustees and the
Debenture Trustee notice of its election of such Extension Period at least 15
Business Days prior to the earlier of (i) the date the Distributions on the
Series A Preferred Securities would have been payable except for the election to
begin such Extension Period and (ii) the date the Administrative Trustees are
required to give notice to the NYSE or other applicable self-regulatory
organization or to holders of such Series A Preferred Securities of the record
date or the date such Distributions are payable, but in any event not less than
one Business Day prior to such record date. The Administrative Trustees shall
give notice of PacifiCorp's election to begin a new Extension Period to the
holders of the Series A Preferred Securities at least 10 Business Days prior to
the date the Distributions on the Series A Preferred Securities would have been
payable except for the election to begin such Extension Period. See "Description
of Junior Subordinated Debentures -- Option to Extend Interest Payment Date" in
the accompanying Prospectus.
ADDITIONAL SUMS
If PacifiCorp Capital I is required to pay any additional taxes, duties or
other governmental charges as a result of a Tax Event, PacifiCorp will pay as
additional amounts on the Series C Debentures such amounts ("Additional Sums")
as shall be required so that the Distributions payable by PacifiCorp Capital I
shall not be reduced as a result of any such additional taxes, duties or other
governmental charges, subject to the conditions described under "Description of
Preferred Securities -- Redemption or Exchange -- Special Event Redemption or
Distribution of Corresponding Junior Subordinated Debentures" in the
accompanying Prospectus.
S-14
<PAGE>
REDEMPTION
The Series C Debentures are redeemable prior to maturity at the option of
PacifiCorp (i) on or after June , 2001, in whole at any time or in part from
time to time, at a redemption price equal to the accrued and unpaid interest on
the Series C Debentures so redeemed to the date fixed for redemption plus 100%
of the principal amount thereof or (ii) at any time, in whole (but not in part),
upon the occurrence and continuation of a Special Event, at a redemption price
equal to the accrued and unpaid interest on the Series C Debentures so redeemed
to the date fixed for redemption, plus 100% of the principal amount thereof, in
each case subject to the further conditions described under "Description of
Junior Subordinated Debentures -- Redemption" and "Description of Corresponding
Junior Subordinated Debentures -- Optional Redemption" in the accompanying
Prospectus.
DISTRIBUTION OF SERIES C DEBENTURES
Under certain circumstances involving the termination of PacifiCorp Capital
I, Series C Debentures may be distributed to the holders of the Series A
Preferred Securities in liquidation of PacifiCorp Capital I after satisfaction
of liabilities to creditors of PacifiCorp Capital I as provided by applicable
law. If distributed to holders of Series A Preferred Securities in liquidation,
the Series C Debentures will initially be issued in the form of one or more
global securities and DTC, or any successor depositary for the Series A
Preferred Securities, will act as depositary for the Series C Debentures. It is
anticipated that the depositary arrangements for the Series C Debentures would
be substantially identical to those in effect for the Series A Preferred
Securities. If the Series C Debentures are distributed to the holders of Series
A Preferred Securities upon the liquidation of PacifiCorp Capital I, PacifiCorp
will use its best efforts to list the Series C Debentures on the NYSE or such
other stock exchanges or other organizations, if any, on which the Series A
Preferred Securities are then listed. There can be no assurance as to the market
price of any Series C Debentures that may be distributed to the holders of
Series A Preferred Securities. For a description of DTC and the terms of the
depositary arrangements relating to payments, transfers, voting rights,
redemption and other notices and other matters, see "Description of Preferred
Securities -- Book-entry Issuance" in the accompanying Prospectus.
REGISTRATION OF SERIES C DEBENTURES
A global security shall be exchangeable for Series C Debentures registered
in the names of persons other than DTC or its nominee only if (i) DTC notifies
PacifiCorp that it is unwilling or unable to continue as a depository for such
global security and no successor depository shall have been appointed, or if at
any time DTC ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, at a time when DTC is required to be so
registered to act as such depository, (ii) PacifiCorp in its sole discretion
determines that such global security shall be so exchangeable or (iii) there
shall have occurred and be continuing a Debenture Event of Default with respect
to such global security. Any global security that is exchangeable pursuant to
the preceding sentence shall be exchangeable for definitive certificates
registered in such names as DTC shall direct. It is expected that such
instructions will be based upon directions received by DTC from its Participants
with respect to ownership of beneficial interests in such global security. In
the event that Series C Debentures are issued in definitive form, such Series C
Debentures will be in denominations of $25 and integral multiples thereof and
may be transferred or exchanged at the offices described below.
Payments on Series C Debentures represented by a global security will be
made to DTC, as the depositary for the Series C Debentures. In the event Series
C Debentures are issued in definitive form, principal and interest will be
payable, the transfer of the Series C Debentures will be registrable, and Series
C Debentures will be exchangeable for Series C Debentures of other denominations
of a like aggregate principal amount, at the corporate office of the Debenture
Trustee in New York, New York, or at the offices of any paying agent or transfer
agent appointed by PacifiCorp, PROVIDED that payment of interest may be made at
the option of PacifiCorp by check mailed to the address of the persons entitled
thereto or by wire transfer as provided under "Description of Junior
Subordinated Debentures -- Payment and Paying Agents" in the accompanying
Prospectus. In addition, if the Series C Debentures are issued in certificated
form, the record dates for payment of interest will be the 15th day of the last
S-15
<PAGE>
month of each calendar quarter. For a description of DTC and the terms of the
depositary arrangements relating to payments, transfers, voting rights,
redemptions and other notices and other matters, see "Description of Preferred
Securities -- Book-entry Issuance" in the accompanying Prospectus.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the principal United States federal income tax
consequences of the purchase, ownership and disposition of Series A Preferred
Securities. This summary only addresses the tax consequences to a person
acquiring Series A Preferred Securities on their original issue at their
original offering price and that is (i) an individual citizen or resident of the
United States, (ii) a corporation or partnership organized in or under the laws
of the United States or any state thereof or the District of Columbia or (iii)
an estate or trust the income of which is subject to United States federal
income tax regardless of source (a "United States Person"). This summary does
not address all tax consequences that may be applicable to a United States
Person that is a beneficial owner of the Series A Preferred Securities, nor does
it address the tax consequences to (i) persons that are not United States
Persons, (ii) persons subject to special treatment under United States federal
income tax law, such as banks, insurance companies, thrift institutions,
regulated investment companies, real estate investment trusts, tax-exempt
organizations and dealers in securities or currencies, (iii) persons that will
hold Preferred Securities as part of a position in a "straddle" or as part of a
"hedging," "conversion" or other integrated investment transaction for United
States federal income tax purposes, (iv) persons whose "functional currency" is
not the United States dollar or (v) persons that do not hold the Series A
Preferred Securities as capital assets.
The statements of law or legal conclusion set forth in this summary
constitute the opinion of Stoel Rives LLP, counsel to PacifiCorp and PacifiCorp
Capital I. This summary is based upon the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury Regulations, Internal Revenue Service rulings and
pronouncements and judicial decisions now in effect, all of which are subject to
change at any time. Such changes may be applied retroactively in a manner that
could cause the tax consequences to vary substantially from the consequences
described below, possibly adversely affecting a beneficial owner of a Series A
Preferred Security. In particular, legislation has been proposed that could
adversely affect PacifiCorp's ability to deduct interest on the Series C
Debentures, which would in turn permit PacifiCorp to cause a redemption of the
Series A Preferred Securities. See "-- Possible Tax Law Changes." The
authorities on which this summary is based are subject to various
interpretations and it is therefore possible that the United States federal
income tax treatment of the Series A Preferred Securities may differ from the
treatment described below.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS IN
LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE UNITED STATES FEDERAL TAX
CONSEQUENCES OF PURCHASE, OWNERSHIP AND DISPOSITION OF SERIES A PREFERRED
SECURITIES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
CLASSIFICATION OF PACIFICORP CAPITAL I
In connection with the issuance of the Series A Preferred Securities, Stoel
Rives LLP will render its opinion to the effect that, under then current law and
assuming compliance with the terms of the Trust Agreement and certain other
documents, and based on certain facts and assumptions contained in such opinion,
PacifiCorp Capital I will be classified as a grantor trust and not as an
association taxable as a corporation for United States federal income tax
purposes. As a result, each beneficial owner of a Series A Preferred Security (a
"Securityholder") will be treated as owning an undivided beneficial interest in
the Series C Debentures. Accordingly, each Securityholder will be required to
include in its gross income its pro rata share of the original issue discount
accrued with respect to the Series C Debentures, whether or not cash is actually
distributed to the Securityholders. See "-- Potential Extension of Interest
Payment Period and Original Issue Discount." No amount included in income with
respect to the Series A Preferred Securities will be eligible for the
dividends-received deduction.
S-16
<PAGE>
CLASSIFICATION OF THE SERIES C DEBENTURES
Based on the advice of its counsel, PacifiCorp believes and intends to take
the position that the Series C Debentures will constitute indebtedness for
United States federal income tax purposes. No assurance can be given that such
position will not be challenged by the Internal Revenue Service or, if so, that
such challenge will not be successful. By purchasing and accepting Series A
Preferred Securities, each Securityholder agrees to treat the Series C
Debentures as indebtedness and the Series A Preferred Securities as evidence of
an indirect beneficial ownership in the Series C Debentures. The remainder of
this discussion assumes that the Series C Debentures will be classified as
indebtedness of PacifiCorp for United States federal income tax purposes.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE DISCOUNT
Under the Indenture, PacifiCorp has the right to defer the payment of
interest on the Series C Debentures at any time from time to time for a period
not exceeding 20 consecutive quarters with respect to each Extension Period,
PROVIDED that no Extension Period may extend beyond the maturity of the Series C
Debentures. Because of this option, the Series C Debentures will be treated as
having been issued with "original issue discount" for United States federal
income tax purposes. Accordingly, a Securityholder will recognize interest
income (in the form of original issue discount) on a daily basis under a
constant yield method over the term of the Series C Debentures (including during
any Extension Period), regardless of the receipt of cash with respect to the
period to which such income is attributable. (Subsequent uses of the term
"interest" in this summary shall include interest in the form of original issue
discount.)
As a result, Securityholders of record during an Extension Period will
include interest in gross income in advance of the receipt of cash, regardless
of their regular method of accounting for tax purposes, and any such
Securityholders who dispose of Series A Preferred Securities prior to the record
date for the payment of Distributions following such Extension Period will
include interest in gross income but will not receive any cash related thereto
from PacifiCorp Capital I. Any amount of original issue discount included in a
Securityholder's gross income (whether or not during an Extension Period) will
increase such Securityholder's tax basis in its Series A Preferred Securities,
and the amount of Distributions received from PacifiCorp Capital I by such
Securityholder will reduce such Securityholder's tax basis in its Series A
Preferred Securities.
DISTRIBUTION OF SERIES C DEBENTURES TO HOLDERS OF SERIES A PREFERRED SECURITIES
As described under the caption "Certain Terms of Series A Preferred
Securities -- Distribution of Series C Debentures," PacifiCorp will have the
right, at any time, to liquidate PacifiCorp Capital I and cause the Series C
Debentures to be distributed to the holders of the Series A Preferred
Securities. Under current United States federal income tax law, provided
PacifiCorp Capital I is treated as a grantor trust at the time of such
distribution, such distribution would not be a taxable event to Securityholders.
Such a distribution would result in a Securityholder receiving directly such
Securityholder's pro rata share of the Series C Debentures previously held
indirectly through PacifiCorp Capital I, with a holding period and aggregate tax
basis equal to the holding period and aggregate tax basis such Securityholder
had in such Securityholder's Series A Preferred Securities before such
distribution. A Securityholder will accrue interest in respect of Series C
Debentures received from PacifiCorp Capital I in the manner described above
under "-- Potential Extension of Interest Payment Period and Original Issue
Discount."
Following the occurrence of a Tax Event pursuant to which PacifiCorp Capital
I was determined to be an association taxable as a corporation, however, such a
distribution would be a taxable event to such holders.
SALE OR REDEMPTION OF SERIES A PREFERRED SECURITIES
Gain or loss will be recognized by a Securityholder on a sale of Series A
Preferred Securities (including a redemption for cash) in an amount equal to the
difference between the amount realized and
S-17
<PAGE>
the Securityholder's adjusted tax basis in the Series A Preferred Securities
sold or so redeemed. Gain or loss recognized by a Securityholder on Series A
Preferred Securities held for more than one year will generally be treated as
long-term capital gain or loss.
The Series A Preferred Securities may trade at a price that does not fully
reflect the value of accrued but unpaid interest with respect to the underlying
Series C Debentures. A Securityholder that disposes of such Securityholder's
Series A Preferred Securities between record dates for payments of Distributions
(and consequently does not receive a Distribution from PacifiCorp Capital I for
the period prior to such disposition) will nevertheless be required to include
as ordinary income accrued but unpaid interest on the Series C Debentures
through the date of disposition and to add such amount to such Securityholder's
adjusted tax basis in the Series A Preferred Securities disposed of. Such
Securityholder will recognize a capital loss on the disposition of Series A
Preferred Securities to the extent the selling price (which may not fully
reflect the amount of accrued but unpaid interest) is less than the
Securityholder's adjusted tax basis in the Series A Preferred Securities (which
will reflect accrued but unpaid interest). Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of original issue discount accrued on the Series A Preferred
Securities held of record by United States Persons (other than corporations and
other exempt Securityholders) will be reported to the Securityholders and to the
Internal Revenue Service. "Backup" withholding at a rate of 31% will apply to
payments of interest to non-exempt United States Persons unless the
Securityholder furnishes its taxpayer identification number in the manner
prescribed in applicable Treasury Regulations, certifies that such number is
correct, certifies as to no loss of exemption from backup withholding and meets
certain other conditions.
Payment of proceeds from disposition of Series A Preferred Securities to or
through the United States office of a broker is subject to information reporting
and backup withholding unless the holder or beneficial owner establishes an
exemption.
Any amounts withheld from a Securityholder under the backup withholding
rules will be allowed as a refund or a credit against such Securityholder's
United States federal income tax liability, provided the required information is
furnished to the Internal Revenue Service.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, President Clinton released the proposed Revenue
Reconciliation Bill of 1996 (the "Bill"). The Bill would, among other things,
generally deny interest deductions for interest on an instrument, issued by a
corporation, that has a maximum weighted average maturity of more than 40 years.
The Bill also would generally deny interest deductions for interest on an
instrument, issued by a corporation, that has a maximum term of more than 20
years and that is not shown as indebtedness on the separate balance sheet of the
issuer or, where the instrument is issued to a related party (other than a
corporation), where the holder or some other related party issues a related
instrument that is not shown as indebtedness on the issuer's consolidated
balance sheet. The above-described provisions of the Bill were proposed to be
effective generally for instruments issued on or after December 7, 1995. If
either provision were to apply to the Series C Debentures, PacifiCorp would be
unable to deduct interest on the Series C Debentures.
S-18
<PAGE>
On March 29, 1996, the Chairmen of the Senate Finance and the House Ways and
Means Committees issued a joint statement to the effect that it was their
intention that the effective date of the President's legislative proposals, if
adopted, would be no earlier than the date of "appropriate Congressional
action." As discussed above under "-- Classification of the Series C
Debentures," PacifiCorp believes and intends to take the position that interest
on the Series C Debentures is deductible for United States federal income tax
purposes. There can be no assurance, however, that current or future legislative
proposals or final legislation will not affect the ability of PacifiCorp to
deduct interest on the Series C Debentures. If legislation were enacted
limiting, in whole or in part, deductibility by PacifiCorp of interest on the
Series C Debentures for United States federal income tax purposes, such
enactment would give rise to a Special Event, which would permit PacifiCorp to
cause a redemption of the Series A Preferred Securities or a distribution of the
Series C Debentures, as described more fully in the accompanying Prospectus
under "Description of Preferred Securities -- Redemption or Exchange -- Special
Event Redemption or Distribution of Corresponding Junior Subordinated
Debentures."
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement,
PacifiCorp and PacifiCorp Capital I have agreed that PacifiCorp Capital I will
sell to each of the Underwriters named below, and each of such Underwriters, for
whom Goldman, Sachs & Co., Smith Barney Inc., Dean Witter Reynolds Inc., A.G.
Edwards & Sons, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated are
acting as representatives, has severally agreed to purchase from PacifiCorp
Capital I the respective number of Series A Preferred Securities set forth
opposite its name below:
<TABLE>
<CAPTION>
NUMBER OF
SERIES A
PREFERRED
UNDERWRITER SECURITIES
- --------------------------------------------------------------------------------- -----------
<S> <C>
Goldman, Sachs & Co..............................................................
Smith Barney Inc.................................................................
Dean Witter Reynolds Inc.........................................................
A.G. Edwards & Sons, Inc.........................................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated...............................
-----------
Total.......................................................................... 8,680,000
-----------
-----------
</TABLE>
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Underwriters are committed to take and pay for all such Series A Preferred
Securities offered hereby, if any are taken.
The Underwriters propose to offer the Series A Preferred Securities in part
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus Supplement and in part to certain securities
dealers at such price less a concession of $ per Series A Preferred Security.
The Underwriters may allow, and such dealers may reallow, a concession not in
excess of $ per Series A Preferred Security to certain brokers and dealers.
After the Series A Preferred Securities are released for sale to the public, the
offering price and other selling terms may from time to time be varied by the
representatives.
In view of the fact that the proceeds from the sale of the Series A
Preferred Securities will be used to purchase the Series C Debentures issued by
PacifiCorp, the Underwriting Agreement provides that PacifiCorp will pay as
Underwriters' Compensation for the Underwriters arranging the investment therein
of such proceeds an amount of $ per Series A Preferred Security ($ per
Series A Preferred Security sold to certain institutions) for the accounts of
the several Underwriters.
S-19
<PAGE>
PacifiCorp and PacifiCorp Capital I have agreed that, during the period
beginning from the date of the Underwriting Agreement and continuing to and
including the earlier of (i) the termination of trading restrictions on the
Series A Preferred Securities, as determined by the Underwriters, and (ii) 30
days after the closing date, they will not offer, sell, contract to sell or
otherwise dispose of any Preferred Securities, any other beneficial interests in
the assets of PacifiCorp Capital I, or any preferred securities or any other
securities of PacifiCorp Capital I or PacifiCorp which are substantially similar
to the Series A Preferred Securities, including any guarantee of such
securities, or any securities convertible into or exchangeable for or that
represent the right to receive preferred securities or any such substantially
similar securities of either PacifiCorp Capital I or PacifiCorp, without the
prior written consent of the Representatives, except for the Series A Preferred
Securities and the Series A Guarantee offered in connection with the offering.
Prior to this offering, there has been no public market for the Series A
Preferred Securities. The Series A Preferred Securities will be listed on the
NYSE. In order to meet one of the requirements for listing the Series A
Preferred Securities on the NYSE, the Underwriters will undertake to sell lots
of 100 or more Series A Preferred Securities to a minimum of 400 beneficial
holders. Trading of the Series A Preferred Securities on the NYSE is expected to
commence within a seven-day period after the initial delivery of the Series A
Preferred Securities. The representatives of the Underwriters have advised
PacifiCorp that they intend to make a market in the Series A Preferred
Securities prior to commencement of trading on the NYSE, but are not obligated
to do so and may discontinue market making at any time without notice. No
assurance can be given as to the liquidity of the trading market for the Series
A Preferred Securities.
PacifiCorp and PacifiCorp Capital I have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, or to contribute to payments the Underwriter
may be required to make in respect thereof.
Certain of the Underwriters or their affiliates have provided from time to
time, and expect to provide in the future, investment or commercial banking
services to PacifiCorp and its affiliates, for which such Underwriters or their
affiliates have received or will receive customary fees and commissions.
LEGAL OPINIONS
Certain matters of Delaware law relating to the validity of the Series A
Preferred Securities, the enforceability of the Trust Agreement and the creation
of PacifiCorp Capital I will be passed upon by Richards, Layton & Finger,
special Delaware counsel to PacifiCorp and PacifiCorp Capital I. The validity of
the Series A Guarantee and the Series C Debentures will be passed upon for
PacifiCorp by Stoel Rives LLP, Portland, Oregon, and for the Underwriters by
Winthrop, Stimson, Putnam & Roberts, New York, New York. Certain matters
relating to United States federal income tax considerations will be passed upon
by Stoel Rives LLP, counsel to PacifiCorp and PacifiCorp Capital I.
S-20
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
JURISDICTION.
<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 3, 1996
$250,000,000
PACIFICORP PACIFICORP CAPITAL I
JUNIOR SUBORDINATED DEBENTURES PACIFICORP CAPITAL II
PREFERRED SECURITIES GUARANTEED
TO THE EXTENT THE ISSUER TRUSTS
HAVE
FUNDS AS SET FORTH HEREIN BY
PACIFICORP
PacifiCorp, an Oregon corporation ("PacifiCorp"), may from time to time
offer in one or more series or issuances its junior subordinated deferrable
interest debentures (the "Junior Subordinated Debentures"). The Junior
Subordinated Debentures will be unsecured and subordinate and junior in right of
payment to Senior Indebtedness (as defined herein) of PacifiCorp. See
"Description of the Junior Subordinated Debentures -- Subordination." If
provided in a related prospectus supplement accompanying this Prospectus (the
"Prospectus Supplement"), PacifiCorp will have the right to defer payments of
interest on any series of Junior Subordinated Debentures at any time or from
time to time for such number of consecutive interest payment periods (which
shall not extend beyond the maturity of the Junior Subordinated Debentures) with
respect to each deferral period as may be specified in the Prospectus Supplement
(each, an "Extension Period"). See "Description of Junior Subordinated
Debentures -- Option to Extend Interest Payments" and "-- Certain Covenants of
PacifiCorp."
PacifiCorp Capital I and PacifiCorp Capital II, each a trust created under
the laws of the State of Delaware (each an "Issuer Trust" and collectively the
"Issuer Trusts"), may severally offer, from time to time, preferred securities
(the "Preferred Securities") representing preferred undivided beneficial
interests in the assets of each Issuer Trust. PacifiCorp will be the owner of
the common securities (the "Common Securities") representing common undivided
beneficial interests in the assets of each Issuer Trust. The payment of periodic
cash distributions ("Distributions") with respect to Preferred Securities of
each Issuer Trust, and payments on liquidation or redemption with respect to
such Preferred Securities, in each case to the extent of funds held by such
Issuer Trust, are each irrevocably guaranteed by PacifiCorp as described herein
(each, a "Guarantee"). See "Description of Guarantees." PacifiCorp's obligations
under each Guarantee will be subordinate and junior in right of payment to all
Senior Indebtedness of PacifiCorp. Concurrently with the issuance by an Issuer
Trust of its Preferred Securities, such Issuer Trust will invest the proceeds
thereof and any contributions made by PacifiCorp in respect of PacifiCorp's
purchase of the Common Securities in a corresponding series of Junior
Subordinated Debentures (the "Corresponding Junior Subordinated Debentures")
with terms corresponding to the terms of such Issuer Trust's Preferred
Securities. The Corresponding Junior Subordinated Debentures will be the sole
assets of each Issuer Trust, and payments under the Corresponding Junior
Subordinated Debentures and the Expense Agreement (as defined herein) will be
the only revenue of each Issuer Trust. PacifiCorp may redeem the Corresponding
Junior Subordinated Debentures (and cause the redemption of the related
Preferred Securities) or may terminate each Issuer Trust and cause the
Corresponding Junior Subordinated Debentures to be distributed to the holders of
Preferred Securities in liquidation of their interests in such Issuer Trust. See
"Description of Preferred Securities -- Liquidation Distribution Upon
Termination."
(CONTINUED ON NEXT PAGE)
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-------------------
The date of this Prospectus is June , 1996
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
Holders of the Preferred Securities will be entitled to receive preferential
cumulative cash Distributions accumulating from the date of original issuance
and payable periodically as specified in the related Prospectus Supplement. If
provided in the related Prospectus Supplement, PacifiCorp will have the right to
defer payments of interest on any series of Corresponding Junior Subordinated
Debentures at any time or from time to time for one or more Extension Periods
(which shall not extend beyond the maturity of such Corresponding Junior
Subordinated Debentures). If interest payments are so deferred, Distributions on
the related series of Preferred Securities will also be deferred and PacifiCorp
will not be permitted, subject to certain exceptions set forth herein, to
declare, set aside or pay any cash distributions with respect to PacifiCorp's
capital stock or debt securities that rank PARI PASSU with or junior to the
Corresponding Junior Subordinated Debentures. During an Extension Period,
interest on the Corresponding Junior Subordinated Debentures will continue to
accrue (and the amount of Distributions to which holders of Preferred Securities
are entitled will accumulate) at the rate per annum set forth in the related
Prospectus Supplement. See "Description of Junior Subordinated Debentures --
Option to Extend Interest Payment Date" and "-- Certain Covenants of PacifiCorp"
and "Description of Preferred Securities -- Distributions."
The Junior Subordinated Debentures and the Preferred Securities (the
"Offered Securities") may be offered in amounts, at prices and on terms to be
determined at the time of offering, PROVIDED that the aggregate initial public
offering price of all Junior Subordinated Debentures (other than Corresponding
Junior Subordinated Debentures) and Preferred Securities shall not exceed
$250,000,000. Certain specific terms of the Offered Securities will be described
in the Prospectus Supplement, including, without limitation and where applicable
and to the extent not set forth herein: (i) in the case of Junior Subordinated
Debentures, the specific designation, aggregate principal amount, denominations,
maturity, interest payment dates, interest rate (which may be fixed or variable)
or method of calculating interest, if any, applicable Extension Period or
interest deferral terms, if any, place or places where principal, premium, if
any, and interest, if any, will be payable, terms of redemption, if any, sinking
fund provisions, if any, terms for conversion or exchange, if any, into other
securities, the initial offering or purchase price, methods of distribution and
any other special terms; and (ii) in the case of Preferred Securities, the
identity of the Issuer Trust, specific title, aggregate amount, stated
liquidation preference, distribution rate or the method of calculating such
rate, applicable Extension Period or Distribution deferral terms, if any, dates
on which and place or places where Distributions will be payable, voting rights,
any redemption provisions, terms for any conversion or exchange into other
securities, initial offering or purchase price, methods of distribution, and any
other special terms.
The Prospectus Supplement will also contain information, as applicable,
concerning certain United States federal income tax considerations relating to
the Offered Securities.
The Offered Securities may be sold directly by PacifiCorp, through agents
designated from time to time or through underwriters or dealers. See "Plan of
Distribution." If any agents of PacifiCorp or underwriters are involved in the
sale of any Offered Securities in respect of which this Prospectus is being
delivered, the names of such agents or underwriters and any applicable
commissions or discounts will be set forth in a Prospectus Supplement. The net
proceeds to PacifiCorp from such sale also will be set forth in a Prospectus
Supplement or Prospectus Supplements. The Prospectus Supplement will state
whether the Offered Securities will be listed on any national securities
exchange or the Nasdaq National Market. If the Offered Securities are not listed
on any national securities exchange or the Nasdaq National Market, there can be
no assurance that there will be a liquid secondary market for such Offered
Securities.
This Prospectus may not be used to consummate sales of Offered Securities
unless accompanied by a Prospectus Supplement relating to such Offered
Securities.
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AVAILABLE INFORMATION
PacifiCorp is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information (including
proxy and information statements) filed by PacifiCorp can be inspected and
copied at public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 10549, and at the following Regional
Offices of the Commission: New York Regional Office, 7 World Trade Center, 13th
Floor, New York, New York 10048, and Chicago Regional Office, Citicorp Center,
500 W. Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, upon payment of the prescribed
rates. The Common Stock of PacifiCorp is listed on the New York Stock Exchange
and the Pacific Stock Exchange. Reports, proxy statements and other information
concerning PacifiCorp can also be inspected at their respective offices: New
York Stock Exchange (the "NYSE"), 20 Broad Street, New York, New York 10005, and
the Pacific Stock Exchange, 301 Pine Street, San Francisco, California 94104.
PacifiCorp and the Issuer Trusts have filed with the Commission a joint
Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the securities offered hereby. This
Prospectus does not contain all of the information set forth in such
Registration Statement and the exhibits thereto. For further information with
respect to PacifiCorp, the Issuer Trusts and the Offered Securities, reference
is hereby made to such Registration Statement, including the exhibits thereto,
which may be examined at the Commission's principal office, 450 Fifth Street,
N.W., Washington, D.C. 20549, or copies of which may be obtained from the
Commission at such office upon payment of the fees prescribed by the Commission.
No separate financial statements of the Issuer Trusts have been included
herein. PacifiCorp and the Issuer Trusts do not consider that such financial
statements would be material to holders of Preferred Securities offered hereby
because each Issuer Trust is a newly formed special purpose entity, has no
operating history, has no independent operations and is not engaged in, and does
not propose to engage in, any activity other than as set forth below. See "The
Issuer Trusts," "Description of the Preferred Securities," "Description of
Guarantees" and "Description of Corresponding Junior Subordinated Debentures."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by PacifiCorp with the Commission pursuant to
the Exchange Act are incorporated in this Prospectus by reference:
(1) PacifiCorp's Annual Report on Form 10-K for the year ended December 31,
1995;
(2) PacifiCorp's Quarterly Report on Form 10-Q for the quarter ended March
31, 1996; and
(3) PacifiCorp's Current Reports on Form 8-K dated January 16, 1996 and
February 12, 1996.
All documents filed by PacifiCorp pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of such
documents (such documents, and the documents enumerated above, being hereinafter
referred to as "Incorporated Documents"; PROVIDED, HOWEVER, that all documents
subsequently filed by PacifiCorp pursuant to Section 13 or 14 of the Exchange
Act in each year during which the offering made by this Prospectus is in effect
prior to the filing with the Commission of PacifiCorp's Annual Report on Form
10-K covering such year shall not be Incorporated Documents or be incorporated
by reference in this Prospectus or be a part hereof from and after such filing
of such Annual Report on Form 10-K).
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other
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subsequently filed Incorporated Document modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
PACIFICORP HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON TO
WHOM A COPY OF THIS PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF
ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE INCORPORATED DOCUMENTS, OTHER THAN
EXHIBITS TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
BY REFERENCE THEREIN. REQUESTS SHOULD BE DIRECTED TO PACIFICORP, 700 NE
MULTNOMAH, SUITE 1600, PORTLAND, OREGON 97232, ATTENTION: RICHARD T. O'BRIEN,
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, TELEPHONE NUMBER (503)
731-2000. THE INFORMATION RELATING TO PACIFICORP CONTAINED IN THIS PROSPECTUS
DOES NOT PURPORT TO BE COMPREHENSIVE AND SHOULD BE READ TOGETHER WITH THE
INFORMATION CONTAINED IN THE INCORPORATED DOCUMENTS.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR IN ANY PROSPECTUS SUPPLEMENT,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY OR THEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT NOR
ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF PACIFICORP OR ITS
SUBSIDIARIES SINCE THE DATE OF THIS PROSPECTUS OR THE DATE OF THE LATEST
PROSPECTUS SUPPLEMENT, AS THE CASE MAY BE.
PACIFICORP
PacifiCorp is an electric utility headquartered in Portland, Oregon that
conducts a retail electric utility business through Pacific Power & Light
Company and Utah Power & Light Company, and engages in power production and
sales on a wholesale basis under the name PacifiCorp. PacifiCorp is the indirect
owner, through PacifiCorp Holdings, Inc. (a wholly-owned subsidiary)
("Holdings"), of 100% of each of Powercor Australia Limited ("Powercor"), an
Australian electric distribution Company, and Pacific Telecom, Inc. ("Pacific
Telecom"), a leading provider of local telephone exchange service to rural and
suburban markets.
PacifiCorp furnishes electric service to approximately 1,300,000 customers
in portions of seven western states: California, Idaho, Montana, Oregon, Utah,
Washington and Wyoming. Powercor serves approximately 570,000 customers in
suburban Melbourne and the western and central regions of the State of Victoria
in southeast Australia. Pacific Telecom, through its subsidiaries, provides
local telephone service and access to the long-distance network in Alaska, seven
other western states and three midwestern states, provides cellular mobile
telephone services in six states and is engaged in sales of capacity in and
operation of a submarine fiber optic cable between the United States and Japan.
Holdings also has interests in the independent power and cogeneration business
through its wholly-owned subsidiary, Pacific Generation Company, and continues
to liquidate portions of the loan, leasing and real estate investment portfolio
of its wholly-owned subsidiary, PacifiCorp Financial Services, Inc. ("PFS"). PFS
expects to retain only its tax advantaged investments in leveraged lease assets
(primarily aircraft) and affordable housing, and is limiting its pursuit of
tax-advantaged investment opportunities to affordable housing.
The principal executive offices of PacifiCorp are located at 700 NE
Multnomah, Suite 1600, Portland, Oregon 97232; the telephone number is (503)
731-2000.
THE ISSUER TRUSTS
Each Issuer Trust is a statutory business trust created under Delaware law
pursuant to (i) a trust agreement executed by PacifiCorp, as depositor of such
Issuer Trust, the Delaware Trustee (as defined
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herein) of such Issuer Trust, the Property Trustee (as defined herein) of such
Issuer Trust and an Administrative Trustee (as defined herein) of such Issuer
Trust and (ii) the filing of a certificate of trust with the Delaware Secretary
of State. Each trust agreement will be amended and restated in its entirety
(each, as so amended and restated, a "Trust Agreement") substantially in the
form filed as an exhibit to the Registration Statement of which this Prospectus
forms a part. Each Trust Agreement will be qualified as an indenture under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). Each Issuer
Trust exists for the exclusive purposes of (i) issuing and selling its Preferred
Securities and Common Securities, (ii) using the proceeds from the sale of such
Preferred Securities and Common Securities to acquire a corresponding series of
Corresponding Junior Subordinated Debentures issued by PacifiCorp and (iii)
engaging in only those other activities necessary, convenient or incidental
thereto. Accordingly, such Corresponding Junior Subordinated Debentures will be
the sole assets of such Issuer Trust, and payments under such Corresponding
Junior Subordinated Debentures and the Expense Agreement will be the sole
revenue of such Issuer Trust.
All of the Common Securities will be owned by PacifiCorp. The Common
Securities of an Issuer Trust will rank PARI PASSU, and payments will be made
thereon PRO RATA, with the Preferred Securities of such Issuer Trust, except
that upon the occurrence and continuance of an event of default under a Trust
Agreement resulting from a Debenture Event of Default (as defined herein), the
rights of PacifiCorp as holder of the Common Securities to payment in respect of
Distributions and payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of the Preferred Securities of such
Issuer Trust. See "Description of Preferred Securities -- Subordination of
Common Securities." PacifiCorp will acquire Common Securities having an
aggregate Liquidation Amount (as defined herein) equal to not less than 3% of
the total capital of each Issuer Trust.
Unless otherwise specified in the applicable Prospectus Supplement, each
Issuer Trust has a term of approximately 45 years, but may terminate earlier as
provided in the applicable Trust Agreement. Each Issuer Trust's business and
affairs are conducted by its trustees, which will be appointed by PacifiCorp as
holder of the Common Securities.
Unless otherwise specified in the applicable Prospectus Supplement, the
trustees will be The Bank of New York, as Property Trustee, (the "Property
Trustee"), The Bank of New York (Delaware), as the Delaware Trustee (the
"Delaware Trustee"), and two individual trustees (the "Administrative Trustees")
who are employees or officers of or affiliated with PacifiCorp (collectively,
the "Issuer Trustees"). The Bank of New York, as Property Trustee, will act as
sole indenture trustee under each Trust Agreement for purposes of compliance
with the Trust Indenture Act. The Bank of New York will also act as trustee
under the Guarantee and the Indenture (each as defined herein). See "Description
of Guarantees" and "Description of Junior Subordinated Debentures." The holder
of the Common Securities, or the holders of a majority in liquidation preference
of the Preferred Securities if a Debenture Event of Default under the Trust
Agreement has occurred and is continuing, will be entitled to appoint, remove or
replace the Property Trustee and/or the Delaware Trustee. In no event will the
holders of the Preferred Securities have the right to vote to appoint, remove or
replace the Administrative Trustees; such voting rights are vested exclusively
in the holder of the Common Securities. The duties and obligations of each
Issuer Trustee are governed by the applicable Trust Agreement. PacifiCorp will
pay all fees and expenses related to each Issuer Trust and the offering of the
Preferred Securities and will pay, directly or indirectly, all ongoing costs,
expenses and liabilities of each Issuer Trust. The principal executive office of
each Issuer Trust is 700 NE Multnomah, Suite 1600, Portland, Oregon 97232;
telephone number (503) 731-2000.
USE OF PROCEEDS
Unless otherwise indicated in the Prospectus Supplement, the net proceeds to
be received by PacifiCorp from the issuance and sale of the Offered Securities
will initially become part of the general funds of PacifiCorp and will be used
to repay all or a portion of PacifiCorp's short-term borrowings outstanding at
the time of issuance of the Offered Securities or may be applied to utility
asset purchases, new construction or other corporate purposes, including the
refunding of long-term debt or other senior
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securities. Reference is made to the Incorporated Documents with respect to
PacifiCorp's capital requirements and its general financing plans. Each Issuer
Trust will invest all proceeds received from the sale of Preferred Securities in
Corresponding Junior Subordinated Debentures.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges of PacifiCorp for the years ended
December 31, 1991 through 1995 and for the three months ended March 31, 1996,
calculated as required by the Commission, are 2.4x, 1.6x, 2.5x, 3.0x, 2.9x, and
2.7x, respectively. Excluding the effect of special charges, the ratio was 1.9x
for the year 1992. For the purpose of computing such ratios, "earnings"
represents the aggregate of (a) income from continuing operations, (b) taxes
based on income from continuing operations, (c) minority interest in the income
of majority-owned subsidiaries that have fixed charges, (d) fixed charges and
(e) undistributed losses (income) of less than 50% owned affiliates without loan
guarantees. "Fixed charges" represents consolidated interest charges, an
estimated amount representing the interest factor in rents and preferred stock
dividend requirements of majority-owned subsidiaries, and excludes discontinued
operations.
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures may be issued from time to time in one or
more series under an Indenture dated as of May 1, 1995, as supplemented and
amended from time to time (the "Indenture"), between PacifiCorp and The Bank of
New York, as trustee (the "Debenture Trustee"). PacifiCorp may issue Junior
Subordinated Debentures to the public or to institutional investors as described
under "Plan of Distribution" or Corresponding Junior Subordinated Debentures to
the Issuer Trusts in connection with the issuance of Preferred Securities. The
following summary is subject to the provisions of and is qualified by reference
to the Indenture, which is filed as an exhibit to the Registration Statement of
which this Prospectus forms a part, and to the Trust Indenture Act. Whenever
particular provisions or defined terms in the Indenture are referred to herein
or in a Prospectus Supplement, such provisions or defined terms are incorporated
herein or therein by reference. Section and Article references used herein are
references to provisions of the Indenture unless otherwise noted.
GENERAL
Each series of Junior Subordinated Debentures will rank PARI PASSU with all
other series of Junior Subordinated Debentures, and will be unsecured and
subordinated and junior in right of payment to the extent and in the manner set
forth in the Indenture to all Senior Indebtedness (as defined below) of
PacifiCorp. See "-- Subordination." As the Junior Subordinated Debentures will
be issued by PacifiCorp, the Junior Subordinated Debentures effectively will be
subordinate to all obligations of PacifiCorp's subsidiaries, and the rights of
PacifiCorp's creditors, including holders of Junior Subordinated Debentures, to
participate in the assets of such subsidiaries upon liquidation or
reorganization will be junior to the rights of the holders of all preferred
stock, indebtedness and other liabilities of such subsidiaries, which may
include trade payables, obligations to banks under credit facilities,
guarantees, pledges, support arrangements, bonds, capital leases, notes and
other obligations.
The Indenture provides that Junior Subordinated Debentures may be issued
from time to time in one or more series pursuant to an indenture supplemental to
the Indenture or a resolution of PacifiCorp's Board of Directors (each, a
"Supplemental Indenture"). (Section 2.01) The Indenture does not limit the
aggregate principal amount of Junior Subordinated Debentures that may be issued
thereunder. PacifiCorp's Second Restated Articles of Incorporation, as amended,
limit the amount of unsecured debt that PacifiCorp may issue to the equivalent
of 30% of the total of all secured indebtedness and total equity. At March 31,
1996, approximately $874 million of unsecured debt of PacifiCorp was outstanding
and approximately $1.3 billion of additional unsecured debt could have been
issued under this provision. The Indenture does not contain any provisions that
would limit the ability of PacifiCorp to incur indebtedness or that would afford
holders of Junior Subordinated Debentures protection in the event of a highly
leveraged or similar transaction involving PacifiCorp or in the event of a
change of control.
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Reference is made to the Prospectus Supplement for the following terms of
the series of Junior Subordinated Debentures being offered thereby: (i) the
specific title of such Junior Subordinated Debentures; (ii) any limit on the
aggregate principal amount of such Junior Subordinated Debentures; (iii) the
date or dates on which the principal of such Junior Subordinated Debentures is
payable; (iv) the rate or rates at which such Junior Subordinated Debentures
will bear interest or the manner of calculation of such rate or rates; (v) the
date or dates from which such interest shall accrue, the interest payment dates
on which such interest will be payable or the manner of determination of such
interest payment dates and the record dates for the determination of holders to
whom interest is payable on any such interest payment dates; (vi) the right, if
any, of PacifiCorp to extend the interest payment periods and the duration of
such extension; (vii) the period or periods within which, the price or prices at
which and the terms and conditions upon which such Junior Subordinated
Debentures may be redeemed, in whole or in part, at the option of PacifiCorp;
(viii) the obligation, if any, of PacifiCorp to redeem or purchase such Junior
Subordinated Debentures pursuant to any sinking fund or analogous provisions or
at the option of the holder thereof and the period or periods, the price or
prices at which and the terms and conditions upon which such Junior Subordinated
Debentures shall be redeemed or purchased, in whole or part, pursuant to such
obligation; (ix) the form of such Junior Subordinated Debentures; (x) if other
than denominations of $25 or any integral multiple thereof, the denominations in
which such Junior Subordinated Debentures shall be issuable; (xi) any and all
other terms with respect to such series; and (xii) whether such Junior
Subordinated Debentures are issuable as a global security, and in such case, the
identity of the depositary. (Section 2.01)
SUBORDINATION
The Indenture provides that Junior Subordinated Debentures are subordinate
and junior in right of payment to the prior payment in full of all Senior
Indebtedness of PacifiCorp as provided in the Indenture. No payment of principal
of (including redemption and sinking fund payments), or premium, if any, or
interest on, the Junior Subordinated Debentures may be made if any Senior
Indebtedness is not paid when due, any applicable grace period with respect to
such default has ended and such default has not been cured or waived, or if the
maturity of any Senior Indebtedness has been accelerated because of a default.
Upon any payment or distribution of assets to creditors upon any dissolution,
winding-up, liquidation or reorganization of PacifiCorp, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, all
amounts due or to become due on all Senior Indebtedness must be paid in full
before the holders of the Junior Subordinated Debentures are entitled to receive
or retain any payment. The rights of the holders of the Junior Subordinated
Debentures will be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions applicable to Senior
Indebtedness until all amounts owing on the Junior Subordinated Debentures are
paid in full. (Sections 14.01 to 14.04) The Junior Subordinated Debentures
effectively will also be subordinate to all obligations of PacifiCorp's
subsidiaries. See "-- General."
The term "Senior Indebtedness" shall mean the principal of and premium, if
any, and interest on and any other payment due pursuant to any of the following,
whether outstanding at the date of execution of the Indenture or thereafter
incurred, created or assumed:
(a) all indebtedness of PacifiCorp evidenced by notes, debentures, bonds or
other securities sold by PacifiCorp for money;
(b) all indebtedness of others of the kinds described in paragraph (a) above
assumed by or guaranteed in any manner by PacifiCorp or in effect guaranteed by
PacifiCorp through an agreement to purchase, contingent or otherwise; and
(c) all renewals, extensions or refundings of indebtedness of the kinds
described in either of paragraphs (a) and (b) above;
unless, in the case of any particular indebtedness, renewal, extension or
refunding, the instrument creating or evidencing the same or the assumption or
guarantee of the same expressly provides that such indebtedness, renewal,
extension or refunding is not superior in right of payment to or is PARI PASSU
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with the Junior Subordinated Debentures. Such Senior Indebtedness shall continue
to be Senior Indebtedness and entitled to the benefits of the subordination
provisions contained in the Indenture irrespective of any amendment,
modification or waiver of any term of such Senior Indebtedness. (Section 1.01)
The Indenture does not limit the aggregate amount of Senior Indebtedness
which may be issued. As of March 31, 1996, Senior Indebtedness of PacifiCorp
aggregated approximately $3.7 billion.
CERTAIN COVENANTS OF PACIFICORP
If there shall have occurred any event that would, with the giving of notice
or the passage of time, or both, constitute a Debenture Event of Default under
the Indenture, as described under "-- Debenture Events of Default" below, or
PacifiCorp exercises its option to extend the interest payment period described
in clause (vi) under "-- General" above, PacifiCorp will not, until all
defaulted interest on the Junior Subordinated Debentures and all interest
accrued on the Junior Subordinated Debentures during any such extended interest
payment period and all principal and premium, if any, then due and payable on
the Junior Subordinated Debentures shall have been paid in full, (i) declare,
set aside or pay any dividend or distribution on any capital stock of
PacifiCorp, including the Common Stock of PacifiCorp, except for dividends or
distributions in shares of its capital stock or in rights to acquire shares of
its capital stock, or (ii) repurchase, redeem or otherwise acquire, or make any
sinking fund payment for the purchase or redemption of, any shares of its
capital stock (except by conversion into or exchange for shares of its capital
stock and except for a redemption, purchase or other acquisition of shares of
its capital stock made for the purpose of an employee incentive plan or benefit
plan of PacifiCorp or any of its subsidiaries and except for mandatory
redemption or sinking fund payments with respect to any series of Preferred
Stock of PacifiCorp that are subject to mandatory redemption or sinking fund
requirements, PROVIDED that the aggregate stated value of all such series
outstanding at the time of any such payment does not exceed five percent of the
aggregate of (1) the total principal amount of all bonds or other securities
representing secured indebtedness issued or assumed by PacifiCorp and then
outstanding and (2) the capital and surplus of PacifiCorp to be stated on the
books of account of PacifiCorp after giving effect to such payment); PROVIDED,
HOWEVER, that any moneys deposited in any sinking fund and not in violation of
this provision may thereafter be applied to the purchase or redemption of such
Preferred Stock in accordance with the terms of such sinking fund without regard
to the restrictions contained in this provision. (Section 4.06) As of March 31,
1996, the aggregate stated value of such series of PacifiCorp's Preferred Stock
outstanding was approximately $219 million, which represented approximately
three percent of the aggregate of clauses (1) and (2) above at such date. With
respect to any issuance of Corresponding Junior Subordinated Debentures in
connection with the issuance of Preferred Securities, PacifiCorp will make
certain additional covenants as described under "Description of Corresponding
Junior Subordinated Debentures."
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Each series of Junior Subordinated Debentures will be issued in registered
form and in certificated form or will be represented by one or more global
securities. If not represented by one or more global securities, Junior
Subordinated Debentures may be presented for registration of transfer (with the
form of transfer endorsed thereon duly executed) or exchange, at the office of
the Registrar or at the office of any transfer agent designated by PacifiCorp
for such purpose with respect to any series of Junior Subordinated Debentures
and referred to in an applicable Prospectus Supplement, without service charge
and upon payment of any taxes and other governmental charges as described in the
Indenture. Such transfer or exchange will be effected upon the Registrar or such
transfer agent, as the case may be, being satisfied with the documents of title
and identity of the person making the request. (Section 2.05) If a Prospectus
Supplement refers to any transfer agent (in addition to the Registrar) initially
designated by PacifiCorp with respect to any series of Junior Subordinated
Debentures, PacifiCorp may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, except that PacifiCorp will be required to maintain a
transfer agent in each Place of Payment for such series. (Section 4.02)
PacifiCorp may at any time designate additional transfer
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agents with respect to any series of Junior Subordinated Debentures. The Junior
Subordinated Debentures may be transferred or exchanged without service charge,
other than any tax or governmental charge imposed in connection therewith.
(Section 2.05)
In the event of any redemption in part, PacifiCorp shall not be required to
(i) issue, register the transfer of or exchange any Junior Subordinated
Debenture during a period beginning at the opening of business 15 days before
any selection for redemption of Junior Subordinated Debentures of like tenor and
of the series of which such Junior Subordinated Debenture is a part, and ending
at the close of business on the earliest date in which the relevant notice of
redemption is deemed to have been given to all holders of Junior Subordinated
Debentures of like tenor and of such series to be redeemed and (ii) register the
transfer of or exchange any Junior Subordinated Debentures so selected for
redemption, in whole or in part, except the unredeemed portion of any Junior
Subordinated Debenture being redeemed in part. (Section 2.05)
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the Prospectus Supplement, payment of
principal of and premium, if any, on any Junior Subordinated Debenture will be
made only against surrender to the Paying Agent of such Junior Subordinated
Debenture. Unless otherwise indicated in the Prospectus Supplement, principal of
and premium, if any, and interest on Junior Subordinated Debentures will be
payable, subject to any applicable laws and regulations, at the office of such
Paying Agent or Paying Agents as PacifiCorp may designate from time to time,
except that at the option of PacifiCorp payments on the Junior Subordinated
Debentures may be made (i) by checks mailed by the Debenture Trustee to the
holders entitled thereto at their registered addresses as specified in the
Register for such Junior Subordinated Debentures or (ii) to a holder of
$1,000,000 or more in aggregate principal amount of such Junior Subordinated
Debentures who has delivered a written request to the Debenture Trustee at least
14 days prior to the relevant Interest Payment Date electing to have payments
made by wire transfer to a designated account in the United States, by wire
transfer of immediately available funds to such designated account; PROVIDED
that, in either case, the payment of principal with respect to any Junior
Subordinated Debenture will be made only upon surrender of such Junior
Subordinated Debenture to the Debenture Trustee. Unless otherwise indicated in
the Prospectus Supplement, payment of interest on a Junior Subordinated
Debenture on any Interest Payment Date will be made to the person in whose name
such Junior Subordinated Debenture (or Predecessor Junior Subordinated
Debenture) is registered at the close of business on the record date for such
interest payment. (Sections 2.03 and 4.03)
PacifiCorp and the Trustee will act as co-Paying Agents with respect to the
Junior Subordinated Debentures for so long as the Series C Debentures are
represented by a Global Debenture. PacifiCorp may at any time designate
additional Paying Agents or rescind the designation of any Paying Agents or
approve a change in the office through which any Paying Agent acts, except that
PacifiCorp will be required to maintain a Paying Agent in each Place of Payment
for each series of the Junior Subordinated Debentures. (Sections 4.02 and 4.03)
All moneys paid by PacifiCorp to a Paying Agent for the payment of the
principal of or premium, if any, or interest on any Junior Subordinated
Debenture of any series that remain unclaimed at the end of two years after such
principal, premium, if any, or interest shall have become due and payable will
be repaid to PacifiCorp and the holder of such Junior Subordinated Debenture
will thereafter look only to PacifiCorp for payment thereof. (Section 11.06)
GLOBAL DEBENTURES
The Junior Subordinated Debentures of a series may be issued in whole or in
part in the form of one or more global securities ("Global Junior Subordinated
Debentures") that will be deposited with, or on behalf of, a depositary (the
"Depositary") identified in the Prospectus Supplement relating to such series.
Global Junior Subordinated Debentures may be issued only in fully registered
form and in either temporary or permanent form. Unless and until it is exchanged
in whole or in part for the individual Junior Subordinated Debentures
represented thereby, a Global Junior Subordinated Debenture may not be
transferred except as a whole by the Depositary for such Global Junior
Subordinated Debenture to a
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nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by the Depositary or any nominee to a
successor Depositary or any nominee of such successor.
The specific terms of the depository arrangement with respect to any portion
of a series of Junior Subordinated Debentures to be represented by a Global
Junior Subordinated Debenture will be described in the Prospectus Supplement.
PacifiCorp anticipates that the following provisions will generally apply to
depositary arrangements.
Upon the issuance of a Global Junior Subordinated Debenture, and the deposit
of such Global Junior Subordinated Debenture with or on behalf of the
Depositary, the Depositary for such Global Junior Subordinated Debenture or its
nominee will credit on its book-entry registration and transfer system, the
respective principal amounts of the individual Junior Subordinated Debentures
represented by such Global Junior Subordinated Debenture to the accounts of
persons that have accounts with such Depositary ("Participants"). Such accounts
shall be designated by the dealers, underwriters or agents with respect to such
Junior Subordinated Debentures or by PacifiCorp if such Junior Subordinated
Debentures are offered and sold directly by PacifiCorp. Ownership of beneficial
interests in a Global Junior Subordinated Debenture will be limited to
Participants or persons that may hold interests through Participants. Ownership
of beneficial interests in such Global Junior Subordinated Debenture will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by the applicable Depositary or its nominee (with respect to
interests of Participants) and the records of Participants (with respect to
interests of persons who hold through Participants). The laws of some states may
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the ability
to transfer beneficial interests in a Global Junior Subordinated Debenture.
So long as the Depositary for a Global Junior Subordinated Debenture, or its
nominee, is the registered owner of such Global Junior Subordinated Debenture,
such Depositary or such nominee, as the case may be, will be considered the sole
owner or holder of the Junior Subordinated Debentures represented by such Global
Junior Subordinated Debenture for all purposes under the Indenture governing
such Junior Subordinated Debentures. Except as provided below, owners of
beneficial interests in a Global Junior Subordinated Debenture will not be
entitled to have any of the individual Junior Subordinated Debentures of the
series represented by such Global Junior Subordinated Debenture registered in
their names, will not receive or be entitled to receive physical delivery of any
such Junior Subordinated Debentures of such series in definitive form and will
not be considered the owners or holders thereof under the Indenture.
Payments of principal of and premium, if any, and interest on individual
Junior Subordinated Debentures represented by a Global Junior Subordinated
Debenture registered in the name of a Depositary or its nominee will be made to
the Depositary or its nominee, as the case may be, as the registered owner of
the Global Junior Subordinated Debenture representing such Junior Subordinated
Debentures. None of PacifiCorp, the Debenture Trustee, any Paying Agent, or the
Registrar for such Junior Subordinated Debentures will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of the Global Junior Subordinated
Debentures representing such Junior Subordinated Debentures or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
PacifiCorp expects that the Depositary for a series of Junior Subordinated
Debentures or its nominee, upon receipt of any payment of principal, premium, if
any, or interest in respect of a permanent Global Junior Subordinated Debenture
representing any of such Junior Subordinated Debentures, immediately will credit
Participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Junior
Subordinated Debenture representing such Junior Subordinated Debentures as shown
on the records of such Depositary or its nominee. PacifiCorp also expects that
payments by Participants to owners of beneficial interests in such Global
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Junior Subordinated Debenture held through such Participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name." Such payments will be the responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Junior Subordinated Debentures is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by PacifiCorp within 90 days, PacifiCorp will issue
individual Junior Subordinated Debentures of such series in exchange for the
Global Junior Subordinated Debenture representing such series of Junior
Subordinated Debentures. In addition, PacifiCorp may at any time and in its sole
discretion, subject to any limitations described in the Prospectus Supplement
relating to such Junior Subordinated Debentures, determine not to have any
Junior Subordinated Debentures of such series represented by one or more Global
Junior Subordinated Debentures and, in such event, will issue individual Junior
Subordinated Debentures of such series in exchange for the Global Junior
Subordinated Debenture representing such series of Junior Subordinated
Debentures. Further, if PacifiCorp so specifies with respect to the Junior
Subordinated Debentures of a series, an owner of a beneficial interest in a
Global Junior Subordinated Debenture representing Junior Subordinated Debentures
of such series may, on terms acceptable to PacifiCorp, the Debenture Trustee and
the Depositary for such Global Junior Subordinated Debenture, receive individual
Junior Subordinated Debentures of such series in exchange for such beneficial
interest, subject to any limitations described in the Prospectus Supplement
relating to such Junior Subordinated Debentures. In any such instance, an owner
of a beneficial interest in a Global Junior Subordinated Debenture will be
entitled to physical delivery of individual Junior Subordinated Debentures of
the series represented by such Global Junior Subordinated Debenture equal in
principal amount to such beneficial interest and to have such Junior
Subordinated Debentures registered in its name. Individual Junior Subordinated
Debentures of such series so issued will be issued in denominations, unless
otherwise specified by PacifiCorp, of $25 and integral multiples thereof.
REDEMPTION
Unless otherwise indicated in the applicable Prospectus Supplement, Junior
Subordinated Debentures will not be subject to any sinking fund.
The applicable Prospectus Supplement will specify the period or periods
within which, the price or prices at which and the terms and conditions upon
which the Junior Subordinated Debentures of any series may be redeemed, in whole
or in part, at the option of PacifiCorp. Junior Subordinated Debentures in
denominations larger than $25 may be redeemed in part but only in integral
multiples of $25. Except as otherwise specified in the applicable Prospectus
Supplement, the redemption price for any Junior Subordinated Debenture so
redeemed shall equal any accrued and unpaid interest thereon to the redemption
date, plus the principal amount thereof.
Except as otherwise specified in the applicable Prospectus Supplement, if a
Debenture Tax Event (as defined below) in respect of a series of Junior
Subordinated Debentures shall occur and be continuing, PacifiCorp may, at its
option, redeem such series of Junior Subordinated Debentures in whole (but not
in part) at any time within 90 days of the occurrence of such Debenture Tax
Event, at a redemption price equal to 100% of the principal amount of such
Junior Subordinated Debentures then outstanding plus accrued and unpaid interest
to the date fixed for redemption.
"Debenture Tax Event" means the receipt by PacifiCorp of an opinion of
counsel, rendered by a law firm having a recognized national tax and securities
practice, to the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or such pronouncement or
decision is announced on or after the date of issuance of the applicable series
of Junior Subordinated Debentures
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under the Indenture, there is more than an insubstantial risk that interest
payable by PacifiCorp on such series of Junior Subordinated Debentures is not,
or within 90 days of the date of such opinion, will not be, deductible by
PacifiCorp, in whole or in part, for United States federal income tax purposes.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Junior Subordinated
Debentures to be redeemed at its registered address. Unless PacifiCorp defaults
in payment of the redemption price, on and after the redemption date interest
ceases to accrue on such Junior Subordinated Debentures or portions thereof
called for redemption.
OPTION TO EXTEND INTEREST PAYMENT DATE
If provided in the applicable Prospectus Supplement, PacifiCorp shall have
the right at any time or from time to time during the term of any series of
Junior Subordinated Debentures to defer the payment of interest for such number
of consecutive interest payment periods with respect to each deferred period as
may be specified in the applicable Prospectus Supplement (each, an "Extension
Period"), subject to the terms, conditions and covenants, if any, specified in
such Prospectus Supplement, provided that such Extension Period may not extend
beyond the maturity of such series of Junior Subordinated Debentures. Certain
United States federal income tax consequences and special considerations
applicable to any such Junior Subordinated Debentures will be described in the
applicable Prospectus Supplement. In the event that PacifiCorp exercises this
right, certain restrictions will be applicable to PacifiCorp as described under
"-- Certain Covenants of PacifiCorp."
AGREED TAX TREATMENT
The Indenture provides that each holder of a Junior Subordinated Debenture,
each person that acquires a beneficial ownership interest in a Junior
Subordinated Debenture and PacifiCorp agree that for United States federal,
state and local tax purposes it is intended that such Junior Subordinated
Debenture constitute indebtedness. (Section 13.12)
MODIFICATION OF INDENTURE
The Indenture contains provisions permitting PacifiCorp and the Debenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of the Junior Subordinated Debentures of each series which are
affected by the modification, to modify the Indenture or any supplemental
indenture affecting that series or the rights of the holders of that series of
Junior Subordinated Debentures; PROVIDED that no such modification may, without
the consent of the holder of each outstanding Junior Subordinated Debenture
affected thereby, (i) extend the fixed maturity of any Junior Subordinated
Debentures of any series, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or reduce any premium
payable upon the redemption thereof or (ii) reduce the percentage of Junior
Subordinated Debentures, the holders of which are required to consent to any
such supplemental indenture. (Section 9.02) In the case of Corresponding Junior
Subordinated Debentures, so long as any of the related series of Preferred
Securities remain outstanding, PacifiCorp will covenant in the applicable
Supplemental Indenture that no such modification may be made that adversely
affects the holders of such Preferred Securities in any material respect, and no
termination of the Indenture may occur, and no waiver of any Debenture Event of
Default or compliance with any covenant under the Indenture may be effective,
without the prior consent of the holders of at least a majority of the aggregate
liquidation preference of such Preferred Securities unless and until the
principal of the Corresponding Junior Subordinated Debentures and all accrued
and unpaid interest thereon have been paid in full and certain other conditions
are satisfied. See "Description of Corresponding Junior Subordinated
Debentures."
In addition, PacifiCorp and the Debenture Trustee may execute, without the
consent of any holder of Junior Subordinated Debentures (including the Junior
Subordinated Debentures being offered hereby), any supplemental indenture for
certain other usual purposes, including the creation of any new series of Junior
Subordinated Debentures. (Sections 2.01, 9.01 and 10.01)
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DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes a "Debenture Event of
Default" with respect to each series of Junior Subordinated Debentures:
(a) failure for 10 days to pay interest on the Junior Subordinated
Debentures of that series when due; or
(b) failure to pay principal of or premium, if any, on the Junior
Subordinated Debentures of that series when due whether at maturity, upon
redemption, by declaration or otherwise, or to make any sinking or analogous
fund payment established with respect to that series; or
(c) failure to observe or perform any other covenant (other than those
specifically relating to one or more other series of Junior Subordinated
Debentures) contained in the Indenture for 90 days after notice; or
(d) a decree or order by a court having jurisdiction in the premises shall
have been entered adjudging PacifiCorp a bankrupt or insolvent, or approving as
properly filed a petition seeking liquidation or reorganization of PacifiCorp
under the Federal Bankruptcy Code or any other similar applicable federal or
state law, and such decree or order shall have continued unvacated and unstayed
for a period of 90 days; an involuntary case shall be commenced under such Code
in respect of PacifiCorp and shall continue undismissed for a period of 90 days
or an order for relief in such case shall have been entered; or a decree or
order of a court having jurisdiction in the premises shall have been entered for
the appointment on the ground of insolvency or bankruptcy of a receiver,
custodian, liquidator, trustee or assignee in bankruptcy or insolvency of
PacifiCorp or of its property, or for the winding up or liquidation of its
affairs, and such decree or order shall have remained in force unvacated and
unstayed for a period of 90 days; or
(e) PacifiCorp shall institute proceedings to be adjudicated a voluntary
bankrupt, shall consent to the filing of a bankruptcy proceeding against it,
shall file a petition or answer or consent seeking liquidation or reorganization
under the Federal Bankruptcy Code or other similar applicable federal or state
law, shall consent to the filing of any such petition or shall consent to the
appointment on the ground of insolvency or bankruptcy of a receiver or custodian
or liquidator or trustee or assignee in bankruptcy or insolvency of it or of its
property, or shall make an assignment for the benefit of creditors. (Section
6.01)
The holders of a majority in aggregate outstanding principal amount of any
series of the Junior Subordinated Debentures have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee for that series. (Section 6.06) The Debenture Trustee or the
holders of not less than 25% in aggregate outstanding principal amount of any
particular series of the Junior Subordinated Debentures may declare the
principal due and payable immediately upon a Debenture Event of Default with
respect to such series and, in the case of Corresponding Junior Subordinated
Debentures, should the Debenture Trustee or such holders of such Corresponding
Junior Subordinated Debentures fail to make such declaration, the holders of at
least 25% in aggregate liquidation preference of the related series of Preferred
Securities shall have such right. The holders of a majority in aggregate
outstanding principal amount of such series may annul such declaration and waive
such Debenture Event of Default if it has been cured and a sum sufficient to pay
all matured installments of interest and principal and any premium has been
deposited with the Debenture Trustee. (Sections 6.01 and 6.06) In the case of
Corresponding Junior Subordinated Debentures, should the holders of such
Corresponding Junior Subordinated Debentures fail to annul such declaration and
waive such Debenture Event of Default, the holders of a majority in aggregate
liquidation preference of the related series of Preferred Securities shall have
such right.
The holders of a majority in aggregate outstanding principal amount of all
series of the Junior Subordinated Debentures affected thereby may, on behalf of
the holders of all the Junior Subordinated Debentures of such series, waive any
past default, except a default in the payment of principal, premium,
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if any, or interest. (Section 6.06) In the case of Corresponding Junior
Subordinated Debentures, should the holders of such Corresponding Junior
Subordinated Debentures fail to waive such default, the holders of a majority in
aggregate liquidation preference of the related series of Preferred Securities
shall have such right. PacifiCorp is required to file annually with the
Debenture Trustee a certificate as to whether or not PacifiCorp is in compliance
with all the conditions and covenants under the Indenture. (Section 5.03(d))
In case a Debenture Event of Default shall occur and be continuing as to a
series of Corresponding Junior Subordinated Debentures, the Property Trustee
will have the right to declare the principal of and the interest on such
Corresponding Junior Subordinated Debentures and any other amounts payable under
the Indenture, to be forthwith due and payable and to enforce its other rights
as a creditor with respect to such Corresponding Junior Subordinated Debentures.
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of PacifiCorp to pay interest or principal
on the Corresponding Junior Subordinated Debentures on the date such interest or
principal is otherwise payable, then a holder of Preferred Securities may
institute a Direct Action (as defined below under "Description of Preferred
Securities -- Enforcement of Certain Rights by Holders of Preferred Securities")
for payment after the respective due dates specified in the Corresponding Junior
Subordinated Debentures. PacifiCorp may not amend the Indenture to remove the
foregoing right to bring a Direct Action without the prior written consent of
the holders of all of the Preferred Securities. PacifiCorp shall be subrogated
to the rights of the holder of such Preferred Securities with respect to
payments on the Preferred Securities to the extent of any payments made by
PacifiCorp to such holder in any Direct Action. The holders of Preferred
Securities will not be able to exercise directly any other remedy available to
the holders of the Corresponding Junior Subordinated Debentures.
The holders of the Preferred Securities would not be able to exercise
directly any rights against PacifiCorp other than those set forth in the
preceding paragraph available to the holders of the Corresponding Junior
Subordinated Debentures unless the Property Trustee or the Debenture Trustee,
acting for the benefit of the Property Trustee, fails to do so for 60 days. In
such event, to the fullest extent permitted by law, the holders of at least 25%
in aggregate liquidation preference of the outstanding Preferred Securities
would have the right to directly institute proceedings for enforcement of such
rights. See "Description of Preferred Securities -- Enforcement of Certain
Rights by Holders of Preferred Securities."
CONSOLIDATION, MERGER AND SALE
The Indenture does not contain any covenant which restricts PacifiCorp's
ability to merge or consolidate with or into any other corporation, sell or
convey all or substantially all of its assets to any corporation or otherwise
engage in restructuring transactions. (Section 10.01)
CONVERSION OR EXCHANGE
Unless otherwise indicated in the applicable Prospectus Supplement, the
Junior Subordinated Debentures of any series may be convertible or exchangeable
into Preferred Securities or other securities. The specific terms on which
Junior Subordinated Debentures of any series may be so converted or exchanged
will be set forth in the applicable Prospectus Supplement. Such terms may
include provisions for conversion or exchange, either mandatory, at the option
of the holder, or at the option of PacifiCorp, in which case the number of
shares of Preferred Securities or other securities to be received by the holders
of Junior Subordinated Debentures would be calculated as of a time and in the
manner stated in the applicable Prospectus Supplement.
DEFEASANCE AND DISCHARGE
Under the terms of the Indenture, PacifiCorp will be discharged from any and
all obligations under the Indenture in respect of the Junior Subordinated
Debentures of any series (except in each case for certain obligations to
register the transfer or exchange of Junior Subordinated Debentures, replace
stolen, lost or mutilated Junior Subordinated Debentures, maintain paying
agencies and hold moneys
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for payment in trust) if PacifiCorp deposits with the Debenture Trustee, in
trust, moneys or Government Obligations, in an amount sufficient to pay all the
principal of, and interest on, the Junior Subordinated Debentures of such series
on the dates such payments are due in accordance with the terms of such Junior
Subordinated Debentures and, if, among other things, such Junior Subordinated
Debentures are not due and payable, or are not to be called for redemption,
within one year, PacifiCorp delivers to the Debenture Trustee an Opinion of
Counsel to the effect that the holders of Junior Subordinated Debentures of such
series will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit and discharge and will be subject to federal income
tax on the same amount and in the same manner and at the same times as would
have been the case if such deposit and discharge had not occurred. In addition
to discharging certain obligations under the Indenture as stated above, if
PacifiCorp delivers to the Debenture Trustee an Opinion of Counsel (in lieu of
the Opinion of Counsel referred to above) to the effect that (a) PacifiCorp has
received from, or there has been published by, the Internal Revenue Service a
ruling or (b) since the date of the Indenture there has been a change in
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the holders of Junior
Subordinated Debentures of such series will not recognize income, gain or loss
for federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amount and in
the same manner and at the same times, as would have been the case if such
deposit, defeasance and discharge had not occurred, and (c) the trust resulting
from the defeasance is a valid trust and will not constitute a regulated
investment company under the Investment Company Act of 1940, as amended, then,
in such event, PacifiCorp will be deemed to have paid and discharged the entire
indebtedness on the Junior Subordinated Debentures. In the event of any such
defeasance and discharge of Junior Subordinated Debentures of such series,
holders of Junior Subordinated Debentures of such series would be able to look
only to such trust fund for payment of principal of (and premium, if any) and
interest, if any, on the Junior Subordinated Debentures of such series.
(Sections 11.01, 11.02 and 11.03)
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed by,
and construed in accordance with, the laws of the State of New York. (Section
13.04)
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee, prior to default, undertakes to perform only such
duties as are specifically set forth in the Indenture and, after default, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. (Section 7.01) Subject to such provision, the
Debenture Trustee is under no obligation to exercise any of the powers vested in
it by the Indenture at the request of any holder of Junior Subordinated
Debentures, unless offered reasonable indemnity by such holder against the
costs, expenses and liabilities which might be incurred thereby. (Section 7.02)
The Debenture Trustee is not required to expend or risk its own funds or
otherwise incur personal financial liability in the performance of its duties if
the Debenture Trustee reasonably believes that repayment or adequate indemnity
is not reasonably assured to it. (Section 7.01)
The Bank of New York serves as trustee and agent under agreements involving
PacifiCorp and its affiliates.
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MISCELLANEOUS
PacifiCorp will have the right at all times to assign any of its rights or
obligations under the Indenture to a direct or indirect wholly-owned subsidiary
of PacifiCorp; PROVIDED THAT, in the event of any such assignment, PacifiCorp
will remain liable for all such obligations. Subject to the foregoing, the
Indenture will be binding upon and inure to the benefit of the parties thereto
and their respective successors and assigns. The Indenture provides that it may
not otherwise be assigned by the parties thereto. (Section 13.11)
DESCRIPTION OF PREFERRED SECURITIES
Pursuant to the terms of the Trust Agreement for each Issuer Trust, the
Issuer Trustees on behalf of such Issuer Trust will issue the Preferred
Securities and the Common Securities. The Preferred Securities of a particular
issue will represent preferred undivided beneficial interests in the assets of
the related Issuer Trust and the holders thereof will be entitled to a
preference in certain circumstances with respect to Distributions and amounts
payable on redemption or liquidation over the Common Securities of such Issuer
Trust, as well as other benefits as described in the corresponding Trust
Agreement. This summary of certain provisions of the Preferred Securities and
each Trust Agreement does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of each Trust
Agreement, including the definitions therein of certain terms, and the Trust
Indenture Act. Wherever particular defined terms of a Trust Agreement (as
supplemented or amended from time to time) are referred to herein or in a
Prospectus Supplement, such defined terms are incorporated herein or therein by
reference. The form of each Trust Agreement has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. Each of the Issuer
Trusts is a legally separate entity and the assets of one are not available to
satisfy the obligations of any of the others.
GENERAL
The Preferred Securities of an Issuer Trust will rank PARI PASSU, and
payments will be made thereon PRO RATA, with the Common Securities of that
Issuer Trust except as described below under "-- Subordination of Common
Securities." Legal title to the Corresponding Junior Subordinated Debentures
will be held by the Property Trustee in trust for the benefit of the holders of
the related Preferred Securities and Common Securities. Each Guarantee Agreement
executed by PacifiCorp for the benefit of the holders of an Issuer Trust's
Preferred Securities (each, a "Guarantee") will be a guarantee on a subordinated
basis with respect to the related Preferred Securities but will not guarantee
payment of Distributions or amounts payable on redemption or liquidation of such
Preferred Securities when the related Issuer Trust does not have funds on hand
available to make such payments. See "Description of Guarantees."
DISTRIBUTIONS
Each Issuer Trust's Preferred Securities represent preferred undivided
beneficial interests in the assets of such Issuer Trust, and the Distributions
on each Preferred Security will be payable at a rate specified in the Prospectus
Supplement for such Preferred Securities. The amount of Distributions payable
for any period will be computed on the basis of a 360-day year of twelve 30-day
months unless otherwise specified in the applicable Prospectus Supplement.
Distributions to which holders of Preferred Securities are entitled will
accumulate additional Distributions ("Additional Amounts") if and as specified
in the applicable Prospectus Supplement. The term "Distributions" as used herein
includes any Additional Amounts unless otherwise stated.
Distributions on the Preferred Securities will be cumulative, will
accumulate from the date of original issuance and will be payable on such dates
as specified in the applicable Prospectus Supplement. In the event that any date
on which Distributions are payable on the Preferred Securities is not a Business
Day (as defined below), payment of the Distribution payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay) except that, if such Business Day
is in the next succeeding calendar year, payment of such Distribution shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date (each date on which Distributions are payable
in accordance with the
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foregoing, a "Distribution Date"). A "Business Day" shall mean any day other
than a Saturday or a Sunday, or a day on which banking institutions in The City
of New York are authorized or required by law or executive order to remain
closed or a day on which the corporate trust office of the Property Trustee or
the Debenture Trustee is closed for business.
If provided in the applicable Prospectus Supplement, PacifiCorp has the
right under the Indenture to defer the payment of interest on any series of the
Corresponding Junior Subordinated Debentures at any time or from time to time
for one or more Extension Periods, subject to the terms, conditions and
covenants, if any, specified in the applicable Prospectus Supplement, PROVIDED
that no Extension Period may extend beyond the maturity of such series of
Corresponding Junior Subordinated Debentures. As a consequence of any such
extension, Distributions on the corresponding Preferred Securities would be
deferred (but would continue to accumulate additional Distributions thereon at
the rate per annum set forth in the Prospectus Supplement for such Preferred
Securities) by the Issuer Trust of such Preferred Securities during any such
Extension Period. During such Extension Period PacifiCorp may not, and may not
permit any subsidiary of PacifiCorp to, (i) declare, set aside or pay any
dividend or distribution on, or repurchase, redeem, or otherwise acquire or make
any sinking fund payment with respect to, any shares of PacifiCorp's capital
stock or (ii) make any payment of principal, interest or premium, if any, on or
repay, repurchase or redeem any debt securities that rank PARI PASSU with or
junior in interest to the Corresponding Junior Subordinated Debentures or make
any guarantee payments with respect to the foregoing (other than (a) dividends
or distributions in shares of its capital stock or in rights to acquire shares
of its capital stock, (b) conversions into or exchanges for shares of its
capital stock, (c) redemptions, purchases or other acquisitions of shares of its
capital stock made for the purpose of an employee incentive plan or benefit plan
of PacifiCorp or any of its subsidiaries and mandatory redemptions or sinking
fund payments with respect to any series of Preferred Stock of PacifiCorp that
are subject to mandatory redemption or sinking fund requirements, PROVIDED that
the aggregate stated value of all such series outstanding at the time of any
such payment does not exceed five percent of the aggregate of (1) the total
principal amount of all bonds or other securities representing secured
indebtedness issued or assumed by PacifiCorp and then outstanding and (2) the
capital and surplus of PacifiCorp to be stated on the books of account of
PacifiCorp after giving effect to such payment, PROVIDED, HOWEVER, that any
moneys deposited in any sinking fund and not in violation of this provision may
thereafter be applied to the purchase or redemption of such Preferred Stock in
accordance with the terms of such sinking fund without regard to the
restrictions contained in this provision, and (d) payments under any guarantee
by PacifiCorp with respect to any securities of a subsidiary of PacifiCorp,
provided that the proceeds from the issuance of such securities were issued to
purchase Junior Subordinated Debentures of any series under the Indenture). See
"Description of Junior Subordinated Debentures -- Option to Extend Interest
Payment Date," "-- Certain Covenants of PacifiCorp" and "Description of
Corresponding Junior Subordinated Debentures -- Certain Covenants of
PacifiCorp."
The revenue of each Issuer Trust available for distribution to holders of
its Preferred Securities will be limited to payments under the Corresponding
Junior Subordinated Debentures in which such Issuer Trust will invest the
proceeds from the issuance and sale of its Preferred Securities and its Common
Securities. See "Description of Corresponding Junior Subordinated Debentures."
If PacifiCorp does not make interest payments on such Corresponding Junior
Subordinated Debentures, the Property Trustee will not have funds available to
pay Distributions on the related Preferred Securities. The payment of
Distributions (if and to the extent the Issuer Trust has funds available for the
payment of such Distributions and cash sufficient to make such payments) is
guaranteed by PacifiCorp on a limited basis as set forth herein under
"Description of Guarantees."
Distributions on the Preferred Securities of each Issuer Trust will be
payable to the holders thereof as they appear on the register of such Issuer
Trust on the relevant record dates, which, as long as the Preferred Securities
remain in book-entry form, will be one Business Day prior to the relevant
Distribution Date. Subject to any applicable laws and regulations and the
provisions of the applicable Trust Agreement, each such payment will be made as
described under "-- Book-entry Issuance." In the event any
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Preferred Securities are not in book-entry form, the relevant record date for
such Preferred Securities shall be a date at least 15 days prior to the relevant
Distribution Date, as specified in the applicable Prospectus Supplement.
REDEMPTION OR EXCHANGE
MANDATORY REDEMPTION. Upon the repayment or redemption, in whole or in
part, of any Corresponding Junior Subordinated Debentures, whether at maturity
or upon earlier redemption as provided in the Indenture, the proceeds from such
repayment or redemption shall be applied by the Property Trustee to redeem a
Like Amount (as defined below) of the related Preferred Securities, upon not
less than 30 nor more than 60 days' notice prior to the date fixed for repayment
or redemption (the "Redemption Date"), at a redemption price equal to the
aggregate liquidation preference of such Preferred Securities plus accumulated
and unpaid Distributions thereon to the Redemption Date (the "Redemption Price")
and the related amount of the premium, if any, paid by PacifiCorp upon the
concurrent redemption of such Corresponding Junior Subordinated Debentures. See
"Description of Corresponding Junior Subordinated Debentures -- Optional
Redemption." If less than all of any series of Corresponding Junior Subordinated
Debentures are to be repaid or redeemed on a Redemption Date, then the proceeds
from such repayment or redemption shall be allocated to the redemption PRO RATA
of the related Preferred Securities and the Common Securities. The amount of
premium, if any, paid by PacifiCorp upon the redemption of all or any part of
any series of any Corresponding Junior Subordinated Debentures to be repaid or
redeemed on a Redemption Date shall be allocated to the redemption PRO RATA of
the related Preferred Securities and the Common Securities.
PacifiCorp will have the right to redeem any series of Corresponding Junior
Subordinated Debentures (i) in whole at any time or in part from time to time,
subject to the conditions described under "Description of Corresponding Junior
Subordinated Debentures -- Optional Redemption," (ii) at any time, in whole (but
not in part), upon the occurrence of a Tax Event or an Investment Company Event
(each as defined below, a "Special Event") and subject to the further conditions
described under "Description of Corresponding Junior Subordinated Debentures --
Optional Redemption," or (iii) as may be otherwise specified in the applicable
Prospectus Supplement.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION OF CORRESPONDING JUNIOR
SUBORDINATED DEBENTURES. If a Special Event in respect of a series of Preferred
Securities shall occur and be continuing, PacifiCorp has the right to redeem the
Corresponding Junior Subordinated Debentures in whole (but not in part) and
thereby cause a mandatory redemption of such Preferred Securities and Common
Securities in whole (but not in part) within 90 days following the occurrence of
such Special Event at the Redemption Price. Whether or not a Special Event has
occurred, PacifiCorp has the right to terminate the related Issuer Trust at any
time and, after satisfaction of liabilities to creditors of such Issuer Trust as
provided by applicable law, cause such Corresponding Junior Subordinated
Debentures to be distributed to the holders of such Preferred Securities in
liquidation of the Issuer Trust. If PacifiCorp does not elect either option
described above, the applicable series of Preferred Securities will remain
outstanding and, in the event a Tax Event has occurred and is continuing,
Additional Sums (as defined below) may be payable on the Corresponding Junior
Subordinated Debentures.
"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by an Issuer Trust on the
outstanding Preferred Securities and Common Securities of the Issuer Trust shall
not be reduced as a result of any additional taxes, duties and other
governmental charges to which such Issuer Trust has become subject as a result
of a Tax Event.
"Investment Company Event" means the receipt by the applicable Issuer Trust
of an opinion of counsel, rendered by a law firm having a recognized national
tax and securities practice, to the effect that, as a result of the occurrence
of a change in law or regulation or a change in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory
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authority (a "Change in 1940 Act Law") the applicable Issuer Trust is or will be
considered an "investment Company" that is required to be registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act"), which
Change in 1940 Act Law becomes effective on or after the date of original
issuance of the series of Preferred Securities issued by the applicable Issuer
Trust.
"Like Amount" means (i) with respect to a redemption of any series of
Preferred Securities, Preferred Securities of such series having a Liquidation
Amount (as defined below) equal to that portion of the principal amount of
Corresponding Junior Subordinated Debentures to be contemporaneously redeemed in
accordance with the Indenture and the proceeds of which will be used to pay the
Redemption Price of such Preferred Securities, and (ii) with respect to a
distribution of Corresponding Junior Subordinated Debentures to holders of any
series of Preferred Securities in connection with a termination or liquidation
of the related Issuer Trust, Corresponding Junior Subordinated Debentures having
a principal amount equal to the Liquidation Amount of the Preferred Securities
of the holder to whom such Corresponding Junior Subordinated Debentures are
distributed. "Liquidation Amount" means the stated amount of $25 per Preferred
Security and Common Security.
"Tax Event" means the receipt by the applicable Issuer Trust of an opinion
of counsel, rendered by a law firm having a recognized national tax and
securities practice, to the effect that, as a result of any amendment to, or
change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States, or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under the related Trust Agreement, there is more than an
insubstantial risk that (i) the applicable Issuer Trust is, or will be within 90
days of the date of such opinion, subject to United States federal income tax
with respect to income received or accrued on the corresponding series of
Corresponding Junior Subordinated Debentures, (ii) interest payable by
PacifiCorp on such series of Corresponding Junior Subordinated Debentures is
not, or within 90 days of the date of such opinion, will not be, deductible by
PacifiCorp, in whole or in part, for United States federal income tax purposes,
or (iii) the applicable Issuer Trust is, or will be within 90 days of the date
of such opinion, subject to more than a DE MINIMIS amount of other taxes, duties
or other governmental charges.
After the liquidation date fixed for any distribution of Corresponding
Junior Subordinated Debentures for any series of Preferred Securities (i) such
series of Preferred Securities will no longer be deemed to be outstanding, (ii)
The Depository Trust Company ("DTC") or its nominee, as the record holder of
such series of Preferred Securities, will receive a registered global
certificate or certificates representing the Corresponding Junior Subordinated
Debentures to be delivered upon such distribution and (iii) any certificates
representing such series of Preferred Securities not held by DTC or its nominee
will be deemed to represent the Corresponding Junior Subordinated Debentures
having a principal amount equal to the stated liquidation preference of such
series of Preferred Securities, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on such series of Preferred
Securities until such certificates are presented to the Administrative Trustees
or their agent for transfer or reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Corresponding Junior Subordinated Debentures that may be
distributed in exchange for Preferred Securities if a termination and
liquidation of an Issuer Trust were to occur. Accordingly, the Preferred
Securities that an investor may purchase, or the Corresponding Junior
Subordinated Debentures that the investor may receive on termination and
liquidation of an Issuer Trust, may trade at a discount to the price that the
investor paid to purchase the Preferred Securities offered hereby.
REDEMPTION PROCEDURES
Preferred Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Corresponding Junior Subordinated Debentures. Redemptions of
the Preferred Securities shall be made and the Redemption
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Price shall be payable on each Redemption Date only to the extent that the
related Issuer Trust has funds on hand available for the payment of such
Redemption Price. See also "-- Subordination of Common Securities."
If an Issuer Trust gives a notice of redemption in respect of its Preferred
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are available, the Property Trustee will deposit irrevocably
with DTC, funds sufficient to pay the applicable Redemption Price and will give
DTC irrevocable instructions and authority to pay the Redemption Price to the
holders of such Preferred Securities. See "-- Book-entry Issuance." If such
Preferred Securities are no longer in book-entry form, such Issuer Trust, to the
extent funds are available, will irrevocably deposit with the paying agent for
such Preferred Securities funds sufficient to pay the applicable Redemption
Price and will give such paying agent irrevocable instructions and authority to
pay the Redemption Price to the holders thereof upon surrender of their
certificates evidencing such Preferred Securities. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Preferred Securities called for redemption shall be payable to the holder of
such Preferred Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of the
holders of such Preferred Securities so called for redemption will cease, except
the right of the holders of such Preferred Securities to receive the Redemption
Price, but without interest on such Redemption Price, and such Preferred
Securities will cease to be outstanding. In the event that any date fixed for
redemption of Preferred Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day. In
the event that payment of the Redemption Price in respect of Preferred
Securities called for redemption is improperly withheld or refused and not paid
either by the Issuer Trust or by PacifiCorp pursuant to the Guarantee as
described under "Description of Guarantees," Distributions on such Preferred
Securities will continue to accumulate at the then applicable rate, from the
Redemption Date originally established by the Issuer Trust for such Preferred
Securities to the date such Redemption Price is actually paid, in which case the
actual payment date will be the date fixed for redemption for purposes of
calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), PacifiCorp or its subsidiaries may at any time and from
time to time purchase outstanding Preferred Securities by tender, in the open
market or by private agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Corresponding Junior Subordinated Debentures to holders of
Preferred Securities shall be made to the applicable recordholders thereof as
they appear on the register for such Preferred Securities on the relevant record
date, which shall be one Business Day prior to the relevant Redemption Date or
liquidation date, as applicable; PROVIDED, HOWEVER, that in the event that any
Preferred Securities are not in book-entry form, the relevant record date for
such Preferred Securities shall be the fifteenth day prior to the Redemption
Date or liquidation date, as applicable, as specified in the applicable
Prospectus Supplement.
If less than all of the Preferred Securities issued by an Issuer Trust are
to be redeemed on a Redemption Date, then the aggregate Liquidation Amount of
such Preferred Securities to be redeemed shall be allocated PRO RATA among the
Preferred Securities. The particular Preferred Securities to be redeemed shall
be selected on a PRO RATA basis not more than 60 days prior to the Redemption
Date by the Property Trustee from the outstanding Preferred Securities not
previously called for redemption, by such method as the Property Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $25 or an integral multiple of $25 in excess thereof) of
the liquidation preference of Preferred Securities of a denomination larger than
$25. The Property Trustee shall promptly notify the trust registrar in writing
of the Preferred Securities selected for redemption and, in the case of any
Preferred Securities selected for partial redemption, the liquidation preference
thereof to be redeemed. For all purposes of each Trust Agreement, unless the
context otherwise requires, all
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provisions relating to the redemption of Preferred Securities shall relate, in
the case of any Preferred Securities redeemed or to be redeemed only in part, to
the portion of the aggregate liquidation preference of Preferred Securities
which has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each holder of Preferred Securities to be
redeemed at its registered address.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions (including Additional Sums, if applicable) on, and
the Redemption Price of, each Issuer Trust's Preferred Securities and Common
Securities, as applicable, shall be made PRO RATA based on the Liquidation
Amount of such Preferred Securities and Common Securities; PROVIDED, HOWEVER,
that if on any Distribution Date or Redemption Date a Debenture Event of Default
shall have occurred and be continuing, no payment of any Distribution (including
Additional Sums, if applicable) on, or Redemption Price of, any of the Issuer
Trust's Common Securities, and no other payment on account of the redemption,
liquidation or other acquisition of such Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid Distributions (including
Additional Sums, if applicable) on all of the Issuer Trust's outstanding
Preferred Securities for all Distribution periods terminating on or prior
thereto, or in the case of payment of the Redemption Price the full amount of
such Redemption Price on all of the Issuer Trust's outstanding Preferred
Securities then called for redemption, shall have been made or provided for, and
all funds available to the Property Trustee shall first be applied to the
payment in full in cash of all Distributions (including Additional Sums, if
applicable) on, or Redemption Price of, the Issuer Trust's Preferred Securities
then due and payable.
In the case of any Event of Default resulting from a Debenture Event of
Default, PacifiCorp as holder of each Issuer Trust's Common Securities will be
deemed to have waived any right to act with respect to any such Event of Default
under the applicable Trust Agreement until the effect of all such Events of
Default with respect to such Preferred Securities have been cured, waived or
otherwise eliminated. Until any such Events of Default under the applicable
Trust Agreement with respect to the Preferred Securities have been so cured,
waived or otherwise eliminated, the Property Trustee shall act solely on behalf
of the holders of such Preferred Securities and not on behalf of PacifiCorp as
holder of the Common Securities, and only the holders of such Preferred
Securities will have the right to direct the Property Trustee to act on their
behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
Pursuant to each Trust Agreement, each Issuer Trust shall automatically
terminate upon expiration of its term and shall terminate on the first to occur
of: (i) certain events of bankruptcy, dissolution or liquidation of PacifiCorp;
(ii) the distribution of a Like Amount of the Corresponding Junior Subordinated
Debentures to the holders of its Preferred Securities if PacifiCorp, as
Depositor, has given written direction to the Property Trustee to terminate such
Issuer Trust (which direction is optional and wholly within the discretion of
PacifiCorp as Depositor); (iii) the redemption of all of such Issuer Trust's
Preferred Securities as described under "-- Redemption or Exchange"; and (iv)
the entry by a court of competent jurisdiction of an order for the dissolution
of such Issuer Trust.
If an early termination occurs as described in clause (i), (ii) or (iv)
above, such Issuer Trust shall be liquidated by the Issuer Trustees as
expeditiously as the Issuer Trustees determine to be possible by distributing,
after satisfaction of liabilities to creditors of such Issuer Trust as provided
by applicable law, to the holders of such Preferred Securities and Common
Securities a Like Amount of the Corresponding Junior Subordinated Debentures,
unless such distribution is determined by the Property Trustee not to be
practical, in which event such holders will be entitled to receive out of the
assets of the Issuer Trust available for distribution to holders, after
satisfaction of liabilities to creditors of such Issuer Trust as provided by
applicable law, an amount equal to, in the case of holders of Preferred
Securities, the aggregate of the liquidation preference plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because such Issuer Trust has insufficient assets available to pay in full the
aggregate
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Liquidation Distribution, then the amounts payable directly by such Issuer Trust
on its Preferred Securities shall be paid on a PRO RATA basis. The holders of
such Issuer Trust's Common Securities will be entitled to receive distributions
upon any such liquidation PRO RATA with the holders of its Preferred Securities,
except that if a Debenture Event of Default has occurred and is continuing, such
Preferred Securities shall have a priority over such Common Securities. A
supplemental indenture may provide that if an early termination occurs as
described in clause (iv) above, the Corresponding Junior Subordinated Debentures
may be subject to optional redemption in whole (but not in part).
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under each
Trust Agreement (an "Event of Default") with respect to the Preferred Securities
issued thereunder (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default under the Indenture
with respect to the Corresponding Junior Subordinated Debentures (see
"Description of Junior Subordinated Debentures -- Debenture Events of
Default"); or
(ii) default by the Trust in the payment of any Distribution with
respect to Preferred Securities of that issue when it becomes due and
payable, and continuation of such default for a period of 30 days; or
(iii) default by the Trust in the payment of any Redemption Price of any
Preferred Security or Common Security of that issue when it becomes due and
payable; or
(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Issuer Trustees in such Trust Agreement
(other than a covenant or warranty a default in the performance of which or
the breach of which is dealt with in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Trustees by the holders of at least 25% in aggregate liquidation
preference of the outstanding Preferred Securities of that issue, a written
notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" under such Trust
Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by PacifiCorp to appoint a
successor Property Trustee within 60 days thereof.
Within 15 Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of such Issuer Trust's Preferred
Securities, the Administrative Trustees and PacifiCorp, as Depositor, unless
such Event of Default shall have been cured or waived. PacifiCorp, as Depositor,
and the Administrative Trustees are required to file annually with the Property
Trustee a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under each Trust Agreement.
If, in the event of a Debenture Event of Default, the Debenture Trustee
fails or the holders of not less than 25% in aggregate principal amount of the
Corresponding Junior Subordinated Debentures fail to declare the principal due
and payable, the holders of at least 25% in aggregate liquidation preference of
the related series of Preferred Securities shall have such right. Except as set
forth above, the existence of an Event of Default does not entitle the holders
of Preferred Securities to accelerate the maturity thereof or declare amounts
due and payable.
If a Debenture Event of Default with respect to any Corresponding Junior
Subordinated Debentures has occurred and is continuing, the corresponding
Preferred Securities shall have a preference over the related Common Securities
upon termination of the applicable Issuer Trust as described above. See "--
Liquidation Distribution Upon Termination."
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ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Debenture Event of Default has occurred and is continuing, then the
holders of Preferred Securities would rely on the enforcement by the Property
Trustee or the Debenture Trustee, acting for the benefit of the Property
Trustee, of its rights as a holder of the Corresponding Junior Subordinated
Debentures against PacifiCorp. Notwithstanding the foregoing, if a Debenture
Event of Default has occurred and is continuing and such event is attributable
to the failure of PacifiCorp to pay interest or principal on the Corresponding
Junior Subordinated Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date), then a
holder of Preferred Securities may directly institute a proceeding against
PacifiCorp for enforcement of payment to such holder of the principal of or
interest on the Corresponding Junior Subordinated Debentures having a principal
amount equal to the aggregate liquidation preference of the Preferred Securities
of such holder (a "Direct Action") after the respective due dates specified in
the Corresponding Junior Subordinated Debentures. In connection with such Direct
Action, PacifiCorp will be subrogated to the rights of such holder of Preferred
Securities with respect to payments on the Preferred Securities to the extent of
any payment made by PacifiCorp to such holder of Preferred Securities in such
Direct Action.
The holders of the Preferred Securities would not be able to exercise
directly against PacifiCorp any rights other than those set forth in the
preceding paragraph available to the holders of the Corresponding Junior
Subordinated Debentures unless the Property Trustee or the Debenture Trustee,
acting for the benefit of the Property Trustee, fails to do so for 60 days. In
such event, to the fullest extent permitted by law, the holders of at least 25%
in aggregate liquidation preference of the outstanding Preferred Securities
would have the right to directly institute proceedings for enforcement of such
rights.
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default with respect to any Corresponding Junior
Subordinated Debentures shall have occurred and be continuing, the applicable
Issuer Trustee may be removed at any time by the holder of the related Common
Securities. If such a Debenture Event of Default has occurred and is continuing,
the Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in Liquidation Amount of the outstanding corresponding
Preferred Securities. In no event will the holders of the Preferred Securities
have the right to vote to appoint, remove or replace the Administrative
Trustees, which voting rights are vested exclusively in PacifiCorp as the holder
of the Common Securities. No resignation or removal of an Issuer Trustee and no
appointment of a successor trustee shall be effective until the acceptance of
appointment by the successor trustee in accordance with the provisions of the
applicable Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the applicable Trust
Property may at the time be located, PacifiCorp, as the holder of the Common
Securities, shall have power to appoint one or more persons either to act as a
co-trustee, jointly with the Property Trustee, of all or any part of such Trust
Property, or to act as separate trustee of any such property, in either case
with such powers as may be provided in the instrument of appointment, and to
vest in such person or persons in such capacity any property, title, right or
power deemed necessary or desirable, subject to the provisions of the applicable
Trust Agreement. In case a Debenture Event of Default has occurred and is
continuing, the Property Trustee alone shall have power to make such
appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any entity into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which such Trustee shall be a party, or any
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entity succeeding to all or substantially all the corporate trust business of
such Trustee, shall be the successor of such Trustee under each Trust Agreement,
provided such entity shall be otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE ISSUER TRUSTS
An Issuer Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except as
described below. An Issuer Trust may, at the request of PacifiCorp, with the
consent of the Administrative Trustees and without the consent of the holders of
the Preferred Securities of such Issuer Trust, merge with or into, consolidate,
amalgamate, be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to a trust organized as such under the laws
of any State; provided that (i) such successor entity either (a) expressly
assumes all of the obligations of such Issuer Trust with respect to such
Preferred Securities or (b) substitutes for such Preferred Securities other
securities having substantially the same terms as such Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the same as
such Preferred Securities rank in priority with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) PacifiCorp expressly
appoints a trustee of such successor entity possessing substantially the same
powers and duties as the Property Trustee as the holder of the Corresponding
Junior Subordinated Debentures, (iii) the Successor Securities are listed or
traded, or any Successor Securities will be listed or traded upon notification
of issuance, on any national securities exchange or other organization on which
such Preferred Securities are then listed, if any, (iv) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
cause such Preferred Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization, (v)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
holders of such Preferred Securities (including any Successor Securities) in any
material respect, (vi) such successor entity has a purpose substantially
identical to that of such Issuer Trust, (vii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease,
PacifiCorp has received an opinion from independent counsel to such Issuer Trust
experienced in such matters to the effect that (a) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of such Preferred
Securities (including any Successor Securities) in any material respect, and (b)
following such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, neither such Issuer Trust nor such successor entity will be
required to register as an "investment Company" under the Investment Company Act
and (viii) PacifiCorp or any permitted successor or assignee owns all of the
common securities of such successor entity and guarantees the obligations of
such successor entity under the Successor Securities at least to the extent
provided by the applicable Guarantee. Notwithstanding the foregoing, an Issuer
Trust shall not, except with the consent of holders of 100% in aggregate
liquidation preference of the Preferred Securities of such Issuer Trust,
consolidate, amalgamate, merge with or into, be replaced by or convey, transfer
or lease its properties and assets substantially as an entirety to any other
entity or permit any other entity to consolidate, amalgamate, merge with or
into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause such Issuer Trust or the successor
entity to be classified as other than a grantor trust for United States federal
income tax purposes.
VOTING RIGHTS; AMENDMENT OF TRUST AGREEMENT
Except as provided below and under "Description of Guarantees -- Amendments
and Assignment" and as otherwise required by law and the applicable Trust
Agreement, the holders of the Preferred Securities will have no voting rights.
Each Trust Agreement may be amended from time to time by PacifiCorp and the
Issuer Trustees, without the consent of the holders of the related Preferred
Securities, (i) to reflect the acceptance of appointment by a successor Issuer
Trustee, (ii) to cure any ambiguity, correct or supplement any provisions in
such Trust Agreement that may be inconsistent with any other provision, or to
make any
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other provisions with respect to matters or questions arising under such Trust
Agreement, that shall not be inconsistent with the other provisions of such
Trust Agreement, or (iii) to modify, eliminate or add to any provisions of such
Trust Agreement to such extent as shall be necessary to ensure that the related
Issuer Trust will be classified for United States federal income tax purposes as
a grantor trust at all times that any Preferred Securities and Common Securities
of such Issuer Trust are outstanding or to ensure that such Issuer Trust will
not be required to register as an "investment Company" under the Investment
Company Act, PROVIDED, HOWEVER, that in the case of clause (ii) above, such
action shall not adversely affect in any material respect the interests of any
holder of Preferred Securities or Common Securities of such Issuer Trust, and
any amendments of such Trust Agreement shall become effective when notice
thereof is given to the holders of such Preferred Securities and Common
Securities. Such Trust Agreement may be amended by the Issuer Trustees and
PacifiCorp with (i) the consent of holders representing not less than a majority
(based upon Liquidation Amounts) of such outstanding Preferred Securities and
Common Securities and (ii) receipt by the Issuer Trustees of an opinion of
counsel to the effect that such amendment or the exercise of any power granted
to the Issuer Trustees in accordance with such amendment will not affect such
Issuer Trust's status as a grantor trust for United States federal income tax
purposes or such Issuer Trust's exemption from status of an "investment Company"
under the Investment Company Act, PROVIDED, FURTHER that without the consent of
each holder of such Preferred Securities and Common Securities, such Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on such Preferred Securities and Common Securities or otherwise
adversely affect the amount of any Distribution required to be made in respect
of such Preferred Securities and Common Securities as of a specified date or
(ii) restrict the right of holders of such Preferred Securities and Common
Securities to institute suit for the enforcement of any such payment on or after
such date as described under "-- Events of Default; Notice" above.
So long as any Corresponding Junior Subordinated Debentures are held by the
Property Trustee, the Issuer Trustees shall not (i) direct the time, method and
place of conducting any proceeding for any remedy available to the Debenture
Trustee or executing any trust or power conferred on the Property Trustee with
respect to such Corresponding Junior Subordinated Debentures, (ii) waive any
past default that is waivable under the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Corresponding
Junior Subordinated Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or such Corresponding
Junior Subordinated Debentures, where such consent shall be required, without,
in each case, obtaining the prior approval of the holders of a majority in
aggregate liquidation preference of all outstanding corresponding Preferred
Securities; PROVIDED, HOWEVER, that where a consent under the Indenture would
require the consent of each holder of Corresponding Junior Subordinated
Debentures affected thereby, no such consent shall be given by the Property
Trustee without the prior consent of each holder of the corresponding Preferred
Securities. The Issuer Trustees shall not revoke any action previously
authorized or approved by a vote of the holders of the Preferred Securities
except by subsequent vote of the holders of the Preferred Securities. The
Property Trustee shall notify each holder of record of the Preferred Securities
of any notice of default with respect to the Corresponding Junior Subordinated
Debentures. In addition to obtaining the foregoing approvals of the holders of
the Preferred Securities, prior to taking any of the foregoing actions, the
Issuer Trustees shall obtain an opinion of counsel experienced in such matters
to the effect that the applicable Issuer Trust will not be classified as a
corporation for United States federal income tax purposes on account of such
action.
Any required approval of holders of Preferred Securities may be given at a
meeting of holders of Preferred Securities convened for such purpose or pursuant
to written consent. The Property Trustee will cause a notice of any meeting at
which holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be given
to each holder of record of Preferred Securities in the manner set forth in the
applicable Trust Agreement.
No vote or consent of the holders of Preferred Securities will be required
for an Issuer Trust to redeem and cancel its Preferred Securities in accordance
with the applicable Trust Agreement.
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Notwithstanding that holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities that are owned by PacifiCorp, the Issuer Trustees or any affiliate of
PacifiCorp or any Issuer Trustees shall, for purposes of such vote or consent,
be treated as if they were not outstanding.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to DTC, which
shall credit the relevant accounts at DTC on the applicable Distribution Dates
or, if any Issuer Trust's Preferred Securities are not held by DTC, such
payments shall be made by check mailed to the address of the holder entitled
thereto as such address shall appear on the Register. Unless otherwise specified
in the applicable Prospectus Supplement, the paying agent (the "Paying Agent")
shall initially be the Property Trustee and any co-paying agent chosen by the
Property Trustee and acceptable to the Administrative Trustees and PacifiCorp.
The Paying Agent shall be permitted to resign as Paying Agent upon 30 days'
written notice to the Property Trustee and PacifiCorp. In the event that the
Property Trustee shall no longer be the Paying Agent, the Administrative
Trustees shall appoint a successor (which shall be a bank or trust Company
acceptable to the Property Trustee and PacifiCorp) to act as Paying Agent.
BOOK-ENTRY ISSUANCE
DTC will act as securities depositary for all of the Preferred Securities.
The Preferred Securities will be issued only as fully-registered securities
registered in the name of Cede & Co. (DTC's nominee). One or more
fully-registered global certificates will be issued for the Preferred Securities
of each Issuer Trust, representing in the aggregate the total number of such
Issuer Trust's Preferred Securities, and will be deposited with DTC.
DTC is a limited purpose trust Company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange,
Inc., the American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. Access to the DTC system is also available to others
such as securities brokers and dealers, banks and trust companies that clear
through or maintain custodial relationships with Direct Participants, either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC
and its Participants are on file with the Commission.
Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
each Preferred Security ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Preferred Securities.
Transfers of ownership interests in the Preferred Securities are to be
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in Preferred Securities, except in the event that use
of the book-entry system for the Preferred Securities of such Issuer Trust is
discontinued.
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DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities are credited, which may or may not
be the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Redemption notices shall be sent to Cede & Co. as the registered holder of
the Preferred Securities. If less than all of an Issuer Trust's Preferred
Securities are being redeemed, DTC's current practice is to determine by lot the
amount of the interest of each Direct Participant to be redeemed.
Although voting with respect to the Preferred Securities is limited to the
holders of record of the Preferred Securities, in those instances in which a
vote is required, neither DTC nor Cede & Co. will itself consent or vote with
respect to Preferred Securities. Under its usual procedures, DTC would mail an
omnibus proxy (the "Omnibus Proxy") to the Property Trustee as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts such Preferred
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners and the voting
rights of Direct Participants, Indirect Participants and Beneficial Owners will
be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Distribution payments on the Preferred Securities will be made by the
Property Trustee to DTC. DTC's practice is to credit Direct Participants'
accounts on the relevant payment date in accordance with their respective
holdings shown on DTC's records unless DTC has reason to believe that it will
not receive payments on such payment date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices and will be the responsibility of such Participant and not of DTC, the
Property Trustee, the Issuer Trust thereof or PacifiCorp, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of Distributions to DTC is the responsibility of the Property Trustee,
disbursement of such payments to Direct Participants is the responsibility of
DTC, and disbursements of such payments to the Beneficial Owners is the
responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depositary with
respect to any of the Preferred Securities at any time by giving reasonable
notice to the Property Trustee and PacifiCorp. In the event that a successor
securities depositary is not obtained, definitive Preferred Security
certificates representing such Preferred Securities are required to be printed
and delivered. PacifiCorp, at its option, may decide to discontinue use of the
system of book-entry transfers through DTC (or a successor depositary). After a
Debenture Event of Default, the holders of a majority in liquidation preference
of Preferred Securities may determine to discontinue the system of book-entry
transfers through DTC. In any such event, definitive certificates for such
Issuer Trust's Preferred Securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Issuer Trusts and PacifiCorp believe to
be accurate, but the Issuer Trusts and PacifiCorp assume no responsibility for
the accuracy thereof. Neither the Issuer Trusts nor PacifiCorp has any
responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
REGISTRAR AND TRANSFER AGENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Property Trustee will act as registrar and transfer agent for the Preferred
Securities.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of each Issuer Trust, but upon payment of any tax or
other governmental charges that may be imposed in
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connection with any transfer or exchange. The Issuer Trusts will not be required
to register or cause to be registered the transfer of their Preferred Securities
after such Preferred Securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of an
Event of Default, undertakes to perform only such duties as are specifically set
forth in each Trust Agreement and, after such Event of Default, must exercise
the same degree of care and skill as a prudent person would exercise or use in
the conduct of his or her own affairs. Subject to this provision, the Property
Trustee is under no obligation to exercise any of the powers vested in it by the
applicable Trust Agreement at the request of any holder of Preferred Securities
unless it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby. If no Event of Default has occurred
and is continuing and the Property Trustee is required to decide between
alternative causes of action, construe ambiguous provisions in the applicable
Trust Agreement or is unsure of the application of any provision of the
applicable Trust Agreement, and the matter is not one on which holders of
Preferred Securities are entitled under such Trust Agreement to vote, then the
Property Trustee shall take such action as is directed by PacifiCorp and if not
so directed, shall take such action as it deems advisable and in the best
interests of the holders of the Preferred Securities and the Common Securities
and will have no liability except for its own bad faith, negligence or willful
misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Issuer Trusts in such a way that no Issuer Trust
will be deemed to be an "investment Company" required to be registered under the
Investment Company Act or classified as an association taxable as a corporation
for United States federal income tax purposes and so that the Corresponding
Junior Subordinated Debentures will be treated as indebtedness of PacifiCorp for
United States federal income tax purposes. In this connection, PacifiCorp and
the Administrative Trustees are authorized to take any action, not inconsistent
with applicable law, the certificate of trust of each Issuer Trust or each Trust
Agreement, that PacifiCorp and the Administrative Trustees determine in their
discretion to be necessary or desirable for such purposes, as long as such
action does not materially adversely affect the interests of the holders of the
related Preferred Securities.
Holders of the Preferred Securities have no preemptive or similar rights.
No Issuer Trust may borrow money or issue debt or mortgage or pledge any of
its assets.
DESCRIPTION OF GUARANTEES
Each Guarantee will be executed and delivered by PacifiCorp concurrently
with the issuance by each Issuer Trust of its Preferred Securities for the
benefit of the holders from time to time of such Preferred Securities. The Bank
of New York will act as indenture trustee ("Guarantee Trustee") under each
Guarantee for the purposes of compliance with the Trust Indenture Act and each
Guarantee will be qualified as an indenture under the Trust Indenture Act. This
summary of certain provisions of the Guarantees does not purport to be complete
and is subject to, and qualified in its entirety by reference to, all of the
provisions of each Guarantee, including the definitions therein of certain
terms, and the Trust Indenture Act. The form of each Guarantee has been filed as
an exhibit to the Registration Statement of which this Prospectus forms a part.
Reference in this summary to the Preferred Securities and the Issuer Trust mean
the Preferred Securities of an Issuer Trust and such Issuer Trust, respectively,
to which a Guarantee relates. The Guarantee Trustee will hold each Guarantee for
the benefit of the holders of the related Issuer Trust's Preferred Securities.
GENERAL
PacifiCorp will irrevocably agree to pay in full on a subordinated basis, to
the extent set forth herein, the Guarantee Payments (as defined below) to the
holders of the Preferred Securities, as and when due, regardless of any defense,
right of set-off or counterclaim that such Issuer Trust may have or assert other
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than the defense of payment. The following payments with respect to the
Preferred Securities, to the extent not paid by or on behalf of the related
Issuer Trust (the "Guarantee Payments"), will be subject to the Guarantee: (i)
any accumulated and unpaid Distributions required to be paid on such Preferred
Securities, to the extent that such Issuer Trust has funds on hand available
therefor, (ii) the Redemption Price with respect to any Preferred Securities
called for redemption to the extent that such Issuer Trust has funds on hand
available therefor, and (iii) upon a voluntary or involuntary dissolution,
winding up or liquidation of such Issuer Trust (unless the Corresponding Junior
Subordinated Debentures are distributed to holders of such Preferred
Securities), the lesser of (a) the Liquidation Amount plus accumulated and
unpaid Distributions on the Preferred Securities to the date of payment to the
extent that such Issuer Trust has funds on hand available therefor and (b) the
amount of assets of such Issuer Trust remaining available for distribution to
holders of Preferred Securities. PacifiCorp's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by PacifiCorp
to the holders of the applicable Preferred Securities or by causing the Issuer
Trust to pay such amounts to such holders.
Each Guarantee will be an irrevocable guarantee on a subordinated basis of
the related Issuer Trust's obligations under the Preferred Securities, but will
apply only to the extent that such related Issuer Trust has funds sufficient to
make such payments, and is not a guarantee of collection.
If PacifiCorp does not make interest payments on the Corresponding Junior
Subordinated Debentures held by the Issuer Trust, the Issuer Trust will not be
able to pay Distributions on the Preferred Securities and will not have funds
available therefor. Each Guarantee will rank subordinate and junior in right of
payment to all Senior Indebtedness of PacifiCorp. See "-- Status of the
Guarantee." Except as otherwise provided in the applicable Prospectus
Supplement, the Guarantees do not limit the incurrence or issuance of other
secured or unsecured debt of PacifiCorp, whether under the Indenture or any
existing or other indenture that PacifiCorp may enter into in the future or
otherwise.
PacifiCorp has, through the applicable Guarantee, the applicable Trust
Agreement, the Junior Subordinated Debentures, the Indenture and the Expense
Agreement (as defined below), taken together, fully, irrevocably and
unconditionally guaranteed all of the Issuer Trust's obligations under the
Preferred Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such a
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Issuer Trust's obligations under the Preferred Securities. See "Relationship
Among the Preferred Securities, the Junior Subordinated Debentures and the
Guarantee -- General."
STATUS OF THE GUARANTEE
Each Guarantee will constitute an unsecured obligation of PacifiCorp and
will rank subordinate and junior in right of payment to all Senior Indebtedness.
Each Guarantee will rank pari passu with all other Guarantees issued by
PacifiCorp. Each Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding directly
against the guarantor to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). Each
Guarantee will be held for the benefit of the holders of the related Preferred
Securities. Each Guarantee will not be discharged except by payment of the
Guarantee Payments in full to the extent not paid by the Issuer Trust or upon
distribution to the holders of the Preferred Securities of the Corresponding
Junior Subordinated Debentures. None of the Guarantees places a limitation on
the amount of additional Senior Indebtedness that may be incurred by PacifiCorp.
PacifiCorp expects from time to time to incur substantial additional
indebtedness constituting Senior Indebtedness.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the related Preferred Securities (in which case no vote
will be required), no Guarantee may be amended without the prior approval of the
holders of not less than a majority of the aggregate liquidation preference of
such outstanding Preferred Securities. The manner of obtaining any such approval
will be
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as set forth under "Description of the Preferred Securities -- Voting Rights;
Amendment of Trust Agreement." All guarantees and agreements contained in each
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of PacifiCorp and shall inure to the benefit of the holders of
the related Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under each Guarantee will occur upon the failure of
PacifiCorp to perform any of its payment or other obligations thereunder. The
holders of not less than a majority in aggregate Liquidation Amount of the
related Preferred Securities have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Guarantee Trustee
in respect of such Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under such Guarantee.
Any holder of the Preferred Securities may institute a legal proceeding
directly against PacifiCorp to enforce its rights under such Guarantee without
first instituting a legal proceeding against the Issuer Trust, the Guarantee
Trustee or any other person or entity.
PacifiCorp, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not PacifiCorp is in compliance with all
the conditions and covenants applicable to it under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of a
default by PacifiCorp in performance of any Guarantee, undertakes to perform
only such duties as are specifically set forth in each Guarantee and, after
default with respect to any Guarantee, must exercise the same degree of care and
skill as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the Guarantee Trustee is under no obligation
to exercise any of the powers vested in it by any Guarantee at the request of
any holder of any Preferred Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.
TERMINATION OF THE GUARANTEE
Each Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the related Preferred Securities, upon
full payment of the amounts payable upon liquidation of the related Issuer Trust
or upon distribution of Corresponding Junior Subordinated Debentures to the
holders of the related Preferred Securities. Each Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of the related Preferred Securities must restore payment of any sums paid under
such Preferred Securities or such Guarantee.
GOVERNING LAW
Each Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
THE EXPENSE AGREEMENT
Pursuant to an Expense Agreement entered into by PacifiCorp under each Trust
Agreement (the "Expense Agreement"), PacifiCorp will irrevocably and
unconditionally guarantee to each person or entity to whom the Issuer Trust
becomes indebted or liable, the full payment of any costs, expenses or
liabilities of the Issuer Trust, other than obligations of the Issuer Trust to
pay to the holders of any Preferred Securities or other similar interests in the
Issuer Trust the amounts due such holders pursuant to the terms of the Preferred
Securities or such other similar interests, as the case may be.
DESCRIPTION OF CORRESPONDING
JUNIOR SUBORDINATED DEBENTURES
The Corresponding Junior Subordinated Debentures are to be issued in one or
more series under the Indenture with terms corresponding to the terms of the
related Preferred Securities. See "Description of Junior Subordinated
Debentures." This summary of certain terms and provisions of, or relating to,
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Corresponding Junior Subordinated Debentures and the Indenture does not purport
to be complete and is subject to, and is qualified in its entirety by reference
to, the Indenture, the form of which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part, and to the Trust Indenture Act.
Whenever particular defined terms of the Indenture (as supplemented or amended
from time to time) are referred to herein or in a Prospectus Supplement, such
defined terms are incorporated herein or therein by reference.
GENERAL
Concurrently with the issuance of each Issuer Trust's Preferred Securities,
such Issuer Trust will invest the proceeds thereof and the consideration paid by
PacifiCorp for the Common Securities in a series of Corresponding Junior
Subordinated Debentures issued by PacifiCorp to such Issuer Trust. Each series
of Corresponding Junior Subordinated Debentures will be in the principal amount
equal to the aggregate stated Liquidation Amount of the related Preferred
Securities plus PacifiCorp's concurrent investment in the Common Securities and
will rank PARI PASSU with all other series of Junior Subordinated Debentures.
The Corresponding Junior Subordinated Debentures will be unsecured and
subordinate and junior in right of payment to the extent and in the manner set
forth in the Indenture to all Senior Indebtedness of PacifiCorp. See
"Description of Junior Subordinated Debentures -- Subordination" and the
Prospectus Supplement relating to any offering of related Preferred Securities.
OPTIONAL REDEMPTION
Unless otherwise specified in the applicable Prospectus Supplement,
PacifiCorp may, at its option, redeem the Corresponding Junior Subordinated
Debentures of any series in whole at any time or in part from time to time.
Except as otherwise set forth in the applicable Prospectus Supplement, the
redemption price for any Corresponding Junior Subordinated Debentures so
redeemed shall be equal to any accrued and unpaid interest thereon to the date
fixed for redemption, plus the principal amount thereof. See "Description of
Junior Subordinated Debentures -- Redemption."
If a Special Event in respect of an Issuer Trust shall occur and be
continuing, PacifiCorp may, at its option, redeem the Corresponding Junior
Subordinated Debentures at any time within 90 days of the occurrence of such
Special Event, in whole but not in part, subject to the provisions of the
Indenture. The redemption price for any Corresponding Junior Subordinated
Debentures shall be equal to 100% of the principal amount of such Corresponding
Junior Subordinated Debentures then outstanding plus accrued and unpaid interest
to the date fixed for redemption.
For so long as the applicable Issuer Trust is the holder of all the
outstanding series of Corresponding Junior Subordinated Debentures, the proceeds
of any such redemption will be used by the Issuer Trust to redeem the related
Preferred Securities in accordance with their terms. PacifiCorp may not redeem a
series of Corresponding Junior Subordinated Debentures in part unless all
accrued and unpaid interest has been paid in full on all outstanding
Corresponding Junior Subordinated Debentures of such series for all interest
periods terminating on or prior to the Redemption Date.
CERTAIN COVENANTS OF PACIFICORP
PacifiCorp will covenant in the applicable Supplemental Indenture as to each
series of Corresponding Junior Subordinated Debentures, that if and so long as
(i) the Issuer Trust of the corresponding series of Preferred Securities and
Common Securities is the holder of all such Corresponding Junior Subordinated
Debentures, (ii) a Tax Event in respect of such Issuer Trust has occurred and is
continuing and (iii) PacifiCorp has elected, and has not revoked such election,
to pay Additional Sums in respect of such Preferred Securities and Common
Securities, PacifiCorp will pay to such Issuer Trust such Additional Sums.
PacifiCorp will also covenant, as to each series of Corresponding Junior
Subordinated Debentures, that it will not, and will not permit any subsidiary of
PacifiCorp to, (i) declare, set aside or pay any dividend or distribution on, or
repurchase, redeem or otherwise acquire, or make any sinking fund payment for
the purchase or redemption of, any shares of its capital stock or (ii) make any
payment of principal, interest or premium, if any, on or repay or repurchase or
redeem any debt securities (including other Corresponding Junior Subordinated
Debentures) that rank pari passu with or junior in interest to the Corresponding
Junior Subordinated Debentures or make any guarantee payments with respect to
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the foregoing (other than (a) dividends or distributions in shares of its
capital stock or in rights to acquire shares of its capital stock, (b)
conversions into or exchanges for shares of its capital stock, (c) redemptions,
purchases or other acquisitions of shares of its capital stock made for the
purpose of an employee incentive plan or benefit plan of PacifiCorp or any of
its subsidiaries and mandatory redemptions or sinking fund payments with respect
to any series of Preferred Stock of PacifiCorp that are subject to mandatory
redemption or sinking fund requirements, provided that the aggregate stated
value of all such series outstanding at the time of any such payment does not
exceed five percent of the aggregate of (1) the total principal amount of all
bonds or other securities representing secured indebtedness issued or assumed by
PacifiCorp and then outstanding and (2) the capital and surplus of PacifiCorp to
be stated on the books of account of PacifiCorp after giving effect to such
payment, provided, however, that any moneys deposited in any sinking fund and
not in violation of this provision may thereafter be applied to the purchase or
redemption of such Preferred Stock in accordance with the terms of such sinking
fund without regard to the restrictions contained in this provision, and (d)
payments under any guarantee by PacifiCorp with respect to any securities of a
subsidiary of PacifiCorp, provided that the proceeds from the issuance of such
securities were used to purchase Junior Subordinated Debentures of any series
under the Indenture) if at such time (i) there shall have occurred any event of
which PacifiCorp has actual knowledge that (a) with the giving of notice or the
lapse of time, or both, would constitute a "Debenture Event of Default" under
the Indenture with respect to Corresponding Junior Subordinated Debentures of
such series and (b) in respect of which PacifiCorp shall not have taken
reasonable steps to cure, (ii) PacifiCorp shall be in default with respect to
its payment of any obligations under the related Guarantee or (iii) PacifiCorp
shall have given notice of its selection of an Extension Period as provided in
the Indenture with respect to Corresponding Junior Subordinated Debentures of
such series and shall not have rescinded such notice, or such Extension Period,
or any extension thereof, shall be continuing.
PacifiCorp will also covenant, as to each series of Corresponding Junior
Subordinated Debentures, (i) to maintain directly or indirectly 100% ownership
of the Common Securities of the Issuer Trust to which Corresponding Junior
Subordinated Debentures have been issued, provided that certain successors which
are permitted pursuant to the Indenture may succeed to PacifiCorp's ownership of
the Common Securities, (ii) not to voluntarily terminate, wind-up or liquidate
any Issuer Trust, except (a) in connection with a distribution of Corresponding
Junior Subordinated Debentures to the holders of the Preferred Securities in
liquidation of such Issuer Trust or (b) in connection with certain mergers,
consolidations or amalgamations permitted by the related Trust Agreement and
(iii) to use its reasonable efforts, consistent with the terms and provisions of
the related Trust Agreement, to cause such Issuer Trust to remain classified as
a grantor trust and not to be classified as an association taxable as a
corporation for United States federal income tax purposes. PacifiCorp will also
make certain additional agreements relating to the Indenture as provided in the
last sentence of the first paragraph under "Description of Junior Subordinated
Debentures -- Modification of Indenture."
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
AND THE GUARANTEES
As long as payments of interest and other payments are made when due on each
series of Corresponding Junior Subordinated Debentures, such payments will be
sufficient to cover Distributions and other payments due on the related
Preferred Securities, primarily because (i) the aggregate principal amount of
each series of Corresponding Junior Subordinated Debentures will be equal to the
sum of the aggregate Liquidation Amount of the related Preferred Securities and
related Common Securities; (ii) the interest rate and interest and other payment
dates on each series of Corresponding Junior Subordinated Debentures will match
the Distribution rate and Distribution and other payment dates for the related
Preferred Securities; (iii) PacifiCorp shall pay for all and any costs, expenses
and liabilities of such Issuer Trust except the Issuer Trust's obligations to
holders of its Preferred Securities under such Preferred Securities; and (iv)
each Trust Agreement further provides that the Issuer Trust will not engage in
any activity that is not consistent with the limited purposes of such Issuer
Trust.
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Payments of Distributions and other amounts due on the Preferred Securities
(to the extent the Issuer Trust has funds available for the payment of such
Distributions) are irrevocably guaranteed by PacifiCorp as and to the extent set
forth under "Description of Guarantees." Taken together, PacifiCorp's
obligations under each series of Junior Subordinated Debentures, the Indenture,
the related Trust Agreement, the related Expense Agreement, and the related
Guarantee provide a full, irrevocable and unconditional guarantee of payments of
distributions and other amounts due on the related series of Preferred
Securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes such guarantee. It is only the
combined operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Issuer Trust's obligations under
the Preferred Securities. If and to the extent that PacifiCorp does not make
payments on any series of Corresponding Junior Subordinated Debentures, such
Issuer Trust will not pay Distributions or other amounts due on related
Preferred Securities. The Guarantees do not cover payment of Distributions when
the related Issuer Trust does not have sufficient funds to pay such
Distributions. In such event, the remedies of a holder of a series of Preferred
Securities are as described above under "Description of Junior Subordinated
Debentures -- Debenture Events of Default" and "Description of Preferred
Securities -- Events of Default; Notice." The obligations of PacifiCorp under
each Guarantee are subordinate and junior in right of payment to all Senior
Indebtedness of PacifiCorp.
Notwithstanding anything to the contrary in the Indenture, PacifiCorp has
the right to set-off any payment it is otherwise required to make thereunder
with and to the extent PacifiCorp has theretofore made, or is concurrently on
the date of such payment making, a payment under the related Guarantee.
A holder of any related Preferred Security may institute a legal proceeding
directly against PacifiCorp to enforce its rights under the related Guarantee
without first instituting a legal proceeding against the Guarantee Trustee, the
related Issuer Trust or any other person or entity.
Each Issuer Trust's Preferred Securities evidence a beneficial interest in
such Issuer Trust, and each Issuer Trust exists for the sole purpose of issuing
its Preferred Securities and Common Securities and investing the proceeds
thereof in Corresponding Junior Subordinated Debentures. A principal difference
between the rights of a holder of a Preferred Security and a holder of a
Corresponding Junior Subordinated Debenture is that a holder of a Corresponding
Junior Subordinated Debenture is entitled to receive from PacifiCorp the
principal amount of and interest accrued on Corresponding Junior Subordinated
Debentures held, while a holder of Preferred Securities is entitled to receive
Distributions from such Issuer Trust (or from PacifiCorp under the applicable
Guarantee) if and to the extent such Issuer Trust has funds available for the
payment of such Distributions.
Upon any voluntary or involuntary termination, winding-up or liquidation of
any Issuer Trust involving the liquidation of the Corresponding Junior
Subordinated Debentures, the holders of the related Preferred Securities will be
entitled to receive, out of assets held by such Issuer Trust and after
satisfaction of liabilities to creditors of such Issuer Trust as provided by
applicable law, the Liquidation Distribution in cash. See "Description of
Preferred Securities -- Liquidation Distribution Upon Termination." Upon any
voluntary or involuntary liquidation or bankruptcy of PacifiCorp, the Property
Trustee, as holder of the Corresponding Junior Subordinated Debentures, would be
a subordinated creditor of PacifiCorp, subordinated in right of payment to all
Senior Indebtedness, but entitled to receive payment in full of principal and
interest, before any shareholders of PacifiCorp receive payments or
distributions. Since PacifiCorp is the guarantor under each Guarantee and has
agreed to pay for all costs, expenses and liabilities of each Issuer Trust
(other than the Issuer Trust's obligations to the holders of its Preferred
Securities), the positions of a holders of such Preferred Securities and a
holder of such Corresponding Junior Subordinated Debentures relative to other
creditors and to shareholders of PacifiCorp in the event of liquidation or
bankruptcy of PacifiCorp would be substantially the same.
A default or event of default under any Senior Indebtedness of PacifiCorp
will not constitute a default or Event of Default under the Indenture. However,
in the event of payment defaults under, or acceleration of, Senior Indebtedness
of PacifiCorp, the subordination provisions of the Indenture provide that no
payments may be made in respect of the Corresponding Junior Subordinated
Debentures until such
33
<PAGE>
Senior Indebtedness has been paid in full or any payment default thereunder has
been cured or waived. Failure to make required payments on any series of
Corresponding Junior Subordinated Debentures would constitute a Debenture Event
of Default under the Indenture with respect to such series.
PLAN OF DISTRIBUTION
PacifiCorp may sell any series of the Junior Subordinated Debentures, and
each Issuer Trust may sell any series of Preferred Securities, through
underwriters, dealers or agents, or directly to one or more purchasers. The
Prospectus Supplement with respect to the securities offered thereby will set
forth the terms of the offering of such Offered Securities, including the name
or names of any underwriters, dealers or agents, the purchase price of such
Offered Securities and the proceeds to PacifiCorp or the Issuer Trust, as the
case may be, from such sale, any underwriting discounts and other items
constituting underwriters' or agents' compensation, any initial public offering
price and any discounts or concessions allowed or reallowed or paid to dealers.
If underwriters are involved in the sale of any Offered Securities, such
Offered Securities will be acquired by the underwriters for their own account
and may be resold from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices
determined at the time of sale. The underwriter or underwriters with respect to
a particular underwritten offering of Offered Securities will be named in the
Prospectus Supplement relating to such offering and, if an underwriting
syndicate is used, the managing underwriter or underwriters will be set forth on
the cover page of such Prospectus Supplement. Unless otherwise set forth in such
Prospectus Supplement, the obligations of the underwriters to purchase the
Offered Securities will be subject to certain conditions precedent, and the
underwriters will be obligated to purchase all such Offered Securities if any
are purchased.
If a dealer is used in the sale of any Offered Securities, PacifiCorp will
sell such Offered Securities to the dealer, as principal. The dealer may then
resell such Offered Securities to the public at varying prices to be determined
by such dealer at the time of resale. The name of any dealer involved in a
particular offering of Offered Securities and any discounts or concessions
allowed or reallowed or paid to the dealer will be set forth in the Prospectus
Supplement relating to such offering.
The Offered Securities may be sold directly by PacifiCorp or through agents
designated by PacifiCorp from time to time. Any such agent, who may be deemed to
be an underwriter as that term is defined in the Securities Act, involved in the
offer or sale of any of the Offered Securities will be named, and any
commissions payable by PacifiCorp to such agent will be set forth, in the
Prospectus Supplement relating to such offer or sale. Unless otherwise indicated
in such Prospectus Supplement, any such agent will be acting on a reasonable
best efforts basis for the period of its appointment.
Certain of the underwriters, dealers or agents and their associates may be
customers of, engage in the transactions with or perform services for PacifiCorp
and/or the applicable Issuer Trust and/or any of their respective affiliates in
the ordinary course of business.
PacifiCorp will indicate in a Prospectus Supplement the extent to which it
anticipates that a secondary market for the Offered Securities will be
available.
Underwriters, dealers and agents participating in the distribution of the
Offered Securities may be deemed to be "underwriters" within the meaning of, and
any discounts and commissions received by them and any profit realized by them
on resale of such Offered Securities may be deemed to be underwriting discounts
and commissions under, the Securities Act. Subject to certain conditions,
PacifiCorp and the applicable Issuer Trustee may agree to indemnify the several
underwriters, dealers or agents and their controlling persons against certain
civil liabilities, including certain liabilities under the Securities Act, or to
contribute to payments any such person may be required to make in respect
thereof.
34
<PAGE>
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus Supplement, certain
legal matters in connection with the Offered Securities, including the validity
of the Junior Subordinated Debentures, the Indenture and the Guarantee, will be
passed upon for PacifiCorp and each Issuer Trust by Stoel Rives LLP, Portland,
Oregon, and for the underwriters by Winthrop, Stimson, Putnam & Roberts, New
York, New York. Certain matters of Delaware law relating to the validity of the
Preferred Securities, the enforceability of each Trust Agreement and the
creation of each Issuer Trust will be passed upon by Richards, Layton & Finger,
P.A., as special Delaware counsel to PacifiCorp and the Issuer Trusts. Certain
tax matters in connection with the Preferred Securities will be passed upon for
PacifiCorp and each Issuer Trust by Stoel Rives LLP. John M. Schweitzer and John
Detjens III, who are assistant secretaries of PacifiCorp, are partners in the
firm of Stoel Rives LLP.
EXPERTS
The financial statements incorporated in this Prospectus by reference from
PacifiCorp's Annual Report on Form 10-K have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their reports, which are incorporated
herein by reference (which reports express an unqualified opinion and include an
explanatory paragraph relating to PacifiCorp's change in its method of
accounting for income taxes and other postretirement benefits), and have been so
incorporated herein in reliance upon the reports of such firm given upon their
authority of as experts in accounting and auditing.
With respect to any unaudited interim financial information that is
incorporated herein by reference, Deloitte & Touche LLP have applied limited
procedures in accordance with professional standards for a review of such
information. However, as stated in their reports included in PacifiCorp's
Quarterly Reports on Form 10-Q incorporated by reference herein, they did not
audit and they do not express an opinion on that interim financial information.
Accordingly, the degree of reliance on their reports on such information should
be restricted in light of the limited nature of the review procedures applied.
Deloitte & Touche LLP are not subject to the liability provisions of Section 11
of the Securities Act for their reports on the unaudited interim financial
information because those reports are not "reports" or a "part" of the
Registration Statement of which this Prospectus is a part prepared or certified
by an accountant within the meaning of Sections 7 and 11 of the Securities Act.
35
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
PACIFICORP SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
--------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
PROSPECTUS SUPPLEMENT
PAGE
----
Risk Factors.............................................................. S-4
PacifiCorp Capital I...................................................... S-7
PacifiCorp................................................................ S-8
Use of Proceeds........................................................... S-8
Selected Financial Information............................................ S-9
Accounting Treatment...................................................... S-10
Certain Terms of Series A Preferred Securities............................ S-11
Certain Terms of Series C Debentures...................................... S-13
Certain Federal Income Tax Considerations................................. S-16
Underwriting.............................................................. S-19
Legal Opinions............................................................ S-20
<CAPTION>
PROSPECTUS
<S> <C>
Available Information..................................................... 3
Incorporation of Certain Documents by Reference........................... 3
PacifiCorp................................................................ 4
The Issuer Trusts......................................................... 4
Use of Proceeds........................................................... 5
Consolidated Ratios of Earnings to Fixed Charges.......................... 6
Description of Junior Subordinated Debentures............................. 6
Description of Preferred Securities....................................... 16
Description of Guarantees................................................. 28
Description of Corresponding Junior Subordinated Debentures............... 30
Relationship Among the Preferred Securities, the Corresponding Junior
Subordinated Debentures and the Guarantees............................... 32
Plan of Distribution...................................................... 34
Legal Opinions............................................................ 35
Experts................................................................... 35
</TABLE>
8,680,000 PREFERRED SECURITIES
PACIFICORP CAPITAL I
% CUMULATIVE QUARTERLY
INCOME PREFERRED SECURITIES,
SERIES A (QUIPSSM)
GUARANTEED TO THE EXTENT PACIFICORP
CAPITAL I HAS FUNDS AS SET FORTH
HEREIN BY
[LOGO]
------------------
PROSPECTUS SUPPLEMENT
------------------
GOLDMAN, SACHS & CO.
SMITH BARNEY INC.
DEAN WITTER REYNOLDS INC.
A.G. EDWARDS & SONS, INC.
MERRILL LYNCH & CO.
REPRESENTATIVES OF THE UNDERWRITERS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Registration fee. . . . . . . . . . . . . . . . . . . . $75,863
*Fees of state regulatory authorities. . . . . . . . . . 1,000
*Counsel fees. . . . . . . . . . . . . . . . . . . . . . 100,000
*Accountants' fees . . . . . . . . . . . . . . . . . . . 30,000
*Stock exchange listing fees . . . . . . . . . . . . . . 25,650
*Trustee fees. . . . . . . . . . . . . . . . . . . . . . 4,000
*Rating agency fees. . . . . . . . . . . . . . . . . . . 50,000
*Blue sky expenses . . . . . . . . . . . . . . . . . . . 5,000
*Printing and delivery of registration statement,
prospectus, certificates, etc.. . . . . . . . . . . . 75,000
*Miscellaneous expenses. . . . . . . . . . . . . . . . . 33,487
Total . . . . . . . . . . . . . . . . . . . . . . . $400,000
___________________
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
PacifiCorp's Second Restated Articles of Incorporation as amended
(""Restated Articles''), and Bylaws, as amended (""Bylaws''), require
PacifiCorp to indemnify directors and officers to the fullest extent not
prohibited by law. The right to and amount of indemnification ultimately
will be subject to determination by a court that indemnification in the
circumstances presented is consistent with public policy considerations and
other provisions of law. It is likely, however, that the Restated Articles
would require indemnification at least to the extent that indemnification is
authorized by the Oregon Business Corporation Act (""OBCA''). The effect of
the OBCA is summarized as follows:
(a) The OBCA permits PacifiCorp to grant a right of
indemnification in respect of any pending, threatened or completed
action, suit or proceeding, other than an action by or in the right
of PacifiCorp, against expenses (including attorneys' fees),
judgments, penalties, fines and amounts paid in settlement actually
and reasonably incurred, PROVIDED the person concerned acted in
good faith and in a manner the person reasonably believed to be in
or not opposed to the best interests of PacifiCorp, and, with
respect to any criminal action or proceeding, had no reasonable
cause to believe the conduct was unlawful. Indemnification is not
permitted in connection with a proceeding in which a person is
adjudged liable on the basis that personal benefit was improperly
received unless indemnification is permitted by a court upon a
finding that the person is fairly and reasonably entitled to
indemnification in view of all of the relevant circumstances. The
termination of a proceeding by judgment, order, settlement,
conviction or plea of NOLO CONTENDERE or its equivalent is not, of
itself, determinative that the person did not meet the prescribed
standard of conduct.
<PAGE>
(b) The OBCA permits PacifiCorp to grant a right of
indemnification in respect of any proceeding by or in the right of
PacifiCorp against the reasonable expenses (including attorneys'
fees) incurred, if the person concerned acted in good faith and in
a manner he or she reasonably believed to be in or not opposed to
the best interests of PacifiCorp, except that no indemnification
may be granted if such person is adjudged to be liable to
PacifiCorp unless permitted by a court.
(c) Under the OBCA, PacifiCorp may not indemnify a person in
respect of a proceeding described in (a) or (b) above unless it is
determined that indemnification is permissible because the person
has met the prescribed standard of conduct by any one of the
following: (i) the Board of Directors, by a majority vote of a
quorum consisting of directors not at the time parties to the
proceeding, (ii) if a quorum of directors not parties to the
proceeding cannot be obtained, by a majority vote of a committee of
two or more directors not at the time parties to the proceeding,
(iii) by special legal counsel selected by the Board of Directors
or the committee thereof, as described in (i) and (ii) above, or
(iv) by the shareholders. Authorization of the indemnification and
evaluation as to the reasonableness of expenses are to be
determined as specified in any one of (i) through (iv) above,
except that if the determination of such indemnification's
permissibility is made by special counsel, then the determination
of the reasonableness of such expenses is to be made by those
entitled to select special counsel. Indemnification can also be
ordered by a court if the court determines that indemnification is
fair in view of all of the relevant circumstances. Notwithstanding
the foregoing, every person who has been wholly successful, on the
merits or otherwise, in defense of a proceeding described in (a) or
(b) above is entitled to be indemnified as a matter of right
against reasonable expenses incurred in connection with the
proceeding.
(d) Under the OBCA, PacifiCorp may pay for or reimburse the
reasonable expenses incurred in defending a proceeding in advance
of the final disposition thereof if the director or officer
receiving the advance furnishes (i) a written affirmation of the
director's or officer's good faith belief that he or she has met
the prescribed standard of conduct and (ii) a written undertaking
to repay the advance if it is ultimately determined that such
person did not meet the standard of conduct.
The rights of indemnification described above are not exclusive of any
other rights of indemnification to which officers or directors may be
entitled under any statute, agreement, vote of shareholders, action of
directors or otherwise. Resolutions adopted by PacifiCorp's Board of
Directors require PacifiCorp to indemnify directors and officers of
PacifiCorp to the fullest extent permitted by law and are intended to create
an obligation to indemnify to the fullest extent a court may find to be
consistent with public policy considerations.
PacifiCorp has directors' and officers' liability insurance coverage
which insures directors and officers of PacifiCorp against certain
liabilities.
PacifiCorp, as Depositor, has agreed to indemnify the Issuer Trustees
for, and to hold the Issuer Trustees harmless against, any loss, damage,
claim, liability, penalty or expense incurred without negligence or bad faith
on the part of any Issuer Trustee, arising out of or in connection with the
acceptance or administration of the Trust Agreement, including the costs and
expenses of any Issuer Trustee of defending itself against any claim or
liability in connection with the exercise and performance of any of its
powers or duties under the Trust Agreement.
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
A list of exhibits included as part of this Registration Statement
is set forth in an Exhibit Index, which immediately precedes such
exhibits.
(b) Financial Statement Schedules
None
ITEM 17. UNDERTAKINGS.
(a) Each of the undersigned registrants hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information
set forth in the registration statement; PROVIDED, HOWEVER, that
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth
in the ""Calculation of Registration Fee'' table in the effective
registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the
registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
<PAGE>
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) That, for purposes of determining liability under the
Securities Act of 1933, each filing of the registrant's annual
report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(5) That, for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this Registration Statement in reliance
upon Rule 430A under the Securities Act of 1933 and contained in a
form of prospectus filed by the registration pursuant to Rule
424(b)(1) or (4) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective.
(6) That, for purposes of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains
a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(7) To provide to the underwriters at the closing specified
in the underwriting agreements certificates in such denominations
and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrants pursuant to the provisions described
under Item 15, or otherwise, the registrants have been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrants of
expenses incurred or paid by a director, officer or controlling person of the
registrants in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrants will, unless in the opinion
of their counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, PacifiCorp
certifies that it has reasonable grounds to believe that it meets the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Portland, State of Oregon, on June 3, 1996.
PACIFICORP
By: /s/ RICHARD T. O'BRIEN
------------------------------------
Richard T. O'Brien
Senior Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been duly signed by the following persons on
June 3, 1996 in the capacities indicated.
SIGNATURE TITLE
--------- -----
*FREDERICK W. BUCKMAN President, Chief Executive Officer
- ------------------------------------- and Director
Frederick W. Buckman
RICHARD T. O'BRIEN
- ------------------------------------- Senior Vice President and Chief
Richard T. O'Brien Financial Officer (also Chief
Accounting Officer)
*KATHRYN A. BRAUN Director
- -------------------------------------
Kathryn A. Braun
*C. TODD CONOVER Director
- -------------------------------------
C. Todd Conover
*NOLAN E. KARRAS Director
- -------------------------------------
Nolan E. Karras
*KEITH R. McKENNON Director
- -------------------------------------
Keith R. McKennon
(CHAIRMAN)
<PAGE>
*ROBERT G. MILLER Director
- -------------------------------------
Robert G. Miller
*VERL R. TOPHAM Director
- -------------------------------------
Verl R. Topham
*DON M. WHEELER Director
- -------------------------------------
Don M. Wheeler
*NANCY WILGENBUSCH Director
- -------------------------------------
Nancy Wilgenbusch
*PETER I. WOLD Director
- -------------------------------------
Peter I. Wold
*BY RICHARD T. O'BRIEN
---------------------------------
Richard T. O'Brien
(Attorney-in-Fact)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, PacifiCorp
Capital I certifies that it has reasonable grounds to believe that it meets
the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Portland, State of Oregon, on June 3, 1996.
PACIFICORP CAPITAL I
By /s/ WILLIAM E. PERESSINI
-----------------------------------
William E. Peressini, as Trustee
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, PacifiCorp
Capital II certifies that it has reasonable grounds to believe that it meets
the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Portland, State of Oregon, on June 3, 1996.
PACIFICORP CAPITAL II
By /s/ WILLIAM E. PERESSINI
---------------------------------
William E. Peressini, as Trustee
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NO. DESCRIPTION PAGE NO.
- ------- ----------- ----------
<S> <C> <C>
*1(a) Form of Underwriting Agreement relating to Junior
Subordinated Debentures not issued in connection with
Preferred Securities (Exhibit (1)(b), File No. 33-55309).
**1(b) Form of Underwriting Agreement to be used in connection
with the issuance of Preferred Securities.
**4(a) Indenture dated as of May[nb]1, 1995 between PacifiCorp
and The Bank of New York, as Trustee, as supplemented by two
Supplemental Indentures.
*4(b) Form of Supplemental Indenture to Indenture to be used
in connection with the issuance of Junior Subordinated
Debentures (other than Corresponding Junior Subordinated
Debentures) (Exhibit 4(d), File No. 33-58569).
**4(c) Form of Third Supplemental Indenture to Indenture to be
used in connection with the issuance of Corresponding Junior
Subordinated Debentures and Preferred Securities.
*4(d) Form of Junior Subordinated Debenture (included in
Exhibits 4(b) and 4(c) above).
**4(e) Certificate of Trust of PacifiCorp Capital I.
**4(f) Trust Agreement of PacifiCorp Capital I.
**4(g) Certificate of Trust of PacifiCorp Capital II.
**4(h) Trust Agreement of PacifiCorp Capital II.
**4(i) Form of Amended and Restated Trust Agreement
(Agreements for PacifiCorp Capital I and PacifiCorp Capital II
are substantially identical except for names and dates).
**4(j) Form of Preferred Security Certificate for PacifiCorp
Capital I and PacifiCorp Capital II. (included in Exhibit
4(i)[nb]above)
**4(k) Form of Guarantee Agreement (Agreements for PacifiCorp
Capital I and PacifiCorp Capital II are substantially
identical except for names and dates).
**5(a) Opinion of Stoel Rives LLP with respect to the Junior
Subordinated Debentures and Guarantees.
**5(b) Opinion of Richards, Layton[nb]& Finger, special
Delaware counsel, with respect to the Preferred Securities of
PacifiCorp Capital I.
</TABLE>
II-9
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
**5(c) Opinion of Richards, Layton[nb]& Finger, special
Delaware counsel, with respect to the Preferred Securities of
PacifiCorp Capital II.
**8 Opinion of Stoel Rives LLP with respect to United States
Federal Income Tax Matters.
*12 Statements re Computation of Ratios of Earnings to Fixed
Charges (Exhibit 12, Form 10-K for the Year ended December[nb]
31, 1995 and Exhibit 12(a), Form 10-Q for the Quarter ended
March[nb]31, 1996).
**23(a) Consent of Deloitte[nb]& Touche LLP.
**23(b) Consent of Stoel Rives LLP (included in Exhibit 5(a)
and (8) above).
**23(c) Consents of Richards, Layton[nb]& Finger (included in
Exhibits 5(b) and 5(c) above).
**24 Powers of Attorney.
**25(a) Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939, as amended, of The Bank of New
York, as Trustee under the Indenture dated as of May[nb]1,
1995, as supplemented, between PacifiCorp and The Bank of New
York.
**25(b) Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 of The Bank of New York, as
Guarantee Trustee for the Guarantee for PacifiCorp Capital I.
**25(c) Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 of The Bank of New York, as
Property Trustee for the Amended and Restated Trust Agreement
of PacifiCorp Capital I.
**25(d) Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 of The Bank of New York, as
Guarantee Trustee for the Guarantee for PacifiCorp Capital II.
**25(e) Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 of The Bank of New York, as
Property Trustee for the Amended and Restated Trust Agreement
of PacifiCorp Capital II.
</TABLE>
__________________
* Incorporated by reference.
** Previously filed.
II-10
