As filed with the Securities and Exchange Commission on March 7, 1997
Registration No. 333-[_______]
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------------
PacifiCorp PacifiCorp Capital II
(Exact name of Registrant (Exact name of Registrant as
as specified in charter) specified in Trust Agreement)
Oregon Delaware
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
93-0246090 93-6305293
(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
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>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
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...........
- ------------------------------------------------------------------------------------------------------------------------------------
PacifiCorp Capital II
Preferred Securities.....................
- ------------------------------------------------------------------------------------------------------------------------------------
PacifiCorp Guarantee with respect to
Preferred Securities (3)(4)..............
- ------------------------------------------------------------------------------------------------------------------------------------
Total.................................... $102,000,000 (5) 100% $102,000,000 (5) $30,910 (6)
====================================================================================================================================
<FN>
(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 II Preferred Securities. No
separate consideration will be received for the PacifiCorp Guarantee or
PacifiCorp Junior Subordinated Deferrable Interest Debentures in
connection with an issuance of Preferred Securities by PacifiCorp Capital
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) An aggregate of $33,000,000 of PacifiCorp Junior Subordinated Debentures
and Preferred Securities are being carried forward from registration
statement No. 333-03357, as to which securities a registration fee of
$11,380 was previously paid with such registration statement.
</FN>
</TABLE>
------------------------------
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.
333-03357.
------------------------------
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>
EXPLANATORY NOTE
This Registration Statement contains two forms of Prospectus Supplement to
the Prospectus included herein: the first form is to be used in connection with
an offering by PacifiCorp of Junior Subordinated Debentures and the second form
is to be used in connection with an offering by PacifiCorp Capital II of
Preferred Securities.
<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.
- --------------------------------------------------------------------------------
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED [__________ __], 1997
[$______________] [__%] Junior Subordinated Deferrable Interest
Debentures, Series D
PACIFICORP
----------
Interest on the [__%] Junior Subordinated Deferrable Interest Debentures,
Series D (the "Series D Junior Subordinated Debentures") is payable quarterly in
arrears on March 31, June 30, September 30 and December 31 of each year,
commencing [_______ ___], 1997. The Series D Junior Subordinated Debentures will
mature on [______ ___, ____]. The Series D Junior Subordinated Debentures will
be redeemable at the option of PacifiCorp, an Oregon corporation ("PacifiCorp"),
in whole or in part, on or after [_______ ___, _____] at a redemption price
equal to 100% of the principal amount to be redeemed plus any accrued and unpaid
interest to the redemption date. The Series D Junior Subordinated Debentures
constitute "Junior Subordinated Debentures" as described in the accompanying
Prospectus.
The Series D Junior Subordinated Debentures will be issued in the form of
one or more global certificates registered in the name of The Depository Trust
Company ("DTC"), as securities depository, or its nominee. Except as described
herein, purchasers of the Series D Junior Subordinated Debentures will not
receive certificates representing their ownership interests therein, and such
interests will be shown on, and transfers thereof will be effected only through,
records maintained by DTC and its participants. See "Description of the Series D
Junior Subordinated Debentures - Registration of Series D Junior Subordinated
Debentures" and "Book-Entry Issuance" in the accompanying Prospectus. The
authorized denominations of the Series D Junior Subordinated Debentures are
$1,000 and integral multiples thereof. See "Description of the Series D Junior
Subordinated Debentures."
The obligations of PacifiCorp under the Series D Junior Subordinated
Debentures are subordinate and junior in right of payment to Senior Indebtedness
(as defined under "Description of Junior Subordinated Debentures -
Subordination" in the accompanying Prospectus) of PacifiCorp. At September 30,
1996, Senior Indebtedness of PacifiCorp aggregated approximately $3.9 billion.
The terms of the Series D Junior Subordinated Debentures place no limitation on
the amount of Senior Indebtedness that may be incurred by PacifiCorp. In
addition, the Series D Junior Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of PacifiCorp's
subsidiaries, and holders of Series D Junior Subordinated Debentures should look
only to the assets of PacifiCorp for payments on Series D Junior Subordinated
Debentures. See "Description of Junior Subordinated Debentures - General" in the
accompanying Prospectus.
----------
See "Risk Factors" for certain information relevant to an investment in the
Series D Junior Subordinated Debentures beginning on page S-3 hereof.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL
OFFENSE.
---------
<PAGE>
<TABLE>
<CAPTION>
Initial Public Underwriting Proceeds to
Offering Price Discount(1) PacifiCorp(2)
-------------- ----------- -------------
<S> <C> <C> <C>
Per Series D Junior Subordinated Debenture..................... 100.00% [__%] [__%]
Total ......................................................... [$________] [$________] [$________]
- ---------
<FN>
(1) PacifiCorp has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting estimated expenses of [$________] payable by PacifiCorp.
</FN>
</TABLE>
---------------
The Series D Junior Subordinated Debentures 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 D Junior Subordinated Debentures will be
ready for delivery in book-entry form only through the facilities of DTC in New
York, New York, on or about [__________ __], 1997.
[Underwriters' names]
---------------
The date of this Prospectus Supplement is [__________ __], 1997.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY EFFECT TRANSACTIONS
WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES OFFERED HEREBY AT
LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
---------------
S-2
<PAGE>
RISK FACTORS
Prospective purchasers of Series D Junior Subordinated Debentures should
carefully review the information contained elsewhere in this Prospectus
Supplement and in the accompanying Prospectus and should particularly consider
the following matters:
Option to Extend Interest Payment Period; Tax Consequences; Potential Market
Volatility During Extension Period
So long as no Debenture Event of Default (as defined under "Description of
Junior Subordinated Debentures - Debenture Events of Default" in the
accompanying Prospectus) under the Indenture has occurred and is continuing,
PacifiCorp has the right under the Indenture to defer the payment of interest on
the Series D Junior Subordinated Debentures at any time or from time to time for
one or more periods (each an "Extension Period"), each of which, together with
all previous and further extensions of such Extension Period prior to its
termination, may not exceed 20 consecutive quarters and may not extend beyond
the maturity of the Series D Junior Subordinated Debentures. As a consequence of
any such election, quarterly interest payments will be deferred (and the amount
of interest to which holders of the Series D Junior Subordinated Debentures 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 that rank pari passu with or junior in interest to the Series D
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, however, 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, further, 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 (as defined under "Description of the Series D Junior Subordinated
Debentures - Interest"), 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 D Junior
Subordinated Debentures. No interest shall be due and payable during an
Extension Period, except at the end thereof. See "Certain Terms of the Series D
Junior Subordinated Debentures - Option to Extend Interest Payment Period."
Should an Extension Period occur, a holder of Series D Junior Subordinated
Debentures (even if it uses the cash method of accounting for United States
federal income tax purposes) will be required to accrue interest income for
United States federal income tax purposes. As a result, a holder of Series D
Junior Subordinated Debentures 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 if the holder disposes of the Series D Junior
Subordinated Debentures prior to the record date for the payment of interest.
See "Certain Federal Income Tax Considerations - United States Holders."
S-3
<PAGE>
PacifiCorp has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Series D
Junior Subordinated Debentures. Moreover, because of the consequences of
exercising such right, including a prohibition on the payment of dividends with
respect to PacifiCorp's capital stock, PacifiCorp believes that the likelihood
of such exercise is remote. However, should PacifiCorp elect to exercise such
right in the future, the market price of the Series D Junior Subordinated
Debentures is likely to be affected. A holder that disposes of its Series D
Junior Subordinated Debentures during an Extension Period, therefore, might not
receive the same return on its investment as a holder that continues to hold its
Series D Junior Subordinated Debentures. In addition, as a result of the
existence of PacifiCorp's right to defer interest payments, the market price of
the Series D Junior Subordinated Debentures may be more volatile than the market
prices of other securities that are not subject to such deferrals.
Subordination of Series D Junior Subordinated Debentures
The obligations of PacifiCorp under the Series D Junior Subordinated
Debentures are unsecured and rank subordinate and junior in right of payment to
all Senior Indebtedness of PacifiCorp. At September 30, 1996, the Senior
Indebtedness of PacifiCorp aggregated approximately $3.9 billion. In addition,
the Series D Junior Subordinated Debentures will be effectively subordinated to
all existing and future liabilities of PacifiCorp's subsidiaries, and holders of
Series D Junior Subordinated Debentures should look only to the assets of
PacifiCorp for payments on the Series D Junior Subordinated Debentures. The
Indenture does not place any limitation on the amount of secured or unsecured
debt, including Senior Indebtedness, that may be incurred by PacifiCorp. See
"Description of Junior Subordinated Debentures - General" and "- Subordination"
in the accompanying Prospectus.
Lack of Public Market for the Series D Junior Subordinated Debentures
The Series D Junior Subordinated Debentures are a new issue of securities
with no established trading market. PacifiCorp has been advised by the
Underwriters that they intend to make a market in the Series D Junior
Subordinated Debentures 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 D Junior Subordinated Debentures.
If markets for the Series D Junior Subordinated Debentures do not develop,
purchasers may be unable to resell the Series D Junior Subordinated Debentures
for an extended period of time, if at all. Consequently, a purchaser of Series D
Junior Subordinated Debentures may not be able to liquidate its investment
readily and the Series D Junior Subordinated Debentures may not be readily
acceptable as collateral for loans.
S-4
<PAGE>
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. ("PTI"), a
leading provider of local telephone exchange service to rural and suburban
markets, in addition to other investments.
PacifiCorp furnishes electric service to approximately 1,400,000 customers
in portions of seven western states: California, Idaho, Montana, Oregon, Utah,
Washington and Wyoming. Powercor serves approximately 547,000 customers in
suburban Melbourne and the western and central regions of the State of Victoria
in southeast Australia. PTI, through its subsidiaries, provides local telephone
service and access to the long-distance network in Alaska, seven other western
states and three Midwestern states and provides cellular mobile telephone
services in six states. 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 and alternative fuels.
The principal executive offices of PacifiCorp are located at 700 NE
Multnomah, Suite 1600, Portland, Oregon 97232; the telephone number is (503)
731-2000.
S-5
<PAGE>
USE OF PROCEEDS
The proceeds from the sale of the Series D Junior Subordinated 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.
DESCRIPTION OF THE SERIES D JUNIOR SUBORDINATED DEBENTURES
The following summary of certain terms and provisions of the Series D
Junior Subordinated Debentures supplements the description of the terms and
provisions of the Junior Subordinated Debentures set forth in the accompanying
Prospectus under the heading "Description of Junior Subordinated Debentures," to
which description reference is hereby made. The summary of certain terms and
provisions of the Series D Junior Subordinated Debentures set forth below does
not purport to be complete and is subject to, and qualified in its entirety by
reference to, the Indenture, dated as of May 1, 1995, between PacifiCorp and The
Bank of New York, as Trustee (the "Debenture Trustee"), as supplemented (the
"Indenture"). The Indenture has been filed as an exhibit to the Registration
Statement of which this Prospectus Supplement and accompanying Prospectus is a
part.
General
The Series D Junior Subordinated Debentures will be issued as a series of
unsecured Junior Subordinated Debentures under the Indenture. The Series D
Junior Subordinated Debentures will be limited in aggregate principal amount to
[$_______________]. The entire principal amount of the Series D Junior
Subordinated Debentures will become due and payable, together with any accrued
and unpaid interest thereon, on [_________ ___, _____]. The Series D Junior
Subordinated Debentures will initially be issued as one or more fully registered
global certificates (the "Global Securities") registered in the name of Cede &
Co., DTC's nominee. As described herein, in certain limited circumstances,
Series D Junior Subordinated Debentures may be issued in certificated form in
exchange for the Global Securities. See "- Registration of Series D Junior
Subordinated Debentures."
Optional Redemption
PacifiCorp shall have the right to redeem the Series D Junior Subordinated
Debentures, in whole or in part, from time to time, on or after [_________ ___,
_____], upon not less than 30 nor more than 60 days' notice, at a redemption
price equal to 100% of the principal amount to be redeemed plus any accrued and
unpaid interest to the redemption date.
Interest
The Series D Junior Subordinated Debentures will bear interest at an annual
rate of [__%] from and including the date of original issuance, payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year (each, an "Interest Payment Date") commencing [_________ ___, _____];
provided that, so long as PacifiCorp shall not be in default in the payment of
interest on the Series D Junior Subordinated Debentures, PacifiCorp shall have
the right to extend the interest payment period from time to time as described
under "- Option to Extend Interest Payment Period" below. Interest payable on
any Series D Junior Subordinated Debenture that is punctually paid or duly
provided for on any Interest Payment Date shall be paid to the person in whose
name such Series D Junior Subordinated Debenture is registered, subject to
certain exceptions, at the close of business on the Business Day (as defined
herein) next preceding such Interest Payment Date. In the event the Series D
Junior Subordinated Debentures shall not continue to remain in book-entry-only
form, PacifiCorp shall have the right to select record dates which shall be more
than one Business Day prior to the Interest Payment Date.
S-6
<PAGE>
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 D
Junior Subordinated Debentures is not a Business Day, then payment of the
interest payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day
(without any reduction in interest or other payments in respect of such early
payment), in each case with the same force and effect as if made on such date. A
"Business Day" shall mean any day other than a day on which banking institutions
in The City of New York are authorized to close.
Option to Extend Interest Payment Period
So long as no Debenture 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 D Junior Subordinated 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, may not exceed 20 consecutive
quarters and may not extend beyond the maturity of the Series D Junior
Subordinated 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 D Junior Subordinated Debentures will be required to
accrue interest income for United States federal income tax purposes. See
"Certain Federal Income Tax Considerations - United States Holders."
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 Series D 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, however,
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, further, 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. Consequently, there could be multiple
Extension Periods of varying lengths throughout the term of the Series D Junior
Subordinated Debentures. No interest shall be due and payable during an
Extension Period, except at the end thereof.
PacifiCorp shall give holders of the Series D Junior Subordinated
Debentures prior notice of (i) PacifiCorp's election to initiate an Extension
Period and the duration thereof, (ii) PacifiCorp's election to extend an
Extension Period beyond the Interest Payment Date on which such Extension Period
is then scheduled to terminate and the duration of such extension and (iii)
PacifiCorp's election to make a full or partial payment of interest accrued on
the Series D Junior Subordinated Debentures on any Interest Payment Date during
an
S-7
<PAGE>
Extension Period and the amount of such payment. In no event shall such notice
be given less than 10 Business Days prior to the applicable Interest Payment
Date.
Registration of Series D Junior Subordinated Debentures
The Global Securities shall be exchangeable for definitive certificates
representing the Series D Junior Subordinated 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 the Global
Securities 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
the Global Securities shall be so exchangeable or (iii) there shall have
occurred and be continuing a Debenture Event of Default with respect to the
Global Securities and the holders of a majority in aggregate principal amount of
Series D Junior Subordinated Debentures determine to discontinue the system of
book-entry transfers through DTC. The Global Securities shall be exchangeable
for definitive certificates registered in such names as DTC shall direct based
upon directions received by DTC from its Participants with respect to ownership
of beneficial interests in the Global Securities. In the event that Series D
Junior Subordinated Debentures are issued in definitive form, such Series D
Junior Subordinated Debentures will be in denominations of $1,000 and integral
multiples thereof and may be transferred or exchanged at the offices described
below.
Payments on Series D Junior Subordinated Debentures represented by the
Global Securities will be made to DTC, as the depositary for the Series D Junior
Subordinated Debentures. In the event Series D Junior Subordinated Debentures
are issued in definitive form, principal and interest will be payable, the
transfer of the Series D Junior Subordinated Debentures will be registrable, and
Series D Junior Subordinated Debentures will be exchangeable for Series D Junior
Subordinated 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, however, 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 D Junior Subordinated Debentures are issued in certificated form, the
record dates for payment of interest will be the 15th day of the last month of
each calendar quarter. For a further description of DTC and the terms of the
depositary arrangements relating to payments, transfers, voting rights,
redemptions and other notices and other matters, see "Book-Entry Issuance" in
the accompanying Prospectus.
Registrar and Transfer Agent
So long as the Series D Junior Subordinated Debentures remain in
book-entry-only form, PacifiCorp will act as registrar and transfer agent for
the Series D Junior Subordinated Debentures.
S-8
<PAGE>
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 D Junior
Subordinated Debentures. This summary only addresses the tax consequences to a
person acquiring Series D Junior Subordinated Debentures 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, (iii) an estate the income of which is subject to United States
federal income tax regardless of source or (iv) a trust the administration of
which is subject to the primary supervision of a court within the United States
and for which one or more United States fiduciaries have the authority to
control all substantial decisions (a "United States Person"). This summary does
not address all tax consequences that may be applicable to a United States
Person that is a holder of the Series D Junior Subordinated Debentures, 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 Series D Junior Subordinated Debentures 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 D Junior Subordinated Debentures 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. 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 holder of a Series D Junior Subordinated
Debentures. 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 D Junior Subordinated Debentures 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 D JUNIOR
SUBORDINATED DEBENTURES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN
TAX LAWS.
Classification of the Series D Junior Subordinated Debentures
Based on the advice of its counsel, PacifiCorp believes and intends to take
the position that the Series D Junior Subordinated Debentures will constitute
indebtedness for United States federal income tax purposes. By purchasing and
accepting Series D Junior Subordinated Debentures, each holder agrees to treat
the Series D Junior Subordinated Debentures as indebtedness. The remainder of
this discussion assumes that the Series D Junior Subordinated Debentures will be
classified as indebtedness of PacifiCorp for United States federal income tax
purposes.
Stated Interest and Original Issue Discount
Under new Treasury Regulations applicable to debt instruments issued on or
after August 13, 1996, generally, stated interest on a debt instrument will give
rise to original issue discount ("OID") unless the likelihood of late payment or
nonpayment is a "remote contingency." Under the Indentures, PacifiCorp has the
right to defer the payment of interest on the Series D Junior Subordinated
Debentures at any time from time to time for a period not exceeding 20
consecutive quarters with respect to each Extension Period; provided, however,
that no Extension Period may extend beyond the maturity of the Series D Junior
Subordinated
S-9
<PAGE>
Debentures. PacifiCorp believes that the likelihood of it exercising its option
to defer payments of interest is remote because exercising the option would,
among other things, prevent PacifiCorp from declaring dividends on its capital
stock. Accordingly, PacifiCorp believes that the Series D Junior Subordinated
Debentures should be considered as issued without OID and, therefore, except as
set forth below, stated interest on the Series D Junior Subordinated Debentures
will generally be taxable to a holder as ordinary income at the time it is paid
or accrued in accordance with the holder's method of accounting for United
States federal income tax consequences.
Notwithstanding the foregoing, should PacifiCorp elect an Extension Period,
the Series D Junior Subordinated Debentures would at that time be treated as
having been reissued with OID. Consequently, holders (even if they used the cash
method of accounting for United States federal income tax purposes) would be
required to include OID in income on an economic accrual basis with respect to
the Series D Junior Subordinated Debentures during such Extension Period and
thereafter for as long as the Series D Junior Subordinated Debentures remained
outstanding. The amount of OID that would accrue in any quarterly period would
approximately equal the amount of interest that accrues in that quarterly period
at the stated interest rate. A holder that disposed of Series D Junior
Subordinated Debentures before the record date for any payment following an
Extension Period would include interest in gross income as it accrued on the
Series D Junior Subordinated Debentures but would not receive any interest
payments related thereto.
Sale or Redemption of Series D Junior Subordinated Debentures
A holder that sells (including a redemption for cash) Series D Junior
Subordinated Debentures will recognize gain or loss equal to the difference
between the amount realized on the sale of such Series D Junior Subordinated
Debentures and such holder's adjusted basis in the Junior Subordinated
Debentures. A holder's adjusted tax basis in the Series D Junior Subordinated
Debentures generally will be its initial purchase price, increased by any OID
previously includible in such holder's gross income to the date of disposition
and decreased by payments received on the Series D Junior Subordinated
Debentures since and including the date of the first Extension Period. Such gain
or loss generally will be capital gain or loss (except to the extent any amount
realized is treated as a payment of accrued interest with respect to such
holders' Series D Junior Subordinated Debentures) and generally will be a
long-term capital gain or loss if the Series D Junior Subordinated Debentures
have been held for more than one year.
The Series D Junior Subordinated Debentures may trade at a price that does
not accurately reflect the value of accrued but unpaid interest with respect to
the Series D Junior Subordinated Debentures. A holder who disposes of its Series
D Junior Subordinated Debentures between record dates for payments thereon (and
consequently does not receive a payment from PacifiCorp for the period prior to
such disposition) will nevertheless be required to include in income, as
ordinary income, accrued but unpaid interest on the Series D Junior Subordinated
Debentures to the date of disposition. To the extent the selling price (which
may not fully reflect the amount of accrued but unpaid interest) is less than
the holder's adjusted tax basis, such holder will recognize a capital loss.
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income purposes.
Backup Withholding Tax and Information Reporting
The amount of interest or original issue discount accrued with respect to
the Series D Junior Subordinated Debentures held of record by United States
Persons (other than corporations and other exempt holders) will be reported to
the holders 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 holder 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 D Junior Subordinated
Debentures 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.
S-10
<PAGE>
Any amounts withheld from a holder under the backup withholding rules will
be allowed as a refund or a credit against such holder's United States federal
income tax liability, provided the required information is furnished to the
Internal Revenue Service.
S-11
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, PacifiCorp has agreed to sell to each of the Underwriters named below
(the "Underwriters"), and each of the Underwriters has severally agreed to
purchase, the principal amount of Series D Junior Subordinated Debentures set
forth opposite its name below:
<TABLE>
<CAPTION>
Principal Amount of Series D
Underwriter Junior Subordinated Debentures
----------- ------------------------------
<S> <C>
[-----------------]........................................................ [$-----------]
------------
Total................................................................... [$___________]
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Series D Junior
Subordinated Debentures, if any are taken.
The Underwriters propose to offer the Series D Junior Subordinated
Debentures 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 [__%] of the principal
amount of the Series D Junior Subordinated Debentures. The Underwriters may
allow, and such dealers may reallow, a concession not to exceed [__%] of the
principal amount of the Series D Junior Subordinated Debentures to certain
brokers and dealers. After the Series D Junior Subordinated Debentures are
released for sale to the public, the offering price and other selling terms may
from time to time be varied by the Underwriters.
The Series D Junior Subordinated Debentures are a new issue of securities
with no established trading market. PacifiCorp has been advised by the
Underwriters that they intend to make a market in the Series D Junior
Subordinated Debentures 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 D Junior Subordinated Debentures.
PacifiCorp has 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 Underwriters may be required to make on respect
thereof.
Certain of the Underwriters engage in transactions with, and from time to
time have performed services for, PacifiCorp and its subsidiaries in the
ordinary course of business.
LEGAL MATTERS
The validity of the Indenture and the Series D Junior Subordinated
Debentures will be passed upon on behalf of PacifiCorp by Stoel Rives LLP,
Portland, Oregon and on behalf of the Underwriters by Winthrop, Stimson, Putnam
& Roberts, New York, New York. Statements as to United States taxation in this
Prospectus Supplement under the caption "Certain Federal Income Tax
Considerations" have been passed upon by Stoel Rives LLP and are stated herein
on their authority. John M. Schweitzer, who is an assistant secretary of
PacifiCorp, is a partner in the firm of Stoel Rives LLP.
S-12
<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.
- --------------------------------------------------------------------------------
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED [__________ ___], 1997
[__%] [__________] Preferred Securities, Series B
PacifiCorp Capital II
(liquidation preference $1,000 per Preferred Security)
guaranteed to the extent PacifiCorp Capital II has funds as set forth herein by
PacifiCorp
--------------
The [__%] Preferred Securities, Series B (the "Series B Preferred
Securities"), offered hereby represent undivided beneficial interests in the
assets of PacifiCorp Capital II, a trust created under the laws of the State of
Delaware ("PacifiCorp Capital II"). PacifiCorp, an Oregon corporation
("PacifiCorp"), will be the owner of all of the beneficial interests represented
by common securities of PacifiCorp Capital II (the "Series B Common
Securities"). The Bank of New York is the Property Trustee of PacifiCorp Capital
II. PacifiCorp Capital II exists for the sole purpose of issuing the Series B
Preferred Securities and the Series B 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 B 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 II(2)(3)
-------------- ------------- ----------------
<S> <C> <C> <C>
Per Series B Preferred Security.......................... $1,000.00 (2) $1,000.00
Total.................................................... [$_________] (2) [$________]
- --------------
<FN>
(1) PacifiCorp Capital II and PacifiCorp have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(2) In view of the fact that the proceeds of the sale of the Series B Preferred
Securities will be used to purchase the Series D Debentures, the
Underwriting Agreement provides that
</FN>
</TABLE>
<PAGE>
PacifiCorp will pay to the Underwriters, as compensation ("Underwriters'
Compensation") for their arranging the investment therein of such proceeds,
[$_________] per Series B Preferred Security; provided, however, that such
compensation will be [$_________] per Series B Preferred Security sold to
certain institutions. Accordingly, the maximum aggregate amount of
Underwriters' Compensation will be [$_________], but the actual amount of
Underwriters' Compensation will be less than such amount to the extent that
Series B Preferred Securities are sold to such institutions. See
"Underwriting."
(3) Expenses of the offering, which are payable by PacifiCorp, are estimated to
be [$---------].
--------------
The Series B 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 B 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 [__________ ___], 1997, against payment therefor
in immediately available funds.
[Underwriters' names]
--------------
The date of this Prospectus Supplement is [__________ ___], 1997.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES B
PREFERRED SECURITIES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET 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 D (the "Series D Debentures") to be issued by PacifiCorp. The Series D
Debentures will mature on [____________, _____] and are redeemable prior to
maturity at the option of PacifiCorp as described below. The Series B 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 B Common Securities. See "Description of Preferred Securities -
Subordination of Common Securities" in the accompanying Prospectus.
The Series B Preferred Securities constitute "Preferred Securities" as
described in the accompanying Prospectus. Subject to the provisions hereof,
holders of the Series B 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 [_________ ____,] 1997, at the
annual rate of [__%] of the liquidation preference of $1,000 per Series B
Preferred Security ("Distributions"). PacifiCorp has the right to defer the
payment of interest on the Series D Debentures at any time or from time to time
for one or more periods (each, an "Extension Period"); provided, however, 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 D 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 D Debentures are so deferred, Distributions on the Series
B 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 D Debentures. During an
Extension Period, interest on the Series D Debentures will continue to accrue
(and the amount of Distributions to which holders of the Series B Preferred
Securities are entitled will accumulate at the rate of [__%] per annum,
compounded quarterly) and holders of Series B 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 D 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 B Guarantee, the Trust Agreement, the
Series D Debentures, the Indenture and the Expense Agreement (each as defined
herein), taken together, fully, irrevocably and unconditionally guaranteed all
of PacifiCorp Capital II's obligations under the Series B Preferred Securities.
See "Relationship Among the Preferred Securities, the Corresponding Junior
Subordinated Debentures and the Guarantee" in the accompanying Prospectus.
PacifiCorp will guarantee the payment of Distributions and payments on
liquidation or redemption of the Series B Preferred Securities, but only in each
case to the extent of funds held by PacifiCorp Capital II, as described herein
(the "Series B Guarantee"). See "Description of Guarantee" in the accompanying
Prospectus. If PacifiCorp does not make interest payments on the Series D
Debentures held by PacifiCorp Capital II, PacifiCorp Capital II will have
insufficient funds to pay Distributions on the Series B Preferred Securities.
The Series B Guarantee does not cover payment of Distributions when PacifiCorp
Capital II does not have sufficient funds to pay such Distributions. In such
event, a holder of Series B 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
S-2
<PAGE>
of Preferred Securities - Enforcement of Certain Rights by Holders of Preferred
Securities" in the accompanying Prospectus. The obligations of PacifiCorp under
the Series B Guarantee and the Series D Debentures are subordinate and junior in
right of payment to all Senior Indebtedness (as defined under "Description of
Junior Subordinated Debentures - Subordination" in the accompanying Prospectus)
of PacifiCorp.
The Series B Preferred Securities are subject to mandatory redemption, in
whole or in part, upon repayment of the Series D Debentures at maturity or their
earlier redemption in an amount equal to the amount of related Series D
Debentures maturing or being redeemed at a redemption price equal to the
aggregate liquidation preference of such Series B Preferred Securities plus
accumulated and unpaid Distributions thereon to the date of redemption. The
Series D Debentures are redeemable prior to maturity at the option of PacifiCorp
(i) on or after [________ ___, _____], 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 D 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 under
"Description of Preferred Securities - Redemption or Exchange -Special Event
Redemption or Distribution of Corresponding Junior Subordinated Debentures" in
the accompanying Prospectus), at a redemption price equal to the accrued and
unpaid interest on the Series D Debentures so redeemed to the date fixed for
redemption plus 100% of the principal amount thereof, in each case as further
described under "Certain Terms of the Series D Debentures" and "Description of
Junior Subordinated Debentures - Redemption" and "- Corresponding Junior
Subordinated Debentures" in the accompanying Prospectus.
At any time, PacifiCorp will have the right to terminate PacifiCorp Capital
II and cause the Series D Debentures to be distributed to the holders of the
Series B Preferred Securities in liquidation of PacifiCorp Capital II. See
"Certain Terms of Series B Preferred Securities - Distribution of Series D
Debentures." In the event of the termination of PacifiCorp Capital II, after
satisfaction of creditors of PacifiCorp Capital II as provided by applicable
law, the holders of the Series B Preferred Securities will be entitled to
receive a liquidation preference of $1,000 per Series B 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 D Debentures, subject
to certain exceptions. See "Description of Preferred Securities - Liquidation
Distribution Upon Termination" in the accompanying Prospectus.
The Series D Debentures are unsecured and subordinate and junior in right
of payment to all Senior Indebtedness of PacifiCorp. As of September 30, 1996,
PacifiCorp had approximately $3.9 billion aggregate principal amount of Senior
Indebtedness outstanding. The terms of the Series D Debentures place no
limitation on the amount of Senior Indebtedness that may be incurred by
PacifiCorp. In addition, the Series D Debentures will be effectively
subordinated to all existing and future liabilities of PacifiCorp's
subsidiaries, and holders of Series D Debentures should look only to the assets
of PacifiCorp for payments on Series D Debentures. See "Description of Junior
Subordinated Debentures - General" and "- Subordination" in the accompanying
Prospectus.
If the Series D Debentures are distributed to the holders of Series B
Preferred Securities upon the liquidation of PacifiCorp Capital II, PacifiCorp
will use its best efforts to list the Series D Debentures on such stock
exchanges or other automated quotation systems, if any, on which the Series B
Preferred Securities are then listed.
The Series B Preferred Securities will be represented by a global
certificate registered in the name of The Depository Trust Company ("DTC") or
its nominee. Beneficial interests in the Series B 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 B Preferred Securities in certificated form will not be
issued in exchange for the global certificate. See "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 Fourth Supplemental Indenture relating to the Series D
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"), the Administrative Trustees named
therein (collectively, with the Property Trustee and the Delaware Trustee, the
"Issuer Trustees") and the holders from time to time of undivided beneficial
interests in the assets of PacifiCorp Capital II. 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 B 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. In addition, because the holders of Series B Preferred
Securities may receive Series D Debentures in exchange therefor upon liquidation
of PacifiCorp Capital II, prospective purchasers of Series B Preferred
Securities are also making an investment decision with regard to the Series D
Debentures and should carefully review all information regarding the Series D
Debentures contained herein.
Ranking of Subordinated Obligations Under the Series B Guarantee and the Series
D Debentures
The obligations of PacifiCorp under the Series B Guarantee issued by
PacifiCorp for the benefit of the holders of Series B 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 D
Debentures are subordinate and junior in right of payment to all such Senior
Indebtedness. At September 30, 1996, the Senior Indebtedness of PacifiCorp
aggregated approximately $3.9 billion. In addition, the Series D Debentures will
be effectively subordinated to all existing and future liabilities of
PacifiCorp's subsidiaries, and holders of Series D Debentures should look only
to the assets of PacifiCorp for payments on the Series D Debentures. None of the
Indenture, the Series B 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 Guarantee - Status of the
Guarantee" and "Description of Junior Subordinated Debentures - Subordination"
in the accompanying Prospectus.
The ability of PacifiCorp Capital II to pay amounts due on the Series B
Preferred Securities is solely dependent upon PacifiCorp making payments on the
Series D Debentures as and when required.
Option to Extend Interest Payment Period; Tax Consequences; Potential Market
Volatility During Extension Period
So long as no Debenture 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 D 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, may not
exceed 20 consecutive quarters and may not extend beyond the maturity of the
Series D Debentures. As a consequence of any such election, quarterly
Distributions on the Series B Preferred Securities by PacifiCorp Capital II will
be deferred (and the amount of Distributions to which holders of the Series B
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,
S-4
<PAGE>
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 Series D 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, however,
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, further, 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 D
Debentures. See "Certain Terms of the Series B Preferred Securities -
Distributions" and "Certain Terms of the Series D Debentures - Option to Extend
Interest Payment Period."
Should an Extension Period occur, a holder of Series B Preferred Securities
(even if it uses the cash method of accounting for United States federal income
tax purposes) will be required to accrue interest income in respect of its pro
rata share of the Series D Debentures held by PacifiCorp Capital II for United
States federal income tax purposes. As a result, a holder of Series B Preferred
Securities will be required to 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 II if the holder disposes of the Series B
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
B 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 D
Debentures. Moreover, because of the consequences of exercising such right,
including a prohibition on the payment of dividends with respect to PacifiCorp's
capital stock, PacifiCorp believes that the likelihood of such exercise is
remote. However, should PacifiCorp elect to exercise such right in the future,
the market price of the Series B Preferred Securities is likely to be affected.
A holder that disposes of its Series B 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 B Preferred Securities. In addition, as
a result of the existence of PacifiCorp's right to defer interest payments, the
market price of the Series B Preferred Securities (which represent a preferred
undivided beneficial interest in the Series D Debentures) may be more volatile
than the market prices of other securities that are not subject to such
deferrals.
S-5
<PAGE>
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 D
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 B
Preferred Securities at the applicable redemption price.
See "- Possible Tax Law Changes" for a discussion of certain legislative
proposals that, if adopted, could give rise to a Tax Event (as defined under
"Description of Preferred Securities Redemption or Exchange -Special Event
Redemption or Distribution of Corresponding Junior Subordinated Debentures" in
the accompanying Prospectus), which may permit PacifiCorp to cause a redemption
of the Series B Preferred Securities prior to [_______ __, ____].
Exchange of Series B Preferred Securities for Series D Debentures
PacifiCorp will have the right at any time to terminate PacifiCorp Capital
II and, after satisfaction of liabilities to creditors of PacifiCorp Capital II
as required by applicable law, cause the Series D Debentures to be distributed
to the holders of the Series B Preferred Securities in exchange therefor upon
liquidation of PacifiCorp Capital II. See "Certain Terms of Series B Preferred
Securities - Distribution of Series D Debentures."
Under current United States federal income tax law, such a distribution of
the Series D Debentures would not constitute a taxable event to the holders of
the Series B Preferred Securities. However, if a Tax Event were to occur that
would cause PacifiCorp Capital II to be classified as an association taxable as
a corporation and to be subject to United States federal income tax with respect
to income received or accrued on the Series D Debentures, a distribution of the
Series D Debentures by PacifiCorp Capital II would be a taxable event to
PacifiCorp Capital II and the holders of the Series B Preferred Securities. See
"Certain Federal Income Tax Considerations - Distribution of Series D Debentures
to Holders of Series B Preferred Securities."
Market Prices
There can be no assurance as to the market prices for Series B Preferred
Securities or Series D Debentures that may be distributed in exchange for Series
B Preferred Securities if a liquidation of PacifiCorp Capital II occurs.
Accordingly, the Series B Preferred Securities that an investor may purchase,
whether pursuant to the offer made hereby or in the secondary market, or the
Series D Debentures that a holder of Series B Preferred Securities may receive
on liquidation of PacifiCorp Capital II, may trade at a discount to the price
that the investor paid to purchase the Series B Preferred Securities offered
hereby. Holders of Series B Preferred Securities may receive Series D Debentures
upon liquidation of PacifiCorp Capital II and prospective purchasers of Series B
Preferred Securities are also making an investment decision with regard to the
Series D Debentures and should carefully review all the information regarding
the Series D 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 Junior
Subordinated Debentures Corresponding Junior Subordinated Debentures" in the
accompanying Prospectus.
Possible Tax Law Changes
On February 6, 1997, President Clinton released the administration's fiscal
year 1998 budget proposal, including a proposal for tax legislation that would,
among other things, generally deny a deduction for interest on a corporate debt
instrument with (i) a maximum weighted average maturity of
S-6
<PAGE>
more than 40 years or (ii) a maximum term of more than 15 years 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. For purposes of
determining the weighted average maturity or the term of an instrument, any
right to extend would be treated as exercised. The above-described provisions
were proposed to be effective for instruments issued on or after the date of
"first committee action," the meaning of which is unclear. The House Ways and
Means Committee began a full committee hearing on the President's fiscal year
1998 budget proposal on February 11, 1997. There can be no assurance as to
whether the effective date guidance contained in the President's legislative
proposal will be followed if the proposed legislation is enacted, or whether
future legislative or administrative proposals or final legislation enacted
after the date hereof will not adversely affect the ability of PacifiCorp to
deduct the interest payable on the Series D Debentures. Such a change in law
would give rise to a Tax Event, which would permit PacifiCorp to cause a
redemption of the Series B Preferred Securities upon dissolution of PacifiCorp
Capital II upon receipt of an opinion of counsel, as described more fully under
"Description of Preferred Securities - Redemption or Exchange -Special Event
Redemption or Distribution of Corresponding Junior Subordinated Debentures" in
the accompanying Prospectus. Such a tax law change would not alter the United
States federal income tax consequences of the purchase, ownership and
disposition of Series B Preferred Securities.
Rights Under the Series B Guarantee
The Series B 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 B Guarantee (the
"Guarantee Trustee") for the purposes of compliance with the Trust Indenture Act
and will hold the Series B Guarantee for the benefit of the holders of the
Series B Preferred Securities. The Bank of New York also will act as Debenture
Trustee for the Series D Debentures and as Property Trustee under the Trust
Agreement. The Series B Guarantee guarantees to the holders of the Series B
Preferred Securities the following payments, to the extent not paid by
PacifiCorp Capital II: (i) any accumulated and unpaid Distributions required to
be paid on the Series B Preferred Securities, to the extent that PacifiCorp
Capital II has funds on hand available therefor, (ii) the redemption price with
respect to any Series B Preferred Securities called for redemption to the extent
that PacifiCorp Capital II has funds on hand available therefor, and (iii) upon
a voluntary or involuntary dissolution, winding up or liquidation of PacifiCorp
Capital II (unless the Series D Debentures are distributed to holders of the
Series B Preferred Securities), the lesser of (a) the aggregate of the
liquidation preference and all accumulated and unpaid Distributions to the date
of payment to the extent PacifiCorp Capital II has funds on hand available
therefor and (b) the amount of assets of PacifiCorp Capital II remaining
available for distribution to holders of the Series B Preferred Securities.
The holders of not less than a majority in aggregate stated liquidation
preference of the Series B 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 the Series B Guarantee or to direct the
exercise of any trust power conferred upon the Guarantee Trustee under the
Series B Guarantee. Any holder of the Series B Preferred Securities may
institute a legal proceeding directly against PacifiCorp to enforce its rights
under the Series B Guarantee without first instituting a legal proceeding
against PacifiCorp Capital II, the Guarantee Trustee or any other person or
entity. If PacifiCorp were to default on its obligation to pay amounts payable
under the Series D Debentures, PacifiCorp Capital II would lack funds for the
payment of Distributions or amounts payable on redemption of the Series B
Preferred Securities or otherwise, and, in such event, holders of the Series B
Preferred Securities would not be able to rely upon the Series B Guarantee for
payment of such amounts. Instead, holders of the Series B 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 Guarantee" and "Description of Junior
Subordinated Debentures - Corresponding Junior Subordinated Debentures"
S-7
<PAGE>
in the accompanying Prospectus. The Trust Agreement provides that each holder of
Series B Preferred Securities by acceptance thereof agrees to the provisions of
the Series B Guarantee and the Indenture.
Limited Voting Rights
Holders of Series B Preferred Securities will generally have limited voting
rights relating only to the modification of the Series B Preferred Securities
and the dissolution, winding-up or liquidation of PacifiCorp Capital II. Holders
of Series B 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 B 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 B Preferred
Securities to ensure that PacifiCorp Capital II 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 also
"Description of Preferred Securities - Voting Rights; Amendment of Trust
Agreement" and " - Removal of Issuer Trustees" in the accompanying Prospectus.
Trading Characteristics of Series B Preferred Securities
PacifiCorp Capital II does not intend to have the Series B Preferred
Securities listed on a national securities exchange or traded on the Nasdaq
Stock Market's National Market or any other automated system. The absence of
such a listing or trading of the Series B Preferred Securities could adversely
effect the liquidity and the price of the Series B Preferred Securities. The
Series B Preferred Securities may trade at prices that do not fully reflect the
value of accrued but unpaid interest with respect to the underlying Series D
Debentures. A holder of Series B Preferred Securities that disposes of its
Series B Preferred Securities between record dates for payments of Distributions
(and consequently does not receive a Distribution from PacifiCorp Capital II for
the period prior to such disposition) will nevertheless be required to include
as ordinary income, accrued but unpaid interest on the Series D Debentures
through the date of disposition. 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. 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 B Preferred Securities."
PACIFICORP CAPITAL II
PacifiCorp Capital II 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 II'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 II exists for the exclusive purposes of (i) issuing and selling the
Series B Preferred Securities and Series B Common Securities, (ii) using the
proceeds from the sale of Series B Preferred Securities and the Series B Common
Securities to acquire Series D Debentures issued by PacifiCorp and (iii)
engaging in only those other activities necessary, convenient or incidental
thereto. Accordingly, the Series D Debentures will be the sole assets of
PacifiCorp Capital II, and payments under the Series D Debentures will be the
sole revenue of PacifiCorp Capital II. All of the Series B Common Securities
will be owned by PacifiCorp. The Series B Common Securities will rank pari
passu, and payments will be made thereon pro rata, with the Series B Preferred
Securities, except that upon the occurrence and continuance of an event of
default under the Trust Agreement resulting from a Debenture Event of Default
(as defined under "Description of Junior Subordinated Debentures - Debenture
Events of Default" in the
S-8
<PAGE>
accompanying Prospectus) under the Indenture, the rights of PacifiCorp as holder
of the Series B 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 B Preferred Securities. See "Description of
Preferred Securities - Subordination of Common Securities" in the accompanying
Prospectus. PacifiCorp will acquire Series B Common Securities having an
aggregate stated liquidation preference equal to 3% of the total capital of
PacifiCorp Capital II. PacifiCorp Capital II has a term of 45 years, but may
terminate earlier as provided in the Trust Agreement. The principal executive
office of PacifiCorp Capital II is 700 NE Multnomah, Suite 1600, Portland, OR
97232, Attention: Secretary, and its telephone number is (503) 731-2000. See
"The Issuer Trust" 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. ("PTI"), a
leading provider of local telephone exchange service to rural and suburban
markets, in addition to other investments.
PacifiCorp furnishes electric service to approximately 1,400,000 customers
in portions of seven western states: California, Idaho, Montana, Oregon, Utah,
Washington and Wyoming. Powercor serves approximately 547,000 customers in
suburban Melbourne and the western and central regions of the State of Victoria
in southeast Australia. PTI, through its subsidiaries, provides local telephone
service and access to the long-distance network in Alaska, seven other western
states and three Midwestern states and provides cellular mobile telephone
services in six states. 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 and alternative fuels.
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 B Preferred Securities will be
invested by PacifiCorp Capital II in Series D Debentures. The proceeds from the
sale of such Series D 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.
ACCOUNTING TREATMENT
For financial reporting purposes, PacifiCorp Capital II will be treated as
a subsidiary of PacifiCorp and, accordingly, the accounts of PacifiCorp Capital
II will be included in the consolidated financial statements of PacifiCorp. The
Series B Preferred Securities will be presented as a separate line item in the
consolidated balance sheet of PacifiCorp and appropriate disclosures about the
Series B Preferred Securities, the Series B Guarantee and the Series D
Debentures will be included in the notes to the consolidated financial
statements. For financial reporting purposes, PacifiCorp will record
Distributions payable on the Series B Preferred Securities as an expense.
S-9
<PAGE>
CERTAIN TERMS OF SERIES B PREFERRED SECURITIES
General
The following summary of certain terms and provisions of the Series B
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 B
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 B Preferred Securities represent undivided beneficial interests
in the assets of PacifiCorp Capital II, and Distributions on each Series B
Preferred Security will be payable at the annual rate of [__%] of the stated
liquidation preference of $1,000, payable quarterly in arrears on March 31, June
30, September 30 and December 31 of each year. Distributions will accumulate
from [________ ___, 1997], the date of original issuance. The first Distribution
payment date for the Series B Preferred Securities will [________ ___, 1997].
The amount of Distributions payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months 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 B 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 (without any reduction in interest or other payments in
respect of such early payment), 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 after the payment
date therefor in an amount equal to the additional interest accrued on interest
in arrears on the Series D Debentures. See "Certain Terms of Series D 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 Debenture 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 D 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, may not
exceed 20 consecutive quarters and may not extend beyond the maturity of the
Series D Debentures. As a consequence of any such election, quarterly
Distributions on the Series B Preferred Securities will be deferred by
PacifiCorp Capital II during any such Extension Period. Distributions to which
holders of the Series B 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 Series D 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
S-10
<PAGE>
of preferred stock of PacifiCorp that are subject to mandatory redemption or
sinking fund requirements; provided, however, 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, further, 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.
Consequently, there could be multiple Extension Periods of varying lengths
throughout the term of the Series D Debentures. See "Certain Terms of the Series
D 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 no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Series D
Debentures.
Redemption
Upon the repayment or redemption, in whole or in part, of the Series D
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 B 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 B 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 D Debentures - Redemption".
PacifiCorp will have the right to redeem the Series D Debentures (i) on or
after [________ ___, _____], 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 D
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 under "Description of Preferred Securities - Redemption or
Exchange - Special Event Redemption or Distribution of Corresponding Junior
Subordinated Debentures" 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 D Debentures so redeemed to the date fixed for
redemption plus 100% of the principal amount thereof, in each case as further
described under "Description of Junior Subordinated Debentures Redemption" and
"- Corresponding Junior Subordinated Debentures" in the accompanying Prospectus.
Distribution of Series D Debentures
At any time, PacifiCorp will have the right to terminate PacifiCorp Capital
II and, after satisfaction of the liabilities of creditors of PacifiCorp Capital
II as provided by applicable law, cause the Series D Debentures to be
distributed to the holders of the Series B Preferred Securities in liquidation
of PacifiCorp Capital I. See "Certain Terms of Series D Debentures -
Distribution of Series D Debentures." Under current United States federal income
tax law, provided PacifiCorp Capital II 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 B Preferred Securities. Following the occurrence of a
Special Event pursuant
S-11
<PAGE>
to which PacifiCorp Capital II 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 Considerations - Distribution of Series
D Debentures to Holders of Series B Preferred Securities." If PacifiCorp does
not elect to redeem or distribute the Series D Debentures as described above,
the Series B Preferred Securities will remain outstanding until the repayment of
the Series D Debentures.
Liquidation Value
The amount payable on the Series B Preferred Securities in the event of any
liquidation of PacifiCorp Capital II is $1,000 per Series B Preferred Security
plus accumulated and unpaid Distributions, which may be in the form of a
distribution of such amount in Series D Debentures, subject to certain
exceptions. See "Description of Preferred Securities - Liquidation Distribution
Upon Termination" in the accompanying Prospectus.
CERTAIN TERMS OF SERIES D DEBENTURES
General
The following summary of certain terms and provisions of the Series D
Debentures supplements the description of the terms and provisions of the
Corresponding Junior Subordinated Debentures set forth in the accompanying
Prospectus under the heading "Description of Junior Subordinated Debentures," to
which description reference is hereby made. The summary of certain terms and
provisions of the Series D 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 B Preferred Securities,
PacifiCorp Capital II will invest the proceeds thereof and the consideration
paid by PacifiCorp for the Series B Common Securities in the Series D Debentures
issued by PacifiCorp. The Series D 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 [________ ___, 1997], to the person in whose name
each Series D Debenture is registered, on the Business Day next preceding that
Interest Payment Date; provided, however, that if the Series D Debentures are
not held by the Property Trustee or are not in the form of a global security,
such record date shall be 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 II, each Series D Debenture will be held in the name of the Property
Trustee in trust for the benefit of the holders of the Series B 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 D 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 (without any reduction
in interest or other payments in respect of such early payment), 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.
S-12
<PAGE>
The Series D Debentures will be issued as a series of Junior Subordinated
Debentures under the Indenture. The Series D Debentures will mature on
[_________ ___, _____]. The Series D 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 D Debentures will be effectively
subordinated to all existing and future liabilities of PacifiCorp's
subsidiaries, and holders of Series D Debentures should look only to the assets
of PacifiCorp for payments on the Series D 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 - General" and "- Subordination" in the
accompanying Prospectus.
Option to Extend Interest Payment Period
So long as no Debenture 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 D 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, may not exceed 20 consecutive quarters and may not extend
beyond the maturity of the Series D 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 D Debentures (or holders of Series B 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 that rank pari passu with or junior in
interest to the Series D 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, however, 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, further, 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. Consequently, there could be multiple Extension Periods of varying
lengths throughout the term of the Series D Debentures. No interest shall be due
and payable during an Extension Period, except at the end thereof.
S-13
<PAGE>
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 B 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 any applicable stock exchange or automated quotation
system on which the Series B Preferred Securities are then listed or quoted or
to holders of such Series B 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 B Preferred Securities at least 10 Business Days prior to the date the
Distributions on the Series B Preferred Securities would have been payable
except for the election to begin such Extension Period.
Additional Sums
If PacifiCorp Capital II 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 D Debentures such amounts ("Additional Sums")
as shall be required so that the Distributions payable by PacifiCorp Capital II
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
Junior Subordinated Debentures Corresponding Junior Subordination Debentures"
and "Description of Preferred Securities - Redemption or Exchange - Special
Event Redemption or Distribution of Corresponding Junior Subordinated
Debentures" in the accompanying Prospectus.
Redemption
The Series D Debentures are redeemable prior to maturity at the option of
PacifiCorp (i) on or after [________ ___, _____], 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 D 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), within 90 days of the occurrence and continuation of a Special Event,
at a redemption price equal to the accrued and unpaid interest on the Series D
Debentures so redeemed to the date fixed for redemption plus 100% of the
principal amount thereof, in each case as further described under "Description
of Junior Subordinated Debentures - Redemption," "- Description of Corresponding
Junior Subordinated Debentures" and "Description of Preferred Securities -
Redemption or Exchange - Special Event Redemption or Distribution of
Corresponding Junior Subordinated Debentures" in the accompanying Prospectus.
Distribution of Series D Debentures
Under certain circumstances involving the termination of PacifiCorp Capital
I, Series D Debentures may be distributed to the holders of the Series B
Preferred Securities in liquidation of PacifiCorp Capital II after satisfaction
of liabilities to creditors of PacifiCorp Capital II as provided by applicable
law. If distributed to holders of Series B Preferred Securities in liquidation,
the Series D Debentures will initially be issued in the form of one or more
global securities and DTC, or any successor depositary for the Series B
Preferred Securities, will act as depositary for the Series D Debentures. It is
anticipated that the depositary arrangements for the Series D Debentures would
be substantially identical to those in effect for the Series B Preferred
Securities. If the Series D Debentures are distributed to the holders of Series
B Preferred Securities upon the liquidation of PacifiCorp Capital II, PacifiCorp
will use its best efforts to list the Series D Debentures on such stock
exchanges or other automated quotation systems, if any, on which the Series B
Preferred Securities are then listed. There can be no assurance as to the market
price of any Series D Debentures that may be distributed to the holders of
Series B Preferred Securities. For a description of DTC and the terms of the
depositary
S-14
<PAGE>
arrangements relating to payments, transfers, voting rights, redemption and
other notices and other matters, see "Book-Entry Issuance" in the accompanying
Prospectus.
Registration of Series D Debentures
A global security shall be exchangeable for definitive certificates
representing Series D 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 and
the holders of a majority in aggregate principal amount of Series D Debentures
determine to discontinue the system of book-entry transfers through DTC. 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 D Debentures are
issued in definitive form, such Series D Debentures will be in denominations of
$1,000 and integral multiples thereof and may be transferred or exchanged at the
offices described below.
Payments on Series D Debentures represented by a global security will be
made to DTC, as the depositary for the Series D Debentures. In the event Series
D Debentures are issued in definitive form, principal and interest will be
payable, the transfer of the Series D Debentures will be registrable, and Series
D Debentures will be exchangeable for Series D 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, however, 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 D Debentures are issued in certificated
form, the record dates for payment of interest will be the 15th day of the last
month of each calendar quarter. For a further description of DTC and the terms
of the depositary arrangements relating to payments, transfers, voting rights,
redemptions and other notices and other matters, see "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 B
Preferred Securities. This summary only addresses the tax consequences to a
person acquiring Series B 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, (iii) an
estate the income of which is subject to United States federal income tax
regardless of source or (iv) a trust the administration of which is subject to
the primary supervision of a court within the United States and for which one or
more United States fiduciaries have the authority to control all substantial
decisions (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 B 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
S-15
<PAGE>
"functional currency" is not the United States dollar or (v) persons that do not
hold the Series B 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 II. 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 B
Preferred Security. In particular, legislation has been proposed that could
adversely affect PacifiCorp's ability to deduct interest on the Series D
Debentures, which would in turn permit PacifiCorp to cause a redemption of the
Series B 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 B 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 B PREFERRED
SECURITIES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
Classification of PacifiCorp Capital II
In connection with the issuance of the Series B 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 II 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 B Preferred Security (a
"Securityholder") will be treated as owning an undivided beneficial interest in
the Series D 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 D 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 B Preferred Securities will be eligible for the
dividends-received deduction.
Classification of the Series D Debentures
Based on the advice of its counsel, PacifiCorp believes and intends to take
the position that the Series D 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 B
Preferred Securities, each Securityholder agrees to treat the Series D
Debentures as indebtedness and the Series B Preferred Securities as evidence of
an indirect beneficial ownership in the Series D Debentures. The remainder of
this discussion assumes that the Series D Debentures will be classified as
indebtedness of PacifiCorp for United States federal income tax purposes.
Stated Interest and Original Issue Discount
Under new Treasury Regulations applicable to debt instruments issued on or
after August 13, 1996, generally, stated interest on a debt instrument will give
rise to original issue discount ("OID") unless the likelihood of late payment or
nonpayment is a "remote contingency." Under the Indentures, PacifiCorp has the
right to defer the payment of interest on the Series D Debentures at any time
from
S-16
<PAGE>
time to time for a period not exceeding 20 consecutive quarters with respect to
each Extension Period; provided, however, that no Extension Period may extend
beyond the maturity of the Series D Debentures. PacifiCorp believes that the
likelihood of it exercising its option to defer payments of interest is remote
because exercising the option would, among other things, prevent PacifiCorp from
declaring dividends on its capital stock. Accordingly, PacifiCorp believes that
the Series D Debentures should be considered as issued without OID and,
therefore, except as set forth below, stated interest on the Series D Debentures
will generally be taxable to a Securityholder as ordinary income at the time it
is paid or accrued in accordance with the Securityholder's method of accounting
for United States federal income tax purposes.
Notwithstanding the foregoing, should PacifiCorp elect an Extension Period,
the Series D Debentures would at that time be treated as having been reissued
with OID. Consequently, Securityholders (even if they used the cash method of
accounting for United States federal income tax purposes) would be required to
include OID in income on an economic accrual basis with respect to the Series D
Debentures during such Extension Period and thereafter for as long as the Series
D Debentures remained outstanding. The amount of OID that would accrue in any
quarterly period would approximately equal the amount of interest that accrues
in that quarterly period at the stated interest rate. A Securityholder that
disposed of Series B Preferred Securities before the record date for any
Distribution Date following an Extension Period would include interest in gross
income as it accrued on the Series D Debentures but would not receive any
interest payments related thereto from the PacifiCorp Capital II.
Distribution of Series D Debentures to Holders of Series B Preferred Securities
As described under the caption "Certain Terms of Series B Preferred
Securities - Distribution of Series D Debentures," PacifiCorp will have the
right, at any time, to liquidate PacifiCorp Capital II and cause the Series D
Debentures to be distributed to the holders of the Series B Preferred
Securities. Under current United States federal income tax law, provided
PacifiCorp Capital II 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 D Debentures previously held
indirectly through PacifiCorp Capital II, 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 B Preferred Securities before
such distribution. A Securityholder would accrue interest in respect of Series D
Debentures received from PacifiCorp Capital II 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 II 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 B Preferred Securities
A Securityholder that sells (including a redemption for cash) Series B
Preferred Securities will recognize gain or loss equal to the difference between
its adjusted tax basis in the Series B Preferred Securities and the amount
realized on the sale of such Series B Preferred Securities. A Securityholder's
adjusted tax basis in the Series B Preferred Securities generally will be its
initial purchase price, increased by any OID previously includible in such
Securityholder's gross income to the date of disposition and decreased by
Distributions received on the Series B Preferred Securities since and including
the date of the first Extension Period. Such gain or loss generally will be
capital gain or loss (except to the extent any amount realized is treated as a
payment of accrued interest with respect to such Securityholders' pro rata share
of the Series D Debentures required to be included in income) and generally will
be a long-term capital gain or loss if the Series B Preferred Securities have
been held for more than one year.
S-17
<PAGE>
The Series B Preferred Securities may trade at a price that does not
accurately reflect the value of accrued but unpaid interest with respect to the
underlying Series D Debentures. A Securityholder who disposes of its Series B
Preferred Securities between record dates for payments of distributions thereon
(and consequently does not receive a Distribution from PacifiCorp Capital II for
the period prior to such disposition) will nevertheless be required to include
in income, as ordinary income, accrued but unpaid interest on the Series D
Debentures to the date of disposition, in the event PacifiCorp exercises its
option to defer any payment of interest, and to add such amount to its adjusted
tax basis in its pro rata share of the underlying Series D Debentures deemed
disposed of. 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, such Securityholder will recognize a capital loss. Subject
to certain limited exceptions, capital losses cannot be applied to offset
ordinary income for United States federal income purposes.
Backup Withholding Tax and Information Reporting
The amount of interest or original issue discount accrued with respect to
the Series B 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 B 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 February 6, 1997, President Clinton released the administration's fiscal
year 1998 budget proposal, including a proposal for tax legislation that would,
among other things, generally deny a deduction for interest on a corporate debt
instrument with (i) a maximum weighted average maturity of more than 40 years or
(ii) a maximum term of more than 15 years 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. For purposes of determining the weighted
average maturity or the term of an instrument, any right to extend would be
treated as exercised. The above-described provisions were proposed to be
effective for instruments issued on or after the date of "first committee
action," the meaning of which is unclear. The House Ways and Means Committee
began a full committee hearing on the President's fiscal year 1998 budget
proposal on February 11, 1997. There can be no assurance as to whether the
effective date guidance contained in the President's legislative proposal will
be followed if the proposed legislation is enacted, or whether future
legislative or administrative proposals or final legislation enacted after the
date hereof will not adversely affect the ability of PacifiCorp to deduct the
interest payable on the Series D Debentures. Such a change in law would give
rise to a Tax Event, which would permit PacifiCorp to cause a redemption of the
Series B Preferred Securities upon dissolution of PacifiCorp Capital II upon
receipt of an opinion of counsel, as described more fully under "Description of
Preferred Securities - Redemption or Exchange - Special Event Redemption or
Distribution of Corresponding Junior Subordinated Debentures" in the
accompanying Prospectus." Such a tax law change would not alter the United
States federal income tax consequences of the purchase, ownership and
disposition of Series B Preferred Securities.
S-18
<PAGE>
ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (a "Plan"), should consider the fiduciary standards of ERISA in the
context of the Plan's particular circumstances before authorizing an investment
in the Series B Preferred Securities. Accordingly, among other factors, the
fiduciary should consider whether the investment would satisfy the prudence and
diversification requirements of ERISA and would be consistent with the documents
and instruments governing the Plan.
Section 406 of ERISA and Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code") prohibit Plans, as well as individual retirement
accounts and Keogh plans subject to Section 4975 of the Code (also "Plans"),
from engaging in certain transactions involving "plan assets" with persons who
are "parties in interest" under ERISA or "disqualified persons" under the Code
("Parties in Interest") with respect to such Plan. A violation of these
"prohibited transaction" rules may result in an excise tax or other liabilities
under ERISA and/or Section 4975 of the Code for such persons, unless exemptive
relief is available under an applicable statutory or administrative exemption.
Employee benefit plans that are governmental plans (as defined in Section 3(32)
of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and
foreign plans (as described in Section 4(b)(4) of ERISA) are not subject to the
requirements of ERISA or Section 4975 of the Code.
Under a regulation (the "Plan Assets Regulation") issued by the U.S.
Department of Labor (the "DOL"), the assets of PacifiCorp Capital II would be
deemed to be "plan assets" of a Plan for purposes of ERISA and Section 4975 of
the Code if "plan assets" of the Plan were used to acquire an equity interest in
PacifiCorp Capital II and no exception were applicable under the Plan Assets
Regulation. An "equity interest" is defined under the Plan Assets Regulation as
any interest in an entity other than an instrument which is treated as
indebtedness under applicable local law and which has no substantial equity
features and specifically includes a beneficial interest in a trust.
Pursuant to an exception contained in the Plan Assets Regulation, the
assets of PacifiCorp Capital II would not be deemed to be "plan assets" of
investing Plans if, immediately after the most recent acquisition of any equity
interest in PacifiCorp Capital II, less than 25% of the value of each class of
equity interests in PacifiCorp Capital II were held by Plans, other employee
benefit plans not subject to ERISA or Section 4975 of the Code (such as
governmental, church and foreign plans), and entities holding assets deemed to
be "plan assets" of any Plan (collectively, "Benefit Plan Investors"), or if the
Series B Preferred Securities were "publicly-offered securities" for purposes of
the Plan Assets Regulation. No assurance can be given that the value of the
Series B Preferred Securities held by Benefit Plan Investors will be less than
25% of the total value of such Series B Preferred Securities at the completion
of the initial offering or thereafter, and no monitoring or other measures will
be taken with respect to the satisfaction of the conditions to this exception.
In addition, the Series B Preferred Securities will be deemed "publicly offered
securities" for the purposes of the Plan Asset Regulations only if owned by 100
or more investors independent of PacifiCorp Capital II and each other. No
assurance can be given that the Series B Preferred Securities would be
considered to be "publicly-offered securities" under the Plan Assets Regulation.
All of the Series B Common Securities will be purchased and initially held by
PacifiCorp.
Certain transactions involving PacifiCorp Capital II could be deemed to
constitute direct or indirect prohibited transactions under ERISA and Section
4975 of the Code with respect to a Plan if the Series B Preferred Securities
were acquired with "plan assets" of such Plan and the assets of PacifiCorp
Capital II were deemed to be "plan assets" of Plans investing in PacifiCorp
Capital II. For example, if PacifiCorp is a Party in Interest with respect to an
investing Plan (either directly or by reason of its relationship with its
affiliates), extensions of credit between PacifiCorp and PacifiCorp Capital II
(as represented by the Series D Debentures and the Series B Guarantee) would
likely be prohibited by Section 406(a)(1)(B) of ERISA and Section 4975 (c)(1)(B)
of the Code, unless exemptive relief were available
S-19
<PAGE>
under an applicable administrative exemption (see below). In addition, if
PacifiCorp were considered to be a fiduciary with respect to PacifiCorp Capital
II as a result of certain powers it holds (such as the powers to remove and
replace the Property Trustee and the Administrative Trustees), certain
operations of PacifiCorp Capital II, including the optional redemption or
acceleration of the Series D Debentures, could be considered to be prohibited
transactions under Section 406(b) of ERISA and Section 4975(c)(1)(E) of the
Code. In order to avoid such prohibited transactions, each investing plan, by
purchasing the Series B Preferred Securities, will be deemed to have directed
PacifiCorp Capital II to invest in the Series D Debentures and to have appointed
the Property Trustee.
The DOL has issued five prohibited transaction class exemptions ("PTCEs")
that may provide exemptive relief if required for direct or indirect prohibited
transactions that may arise from the purchase or holdings of the Series B
Preferred Securities if assets of PacifiCorp Capital II were deemed to be "plan
assets" of Plans investing in PacifiCorp Capital II as described above. Those
class exemptions are PTCE 96-23 (for certain transactions determined by in-house
asset managers), PTCE 95-60 (for certain transactions involving insurance
company general accounts), PTCE 91-38 (for certain transactions involving bank
collective investment funds), PTCE 90-1 (for certain transactions involving
insurance company separate accounts), and PTCE 84-14 (for certain transactions
determined by independent qualified professional asset managers).
Because the Series B Preferred Securities may be deemed to be equity
interests in PacifiCorp Capital II for purposes of applying ERISA and Section
4975 of the Code, the Series B Preferred Securities may not be purchased and
should not be held by any Plan, any entity whose underlying assets include "plan
assets" by reason of any Plan's investment in the entity (a "Plan Asset Entity")
or any person investing "plan assets" of any Plan, unless such purchaser or
holder is eligible for the exemptive relief available under PTCE 96-23, 95-60,
91-38, 90-1 or 84-14. Any purchaser or holder of the Series B Preferred
Securities or any interest therein will be deemed to have represented by its
purchase and holding thereof that it either (a) is not a Plan or a Plan Asset
Entity and is not purchasing the Series B Preferred Securities on behalf of or
with "plan assets" of any Plan or (b) is eligible for the exemptive relief
available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 with respect to such
purchase and holding.
Due to the complexity of these rules and the penalties that may be imposed
upon persons involved in nonexempt prohibited transactions, it is particularly
important that fiduciaries or other persons considering purchasing the Series B
Preferred Securities on behalf of or with "plan assets" of any Plan consult with
their counsel regarding the potential consequences if the assets of PacifiCorp
Capital II were deemed to be "plan assets" and the availability of exemptive
relief under PTCE 96-23, 95-60, 91-38, 90- 1 or 84-14.
S-20
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement,
PacifiCorp and PacifiCorp Capital II have agreed that PacifiCorp Capital II will
sell to each of the Underwriters named below, and each of such Underwriters, for
whom [______________________________________________________] are acting as
representatives, has severally agreed to purchase from PacifiCorp Capital II the
respective number of Series B Preferred Securities set forth opposite its name
below:
Number of
Series B
Preferred
Underwriter Securities
----------- ----------
[---------------]............................................. [-------]
-------
Total...................................................... [_______]
=======
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Underwriters are committed to take and pay for all such Series B
Preferred Securities offered hereby, if any are taken.
The Underwriters propose to offer the Series B 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 B Preferred
Security. The Underwriters may allow, and such dealers may reallow, a concession
not in excess of [$__] per Series B Preferred Security to certain brokers and
dealers. After the Series B Preferred Securities are released for sale to the
public, the offering price and other selling terms may from time to time be
varied by the representatives.
In view of the fact that the proceeds from the sale of the Series B
Preferred Securities will be used to purchase the Series D Debentures issued by
PacifiCorp, the Underwriting Agreement provides that PacifiCorp will pay as
Underwriters' Compensation for the Underwriters arranging the investment therein
of such proceeds an amount of [$__] per Series B Preferred Security ([$__] per
Series B Preferred Security sold to certain institutions) for the accounts of
the several Underwriters.
Because the National Association of Securities Dealers, Inc. ("NASD") is
expected to view the Series B Preferred Securities offered hereby as interests
in a direct participation program, the offering is being made in compliance with
Rule 2810 of the NASD's Conduct Rules. Offers and sales of Series B Preferred
Securities will be made only to (i) "qualified institutional buyers", as defined
in Rule 144A under the Securities Act of 1933, as amended (the "Act"), or (ii)
institutional "accredited investors", as defined in Rule 501(a)(1)-(3) of
Regulation D under the Act. The Underwriters may not confirm sales to any
accounts over which they exercise discretionary authority without prior written
approval of the transaction by the customer.
PacifiCorp and PacifiCorp Capital II 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 B Preferred Securities, as determined by the Underwriters, and (ii) the
closing date, they will not offer, sell, contract to sell or otherwise dispose
of any other beneficial interests in the assets of PacifiCorp Capital II, or any
preferred securities or any other securities of PacifiCorp Capital II or
PacifiCorp which are substantially similar to the Series B 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 II or
PacifiCorp, without the prior written consent of the Representatives, except for
the Series B Preferred Securities and the Series B Guarantee offered in
connection with the offering.
S-21
<PAGE>
The Series B Preferred Securities are a new issue of securities with no
established trading market. The representatives of the Underwriters have advised
PacifiCorp that they intend to make a market in the Series B Preferred
Securities, 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 B Preferred Securities.
PacifiCorp and PacifiCorp Capital II 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 B
Preferred Securities, the enforceability of the Trust Agreement and the creation
of PacifiCorp Capital II will be passed upon by Richards, Layton & Finger,
special Delaware counsel to PacifiCorp and PacifiCorp Capital II. The validity
of the Series B Guarantee and the Series D 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 II. John M.
Schweitzer, who is an assistant secretary of PacifiCorp, is a partner in the
firm of Stoel Rives LLP.
S-22
<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.
- --------------------------------------------------------------------------------
Subject to Completion, Dated March [__], 1997
$135,000,000
PACIFICORP PACIFICORP CAPITAL II
Junior Subordinated Debentures Preferred Securities guaranteed
to the extent the Issuer Trust has
funds as set forth herein by
PACIFICORP
PacifiCorp, an Oregon corporation ("PacifiCorp"), may from time to time
offer its junior subordinated deferrable interest debentures (the "Junior
Subordinated Debentures") in one or more series or issuances. The Junior
Subordinated Debentures will be unsecured and subordinate and junior in right of
payment to Senior Indebtedness (as defined below under "Description of Junior
Subordinated Debentures-Subordination") of PacifiCorp. 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 up to 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 applicable Prospectus
Supplement (each, an "Extension Period"). In such circumstances, however,
PacifiCorp would not be permitted, subject to certain exceptions set forth
herein, to declare, set aside or pay any dividends, distributions or other
payments with respect to, or repay, repurchase, redeem or otherwise acquire,
PacifiCorp's capital stock or debt securities that rank pari passu in all
respects with or junior to the Junior Subordinated Debentures. See "Description
of Junior Subordinated Debentures - Option to Extend Interest Payments" and "-
Certain Covenants of PacifiCorp."
PacifiCorp Capital II, a trust created under the laws of the State of
Delaware (the "Issuer Trust"), may offer, from time to time, preferred
securities (the "Preferred Securities") representing preferred undivided
beneficial interests in the assets of the Issuer Trust. PacifiCorp will be the
owner of the common securities (the "Common Securities") representing common
undivided beneficial interests in the assets of the Issuer Trust. Holders of the
Preferred
(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 March [_], 1997
<PAGE>
(Continued from previous page)
Securities will be entitled to receive preferential cumulative cash
distributions ("Distributions") accumulating from the date of original issuance
and payable periodically as specified in the applicable Prospectus Supplement.
Concurrently with the issuance by the Issuer Trust of the Preferred Securities,
the 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
series of Junior Subordinated Debentures (the "Corresponding Junior Subordinated
Debentures") with terms corresponding to the terms of the Preferred Securities.
The Corresponding Junior Subordinated Debentures will be the sole assets of the
Issuer Trust, and payments under the Corresponding Junior Subordinated
Debentures and the Expense Agreement (as defined below under "Description of
Guarantee - The Expense Agreement") will be the only revenue of the Issuer
Trust. PacifiCorp may redeem the Corresponding Junior Subordinated Debentures
(and cause the redemption of the Preferred Securities) or may terminate the
Issuer Trust and, after satisfaction of liabilities to creditors of the Issuer
Trust as provided by applicable law, cause the Corresponding Junior Subordinated
Debentures to be distributed to the holders of Preferred Securities in
liquidation of their interests in the Issuer Trust. See "Description of
Preferred Securities - Liquidation Distribution Upon Termination" and
"Description of Junior Subordinated Debentures -- Corresponding Junior
Subordinated Debentures."
If provided in the applicable Prospectus Supplement, PacifiCorp will have
the right to defer payments of interest on the 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 the Corresponding Junior
Subordinated Debentures). If interest payments are so deferred, Distributions on
the 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 dividends, distributions or other payments with respect to, or repay,
repurchase, redeem or otherwise acquire, 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 applicable 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."
Taken together, PacifiCorp's obligations under the Corresponding Junior
Subordinated Debentures, the Indenture, the Trust Agreement, the Expense
Agreement and the Guarantee (each as defined herein), in the aggregate, provide
a full, irrevocable and unconditional guarantee of payments of distributions and
other amounts due on the Preferred Securities. See "Relationship Among the
Preferred Securities, the Corresponding Junior Subordinated Debentures and the
Guarantee." The payment of Distributions with respect to the Preferred
Securities and payments on liquidation or redemption with respect to the
Preferred Securities, in each case out of funds held by the Issuer Trust, are
each irrevocably guaranteed by PacifiCorp to the extent described herein (the
"Guarantee"). See "Description of Guarantee." The obligations of PacifiCorp
under the Guarantee will be subordinate and junior in right of payment to all
Senior Indebtedness of PacifiCorp.
2
<PAGE>
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, however, that the aggregate
initial public offering price of all Junior Subordinated Debentures (other than
Corresponding Junior Subordinated Debentures) and Preferred Securities shall not
exceed $135,000,000. Certain specific terms of the Offered Securities will be
described in the applicable 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, 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 applicable 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 the applicable Prospectus
Supplement. The net proceeds to PacifiCorp from such sale also will be set forth
in the applicable Prospectus Supplement. The applicable 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.
3
<PAGE>
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 Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding reporting companies under
the Exchange Act, including PacifiCorp, at http://www.sec.gov. 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.
This Prospectus constitutes part of a joint Registration Statement on Form
S-3 PacifiCorp and the Issuer Trust have filed with the Commission 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.
Statements contained herein concerning the provisions of any document do not
purport to be complete and, in each instance, are qualified in all respects by
reference to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is subject
to and qualified in its entirety by such reference. For further information with
respect to PacifiCorp, the Issuer Trust 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 Trust have been included
herein. PacifiCorp and the Issuer Trust do not consider that such financial
statements would be material to holders of Preferred Securities offered hereby
because the Issuer Trust is a 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 Trust,"
"Description of the Preferred Securities," "Description of Junior Subordinated
Debentures Corresponding Junior Subordinated Debentures," and "Description of
Guarantee."
4
<PAGE>
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, as amended by Form 10-K/A dated June 24, 1996;
(2) PacifiCorp's Quarterly Report on Form 10-Q for the quarters ended March
31, June 30 and September 30, 1996; and
(3) PacifiCorp's Current Reports on Form 8-K dated January 16, February 12,
and August 5, 1996 and February 12, 1997.
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 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
5
<PAGE>
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 a 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. ("PTI"), a
leading provider of local telephone exchange service to rural and suburban
markets, in addition to other investments.
PacifiCorp furnishes electric service to approximately 1,400,000 customers
in portions of seven western states: California, Idaho, Montana, Oregon, Utah,
Washington and Wyoming. Powercor serves approximately 547,000 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 and provides cellular mobile
telephone services in six states. 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 and alternative fuels..
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 TRUST
The Issuer Trust is a statutory business trust created under Delaware law
pursuant to (i) a trust agreement executed by PacifiCorp, as depositor of the
Issuer Trust, the Delaware Trustee (as defined herein) of the Issuer Trust, the
Property Trustee (as defined herein) of the Issuer Trust and an Administrative
Trustee (as defined herein) of the Issuer Trust and (ii) the filing of a
certificate of trust with the Delaware Secretary of State. The trust agreement
will be amended and restated in its entirety (as so amended and restated, the
"Trust Agreement") substantially in the form filed as an exhibit to the
Registration Statement of which this Prospectus forms a
6
<PAGE>
part. The Trust Agreement will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). The Issuer Trust
exists for the exclusive purposes of (i) issuing and selling the Preferred
Securities and Common Securities, (ii) using the proceeds from the sale of the
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, the Corresponding Junior Subordinated Debentures will be
the sole assets of the Issuer Trust, and payments under the Corresponding Junior
Subordinated Debentures and the Expense Agreement will be the sole revenue of
the Issuer Trust.
All of the Common Securities will be owned by PacifiCorp. The Common
Securities of the Issuer Trust will rank pari passu, and payments will be made
thereon pro rata, with the Preferred Securities of the Issuer Trust, except that
upon the occurrence and continuance of an event of default under the Trust
Agreement resulting from a Debenture Event of Default (as defined below under
"Description of Junior Subordinated Debentures - Debenture Events of Default"),
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.
See "Description of Preferred Securities - Subordination of Common Securities."
PacifiCorp will acquire Common Securities having an aggregate stated liquidation
preference equal to not less than 3% of the total capital of the Issuer Trust.
Unless otherwise specified in the applicable Prospectus Supplement, the
Issuer Trust has a term of approximately 45 years, but may terminate earlier as
provided in the Trust Agreement. The 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 the Property Trustee
(the "Property Trustee"), The Bank of New York (Delaware), as the Delaware
Trustee (the "Delaware Trustee"), and two individual trustees who are employees
or officers of or affiliated with PacifiCorp (the "Administrative Trustees," and
together with the Property Trustee and the Delaware Trustee, the "Issuer
Trustees"). The Bank of New York, as Property Trustee, will act as sole
indenture trustee under the 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. The holder of the Common Securities, or the holders
of a majority in aggregate liquidation preference of the Preferred Securities if
an event of default under the Trust Agreement resulting from a Debenture Event
of Default 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 Trust Agreement. PacifiCorp will pay
all fees and expenses related to the Issuer Trust and the offering of the
Preferred Securities and will pay, directly or indirectly, all ongoing costs,
expenses and liabilities of the Issuer Trust.
7
<PAGE>
The principal executive office of the Issuer Trust is 700 NE Multnomah,
Suite 1600, Portland, Oregon 97232; telephone number (503) 731-2000.
USE OF PROCEEDS
Unless otherwise indicated in the applicable 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 securities. Reference
is made to the Incorporated Documents with respect to PacifiCorp's capital
requirements and its general financing plans. The 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 nine months ended September 30, 1996,
calculated as required by the Commission, are 2.4x, 1.6x, 2.5x, 3.0x, 2.9x, and
2.6x, 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 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 under
the Indenture to the public or to institutional investors as described under
"Plan of Distribution" or Corresponding Junior Subordinated Debentures under the
Indenture to the Issuer Trust in connection with the issuance of Preferred
Securities. In addition to the information set forth under "- Corresponding
Junior Subordinated Debentures," this summary of certain terms and provisions of
Junior Subordinated Debentures is also applicable to Corresponding Junior
Subordinated Debentures. 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
8
<PAGE>
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 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 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
thereunder 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 Third Restated Articles of Incorporation 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 September 30,
1996, approximately $1.4 billion of unsecured debt of PacifiCorp was outstanding
and approximately $670 million 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.
Reference is made to the applicable 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
9
<PAGE>
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.
Subordination
The Indenture provides that the 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
10
<PAGE>
provides that such indebtedness, renewal, extension or refunding is not superior
in right of payment to or is pari passu 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 September 30, 1996, Senior Indebtedness of PacifiCorp
aggregated approximately $3.9 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, 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 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 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, however,
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, further, 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).
(Section 5.06 of the Fourth Supplemental Indenture) As of September 30, 1996,
the aggregate stated value of such series of PacifiCorp's preferred stock
outstanding was approximately $178 million, which represented approximately
three percent of the aggregate of clauses (1) and (2) above at such date.
11
<PAGE>
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 the applicable
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 required by the
Indenture. (Section 4.02) PacifiCorp may at any time designate additional
transfer 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 Debentures 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 applicable 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 any paying agent or agents selected by PacifiCorp (each, a "Debentures Paying
Agent"), 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 the 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,
12
<PAGE>
by wire transfer of immediately available funds to such designated account;
provided, however, 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 applicable 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-Debentures Paying Agents with
respect to the Junior Subordinated Debentures for so long as the Junior
Subordinated Debentures are in global form. PacifiCorp may at any time designate
additional Debentures Paying Agents or rescind the designation of any Debentures
Paying Agents or approve a change in the office through which any Debentures
Paying Agent acts, except that PacifiCorp will be required to maintain a
Debentures Paying Agent in each place of payment for each series of Junior
Subordinated Debentures. (Sections 4.02 and 4.03)
All moneys paid by PacifiCorp to a Debentures 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)
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 100% of 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.
13
<PAGE>
"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 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
the applicable Prospectus Supplement; provided, however, that such Extension
Period may not extend beyond the maturity of such series 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
From time to time PacifiCorp and the Debenture Trustee may, without the
consent of the holders of a series of Junior Subordinated Debentures, amend,
waive or supplement the Indenture for specified purposes, including, among other
things, curing ambiguities, defects or inconsistencies (provided that any such
action does not adversely affect the interest of the holders
14
<PAGE>
of that series of Junior Subordinated Debentures. (Section 9.01) 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 that
series of Junior Subordinated Debentures 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, however, 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, 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 amendment or
supplement of the Indenture may be made that materially adversely affects the
holders of such Preferred Securities, and no termination of the Indenture may
occur, and no waiver of any Debenture Event of Default (or annulment of any
declaration of acceleration) or compliance with any covenant under the Indenture
may be effective, without the prior consent of the holders of at least a
majority in 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.
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
the purpose of creating any new series of Junior Subordinated Debentures.
(Sections 2.01, 9.01 and 10.01)
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
15
<PAGE>
(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) In the case of Corresponding Junior Subordinated Debentures, should the
holders of such Corresponding Junior Subordinated Debentures fail to annul
acceleration 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; provided, however, that if the principal of
the Corresponding Junior Subordinated Debentures has been declared due and
payable by the holders of Preferred Securities, no such annulment will be
effective unless consented to by a majority in aggregate liquidation preference
of such Preferred Securities.
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)
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
16
<PAGE>
Subordinated Debentures of such series, waive any past default, except a default
in the payment of principal, premium, 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 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)
17
<PAGE>
Conversion or Exchange
If and to the extent 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 for payment in trust) if PacifiCorp deposits with the
Debenture Trustee, in trust, moneys or Government Obligations (as defined in the
Indenture), 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 (the "Investment Company Act"), 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
18
<PAGE>
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.
Corresponding Junior Subordinated Debentures
The Corresponding Junior Subordinated Debentures are to be issued as a
series of Junior Subordinated Debentures under the Indenture with terms
corresponding to the terms of the related Preferred Securities. In that event,
concurrently with the issuance of the Preferred Securities, the Issuer Trust
will invest the proceeds thereof and the consideration paid by PacifiCorp for
the Common Securities in the Corresponding Junior Subordinated Debentures issued
by PacifiCorp to the Issuer Trust. The Corresponding Junior Subordinated
Debentures will be in the principal amount equal to the aggregate stated
liquidation preference of the Preferred Securities plus PacifiCorp's concurrent
investment in the Common Securities. 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 "- Subordination" and the applicable Prospectus
Supplement relating to any offering of the Preferred Securities.
If a Special Event (as defined under "Description of Preferred Securities
- -- Redemption or Exchange -- Special Event Redemption or Distribution of
Corresponding Junior Subordinated Debentures") in respect of the 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, at a redemption
price equal to 100% of the principal amount of such Corresponding Junior
Subordinated Debentures then
19
<PAGE>
outstanding plus accrued and unpaid interest to the date fixed for redemption.
For so long as the Issuer Trust is the holder of all the outstanding
Corresponding Junior Subordinated Debentures, the proceeds of any such
redemption will be used by the Issuer Trust to redeem the Preferred Securities
in accordance with their terms. See "Description of Preferred Securities
- --Redemption or Exchange -- Mandatory Redemption." PacifiCorp may not redeem the
Corresponding Junior Subordinated Debentures in part unless all accrued and
unpaid interest has been paid in full on all outstanding Corresponding Junior
Subordinated Debentures for all interest periods terminating on or prior to the
date fixed for redemption.
PacifiCorp will covenant as to the Corresponding Junior Subordinated
Debentures, that if and so long as (i) the Issuer Trust of the Preferred
Securities and Common Securities is the holder of all the Corresponding Junior
Subordinated Debentures, (ii) a Tax Event (as defined under "Description of
Preferred Securities -- Redemption or Exchange -- Special Event Redemption or
Distribution of Corresponding Junior Subordinated Debentures") in respect of
such Issuer Trust has occurred and is continuing and (iii) PacifiCorp has not
redeemed such Corresponding Junior Subordinated Debentures or terminated the
Issuer Trust in respect of the Preferred Securities and Common Securities,
PacifiCorp will pay to the Issuer Trust such Additional Sums (as defined under
"Description of Preferred Securities -- Redemption or Exchange -- Special Event
Redemption or Distribution of Corresponding Junior Subordinated Debentures").
(Section 5.05 of the Fourth Supplemental Indenture) PacifiCorp will also
covenant, as to the 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 the Issuer Trust, except (a)
in connection with a distribution of Corresponding Junior Subordinated
Debentures to the holders of the Preferred Securities in liquidation of the
Issuer Trust or (b) in connection with certain mergers, consolidations or
amalgamations permitted by the Trust Agreement and (iii) to use its reasonable
efforts, consistent with the terms and provisions of the Trust Agreement, to
cause the 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. (Section 5.07 of the Fourth Supplemental Indenture)
PacifiCorp will also make certain additional agreements with respect to the
Corresponding Junior Subordinated Debentures as provided in the last sentence of
the first paragraph under "- Modification of Indenture."
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, however, 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)
20
<PAGE>
DESCRIPTION OF PREFERRED SECURITIES
Pursuant to the terms of the Trust Agreement for the Issuer Trust, the
Issuer Trustees on behalf of the 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 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 the Issuer Trust, as
well as other benefits as described in the Trust Agreement. This summary of
certain provisions of the Preferred Securities and the 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 the Trust Agreement, including the
definitions therein of certain terms, and the Trust Indenture Act. Wherever
particular defined terms of the Trust Agreement (as supplemented or amended from
time to time) are referred to herein or in the applicable Prospectus Supplement,
such defined terms are incorporated herein or therein by reference. The form of
the Trust Agreement has been filed as an exhibit to the Registration Statement
of which this Prospectus forms a part.
General
The Preferred Securities will rank pari passu, and payments will be made
thereon pro rata, with the Common Securities 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 Preferred Securities and Common Securities. The
Guarantee Agreement executed by PacifiCorp for the benefit of the holders of the
Preferred Securities will be a guarantee on a subordinated basis with respect to
the Preferred Securities but will not guarantee payment of Distributions or
amounts payable on redemption or liquidation of such Preferred Securities when
the Issuer Trust does not have funds on hand available to make such payments.
See "Description of Guarantee."
Distributions
The Preferred Securities represent preferred undivided beneficial interests
in the assets of the Issuer Trust, and the Distributions on the Preferred
Securities will be payable at a rate specified in the applicable Prospectus
Supplement. 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
21
<PAGE>
without any interest or other payment in respect of any such delay) except that,
if such Business Day is in the next succeeding calendar year, payment of such
Distribution shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date (each date on which
Distributions are payable in accordance with the foregoing, a "Distribution
Date"). A "Business Day" 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 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, however, that no
Extension Period may extend beyond the maturity of the Corresponding Junior
Subordinated Debentures. (Section 4.01 of the Fourth Supplemental Indenture) As
a consequence of any such extension, Distributions on the Preferred Securities
would be deferred (but would continue to accumulate additional Distributions
thereon at the rate per annum set forth in the applicable Prospectus Supplement)
by the Issuer Trust 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, however, 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, further, 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). (Section 5.06 of the Fourth
Supplemental Indenture) See "Description of Junior Subordinated Debentures -
Option to Extend Interest Payment Date" "- Certain Covenants of PacifiCorp."
22
<PAGE>
The revenue of the Issuer Trust available for distribution to holders of
Preferred Securities will be limited to payments under the Corresponding Junior
Subordinated Debentures in which the Issuer Trust will invest the proceeds from
the issuance and sale of Preferred Securities and Common Securities. See
"Description of Corresponding Junior Subordinated Debentures." If PacifiCorp
does not make interest payments on the Corresponding Junior Subordinated
Debentures, the Property Trustee will not have funds available to pay
Distributions on the 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
Guarantee."
Distributions on the Preferred Securities of the Issuer Trust will be
payable to the holders thereof as they appear on the register of the 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 Trust Agreement, each such payment will be made as described
under "Book-Entry Issuance." In the event any Preferred Securities are not in
book-entry form, the relevant record date for the 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 Junior Subordinated Debentures Redemption" and "- Corresponding
Junior Subordinated Debentures." If less than all of the 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 the Corresponding Junior Subordinated
Debentures to be repaid or redeemed on a Redemption Date shall be allocated to
the redemption pro rata of the Preferred Securities and the Common Securities.
Special Event Redemption or Distribution of Corresponding Junior Subordinated
Debentures. If a Tax Event or an Investment Company Event (each as defined
below, a "Special Event") in respect of the Preferred Securities shall occur and
be continuing, PacifiCorp has the right to redeem the Corresponding Junior
Subordinated Debentures in whole but not in part at a
23
<PAGE>
redemption price of 100% of the principal amount thereof plus any accrued and
unpaid interest thereon to the redemption date and thereby cause a mandatory
redemption of the 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. (Section 3.02 of the Fourth Supplemental Indenture) Whether or
not a Special Event has occurred, PacifiCorp has the right to terminate the
Issuer Trust at any time and, after satisfaction of liabilities to creditors of
the Issuer Trust as provided by applicable law, cause the Corresponding Junior
Subordinated Debentures to be distributed to the holders of the Preferred
Securities in liquidation of the Issuer Trust. If PacifiCorp does not elect
either option described above, the Preferred Securities will remain outstanding
and, in the event a Tax Event has occurred and is continuing, Additional Sums
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 the 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 the Issuer Trust has become subject as a result of
a Tax Event.
"Investment Company Event" means the receipt by the 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
authority (a "Change in 1940 Act Law") the Issuer Trust is or will be considered
an "investment company" that is required to be registered under the Investment
Company Act, which Change in 1940 Act Law becomes effective on or after the date
of original issuance of the Preferred Securities.
"Like Amount" means (i) with respect to a redemption of Preferred
Securities, Preferred Securities having a stated liquidation preference 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 Preferred Securities in connection with a
termination or liquidation of the Issuer Trust, Corresponding Junior
Subordinated Debentures having a principal amount equal to the stated
liquidation preference of the Preferred Securities of the holder to whom such
Corresponding Junior Subordinated Debentures are distributed.
"Tax Event" means the receipt by the Issuer Trust or 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 which
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under the Trust Agreement, there is more than
24
<PAGE>
an insubstantial risk that (i) the 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 Junior Subordinated
Debentures, (ii) interest payable by PacifiCorp on the 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 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 the Preferred Securities (i) the Preferred
Securities will no longer be deemed to be outstanding, (ii) The Depository Trust
Company ("DTC") or its nominee, as the record holder of the 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 the 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 the Preferred Securities, and bearing
accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on the 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 the 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 the Issuer Trust, may trade at a discount to the price that the
investor paid to purchase the Preferred Securities offered hereby.
Possible Tax Law Changes. On February 6, 1997, President Clinton released
the administration's fiscal year 1998 budget proposal, including a proposal for
tax legislation that would, among other things, generally deny a deduction for
interest on a corporate debt instrument with (i) a maximum weighted average
maturity of more than 40 years or (ii) a maximum term of more than 15 years 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. For
purposes of determining the weighted average maturity or the term of an
instrument, any right to extend would be treated as exercised. The
above-described provisions were proposed to be effective for instruments issued
on or after the date of "first committee action," the meaning of which is
unclear. The House Ways and Means Committee began a full committee hearing on
the President's fiscal year 1998 budget proposal on February 11, 1997. There can
be no assurance as to whether the effective date guidance contained in the
President's legislative proposal will be followed if the proposed legislation is
enacted, or whether future legislative or administrative proposals or final
legislation enacted after the date hereof will not adversely affect the ability
of PacifiCorp to
25
<PAGE>
deduct the interest payable on the Junior Subordinated Debentures. Such a change
in law would give rise to a Tax Event, which would permit PacifiCorp to cause a
redemption of the Preferred Securities upon dissolution of PacifiCorp Capital II
upon receipt of an opinion of counsel, as described more fully under "Redemption
or Exchange - Special Event Redemption or Distribution of Corresponding Junior
Subordinated Debentures." Such a tax law change would not alter the United
States federal income tax consequences of the purchase, ownership and
disposition of Preferred Securities.
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 Price shall be payable
on each Redemption Date only to the extent that the Issuer Trust has funds on
hand available for the payment of such Redemption Price. See also "-
Subordination of Common Securities."
If the 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 the Preferred Securities. See "Book-Entry Issuance." If
the Preferred Securities are no longer in book-entry form, the Issuer Trust, to
the extent funds are available, will irrevocably deposit with the Preferred
Securities Paying Agent (as defined below) for the Preferred Securities funds
sufficient to pay the applicable Redemption Price and will give the Preferred
Securities Paying Agent irrevocable instructions and authority to pay the
Redemption Price to the holders thereof upon surrender of their certificates
evidencing the 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 (without any reduction in
interest in respect of such early payment). 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
Guarantee," 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
26
<PAGE>
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 record holders 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 are to be redeemed on a
Redemption Date, then the aggregate stated liquidation preference of the
Preferred Securities to be redeemed shall be allocated pro rata among the
Preferred Securities. If the Preferred Securities continue to be in book-entry
form at the time of such redemption, the Preferred Securities to be redeemed
will be redeemed in accordance with the procedures of DTC. If at such time the
Preferred Securities are not in book-entry form, 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 the Trust
Agreement, unless the context otherwise requires, all 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. Unless PacifiCorp defaults in payment of the
redemption price on the Corresponding Junior Subordinated Debentures, on and
after the Redemption Date interest will cease to accrue on the Junior
Subordinated Debentures or portions thereof (and Distributions will cease to
accrue on the Preferred Securities or portions thereof) called for redemption.
27
<PAGE>
Subordination of Common Securities
Payment of Distributions (including Additional Sums, if applicable) on, and
the Redemption Price of, the Preferred Securities and Common Securities, as
applicable, shall be made pro rata based on the stated liquidation preference of
such Preferred Securities and Common Securities; provided, however, that if on
any Distribution Date or Redemption Date any Event of Default (as defined below
under "- Events of Default; Notice") under the Trust Agreement resulting from 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 Common Securities, and no other payment on account of the
redemption, liquidation or other acquisition of the 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 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 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 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 the Common Securities will be deemed to have
waived any right to act with respect to any such Event of Default under the
Trust Agreement until the effect of all such Events of Default with respect to
the Preferred Securities have been cured, waived or otherwise eliminated. Until
any such Events of Default under the 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 the Preferred
Securities and not on behalf of PacifiCorp as holder of the Common Securities,
and only the holders of the Preferred Securities will have the right to direct
the Property Trustee to act on their behalf.
Liquidation Distribution Upon Termination
Pursuant to the Trust Agreement, the 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 the Preferred Securities if PacifiCorp, as
depositor, has given written direction to the Property Trustee to terminate the
Issuer Trust (which direction is optional and wholly within the discretion of
PacifiCorp as depositor); (iii) the redemption of all of the 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 the Issuer
Trust.
If an early termination occurs as described in clause (i), (ii) or (iv)
above, the 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 the Issuer Trust as provided
by applicable law, to the holders of the Preferred Securities and Common
Securities
28
<PAGE>
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 the 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 the Issuer Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Issuer Trust on the
Preferred Securities shall be paid on a pro rata basis. The holders of the
Common Securities will be entitled to receive distributions upon any such
liquidation pro rata with the holders of the Preferred Securities, except that
if a Debenture Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the 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 the
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 Issuer Trust in the payment of any Distribution with
respect to Preferred Securities when it becomes due and payable, and
continuation of such default for a period of 30 days; or
(iii) default by the Issuer Trust in the payment of any Redemption Price of
any Preferred Security or Common Security 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 the 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, 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 the Trust Agreement; or
29
<PAGE>
(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 the 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 the 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 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 Common Securities upon
termination of the Issuer Trust as described above. See "- Liquidation
Distribution Upon Termination."
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
30
<PAGE>
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 Issuer
Trustees may be removed at any time by PacifiCorp as the holder of the 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 aggregate liquidation preference 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 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 property of the
Issuer Trust 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
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 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 Issuer Trustee shall be a party, or
any entity succeeding to all or substantially all the corporate trust business
of such Issuer Trustee, shall be the successor of such Issuer Trustee under the
Trust Agreement, provided such entity shall be otherwise qualified and eligible.
31
<PAGE>
Mergers, Consolidations, Amalgamations or Replacements of the Issuer Trust
The 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 or as otherwise described in "Liquidation Distribution Upon
Termination." The 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, 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 the Issuer Trust with respect to the Preferred Securities or (b)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities") so long
as the Successor Securities rank the same as the 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 the Preferred Securities are then
listed, if any, (iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the 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 the Preferred Securities (including
any Successor Securities) in any material respect, (vi) such successor entity
has a purpose substantially identical to that of the Issuer Trust, (vii) prior
to such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease, PacifiCorp has received an opinion from independent counsel to the
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 the
Preferred Securities (including any Successor Securities) in any material
respect, and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the 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 Guarantee. Notwithstanding the
foregoing, the Issuer Trust shall not, except with the consent of holders of
100% in aggregate liquidation preference of the Preferred Securities of the
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 the Issuer Trust or the
successor entity to be classified as other than a grantor trust for United
States federal income tax purposes.
32
<PAGE>
Voting Rights; Amendment of Trust Agreement
Except as provided below and under "Description of Guarantee - Amendments
and Assignment" and as otherwise required by law the Trust Agreement and the
Indenture, the holders of the Preferred Securities will have no voting rights.
The Trust Agreement may be amended from time to time by PacifiCorp and the
Issuer Trustees, without the consent of the holders of the 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 the Trust
Agreement that may be inconsistent with any other provision, or to make any
other provisions with respect to matters or questions arising under the Trust
Agreement, that shall not be inconsistent with the other provisions of the Trust
Agreement, or (iii) to modify, eliminate or add to any provisions of the Trust
Agreement to such extent as shall be necessary to ensure that the 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 the
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, and any amendments of the Trust
Agreement shall become effective when notice thereof is given to the holders of
the Preferred Securities and Common Securities. The 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 aggregate liquidation
preference) of the 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 the Issuer Trust's status as a
grantor trust for United States federal income tax purposes or the Issuer
Trust's exemption from status of an "investment company" under the Investment
Company Act; provided, however, that without the consent of each holder of the
Preferred Securities and Common Securities, the Trust Agreement may not be
amended to (i) change the amount or timing of any Distribution on the Preferred
Securities and Common Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Preferred Securities and
Common Securities as of a specified date or (ii) restrict the right of holders
of the 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
33
<PAGE>
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 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 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
Trust Agreement.
No vote or consent of the holders of Preferred Securities will be required
for the Issuer Trust to redeem and cancel the Preferred Securities in accordance
with the Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by 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 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 "Preferred Securities 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 Preferred Securities Paying Agent shall be permitted to resign
as Preferred Securities 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 Preferred Securities 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 Preferred Securities Paying
Agent.
34
<PAGE>
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 the Issuer Trust, but upon payment of any tax or other
governmental charges that may be imposed in connection with any transfer or
exchange. The Issuer Trust will not be required to register or cause to be
registered the transfer of the Preferred Securities after the 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 the 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
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 Trust Agreement or is unsure of the
application of any provision of the Trust Agreement, and the matter is not one
on which holders of Preferred Securities are entitled under the 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 Trust in such a way that Issuer Trust will
not 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 the Issuer Trust or the 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
Preferred Securities.
Holders of the Preferred Securities have no preemptive or similar rights.
35
<PAGE>
Issuer Trust may not borrow money or issue debt or mortgage or pledge any
of its assets.
BOOK-ENTRY ISSUANCE
Unless otherwise specified in the applicable Prospectus Supplement, DTC
will act as securities depositary for all of the Preferred Securities and the
Junior Subordinated Debentures. The Preferred Securities and the Junior
Subordinated Debentures 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
and the Junior Subordinated Debentures, representing in the aggregate the total
number of Preferred Securities, or aggregate principal amount of Junior
Subordinated Debentures, respectively, and will be deposited with DTC or its
custodian.
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 or Junior Subordinated Debentures within
the DTC system must be made by or through Direct Participants, which will
receive a credit for the Preferred Securities or Junior Subordinated Debentures
on DTC's records. The ownership interest of each actual purchaser of each
Preferred Security and each Junior Subordinated Debenture ("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 or Junior Subordinated Debentures.
Transfers of ownership interests in the Preferred Securities or Junior
Subordinated Debentures 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 or Junior Subordinated Debentures, except in the event that use of
the book-entry system for the Preferred Securities or Junior Subordinated
Debentures is discontinued.
36
<PAGE>
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities or Junior Subordinated Debentures; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Preferred Securities
or Junior Subordinated Debentures 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 or Junior Subordinated Debentures. If less than all of
the Preferred Securities or Junior Subordinated Debentures are being redeemed,
DTC will determine the amount of the interest of each Direct Participant to be
redeemed in accordance with its procedures.
Although voting with respect to the Preferred Securities or Junior
Subordinated Debentures is limited to the holders of record of the Preferred
Securities or Junior Subordinated Debentures, in those instances in which a vote
is required, neither DTC nor Cede & Co. will itself consent or vote with respect
to Preferred Securities or Junior Subordinated Debentures. 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 or Junior Subordinated Debentures 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.
Payments on the Preferred Securities or Junior Subordinated Debentures will
be made by the Property Trustee and the Debenture Trustee, respectively, 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 Debenture Trustee,
the Issuer Trust thereof or PacifiCorp, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payments on the Preferred
Securities or Junior Subordinated Debentures are the responsibility of the
Property Trustee or the Debenture Trustee, respectively, 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 or Junior Subordinated Debentures 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 or Junior Subordinated Debentures certificates representing
such Preferred Securities or Junior Subordinated Debentures are required to be
37
<PAGE>
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 an Event of Default or Debenture Event of Default, the holders of a
majority in aggregate liquidation preference of Preferred Securities or
aggregate principal amount of Junior Subordinated Debentures, respectively, may
determine to discontinue the system of book-entry transfers through DTC. In any
such event, definitive certificates for the Preferred Securities or Junior
Subordinated Debentures 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 Trust and PacifiCorp believe to
be accurate, but the Issuer Trust and PacifiCorp assume no responsibility for
the accuracy thereof. Neither the Issuer Trust 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.
DESCRIPTION OF GUARANTEE
The Guarantee will be executed and delivered by PacifiCorp concurrently
with the issuance by the Issuer Trust of the Preferred Securities for the
benefit of the holders from time to time of the Preferred Securities. The Bank
of New York will act as indenture trustee ("Guarantee Trustee") under the
Guarantee for the purposes of compliance with the Trust Indenture Act and the
Guarantee will be qualified as an indenture under the Trust Indenture Act. This
summary of certain provisions of the Guarantee does not purport to be complete
and is subject to, and qualified in its entirety by reference to, all of the
provisions of the Guarantee, including the definitions therein of certain terms,
and the Trust Indenture Act. The form of the Guarantee has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part. The
Guarantee Trustee will hold the Guarantee for the benefit of the holders of the
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 the Issuer Trust may have or assert other
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 Issuer Trust
(the "Guarantee Payments"), will be subject to the Guarantee: (i) any
accumulated and unpaid Distributions required to be paid on the Preferred
Securities, to the extent that the 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 the Issuer Trust has funds on hand
available therefor, and (iii) upon a voluntary or involuntary dissolution,
winding up or liquidation of the Issuer Trust (unless the Corresponding Junior
Subordinated Debentures are distributed to holders of the Preferred Securities),
the lesser of (a) the stated liquidation preference plus accumulated and unpaid
Distributions on the Preferred Securities to the date of payment to the extent
that the Issuer Trust has funds on hand available therefor and (b) the amount of
assets of the Issuer Trust
38
<PAGE>
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 Preferred
Securities or by causing the Issuer Trust to pay such amounts to such holders.
The Guarantee will be an irrevocable guarantee on a subordinated basis of
the Issuer Trust's obligations under the Preferred Securities, but will apply
only to the extent that the 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. The 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 Guarantee does 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 Guarantee, the 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
The Guarantee will constitute an unsecured obligation of PacifiCorp and
will rank subordinate and junior in right of payment to all Senior Indebtedness.
The 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). The
Guarantee will be held for the benefit of the holders of the Preferred
Securities. The 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. The Guarantee does not place 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.
39
<PAGE>
Amendments and Assignment
Except with respect to any changes which do not materially adversely affect
the rights of holders of the Preferred Securities (in which case no vote will be
required), the Guarantee may not be amended without the prior approval of the
holders of not less than a majority in aggregate liquidation preference of the
outstanding Preferred Securities. The manner of obtaining any such approval will
be as set forth under "Description of the Preferred Securities Voting Rights;
Amendment of Trust Agreement." All guarantees and agreements contained in the
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of PacifiCorp and shall inure to the benefit of the holders of
the Preferred Securities then outstanding.
Events of Default
An event of default under the 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 stated liquidation preference
of the 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 the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
Any holder of the Preferred Securities may institute a legal proceeding
directly against PacifiCorp to enforce its rights under the 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 the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee and, after
default with respect to the 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 the 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
The Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the Preferred Securities, upon full
payment of the amounts payable upon liquidation of the Issuer Trust or upon
distribution of Corresponding Junior Subordinated
40
<PAGE>
Debentures to the holders of the Preferred Securities. The Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of the Preferred Securities must restore payment of any sums
paid under the Preferred Securities or the Guarantee.
Governing Law
The 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 the 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.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
AND THE GUARANTEE
As long as payments of interest and other payments are made when due on the
Corresponding Junior Subordinated Debentures, such payments will be sufficient
to cover Distributions and other payments due on the Preferred Securities,
primarily because (i) the aggregate principal amount of the Corresponding Junior
Subordinated Debentures will be equal to the sum of the aggregate stated
liquidation preference of the Preferred Securities and Common Securities; (ii)
the interest rate and interest and other payment dates of the Corresponding
Junior Subordinated Debentures will match the Distribution rate and Distribution
and other payment dates for the Preferred Securities; (iii) PacifiCorp shall pay
for all and any costs, expenses and liabilities of the Issuer Trust except the
Issuer Trust's obligations to holders of the Preferred Securities under the
Preferred Securities; and (iv) the Trust Agreement further provides that the
Issuer Trust will not engage in any activity that is not consistent with the
limited purposes of the Issuer Trust.
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 Guarantee." Taken together, PacifiCorp's obligations
under the Corresponding Junior Subordinated Debentures, the Indenture, the Trust
Agreement, the Expense Agreement, and the Guarantee provide a full, irrevocable
and unconditional guarantee of payments of distributions and other amounts due
on the 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
41
<PAGE>
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 the Corresponding Junior Subordinated Debentures, the Issuer Trust
will not pay Distributions or other amounts due on the Preferred Securities. The
Guarantee does not cover payment of Distributions when the Issuer Trust does not
have sufficient funds to pay such Distributions. In such event, the remedies of
a holder of the 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" and "-
Enforcement of Certain Rights by Holders of Preferred Securities." The
obligations of PacifiCorp under the 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 Guarantee.
A holder of any Preferred Security may institute a legal proceeding
directly against PacifiCorp to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee, the Issuer
Trust or any other person or entity.
The Preferred Securities evidence a beneficial interest in the Issuer
Trust, and the Issuer Trust exists for the sole purpose of issuing the 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 the Issuer Trust (or from PacifiCorp under the Guarantee) if
and to the extent the Issuer Trust has funds available for the payment of such
Distributions.
Upon any voluntary or involuntary termination, winding-up or liquidation of
the Issuer Trust involving the liquidation of the Corresponding Junior
Subordinated Debentures, the holders of the Preferred Securities will be
entitled to receive, out of assets held by the Issuer Trust and after
satisfaction of liabilities to creditors of the 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 of PacifiCorp, 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 the Guarantee and has
agreed to pay for all costs, expenses and liabilities of the Issuer Trust (other
than the Issuer Trust's obligations to the holders of the Preferred Securities),
the positions of a holders of the Preferred Securities and a holder of the
Corresponding Junior Subordinated Debentures relative to other creditors and to
shareholders
42
<PAGE>
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 Senior Indebtedness has been paid in full or any payment
default thereunder has been cured or waived. Failure to make required payments
on the Corresponding Junior Subordinated Debentures would constitute a Debenture
Event of Default under the Indenture with respect thereto.
PLAN OF DISTRIBUTION
PacifiCorp may sell any series of the Junior Subordinated Debentures, and
the Issuer Trust may sell the 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
43
<PAGE>
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 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.
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 the 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 the Trust Agreement and the creation
of the Issuer Trust will be passed upon by Richards, Layton & Finger, P.A., as
special Delaware counsel to PacifiCorp and the Issuer Trust. Certain tax matters
in connection with the Preferred Securities will be passed upon for PacifiCorp
and the Issuer Trust by Stoel Rives LLP. John M. Schweitzer, who is an assistant
secretary of PacifiCorp, is a partner 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 (as it may be amended) 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.
44
<PAGE>
With respect to the unaudited interim financial information which 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 and 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.
45
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Registration fee............................................$ 30,910
*Fees of state regulatory authorities........................ 1,000
*Counsel fees................................................ 100,000
*Accountants' fees........................................... 30,000
*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...................................... 104,090
-------
Total...................................................$400,000
=======
- -------------------
* Estimated
Item 15. Indemnification of Directors and Officers.
PacifiCorp's Third Restated Articles of Incorporation ("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.
II-1
<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
II-2
<PAGE>
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.
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.
II-3
<PAGE>
(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.
(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.
II-4
<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 registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Portland, State of Oregon, on March 7, 1997.
PACIFICORP
By: 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 March 7,
1997 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
- ---------------------------------- Financial Officer (also Chief Accounting
Richard T. O'Brien Officer)
*W. CHARLES ARMSTRONG Director
- ----------------------------------
W. Charles Armstrong
*KATHRYN A. BRAUN Director
- ----------------------------------
Kathryn A. Braun
*C. TODD CONOVER Director
- ----------------------------------
C. Todd Conover
*NOLAN E. KARRAS Director
- ----------------------------------
Nolan E. Karras
II-5
<PAGE>
*KEITH R. McKENNON Director
- ----------------------------------
Keith R. McKennon
(Chairman)
*ROBERT G. MILLER Director
- ----------------------------------
Robert G. Miller
*ALAN K. SIMPSON Director
- ----------------------------------
Alan K. Simpson
*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)
II-6
<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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Portland, State of Oregon, on March 7, 1997.
PACIFICORP CAPITAL II
By PacifiCorp, as Depositor
By WILLIAM E. PERESSINI
--------------------------------------
William E. Peressini,
Vice President and Treasurer
II-7
<PAGE>
EXHIBIT INDEX
Exhibit Sequential
No. Description Page No.
- ------- ----------- ----------
*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 (Exhibit 1(b), File No.
333-03357).
*4(a) Indenture dated as of May 1, 1995 between PacifiCorp and The
Bank of New York, as Trustee, as supplemented by two
Supplemental Indentures (Exhibit 4(a), File No. 333-03357).
*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 Fourth 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 II (Exhibit 4(g),
File No. 333-03357).
*4(f) Trust Agreement of PacifiCorp Capital II (Exhibit 4(h), File
No. 333-03357).
*4(g) Form of Amended and Restated Trust Agreement (Exhibit 4(i),
File No. 333- 03357).
*4(h) Form of Preferred Security Certificate (included in Exhibit
4(g) above).
*4(i) Form of Guarantee Agreement (Exhibit 4(k), File No.
333-03357).
5(a) Opinion of Stoel Rives LLP with respect to the Junior
Subordinated Debentures and the Guarantee.
5(b) Opinion of Richards, Layton & 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.
II-8
<PAGE>
EXHIBIT INDEX
Exhibit Sequential
No. Description Page No.
- ------- ----------- ----------
*12 Statements re Computation of Ratios of Earnings to Fixed
Charges (Exhibit 12, Form 10-K for the Year ended December
31, 1995 and Exhibit 12(a), Form 10-Q for the Quarter ended
September 30, 1996).
23(a) Consent of Deloitte & Touche LLP.
23(b) Consents of Stoel Rives LLP (included in Exhibits 5(a) and
(8) above).
23(c) Consent of Richards, Layton & Finger (included in Exhibit
5(b) 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 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.
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.
- -----------------
* Incorporated by reference.
II-9
<PAGE>
EXHIBIT 4(c)
PACIFICORP
AND
THE BANK OF NEW YORK,
as Trustee
--------------------
FOURTH SUPPLEMENTAL INDENTURE
Dated as of [_________ __,] 1997
TO
INDENTURE
Dated as of May 1, 1995
--------------------
[____%] Junior Subordinated Deferrable Interest Debentures, Series D
<PAGE>
FOURTH SUPPLEMENTAL INDENTURE, dated as of the [___]day of [______],
1997 (this "Fourth Supplemental Indenture"), between PACIFICORP, a corporation
duly organized and existing under the laws of the State of Oregon (hereinafter
sometimes referred to as the "Company"), and THE BANK OF NEW YORK, a New York
banking corporation, as trustee (hereinafter sometimes referred to as the
"Trustee") (under the Indenture dated as of May 1, 1995 between the Company and
the Trustee (the "Indenture").
WHEREAS, the Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of its junior subordinated debentures
(the "Debentures"), which Debentures are to be issued from time to time in such
series as may be determined by the Company under the Indenture, in an unlimited
aggregate principal amount which may be authenticated and delivered thereunder
as in the Indenture provided; and
WHEREAS, the Company and the Trustee previously executed and delivered
a First Supplemental Indenture dated as of May 1, 1995 (the "First Supplemental
Indenture") and in accordance therewith the Company issued a series of
Debentures designated the "8 3/8% Junior Subordinated Deferrable Interest
Debentures, Series A, Due 2025" in the aggregate principal amount of
$120,000,000; and
WHEREAS, the Company and the Trustee previously executed and delivered
a Second Supplemental Indenture dated as of October 1, 1995 (the "Second
Supplemental Indenture") and in accordance therewith the Company issued a series
of Debentures designated the "8.55% Junior Subordinated Deferrable Interest
Debentures, Series B" in the aggregate principal amount of $55,825,925; and
WHEREAS, the Company and the Trustee previously executed and delivered
a Third Supplemental Indenture dated as of June 1, 1996 (the "Third Supplemental
Indenture") and in accordance therewith the Company issued a series of
Debentures designated the "8 1/4% Junior Subordinated Deferrable Interest
Debentures, Series C" in the aggregate principal amount of $223,712,000; and
WHEREAS, pursuant to the terms of the Indenture, the Company desires to
provide for the establishment of a new series of its Debentures to be known as
its [____%] Junior Subordinated Deferrable Interest Debentures, Series D (such
series being hereinafter referred to as the "Series D Debentures"), which Series
D Debentures will be issued to evidence a loan made to the Company of the
proceeds from the issuance by PacifiCorp Capital II, a Delaware business trust
(the "Trust") of preferred undivided beneficial interests in the assets of the
Trust (the "Preferred Securities") and common undivided beneficial interests in
the assets of the Trust (the "Common Securities") pursuant to the terms of an
Amended and Restated Trust Agreement (the "Trust Agreement") dated as of
[_______ __,] 1997 among the Company, as Depositor, The Bank of New York, as
Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the
Administrative Trustees named therein (the "Administrative Trustees"), and the
holders from time to time of undivided beneficial interests in the assets of the
Trust, the form and substance of such Series D Debentures and the terms,
provisions and conditions thereof to be set forth as provided in the Indenture
and this Fourth Supplemental Indenture; and
WHEREAS, the Company desires and has requested the Trustee to join with
it in the execution and delivery of this Fourth Supplemental Indenture, and all
requirements necessary to make this Fourth Supplemental Indenture a valid
instrument, in accordance with its terms, and to make the Series D Debentures,
when executed by the Company and authenticated and delivered by the Trustee,
<PAGE>
the valid obligations of the Company, have been performed and fulfilled, and the
execution and delivery hereof have been in all respects duly authorized;
NOW, THEREFORE, in consideration of the purchase and acceptance of the
Series D Debentures by the holders thereof, and for the purpose of setting
forth, as provided in the Indenture, the form and substance of the Series D
Debentures and the terms, provisions and conditions thereof, the Company
covenants and agrees with the Trustee as follows:
ARTICLE ONE
Additional Definitions
SECTION 1.01. For all purposes of this Fourth Supplemental Indenture,
capitalized terms used herein without definition shall have the meanings
specified in the Indenture.
SECTION 1.02. The terms defined in this Section, for all purposes of
this Fourth Supplemental Indenture, shall have the respective meanings specified
in this Section.
"Additional Sums" has the meaning specified in Section 5.05 of this
Fourth Supplemental Indenture.
"Additional Taxes" means the sum of any additional taxes, duties and
other governmental charges to which the Trust has become subject from time to
time as a result of a Tax Event.
"Common Securities" has the meaning specified in the fifth recital of
this Fourth Supplemental Indenture.
"Distributions" means amounts payable in respect of the Preferred
Securities as provided in the Trust Agreement.
"Extension Period" has the meaning specified in Section 4.01 of this
Fourth Supplemental Indenture.
"Guarantee" means the guarantee by the Company of Distributions to the
extent provided in the Guarantee Agreement, between the Company and The Bank of
New York, as guarantee trustee.
"Investment Company Event" means, in respect of the Trust, the receipt
by the 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 authority (a "Change in 1940 Act Law"), the Trust is or
will be considered an "investment company" that is required to be registered
under the 1940 Act, which Change in 1940 Act Law becomes effective on or after
the date of original issuance of the Preferred Securities of the Trust.
"1940 Act" means the Investment Company Act of 1940, as amended.
"Preferred Securities" has the meaning specified in the fifth recital
of this Fourth Supplemental Indenture.
2
<PAGE>
"Property Trustee" means, in respect of the Trust, the commercial bank
or trust company identified as the "Property Trustee" in the fifth recital of
this Fourth Supplemental Indenture, solely in its capacity as Property Trustee
of the Trust under the Trust Agreement and not in its individual capacity, or
its successor in interest in such capacity, or any successor property trustee
appointed as therein provided.
"Special Event" means a Tax Event or an Investment Company Event.
"Tax Event" means the receipt by the Trust or the Company 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, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date of such Opinion of Counsel,
subject to United States federal income tax with respect to income received or
accrued on the corresponding Series D Debentures, (ii) interest payable by the
Company on the Series D Debentures is not, or within 90 days of the date of such
Opinion of Counsel, will not be, deductible by PacifiCorp, in whole or in part,
for United States federal income tax purposes or (iii) the Trust is, or will be
within 90 days of the date of such Opinion of Counsel, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
"Trust" has the meaning specified in the fifth recital of this Fourth
Supplemental Indenture.
"Trust Agreement" has the meaning specified in the fifth recital of
this Fourth Supplemental Indenture.
ARTICLE TWO
General Terms and Conditions of
the Series D Debentures
SECTION 2.01. There shall be and is hereby authorized a series of
Debentures designated the "[_____%] Junior Subordinated Deferrable Interest
Debentures, Series D," limited in aggregate principal amount to [$____________],
which amount shall be as set forth in any written order of the Company for the
authentication and delivery of Series D Debentures. The Series D Debentures
shall mature and the principal shall be due and payable, together with all
accrued and unpaid interest thereon, on [_______ ___, _____]; The Series D
Debentures shall be issued in the form of registered Series D Debentures without
coupons.
SECTION 2.02. The Series D Debentures shall be issued in certificated
form and registered in the name of the Property Trustee or its nominee, subject
to the exchange of such certificated Series D Debentures for a Global Debenture
upon a distribution of Series D Debentures to the holders of Preferred
Securities as provided in the Trust Agreement. Series D Debentures represented
by a Global Debenture will not be exchangeable for, and will not otherwise be
issuable as, Series D Debentures in certificated form, except as provided in
Section 2.11 of the Indenture and except if there shall have occurred and be
continuing an Event of Default and the holders of a majority in aggregate
principal amount of Series D Debentures determine to discontinue the system of
book-entry transfers through the Depositary. Principal and interest on the
Series D Debentures will be payable,
3
<PAGE>
the transfer of such Series D Debentures will be registrable and such Series D
Debentures will be exchangeable for Series D Debentures bearing identical terms
and provisions at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York; provided, however,
that payment of interest may be made at the option of the Company by check
mailed to the registered holder at such address as shall appear in the Debenture
Register or, with respect to a registered holder of $1,000,000 or more in
aggregate principal amount of Series D Debentures who has delivered a written
request to the Trustee at least 14 days prior to the relevant Interest Payment
Date (as defined in Section 2.03 below) 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. The Company and the
Trustee will act as co-paying agents for the Series D Debentures. Payments of
principal of and interest on the Series D Debentures issued as a Global
Debenture will be made to the Depository.
SECTION 2.03. Each Series D Debenture will bear interest at the rate of
[____%] per annum from and including the original date of issuance or from the
most recent Interest Payment Date referred to below to which interest has been
paid or duly provided for until the principal thereof becomes due and payable,
and on any overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
same rate per annum, payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year (each, an "Interest Payment Date"),
commencing on [______ __,] 1997, to the person in whose name such Series D
Debenture or any predecessor Series D Debenture is registered at the close of
business on the Business Day next preceding that Interest Payment Date (each, a
"Record Date"); provided, however, that if the Series D Debentures shall not be
held by the Property Trustee or be in the form of a Global Debenture, the record
date shall be the 15th day of the last month of each calendar quarter. Any such
interest installment not punctually paid or duly provided for on any Interest
Payment Date shall forthwith cease to be payable to the registered holder on the
relevant Record Date, and may be paid to the person in whose name the Series D
Debenture (or one or more predecessor Debentures) is registered at the close of
business on a special record date to be fixed by the Trustee for the payment of
such defaulted interest, notice whereof shall be given to the registered holders
of the Series D Debentures not less than 10 days prior to such special record
date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Series D
Debentures may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture; provided, however, that
interest (other than interest described in the next sentence) shall not be
considered payable by the Company on any Interest Payment Date falling within an
Extension Period, unless the Company has elected to make a full or partial
payment of interest accrued on the Series D Debentures on that Interest Payment
Date. Any partial payment of interest accrued on the Series D Debentures on any
Interest Payment Date falling within an Extension Period shall be paid pro rata
to such registered holders based upon the principal amount of Series D
Debentures then held by such registered holders.
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 D
Debentures is not a Business Day, then payment of 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 (without any reduction in interest or
other payments in respect of such early payments), in each case with the same
force and effect as if made on the date such payment was originally payable.
4
<PAGE>
ARTICLE THREE
Redemption of the Series D Debentures
SECTION 3.01. Subject to the terms of Article Three of the Indenture,
the Company shall have the right to redeem the Series D Debentures, in whole, at
any time, or in part, from time to time, on or after [_____ __, ____], at a
redemption price equal to 100% of the principal amount of Series D Debentures to
be redeemed plus any accrued and unpaid interest thereon to the date of such
redemption. If the Series D Debentures are only partially redeemed pursuant to
this Section, the Series D Debentures will be redeemed pro rata by the Trustee.
The Company may not redeem the Series D Debentures in part unless all accrued
and unpaid interest has been paid in full on all outstanding Series D Debentures
for all interest periods terminating on or prior to the date of redemption.
SECTION 3.02. If a Special Event in respect of the Trust shall occur
and be continuing, the Company may, at its option, redeem the Series D
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 Series D Debenture so redeemed shall be equal to 100%
of the principal amount of the Series D Debentures to be redeemed plus any
accrued and unpaid interest thereon to the date of redemption.
ARTICLE FOUR
Extension of Interest Payment Period
SECTION 4.01. Subject to Section 4.06 of the Indenture and Section 5.06
of this Fourth Supplemental Indenture, so long as no Event of Default has
occurred and is continuing, the Company shall have the right, at any time during
the term of the Series D Debentures, to defer the payment of interest on such
Series D Debentures at any time and from time to time for a period not to exceed
20 consecutive calendar quarters from the last Interest Payment Date to which
interest was paid in full (each, an "Extension Period"), during which periods
the Company shall have the right to make partial payments of interest on any
Interest Payment Date, and at the end of such Extension Period the Company shall
pay all interest then accrued and unpaid thereon. Prior to the termination of
any such Extension Period, the Company may further extend the interest payment
period, provided that such Extension Period together with all such previous and
further extensions of such Extension Period shall not exceed 20 consecutive
quarters or extend beyond the maturity of the Series D Debentures. No such
Extension Period shall end on a date other than an Interest Payment Date. Upon
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest then due, the Company 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.
SECTION 4.02. The Company shall give the Trustee and the Administrative
Trustees written notice of (i) any election by the Company to initiate an
Extension Period and the duration thereof, (ii) any election by the Company to
extend an Extension Period beyond the Interest Payment Date on which that
Extension Period is then scheduled to terminate and the duration of such
extension and (iii) any election by the Company to make a full or partial
payment of interest accrued on the Series D Debentures on any Interest Payment
Date during an Extension Period and the amount of such payment. In no event
shall such notice by the Company be given less than 15 Business Days prior to
the later of (A) the Record Date next preceding the applicable Interest Payment
Date and (B) five Business Days prior to such Interest Payment Date. Upon
receipt of any such notice, the Trustee shall give written notice of the
Company's election by mail to the Series D Debentureholders not less than 10
Business Days prior to such Interest Payment Date. The Company shall make a
public
5
<PAGE>
announcement of any such election in accordance with New York Stock Exchange
rules not less than five Business Days prior to such Record Date.
ARTICLE FIVE
Additional Terms Relating to the Preferred Securities
SECTION 5.01. (a) For so long as any Preferred Securities remain
outstanding, if, upon an Event of Default, the Trustee fails or the holders of
not less than 25% in principal amount of the outstanding Series D Debentures
fail to declare the principal of all of the Series D Debentures to be
immediately due and payable, the holders of at least 25% in aggregate
liquidation preference of the Preferred Securities then outstanding
(determined in accordance with the Trust Agreement) shall have such right by a
notice in writing to the Company and the Trustee; and upon any such declaration
such principal amount of and the accrued interest on all of the Series D
Debentures shall become immediately due and payable, provided that the payment
of principal and interest on such Series D Debentures shall remain subordinated
to the extent provided in the Indenture.
(b) For so long as any Preferred Securities remain outstanding, if,
upon an Event of Default, the Trustee fails to proceed to enforce any right
available to the holders of the Series D Debentures for 60 days, the holders of
at least 25% in aggregate liquidation preference of the Preferred Securities
then outstanding (determined in accordance with the Trust Agreement) shall have
the right, to the fullest extent permitted by law, to directly institute
proceedings for enforcement of such rights.
(c) For so long as any Preferred Securities remain outstanding, to the
fullest extent permitted by law, upon the occurrence of an Event of Default
described in Section 6.01(a)(1) or 6.02(a)(2) of the Indenture, any holder of
Preferred Securities shall have the right to institute a proceeding directly
against the Company for enforcement of payment to such holder of the principal
of or interest on the Series D Debentures having a principal amount equal to the
aggregate liquidation preference of the related Preferred Securities held by
such holder after the due date specified for such payment in the Series D
Debentures.
SECTION 5.02. For so long as any Preferred Securities remain
outstanding, if the holders of a majority in aggregate principal amount of the
Series D Debentures fail to waive an Event of Default (or annul any declaration
of acceleration) in accordance with Section 6.06 of the Indenture, the holders
of a majority in aggregate liquidation preference of the Preferred Securities
then outstanding (determined in accordance with the Trust Agreement) have such
right.
SECTION 5.03. For so long as any Preferred Securities remain
outstanding, the Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, and no Person shall consolidate with or merge into
the Company or convey, transfer or lease its properties and assets substantially
as an entirety to the Company, unless such consolidation, merger, conveyance,
transfer or lease is permitted under the Trust Agreement and the Guarantee and
does not give rise to any breach or violation of the Trust Agreement or the
Guarantee.
SECTION 5.04. For so long as any Preferred Securities remain
outstanding, the Company shall not terminate the Indenture or amend or
supplement the Indenture in any manner that materially adversely affects the
interests of the holders of the Preferred Securities, and no waiver of any Event
of
6
<PAGE>
Default (or annulment of any declaration of acceleration) or compliance with any
covenant under the Indenture shall be effective without the prior consent to
such waiver of the holders of at least a majority of the aggregate liquidation
preference of such Preferred Securities then outstanding (determined in
accordance with the Trust Agreement) unless and until the principal of the
Series D Debentures and all accrued and unpaid interest thereon have been paid
in full.
SECTION 5.05. In the event that (i) the Trust is the holder of all of
the Outstanding Series D Debentures, (ii) a Tax Event in respect of the Trust
shall have occurred and be continuing and (iii) the Company shall not have (a)
redeemed the Series D Debentures pursuant to Section 3.02 of this Fourth
Supplemental Indenture or (b) terminated the Trust pursuant to Section 902(b) of
the Trust Agreement, the Company shall pay to the Trust (and its permitted
successors or assigns under the Trust Agreement) for so long as the Trust (or
its permitted successor or assignee) is the registered holder of any Series D
Debentures, such additional amounts as may be necessary in order that the amount
of Distributions (including any Additional Amounts (as defined in the Trust
Agreement)) then due and payable by the Trust on the related Preferred
Securities and Common Securities that at any time remain outstanding in
accordance with the terms thereof shall not be reduced as a result of any
Additional Taxes (the "Additional Sums"). Whenever in the Indenture or the
Series D Debentures there is a reference in any context to the payment of
principal of or interest on the Series D Debentures, such mention shall be
deemed to include mention of the payments of the Additional Sums provided for in
this paragraph to the extent that, in such context, Additional Sums are, were or
would be payable in respect thereof pursuant to the provisions of this paragraph
and express mention of the payment of Additional Sums (if applicable) in any
provisions hereof shall not be construed as excluding Additional Sums in those
provisions hereof where such express mention is not made, provided, however,
that the deferral of the payment of interest pursuant to Section 4.01 of this
Fourth Supplemental Indenture or the Series D Debentures shall not defer the
payment of any Additional Sums that may be due and payable during such interest
payment period.
SECTION 5.06. For so long as any Preferred Securities remain
outstanding, the Company covenants and agrees with each holder of Series D
Debentures issued to the Trust that it will not, and it will not permit any
Subsidiary of the Company 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 the Company'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 Series D 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 the Company or any of
its subsidiaries and mandatory redemptions or sinking fund payments with respect
to any series of Preferred Stock of the Company 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
the Company and then outstanding and (2) the capital and surplus of the Company
to be stated on the books of account of the Company 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 the Company with respect to any securities of a
subsidiary of the Company, provided that the proceeds from the issuance of such
securities were used
7
<PAGE>
to purchase Debentures of any series) if at such time (i) there shall have
occurred any event of which the Company has actual knowledge that (a) with the
giving of notice or the lapse of time or both, would constitute an Event of
Default hereunder and (b) in respect of which the Company shall not have taken
reasonable steps to cure, (ii) the Company shall be in default with respect to
its payment of any obligations under the Guarantee or (iii) the Company shall
have given notice of its election to begin an Extension Period as provided
herein and shall not have rescinded such notice, or such period, or any
extension thereof, shall be continuing.
SECTION 5.07. For so long as any Preferred Securities remain
outstanding, the Company also covenants with each holder of Series D Debentures
issued to the Trust (i) to maintain directly or indirectly 100% ownership of the
Common Securities of the Trust; provided, however, that any permitted successor
of the Company under the Indenture may succeed to the Company's ownership of
such Common Securities, (ii) not to voluntarily terminate, wind-up or liquidate
the Trust, except (a) in connection with a distribution of the Series D
Debentures to the holders of Preferred Securities in liquidation of the Trust or
(b) in connection with certain mergers, consolidations or amalgamations
permitted by the Trust Agreement and (iii) to use its reasonable efforts,
consistent with the terms and provisions of the Trust Agreement, to cause the
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.
ARTICLE SIX
Form of Series D Debenture
The Series D Debentures and the Trustee's Certificate of Authentication
to be endorsed thereon are to be substantially in the following forms:
(FORM OF FACE OF DEBENTURE)
[If the Debenture is to be issued as a Global Debenture, insert--This
Debenture is a Global Debenture within the meaning of the Indenture hereinafter
referred to and is registered in the name of a Depository or a nominee of a
Depository. This Debenture is exchangeable for Debentures registered in the name
of a person other than the Depository or its nominee only in the limited
circumstances described in the Indenture, and no transfer of this Debenture
(other than a transfer of this Debenture as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository) may be registered except in limited
circumstances.
Unless this Debenture is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York) to the issuer or its
agent for registration of transfer, exchange or payment, and any Debenture
issued is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered owner hereof,
Cede & Co., has an interest herein.]
8
<PAGE>
No.___________ $__________
CUSIP No. ______________
PACIFICORP
[-----%]
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE,
SERIES D
PACIFICORP, a corporation duly organized and existing under the laws of
the State of Oregon (herein referred to as the "Company", which term includes
any successor corporation under the Indenture), for value received, hereby
promises to pay to _____________________ or registered assigns, the principal
sum of $____, on [______ __, ____], and to pay interest on such principal sum
from and including [______ __], 1997 or from the most recent interest payment
date (each such date, an "Interest Payment Date") to which interest has been
paid or duly provided for, payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year, commencing on [______ __], 1997, at
the rate of [____%] per annum, until the principal hereof shall have become due
and payable, and on any overdue principal and premium, if any, and (to the
extent that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the same rate per annum. The amount of
interest payable on any Interest Payment Date shall 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 this
Debenture is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day (without any reduction in interest or
other payments in respect of such early payments), in each case with the same
force and effect as if made on such date. The interest installment so payable,
and punctually paid or duly provided for on any Interest Payment Date will, as
provided in the Indenture, be paid to the person in whose name this Debenture
(or one or more Predecessor Debentures, as defined in the Indenture) is
registered at the close of business on the Business Day next preceding that
Interest Payment Date (each a "Record Date"); provided, however, that if this
Debenture shall not be held by the Property Trustee or be in the form of a
Global Debenture the record date shall be the 15th day of the last month of each
calendar quarter. Any such interest installment not punctually paid or duly
provided for on any Interest Payment Date shall forthwith cease to be payable to
the registered holder on the relevant Record Date, and may be paid to the person
in whose name this Debenture (or one or more Predecessor Debentures) is
registered at the close of business on a special record date to be fixed by the
Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered holders of this series of Debentures not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Debentures may then be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture
hereinafter referred to; provided, however, that interest shall not be
considered payable by the Company on any Interest Payment Date falling within an
Extension Period (as defined below), unless the Company has elected to make a
full or partial payment of interest accrued on this Debenture on that Interest
Payment Date. Any partial payment of interest accrued on this series of
Debentures on any Interest Payment Date falling within an Extension Period shall
be paid pro rata
9
<PAGE>
to the registered holder of this Debenture based upon the principal amount of
this Debenture in relation to the aggregate principal amount of all Debentures
of this series then outstanding. The principal of (and premium, if any) and the
interest on this Debenture shall be payable at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of New
York, in any coin or currency of the United States of America which at the time
of payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the registered holder at such address as shall appear in the
Debenture Register or, with respect to a registered holder of $1,000,000 or more
in aggregate principal amount of Debentures who has delivered a written request
to the 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.
The indebtedness evidenced by this Debenture is, to the extent provided
in the Indenture, subordinated and junior in right of payment to the prior
payment in full of all Senior Indebtedness, and this Debenture is issued subject
to the provisions of the Indenture with respect thereto. Each holder of this
Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee its attorney-in-fact for
any and all such purposes. Each holder hereof, by its acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
those provisions.
This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Debenture are contained on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be
executed.
PACIFICORP
By
--------------------------------------
William E. Peressini, Vice President
and Treasurer
Attest:
- ---------------------------------------
Lenore M. Martin, Assistant Secretary
10
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures described in
the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK
- ---------------------------------- -----------------------------------
as Trustee or as Authentication Agent
By
------------------------------- -----------------------------------
Authorized Signatory Authorized Signatory
11
<PAGE>
(REVERSE)
[____%] JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE,
SERIES D
(continued)
This Debenture is one of a duly authorized series of debentures of the
Company (herein sometimes referred to as the "Debentures"), specified in the
Indenture (as defined below), all issued or to be issued in one or more series
under and pursuant to an Indenture dated as of May 1, 1995 duly executed and
delivered between the Company and THE BANK OF NEW YORK, a New York banking
corporation, as Trustee (herein referred to as the "Trustee"), as supplemented
by the First Supplemental Indenture dated as of May 1, 1995, the Second
Supplemental Indenture dated as of October 1, 1995, the Third Supplemental
Indenture dated as of June 1, 1996 and the Fourth Supplemental Indenture dated
as of [_________ __,] 1997 between the Company and the Trustee (such Indenture
as so supplemented being hereinafter referred to as the "Indenture"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the
Debentures. By the terms of the Indenture, the Debentures are issuable in series
which may vary as to amount, date of maturity, rate of interest and in other
respects as in the Indenture provided. This series of Debentures is limited in
aggregate principal amount as specified in the Fourth Supplemental Indenture.
Subject to the terms of Article Three of the Indenture, the Company
shall have the right to redeem the Debentures of this series at the option of
the Company, without premium or penalty, in whole or in part at any time and
from time to time on or after [______ __, ____] (an "Optional Redemption"), at a
redemption price equal to 100% of the principal amount of the Debentures of this
series to be redeemed plus any accrued and unpaid interest thereon to the date
of such redemption. If the Debentures of this series are only partially redeemed
by the Company pursuant to an Optional Redemption, the Debentures of this series
will be redeemed pro rata by the Trustee.
If a Special Event in respect of the Trust shall occur and be
continuing, the Company may, at its option, redeem this Debenture 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
Debenture of this series so redeemed shall be equal to 100% of the principal
amount thereof plus accrued and unpaid interest to the date of such redemption.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series for the unredeemed portion hereof will be
issued in the name of the holder hereof upon the cancellation hereof.
In case an Event of Default with respect to the Debentures of this
series shall have occurred and be continuing, the principal of all of the
Debentures of this series may be declared, and upon such declaration shall
become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of the Debentures of this series upon compliance by the
Company with certain conditions set forth therein.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
Outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to, changing in any manner or eliminating
any of
12
<PAGE>
the provisions of the Indenture or of any supplemental indenture or of modifying
in any manner the rights of the holders of the Debentures; provided, however,
that no such supplemental indenture shall (i) extend the fixed maturity of any
Debentures of any series, reduce the principal amount thereof, reduce the rate
or extend the time of payment of interest thereon or reduce any premium payable
upon the redemption thereof, without the consent of the holder of each Debenture
so affected or (ii) reduce the aforesaid percentage of Debentures, the holders
of which are required to consent to any such supplemental indenture, without the
consent of the holders of each Debenture then outstanding and affected thereby.
The Indenture also contains provisions permitting the holders of a majority in
aggregate principal amount of the Debentures of all series at the time
outstanding affected thereby, on behalf of the holders of the Debentures of such
series, to waive any past default in the performance of any of the covenants
contained in the Indenture, or established pursuant to the Indenture with
respect to such series, and its consequences, except a default in the payment of
the principal of or premium, if any, or interest on any of the Debentures of
such series, which default may be waived by the unanimous consent of the holders
affected. Any such consent or waiver by the registered holder of this Debenture
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such holder and upon all future holders and owners of this Debenture and of
any Debenture issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Debenture.
For so long as any Preferred Securities (as defined in the Indenture)
remain outstanding, if, upon an Event of Default, the Trustee fails or the
holders of not less than 25% in principal amount of the outstanding Debentures
of this series fail to declare the principal of all of the Debentures of this
series to be immediately due and payable, the holders of at least 25% in
aggregate liquidation preference of the Preferred Securities then outstanding
(determined in accordance with the related Trust Agreement) shall have such
right by a notice in writing to the Company and the Trustee; and upon any such
declaration such principal amount of and the accrued interest on all of the
Debentures of this series shall become immediately due and payable, provided
that the payment of principal and interest on such Debentures shall remain
subordinated to the extent provided in the Indenture.
For so long as any Preferred Securities remain outstanding, if, upon an
Event of Default, the Trustee fails to proceed to enforce any right available to
the holders of the Series D Debentures for 60 days, the holders of at least 25%
in aggregate liquidation preference of the Preferred Securities then outstanding
(determined in accordance with the Trust Agreement) shall have the right, to the
fullest extent permitted by law, to directly institute proceedings for
enforcement of such rights.
For so long as any Preferred Securities remain outstanding, to the
fullest extent permitted by law, upon the occurrence of an Event of Default
described in Section 6.01(a)(1) or 6.02(a)(2) of the Indenture, any holder of
Preferred Securities shall have the right to institute a proceeding directly
against the Company for enforcement of payment to such holder of the principal
of or interest on the Series D Debentures having a principal amount equal to the
aggregate liquidation preference of the related Preferred Securities held by
such holder after the due date specified for such payment in the Series D
Debentures.
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Debenture at the time and place and at the rate and in the
money herein prescribed.
Subject to the provisions of the Indenture, the Company shall have the
right, at any time during the term of this series of Debentures, to defer the
payment of interest on this series of
13
<PAGE>
Debentures at any time and from time to time for a period not to exceed 20
consecutive calendar quarters from the last Interest Payment Date to which
interest was paid in full (each, an "Extension Period") during which periods the
Company shall have the right to make partial payments of interest on any
Interest Payment Date, and at the end of such Extension Period the Company shall
pay all interest then accrued and unpaid thereon. Prior to the termination of
any such Extension Period, the Company may further extend the interest payment
period, provided that such Extension Period together with all such previous and
further extensions of such Extension Period shall not exceed 20 consecutive
quarters or extend beyond the maturity of the Series D Debentures. Upon
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest then due, the Company may select 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.
As provided in the Indenture and subject to certain limitations therein
set forth, this Debenture is transferable by the registered holder hereof on the
Debenture Register of the Company, upon surrender of this Debenture for
registration of transfer at the office or agency of the Company designated for
such purpose in the Borough of Manhattan, The City of New York, accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company and the Trustee duly executed by the registered holder hereof or its
attorney duly authorized in writing, and thereupon one or more new Debentures of
authorized denominations and for the same aggregate principal amount and series
will be issued to the designated transferee or transferees. No service charge
will be made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any Debenture
Registrar may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Debenture shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Debenture Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
[If the Debenture is to be issued as a Global Debenture, insert--This
Global Debenture is exchangeable for Debentures in certificated form only under
certain limited circumstances set forth in the Indenture.] The Debentures of
this series are issuable in registered form without coupons in denominations of
$1,000 and any integral multiple thereof. As provided in the Indenture and
subject to certain limitations herein and therein set forth, Debentures of this
series so issued are exchangeable for a like aggregate principal amount of
Debentures of this series of a different authorized denomination, as requested
by the holder surrendering the same.
All terms used in this Debenture which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
14
<PAGE>
ARTICLE SEVEN
Original Issue of Series D Debentures
Series D Debentures in the aggregate principal amount of
[$_______________] may, upon execution of this Fourth Supplemental Indenture, or
from time to time thereafter, be executed by the Company and delivered to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver such Debentures to or upon the written order of the Company,
signed by its Chairman, President or any Vice President and its Treasurer or an
Assistant Treasurer, without any further action by the Company.
ARTICLE EIGHT
Miscellaneous Provisions
SECTION 8.01. Except as otherwise expressly provided in this Fourth
Supplemental Indenture or in the form of Series D Debenture or otherwise clearly
required by the context hereof or thereof, all terms used herein or in the form
of Series D Debenture that are defined in the Indenture shall have the several
meanings respectively assigned to them thereby.
SECTION 8.02. The Indenture, as supplemented by the First Supplemental
Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture
and this Fourth Supplemental Indenture, is in all respects ratified and
confirmed, and this Fourth Supplemental Indenture shall be deemed part of the
Indenture in the manner and to the extent herein and therein provided.
SECTION 8.03. The recitals herein contained are made by the Company and
not by the Trustee, and the Trustee assumes no responsibility for the
correctness thereof. The Trustee makes no representation as to the validity or
sufficiency of this Fourth Supplemental Indenture.
SECTION 8.04. This Fourth Supplemental Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Supplemental Indenture to be duly executed on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
PACIFICORP
By:
-------------------------------------
William E. Peressini, Vice President
and Treasurer
THE BANK OF NEW YORK, as Trustee
By:
-------------------------------------
15
Exhibit 5(a)
[Stoel Rives LLP Letterhead]
March 7, 1997
PacifiCorp
700 NE Multnomah, Suite 1600
Portland, OR 97232
PacifiCorp Capital II
c/o PacifiCorp
700 NE Multnomah, Suite 1600
Portland, OR 97232
Ladies and Gentlemen:
We are acting as counsel to PacifiCorp, an Oregon corporation (the
"Company"), in connection with the proposed issuance and sale by the Company
from time to time of not to exceed $135,000,000 in aggregate principal amount of
Junior Subordinated Debentures (the "Debentures") to be issued pursuant to an
indenture between the Company and The Bank of New York, as Trustee, as
supplemented (collectively, the "Indenture"), and the proposed issuance and sale
by PacifiCorp Capital II, a business trust created under the laws of the State
of Delaware (the "Issuer Trust"), from time to time of not to exceed
$135,000,000 of its preferred securities, representing preferred undivided
beneficial interests in the assets of the Issuer Trust (the "Preferred
Securities"), all as contemplated by the Registration Statement on Form S-3 (the
"Registration Statement") about to be filed by the Company and the Issuer Trust
with the Securities and Exchange Commission for the registration of the
Debentures and Preferred Securities under the Securities Act of 1933 (the
"Act").
As described in the Registration Statement, the Company may issue the
Debentures to (a) the public or institutional investors or (b) the Issuer Trust
in connection with the issuance of Preferred Securities. If Preferred Securities
are issued by the Issuer Trust, the proceeds therefrom, together with the
capital contribution of the Company, as owner of
<PAGE>
March 7, 1997
Page 2
the common securities of the Issuer Trust, will be used to purchase Debentures.
The Company will guarantee the payment by the Issuer Trust of distributions with
respect to the Preferred Securities and of amounts due upon liquidation of the
Issuer Trust or redemption of the Preferred Securities (the "Guarantee"), all to
the extent the Issuer Trust has funds available therefor as set forth in the
Guarantee. The Preferred Securities are to be issued by the Issuer Trust
pursuant to a Trust Agreement, as amended and restated.
In connection with the foregoing, we are of the opinion that:
(a) All action necessary to make valid the proposed issuance of the
Debentures by the Company will have been taken when:
1. The Registration Statement, as it may be amended, shall have
become effective;
2. The Indenture shall have been qualified under the Trust Indenture
Act of 1939, as amended;
3. Appropriate orders authorizing the issuance of the Debentures by
the Company shall have been entered by the Idaho Public Utilities
Commission, the Montana Public Service Commission, the Public
Utility Commission of Oregon and the Utah Public Service
Commission and an appropriate notice filing shall have been made
with the Washington Utilities and Transportation Commission;
4. The Finance Committee or the Pricing Committee of the Company's
Board of Directors shall have duly adopted appropriate
resolutions establishing one or more series of Debentures, fixing
certain of the terms thereof, authorizing the execution and
delivery of one or more supplemental indentures with respect to
the Debentures, authorizing the execution and delivery of the
Debentures and authorizing or ratifying such other corporate acts
as may be necessary in connection with the issuance and sale of
the Debentures;
5. One or more supplemental indentures with respect to the
Debentures shall have been duly executed and delivered; and
6. The Debentures shall have been appropriately issued,
authenticated and delivered for the consideration contemplated
by, and otherwise in
conformity with, the acts, proceedings and documents referred to
above.
<PAGE>
March 7, 1997
Page 3
(b) When the steps set forth in paragraph (a) shall have been taken, the
Debentures will be legal, valid and binding obligations of the Company
enforceable in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization or
other laws limiting creditors' rights generally or by equitable
principles relating to the availability of remedies; provided,
however, that in rendering the above opinion, we express no opinion as
to the effect, if any, of the usury laws of any state upon the
enforceability of rights of the holders of the Debentures.
(c) All action necessary to make valid the proposed issuance by the
Company of the Guarantee shall have been taken when:
1. The steps set forth in paragraph (a) above have been taken;
2. The Preferred Securities shall have been duly issued;
3. The Guarantee shall have been qualified under the Trust Indenture
Act of 1939, as amended;
4. Appropriate orders authorizing the Company to enter into the
Guarantee shall have been entered by the Idaho Public Utilities
Commission, the Montana Public Service Commission, the Public
Utility Commission of Oregon and the Utah Public Service
Commission and an appropriate notice filing shall have been made
with the Washington Utilities and Transportation Commission;
5. The Finance Committee or the Pricing Committee of the Board of
Directors of the Company shall have approved the terms of the
Guarantee in accordance with the resolutions adopted by the
Company's Board of Directors authorizing the execution and
delivery by the Company of the Guarantee; and
6. The Guarantee shall have been duly executed and delivered in
conformity with the acts, proceedings and documents referred to
above.
(d) When the steps set forth in paragraph (c) shall have been taken, the
Guarantee will be the legal, valid and binding obligations of the
Company enforceable in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or other laws
<PAGE>
March 7, 1997
Page 4
limiting creditors' rights generally or by equitable principles
relating to the availability of remedies.
We hereby authorize and consent to the use of this opinion as Exhibit 5(a)
of the Registration Statement and authorize and consent to the references to our
firm in the Registration Statement and in the preliminary Prospectus and the
preliminary Prospectus Supplements constituting a part thereof. In giving such
consent, we do not thereby admit that we are within the category of persons
whose consent is required pursuant to Section 7 of the Act or the rules and
regulations of the Securities and Exchange Commission.
Very truly yours,
STOEL RIVES LLP
EXHIBIT 5(b)
[Letterhead of Richards, Layton & Finger]
March 7, 1997
PacifiCorp Capital II
c/o PacifiCorp
700 NE Multnomah, Suite 1600
Portland, Oregon 97232
Re: PacifiCorp Capital II
---------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for PacifiCorp, an Oregon
corporation (the "Company"), and PacifiCorp Capital II, a Delaware business
trust (the "Trust"), in connection with the matters set forth herein. At your
request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our examination
of documents has been limited to the examination of originals or copies of the
following:
(a) The Certificate of Trust of the Trust, dated May 3, 1996 (the
"Certificate"), as filed in the office of the Secretary of State of the State of
Delaware (the "Secretary of State") on May 7, 1996;
(b) The Trust Agreement of the Trust, dated as of May 3, 1996, among the
Company, as Depositor, and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement") on Form S-3,
including a preliminary prospectus (the "Prospectus") and preliminary prospectus
supplement (the "Prospectus Supplement"), relating to the Preferred Securities,
Series B, of the Trust representing preferred undivided beneficial interests in
<PAGE>
PacifiCorp Capital II
March 7, 1997
Page 2
the assets of the Trust (each, a "Preferred Security" and collectively, the
"Preferred Securities"), as proposed to be filed by the Company and the Trust
with the Securities and Exchange Commission on or about March 7, 1997;
(d) A form of Amended and Restated Trust Agreement of the Trust, to be
entered into among the Company, as Depositor, the trustees of the Trust named
therein, and the holders, from time to time, of undivided beneficial interests
in the assets of the Trust (including Exhibits A, C and E thereto) (the "Trust
Agreement"), incorporated by reference into the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated March 7, 1997,
obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are used
as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other than
the documents listed in paragraphs (a) through (e) above. In particular, we have
not reviewed any document (other than the documents listed in paragraphs (a)
through (e) above) that is referred to in or incorporated by reference into the
documents reviewed by us. We have assumed that there exists no provision in any
document that we have not reviewed that is inconsistent with the opinions stated
herein. We have conducted no independent factual investigation of our own but
rather have relied solely upon the foregoing documents, the statements and
information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust Agreement
and the Certificate are in full force and effect and have not been amended, (ii)
except to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization,
<PAGE>
PacifiCorp Capital II
March 7, 1997
Page 3
execution and delivery by all parties thereto of all documents examined by us,
(vi) the receipt by each Person to whom a Preferred Security is to be issued by
the Trust (collectively, the "Preferred Security Holders") of a Preferred
Securities Certificate for such Preferred Security and the payment for the
Preferred Security acquired by it, in accordance with the Trust Agreement and
the Registration Statement, and (vii) that the Preferred Securities are issued
and sold to the Preferred Security Holders in accordance with the Trust
Agreement and the Registration Statement. We have not participated in the
preparation of the Registration Statement and assume no responsibility for its
contents.
This opinion is limited to the laws of the State of Delaware (excluding the
securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder which are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of law
and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good standing
as a business trust under the Delaware Business Trust Act.
2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the Trust, will
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. In addition, we hereby
consent to the use of our name under the heading "Legal Opinions" in the
Prospectus and the Prospectus Supplement. In giving the foregoing consents, we
do not thereby admit that we come within the category of Persons whose consent
is required under Section 7 of the Securities Act of 1933, as amended, or the
rules and regulations of the Securities and Exchange Commission thereunder.
Except as stated above, without our
<PAGE>
PacifiCorp Capital II
March 7, 1997
Page 4
prior written consent, this opinion may not be furnished or quoted to, or relied
upon by, any other Person for any purpose.
Very truly yours,
RICHARDS, LAYTON & FINGER
Exhibit 8
[STOEL RIVES LLP LETTERHEAD]
March 7, 1997
PacifiCorp
Suite 1600
700 NE Multnomah
Portland, OR 97232
We have acted as counsel for you and for PacifiCorp Capital II, a statutory
business trust created under the laws of the State of Delaware ("PacifiCorp
Capital II"), in connection with preparation of a Registration Statement on Form
S-3 (the "Registration Statement") about to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "1933
Act"), relating to the public offering of $135,000,000 in the aggregate of (i)
debt securities representing junior unsecured deferrable interest subordinated
obligations of PacifiCorp, to be issued pursuant to an Indenture dated as of May
1, 1995 between PacifiCorp and The Bank of New York as trustee, as supplemented
(the "Series D Debentures") and (ii) preferred securities representing secured
undivided beneficial interests in the assets of PacifiCorp Capital II. The
proceeds of the offering of preferred securities by PacifiCorp Capital II may be
loaned to PacifiCorp (together with proceeds from issuance of common securities
in PacifiCorp Capital II), and the loan may be evidenced by Series D Debentures.
In addition, certain payment obligations of PacifiCorp Capital II with respect
to the preferred securities will be guaranteed by PacifiCorp to the extent set
forth in a subordinated guarantee.
In so acting, we have reviewed (i) the original Trust Agreement of
PacifiCorp Capital II, dated as of May 3, 1996, and (ii) the form of Amended and
Restated Trust Agreement for PacifiCorp Capital II (the "Amended Trust
Agreement"), incorporated by reference as an exhibit to the Registration
Statement. Our opinion is based upon the Internal Revenue Code of 1986, as
amended, Treasury Regulations promulgated thereunder, administrative
pronouncements by the Internal Revenue Service, judicial decisions, and such
other legal authorities as we have deemed necessary or appropriate for purposes
of our opinion, as each exists on the date of this letter. Existing tax laws may
be changed by legislation or promulgation of regulations or may be interpreted
differently than they are at present by the courts or the Internal Revenue
Service, and such changes may alter the conclusions set forth in this letter.
<PAGE>
PacifiCorp
March 7, 1997
Page 2
In connection with issuance pursuant to the Registration Statement of the
Series D Debentures and the preferred securities of PacifiCorp Capital II (the
"Series B Preferred Securities"), you have requested that we render the opinion
set forth below. In rendering our opinion, we have examined and relied upon
representations and warranties as to factual matters made in or pursuant to the
documents referred to above and upon the originals, or copies certified or
otherwise identified to our satisfaction, of such records, documents,
certificates or other instruments as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below. We have not,
however, undertaken any independent investigation of any factual matter set
forth in any of the foregoing. We also have assumed that, upon execution and
delivery, the Amended Trust Agreement will be valid and enforceable in
accordance with its terms and that PacifiCorp Capital II will at all times
comply with the Delaware Business Trust Act and the terms of the Amended Trust
Agreement. Our opinion addresses only the United States federal income tax
considerations of general application relevant to a beneficial owner acquiring
Series D Debentures and Series B Preferred Securities upon original issue at the
original offering price that is (i) an individual citizen or resident of the
United States, (ii) a corporation or partnership created or 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 treated as a United States person for
federal income tax purposes.
Subject to the foregoing and to the qualifications and limitations set
forth herein, the statements relating to issuance of the Series D Debentures and
the Series B Preferred Securities set forth in the Prospectus Supplements,
subject to completion, dated March___, 1997 (the "Prospectus Supplements"), in
each case under the caption "Certain Federal Income Tax Considerations," to the
extent they relate to matters of law or legal conclusion, constitute our
opinion.
Our opinion is limited to the United States federal income tax matters
addressed, and no opinion is rendered as to any other issue. In addition, our
conclusions are based upon United States federal income tax law currently in
effect, which is subject to change on a prospective or retroactive basis,
representations concerning relevant facts that exist as of the date hereof and
the assumptions described above. If any assumption or representation described
above is not true, correct and complete, or in the event of a change in United
States federal income tax law adversely affecting the conclusions set forth in
this letter or in the Prospectus Supplements under
<PAGE>
PacifiCorp
March 7, 1997
Page 3
"Certain Federal Income Tax Considerations," our opinion shall be void and of no
force or effect. We undertake no obligation to update our opinion at any time.
Our opinion is not binding on the courts or on any administrative agency, and a
court or agency may hold or act to the contrary.
This opinion is addressed solely to you, and no other person may rely on
it, provided, however, that we hereby consent to the filing of this opinion as
an exhibit to the Registration Statement and to the use of our name under the
captions "Certain Federal Income Tax Considerations" and "Legal Opinions" in
each of the Prospectus Supplements. In giving such consent, we do not thereby
concede that we are within the category of persons whose consent is required
under Section 7 of the 1933 Act or the Rules and Regulations of the Securities
and Exchange Commission thereunder.
Very truly yours,
STOEL RIVES LLP
Exhibit 23(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
PacifiCorp on Form S-3 of our report dated February 13, 1996 (which expresses an
unqualified opinion and includes an explanatory paragraph relating to the change
in the Company's method of accounting for income taxes and postretirement
benefits), incorporated by reference in the Annual Report on Form 10-K of
PacifiCorp for the year ended December 31, 1995 and to the reference to us under
the heading "Experts" in the Prospectus, which is part of this Registration
Statement.
DELOITTE & TOUCHE LLP
March 7, 1997
EXHIBIT (24)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints Frederick W. Buckman and Richard T. O'Brien, the undersigned's true and
lawful attorneys and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign the Form S-3 Registration Statements under The
Securities Act of 1933, prepared in connection with the issuance of up to
$165,000,000 of securities of PacifiCorp in the form of subordinated debt and/or
guarantees with respect to preferred securities of one or more of its
subsidiaries, and any and all amendments (including post-effective amendments)
thereto, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys and agents, and each of them, full power and authority to do any
and all acts and things necessary or advisable to be done, as fully and to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that said attorneys and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Dated: February 12, 1997.
W. CHARLES ARMSTRONG
--------------------------------------
W. Charles Armstrong
<PAGE>
EXHIBIT (24)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints Frederick W. Buckman and Richard T. O'Brien, the undersigned's true and
lawful attorneys and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign the Form S-3 Registration Statements under The
Securities Act of 1933, prepared in connection with the issuance of up to
$165,000,000 of securities of PacifiCorp in the form of subordinated debt and/or
guarantees with respect to preferred securities of one or more of its
subsidiaries, and any and all amendments (including post-effective amendments)
thereto, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys and agents, and each of them, full power and authority to do any
and all acts and things necessary or advisable to be done, as fully and to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that said attorneys and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Dated: February 12, 1997.
KATHRYN R. BRAUN
--------------------------------------
Kathryn R. Braun
<PAGE>
EXHIBIT (24)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints Frederick W. Buckman and Richard T. O'Brien, the undersigned's true and
lawful attorneys and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign the Form S-3 Registration Statements under The
Securities Act of 1933, prepared in connection with the issuance of up to
$165,000,000 of securities of PacifiCorp in the form of subordinated debt and/or
guarantees with respect to preferred securities of one or more of its
subsidiaries, and any and all amendments (including post-effective amendments)
thereto, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys and agents, and each of them, full power and authority to do any
and all acts and things necessary or advisable to be done, as fully and to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that said attorneys and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Dated: February 12, 1997.
FREDERICK W. BUCKMAN
--------------------------------------
Frederick W. Buckman
<PAGE>
EXHIBIT (24)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints Frederick W. Buckman and Richard T. O'Brien, the undersigned's true and
lawful attorneys and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign the Form S-3 Registration Statements under The
Securities Act of 1933, prepared in connection with the issuance of up to
$165,000,000 of securities of PacifiCorp in the form of subordinated debt and/or
guarantees with respect to preferred securities of one or more of its
subsidiaries, and any and all amendments (including post-effective amendments)
thereto, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys and agents, and each of them, full power and authority to do any
and all acts and things necessary or advisable to be done, as fully and to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that said attorneys and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Dated: February 12, 1997.
C. TODD CONOVER
--------------------------------------
C. Todd Conover
<PAGE>
EXHIBIT (24)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints Frederick W. Buckman and Richard T. O'Brien, the undersigned's true and
lawful attorneys and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign the Form S-3 Registration Statements under The
Securities Act of 1933, prepared in connection with the issuance of up to
$165,000,000 of securities of PacifiCorp in the form of subordinated debt and/or
guarantees with respect to preferred securities of one or more of its
subsidiaries, and any and all amendments (including post-effective amendments)
thereto, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys and agents, and each of them, full power and authority to do any
and all acts and things necessary or advisable to be done, as fully and to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that said attorneys and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Dated: February 12, 1997.
NOLAN E. KARRAS
--------------------------------------
Nolan E. Karras
<PAGE>
EXHIBIT (24)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints Frederick W. Buckman and Richard T. O'Brien, the undersigned's true and
lawful attorneys and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign the Form S-3 Registration Statements under The
Securities Act of 1933, prepared in connection with the issuance of up to
$165,000,000 of securities of PacifiCorp in the form of subordinated debt and/or
guarantees with respect to preferred securities of one or more of its
subsidiaries, and any and all amendments (including post-effective amendments)
thereto, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys and agents, and each of them, full power and authority to do any
and all acts and things necessary or advisable to be done, as fully and to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that said attorneys and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Dated: February 12, 1997.
KEITH R. MCKENNON
--------------------------------------
Keith R. McKennon
<PAGE>
EXHIBIT (24)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints Frederick W. Buckman and Richard T. O'Brien, the undersigned's true and
lawful attorneys and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign the Form S-3 Registration Statements under The
Securities Act of 1933, prepared in connection with the issuance of up to
$165,000,000 of securities of PacifiCorp in the form of subordinated debt and/or
guarantees with respect to preferred securities of one or more of its
subsidiaries, and any and all amendments (including post-effective amendments)
thereto, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys and agents, and each of them, full power and authority to do any
and all acts and things necessary or advisable to be done, as fully and to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that said attorneys and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Dated: February 12, 1997.
ROBERT G. MILLER
--------------------------------------
Robert G. Miller
<PAGE>
EXHIBIT (24)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints Frederick W. Buckman and Richard T. O'Brien, the undersigned's true and
lawful attorneys and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign the Form S-3 Registration Statements under The
Securities Act of 1933, prepared in connection with the issuance of up to
$165,000,000 of securities of PacifiCorp in the form of subordinated debt and/or
guarantees with respect to preferred securities of one or more of its
subsidiaries, and any and all amendments (including post-effective amendments)
thereto, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys and agents, and each of them, full power and authority to do any
and all acts and things necessary or advisable to be done, as fully and to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that said attorneys and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Dated: February 27, 1997.
ALAN K. SIMPSON
--------------------------------------
Alan K. Simpson
<PAGE>
EXHIBIT (24)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints Frederick W. Buckman and Richard T. O'Brien, the undersigned's true and
lawful attorneys and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign the Form S-3 Registration Statements under The
Securities Act of 1933, prepared in connection with the issuance of up to
$165,000,000 of securities of PacifiCorp in the form of subordinated debt and/or
guarantees with respect to preferred securities of one or more of its
subsidiaries, and any and all amendments (including post-effective amendments)
thereto, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys and agents, and each of them, full power and authority to do any
and all acts and things necessary or advisable to be done, as fully and to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that said attorneys and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Dated: February 12, 1997.
VERL R. TOPHAM
--------------------------------------
Verl R. Topham
<PAGE>
EXHIBIT (24)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints Frederick W. Buckman and Richard T. O'Brien, the undersigned's true and
lawful attorneys and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign the Form S-3 Registration Statements under The
Securities Act of 1933, prepared in connection with the issuance of up to
$165,000,000 of securities of PacifiCorp in the form of subordinated debt and/or
guarantees with respect to preferred securities of one or more of its
subsidiaries, and any and all amendments (including post-effective amendments)
thereto, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys and agents, and each of them, full power and authority to do any
and all acts and things necessary or advisable to be done, as fully and to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that said attorneys and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Dated: February 11, 1997.
DON M. WHEELER
--------------------------------------
Don M. Wheeler
<PAGE>
EXHIBIT (24)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints Frederick W. Buckman and Richard T. O'Brien, the undersigned's true and
lawful attorneys and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign the Form S-3 Registration Statements under The
Securities Act of 1933, prepared in connection with the issuance of up to
$165,000,000 of securities of PacifiCorp in the form of subordinated debt and/or
guarantees with respect to preferred securities of one or more of its
subsidiaries, and any and all amendments (including post-effective amendments)
thereto, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys and agents, and each of them, full power and authority to do any
and all acts and things necessary or advisable to be done, as fully and to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that said attorneys and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Dated: February 20, 1997.
NANCY WILGENBUSCH
--------------------------------------
Nancy Wilgenbusch
<PAGE>
EXHIBIT (24)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints Frederick W. Buckman and Richard T. O'Brien, the undersigned's true and
lawful attorneys and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign the Form S-3 Registration Statements under The
Securities Act of 1933, prepared in connection with the issuance of up to
$165,000,000 of securities of PacifiCorp in the form of subordinated debt and/or
guarantees with respect to preferred securities of one or more of its
subsidiaries, and any and all amendments (including post-effective amendments)
thereto, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys and agents, and each of them, full power and authority to do any
and all acts and things necessary or advisable to be done, as fully and to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that said attorneys and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Dated: February 12, 1997.
PETER I. WOLD
--------------------------------------
Peter I. Wold
<PAGE>
EXHIBIT (24)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints Frederick W. Buckman and Richard T. O'Brien, the undersigned's true and
lawful attorneys and agents, with full power of substitution and resubstitution
for the undersigned and in the undersigned's name, place and stead, in any and
all capacities, to sign the Form S-3 Registration Statements under The
Securities Act of 1933, prepared in connection with the issuance of up to
$165,000,000 of securities of PacifiCorp in the form of subordinated debt and/or
guarantees with respect to preferred securities of one or more of its
subsidiaries, and any and all amendments (including post-effective amendments)
thereto, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys and agents, and each of them, full power and authority to do any
and all acts and things necessary or advisable to be done, as fully and to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that said attorneys and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Dated: February 12, 1997.
RICHART T. O'BRIEN
--------------------------------------
Richard T. O'Brien
EXHIBIT 25(A)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
- --------------------------------------------------------------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
- --------------------------------------------------------------------------------
PACIFICORP
(Exact name of obligor as specified in its charter)
Oregon 93-0246090
(State or other jurisdiction of (I.R.S. employer
incorporation or organization)
identification no.)
700 NE Multnomah
Suite 1600
Portland, Oregon 97232
(Address of principal executive offices) (Zip code)
----------------------
Junior Subordinated Deferrable Interest Debentures
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24
of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33- 21672 and Exhibit
1 to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 5th day of March, 1997.
THE BANK OF NEW YORK
By: /s/ MARY LAGUMINA
-------------------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
<PAGE>
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ....................... $ 4,404,522
Interest-bearing balances ............... 732,833
Securities:
Held-to-maturity securities ............. 789,964
Available-for-sale securities ........... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold ........................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................................28,728,602
LESS: Allowance for loan and
lease losses .......................... 584,525
LESS: Allocated transfer risk
reserve................................ 429
Loans and leases, net of unearned
income, allowance, and reserve 28,143,648
Assets held in trading accounts ........... 1,004,242
Premises and fixed assets (including
capitalized leases) ..................... 605,668
Other real estate owned ................... 41,238
Investments in unconsolidated
subsidiaries and associated
companies ............................... 205,031
Customers' liability to this bank on
acceptances outstanding ................. 949,154
Intangible assets ......................... 490,524
Other assets .............................. 1,305,839
-----------
Total assets .............................. $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices ..................... $20,441,318
Noninterest-bearing ..................... 8,158,472
Interest-bearing ........................12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ........ 11,710,903
Noninterest-bearing ..................... 46,182
Interest-bearing .......................11,664,721
<PAGE>
Exhibit 7
Federal funds purchased in
domestic offices of the
bank:
Federal funds purchased ................. 1,565,288
Demand notes issued to the U.S.
Treasury ................................ 293,186
Trading liabilities ....................... 826,856
Other borrowed money:
With original maturity of one year
or less ............................... 2,103,443
With original maturity of more than
one year .............................. 20,766
Bank's liability on acceptances exe-
cuted and outstanding ................... 951,116
Subordinated notes and debentures ......... 1,020,400
Other liabilities ......................... 1,522,884
-----------
Total liabilities ......................... 40,456,160
-----------
EQUITY CAPITAL
Common stock .............................. 942,284
Surplus ................................... 525,666
Undivided profits and capital
reserves ................................ 2,129,376
Net unrealized holding gains
(losses) on available-for-sale
securities .............................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments ........................ ( 8,403)
-----------
Total equity capital ...................... 3,586,850
-----------
Total liabilities and equity
capital ................................. $44,043,010
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
EXHIBIT 25(B)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
- --------------------------------------------------------------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
PACIFICORP
(Exact name of obligor as specified in its charter)
Oregon 93-0246090
(State or other jurisdiction of (I.R.S. employer
incorporation or organization)
identification no.)
700 NE Multnomah
Suite 1600
Portland, Oregon 97232
(Address of principal executive offices) (Zip code)
----------------------
Guarantee of Preferred Securities of
PacifiCorp Capital II
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24
of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33- 21672 and Exhibit
1 to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 5th day of March, 1997.
THE BANK OF NEW YORK
By: /s/ MARY LAGUMINA
-------------------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
<PAGE>
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ....................... $ 4,404,522
Interest-bearing balances ............... 732,833
Securities:
Held-to-maturity securities ............. 789,964
Available-for-sale securities ........... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold ........................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................................28,728,602
LESS: Allowance for loan and
lease losses .......................... 584,525
LESS: Allocated transfer risk
reserve................................ 429
Loans and leases, net of unearned
income, allowance, and reserve 28,143,648
Assets held in trading accounts ........... 1,004,242
Premises and fixed assets (including
capitalized leases) ..................... 605,668
Other real estate owned ................... 41,238
Investments in unconsolidated
subsidiaries and associated
companies ............................... 205,031
Customers' liability to this bank on
acceptances outstanding ................. 949,154
Intangible assets ......................... 490,524
Other assets .............................. 1,305,839
-----------
Total assets .............................. $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices ..................... $20,441,318
Noninterest-bearing ..................... 8,158,472
Interest-bearing ........................12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ........ 11,710,903
Noninterest-bearing ..................... 46,182
Interest-bearing .......................11,664,721
<PAGE>
Exhibit 7
Federal funds purchased in
domestic offices of the
bank:
Federal funds purchased ................. 1,565,288
Demand notes issued to the U.S.
Treasury ................................ 293,186
Trading liabilities ....................... 826,856
Other borrowed money:
With original maturity of one year
or less ............................... 2,103,443
With original maturity of more than
one year .............................. 20,766
Bank's liability on acceptances exe-
cuted and outstanding ................... 951,116
Subordinated notes and debentures ......... 1,020,400
Other liabilities ......................... 1,522,884
-----------
Total liabilities ......................... 40,456,160
-----------
EQUITY CAPITAL
Common stock .............................. 942,284
Surplus ................................... 525,666
Undivided profits and capital
reserves ................................ 2,129,376
Net unrealized holding gains
(losses) on available-for-sale
securities .............................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments ........................ ( 8,403)
-----------
Total equity capital ...................... 3,586,850
-----------
Total liabilities and equity
capital ................................. $44,043,010
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
EXHIBIT 25(C)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
- --------------------------------------------------------------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
PACIFICORP CAPITAL II
(Exact name of obligor as specified in its charter)
Delaware To be Applied For
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
PacifiCorp
700 NE Multnomah, Suite 1600
Portland, Oregon 97232
(Address of principal executive offices) (Zip code)
----------------------
Preferred Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33- 21672 and Exhibit
1 to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 5th day of March, 1997.
THE BANK OF NEW YORK
By: /s/ MARY LAGUMINA
-------------------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
<PAGE>
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ....................... $ 4,404,522
Interest-bearing balances ............... 732,833
Securities:
Held-to-maturity securities ............. 789,964
Available-for-sale securities ........... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold ........................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................................28,728,602
LESS: Allowance for loan and
lease losses .......................... 584,525
LESS: Allocated transfer risk
reserve................................ 429
Loans and leases, net of unearned
income, allowance, and reserve 28,143,648
Assets held in trading accounts ........... 1,004,242
Premises and fixed assets (including
capitalized leases) ..................... 605,668
Other real estate owned ................... 41,238
Investments in unconsolidated
subsidiaries and associated
companies ............................... 205,031
Customers' liability to this bank on
acceptances outstanding ................. 949,154
Intangible assets ......................... 490,524
Other assets .............................. 1,305,839
-----------
Total assets .............................. $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices ..................... $20,441,318
Noninterest-bearing ..................... 8,158,472
Interest-bearing ........................12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ........ 11,710,903
Noninterest-bearing ..................... 46,182
Interest-bearing .......................11,664,721
Federal funds purchased in
domestic offices of the
bank:
Federal funds purchased ................. 1,565,288
Demand notes issued to the U.S.
Treasury ................................ 293,186
Trading liabilities ....................... 826,856
<PAGE>
Exhibit 7
Other borrowed money:
With original maturity of one year
or less ............................... 2,103,443
With original maturity of more than
one year .............................. 20,766
Bank's liability on acceptances exe-
cuted and outstanding ................... 951,116
Subordinated notes and debentures ......... 1,020,400
Other liabilities ......................... 1,522,884
-----------
Total liabilities ......................... 40,456,160
-----------
EQUITY CAPITAL
Common stock .............................. 942,284
Surplus ................................... 525,666
Undivided profits and capital
reserves ................................ 2,129,376
Net unrealized holding gains
(losses) on available-for-sale
securities .............................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments ........................ ( 8,403)
-----------
Total equity capital ...................... 3,586,850
-----------
Total liabilities and equity
capital ................................. $44,043,010
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
