Rule 424(b)(3)
File No. 33-49669
PROSPECTUS SUPPLEMENT
(To Prospectus Dated June 25, 1993)
$450,000,000
PENNSYLVANIA ELECTRIC COMPANY
Secured Medium-Term Notes, Series D
(A Series of First Mortgage Bonds)
Due From One Year to 35 Years From Date of Issue
Pennsylvania Electric Company (the "Company") may from time to
time offer its Secured Medium-Term Notes, Series D (the "Notes")
in an aggregate principal amount of up to $450,000,000. The
Notes will be offered at varying maturities from one year to 35
years from their dates of issuance, may be subject to redemption
at the option of the Company and will, under certain limited
circumstances, be redeemable at par. Each Note will bear
interest at a fixed rate as set forth in a pricing supplement
(the "Pricing Supplement") to this Prospectus Supplement
applicable to such Note. See "Description of Secured Medium-Term
Notes, Series D."
The issue price, interest rate, maturity date, and optional
redemption provisions, if any, for each Note will be established
at the time of issuance of such Note and will be set forth
therein and in the Pricing Supplement.
Each Note will be represented by a global security registered in
the name of a nominee of The Depository Trust Company, as
Depositary, or another depositary (a "Book-Entry Note").
Interests in Book-Entry Notes will be shown on, and transfers
thereof will be effected only through, records maintained by the
Depositary and its participants. See "Description of Secured
Medium-Term Notes, Series D."
The authorized denominations of Notes will be $100,000 or any
larger amount that is an integral multiple of $1,000.
Interest on each Note will accrue from its date of issuance and
will be payable semiannually on each January 1 and July 1 and at
maturity or upon earlier redemption.
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, ANY PRICING SUPPLEMENT HERETO OR
THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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Price to Agents' Proceeds to the
Public(1) Commission(2) Company (2)(3)
Per Note 100.000% .150%-.750% 99.85%-99.25%
Total . . $450,000,000 $675,000-%3,375,000 $449,325,000 -
$446,625,000
(1) The Notes will be sold at 100% of their principal amount
except as may be provided in a Pricing Supplement hereto.
(2) The Company will pay a commission to Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon
Brothers Inc or Smith Barney, Harris Upham & Co.
Incorporated, each as an Agent (collectively, the "Agents"),
in the form of a discount, ranging from .150% to .750%,
depending upon the maturity of the Note, of the principal
amount of any Note sold through such Agent. The Company may
also sell the Notes to any Agent for its own account or for
resale to one or more investors or other purchasers at
varying prices relating to prevailing market prices at the
time of resale, as determined by such Agent. Unless
otherwise specified in the applicable Pricing Supplement,
any Note sold to an Agent as principal will be purchased by
such Agent at a price equal to 100% of the principal amount
thereof, less a percentage equal to the commission
applicable to an agency sale of a Note of identical maturity
(which will be the commission set forth above in
circumstances in which no other discount is agreed to), and
may be resold by such Agent. In connection with the
purchase of Notes by any Agent as underwriter, such Agent
may use a selling group and may reallow a portion of the
discount or commission payable to such Agent to other
dealers or purchasers. See "Plan of Distribution of Notes."
(3) Before deducting other expenses payable by the Company
estimated to be $890,000, including reimbursement of certain
of the Agents' expenses. The Company has agreed to
indemnify each Agent against certain civil liabilities,
including liabilities under the Securities Act of 1933, as
amended, or to contribute to payments the Agents may be
required to make in respect thereof.
The Notes are being offered on a continual basis by the Company
through the Agents, each of which has agreed to use its
reasonable best efforts to solicit purchases of the Notes. In
addition, the Notes may be sold to any Agent, as principal, for
resale to investors or dealers. The Notes will not be listed on
any securities exchange, and there can be no assurance that the
Notes offered by this Prospectus Supplement will be sold or that
there will be a secondary market for any of the Notes. The
Company reserves the right to withdraw, cancel or modify the
offer made hereby without notice. The Company or the Agent who
solicits any offer may reject such offer in whole or in part.
See "Plan of Distribution of Notes."
Merrill Lynch & Co.
Salomon Brothers Inc
Smith Barney, Harris Upham & Co.
Incorporated
The date of this Prospectus Supplement is September 22, 1995.
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DESCRIPTION OF SECURED MEDIUM-TERM NOTES, SERIES D
The information herein concerning the Notes should be read
in conjunction with the statements under "Description of
Securities -Description of Debt Securities" in the accompanying
Prospectus. The Notes will be a series of Bonds as defined in
the Prospectus. The following description will apply to the
Notes unless otherwise specified in the applicable Pricing
Supplement.
General
The Notes are to be issued as a series of Bonds under the
Company's Mortgage and Deed of Trust, dated as of January 1,
1942, as amended and supplemented ("Mortgage"), with Bankers
Trust Company, as trustee ("Trustee"). The Notes will be equally
and ratably secured with all other Bonds issued or to be issued
under the Mortgage. For further information concerning the
security for the Notes, see "Description of Securities -
Description of Debt Securities" in the accompanying Prospectus.
The Notes are limited to an aggregate principal amount of
$450,000,000.
Each Note will be issued as a Book-Entry Note and not in
certificated form.
The Notes will be offered on a continual basis and will
mature on any Business Day (as defined below) from one year to 35
years from the date of issue, as selected by the purchaser and
agreed to by the Company. Prior to maturity, the Notes may be
subject to optional redemption by the Company at the price or
prices set forth in the applicable Pricing Supplement and will,
under certain limited circumstances provided in the Mortgage, be
subject to redemption at par. Each Note will bear interest at a
fixed rate specified in the applicable Pricing Supplement.
The authorized denominations of the Notes will be $100,000
or any larger amount that is an integral multiple of $1,000.
"Business Day" means any day, other than a Saturday or
Sunday, that is not a day on which banking institutions are
authorized or required by law or regulation to be closed in The
City of New York.
The Pricing Supplement relating to each Note will describe
the following terms: (1) the price (expressed as a percentage of
the aggregate principal amount thereof) at which such Note will
be issued (the "Issue Price"); (2) the date on which such Note
will be issued (the "Original Issue Date"); (3) the date on which
such Note will mature (the "Maturity Date"); (4) the rate per
annum at which such Note will bear interest; (5) provisions, if
any, relating to the optional redemption of such Note prior to
the Maturity Date; and (6) any other terms of such Note not
inconsistent with the provisions of the Mortgage.
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Issuance of Additional Bonds
The Notes will be issued against property additions and/or
previously retired Bonds. At March 31, 1993, the Company had
available property additions sufficient to permit it to issue a
maximum of approximately $272 million aggregate principal amount
of additional Bonds under the Mortgage. At such date, the
Company did not have available any retired Bonds against which it
could issue additional Bonds under the Mortgage. See
"Description of Securities - Description of Debt Securities -
Issuance of Additional Bonds" in the Prospectus.
Payment of Principal and Interest
Until the Notes are paid or payment thereof is provided for,
the Company will, at all times, maintain a paying agent (the
"Paying Agent") in The City of New York capable of performing the
duties described herein to be performed by the Paying Agent. The
Company has initially appointed Bankers Trust Company, Four
Albany Street, New York, New York 10006, as Paying Agent. The
Company will notify the holders of the Notes in accordance with
the Mortgage of any change in the Paying Agent or its address.
Any payment required to be made in respect of a Note on a
date that is not a Business Day for such Note need not be made on
such date, but may be made on the next succeeding Business Day
with the same force and effect as if made on such date, and no
additional interest shall accrue as a result of such delayed
payment.
Each Note will bear interest from its Original Issue Date at
the rate per annum stated on the face thereof until the principal
amount thereof is paid or made available for payment. Interest
on each Note will be payable semiannually each January 1 and July
1 (each an "Interest Payment Date") and at maturity or upon
earlier redemption; provided, however, that the first payment of
interest on any Note with an Original Issue Date between a Record
Date (as defined below) and an Interest Payment Date will be made
on the succeeding Interest Payment Date to the registered holder.
Each payment of interest in respect of an Interest Payment Date
will include interest accrued to but excluding such Interest
Payment Date. Interest will be computed on the basis of a 360-
day year of twelve 30-day months.
Interest payable on any Interest Payment Date will be paid
to the person in whose name a Note is registered at the close of
business on the Record Date next preceding such Interest Payment
Date; provided, however, that interest payable at maturity or
upon earlier redemption will be payable to the person to whom
principal shall be payable. The "Record Date" with respect to
any Interest Payment Date will be the fifteenth day of the
calendar month next preceding such Interest Payment Date (or if
such fifteenth day is not a Business Day, the next preceding
Business Day).
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Redemption and Repurchase
The Pricing Supplement relating to each Note will indicate
whether and under what circumstances such Note will be subject to
optional redemption by the Company prior to maturity and the
redemption prices applicable thereto. Notes having a Maturity
Date of 15 years or more from their Original Issue Date will be
redeemable at the option of the Company commencing not later than
15 years after the Original Issue Date at par or at various
premiums above par.
The Notes will not be subject to a sinking fund.
The Notes may be redeemed at par, in whole or from time to
time in part, as provided in the Mortgage, out of cash received
by the Trustee in respect of prior lien bonds or deposited with
the Trustee pursuant to the improvement or maintenance funds or
as the result of the release, sale or other disposition of
property or representing the proceeds of insurance or the taking
by eminent domain provided that on any such redemption the
portion of such cash applied to the redemption of Notes at the
applicable redemption price does not exceed the fraction of such
cash which is equal to the ratio of (i) the aggregate principal
amount of then outstanding Notes to (ii) the aggregate principal
amount of then outstanding Bonds of all series. See "Description
of Securities - Description of Debt Securities - Improvement
Fund, Maintenance Fund" in the Prospectus.
The Company will provide not less than 30 and not more than
90 days' notice of redemption to each registered holder of Notes
being redeemed. At the Company's election, any notice of
redemption may provide that it is subject to the deposit of the
required redemption funds with the Trustee before the date fixed
for such redemption and will be of no effect if such deposit is
not made.
The Company may at any time purchase Notes at any price in
the open market or otherwise. Notes so purchased by the Company
will be surrendered to the Trustee for cancellation.
Book-Entry Notes
The Notes will be issued in whole or in part in the form of
one or more Global Securities (each a "Global Security") that
will be deposited with, or on behalf of, The Depository Trust
Company, New York, New York ("DTC") or such other depositary as
is specified in the Pricing Supplement (the "Depositary"), and
registered in the name of a nominee of the Depositary ("Book-
Entry Notes").
Upon issuance, all Book-Entry Notes having the same Original
Issue Date, Maturity Date, redemption provisions and interest
rate will be represented by one or more Global Securities.
Except under the circumstances described below, Book-Entry Notes
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will not be exchangeable for notes in certificated form and will
not otherwise be issuable in certificated form.
If the Depositary is at any time unwilling or unable to
continue as depositary and a successor depositary is not
appointed, the Company will issue notes in certificated form
("Certificated Notes") in exchange for the Global Security or
Global Securities representing the corresponding Book-Entry
Notes. In addition, the Company may at any time and in its sole
discretion determine not to have any Book-Entry Notes represented
by one or more Global Securities and, in such event, will issue
individual Certificated Notes in exchange for the Global Security
or Global Securities representing the corresponding Book-Entry
Notes. In any such instance, an owner of a Book-Entry Note
represented by a Global Security will be entitled to physical
delivery of individual Certificated Notes equal in principal
amount to such Book-Entry Notes and to have such Certificated
Notes registered in its name. Individual Certificated Notes will
be issued as registered Notes in denominations of $100,000 or any
higher integral multiple of $1,000.
The following is based on information furnished by DTC:
. . 1. DTC will act as securities depositary for the
Global Securities. The Global Securities will be issued as
fully-registered securities in the name of Cede & Co. (DTC's
partnership nominee). One or more fully-registered Global
Securities will be issued for Book-Entry Notes having the
same Original Issue Date and other terms, in the aggregate
principal amount thereof, and will be deposited with or on
behalf of DTC.
. . 2. DTC is a limited-purpose trust company organized
under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of
the Federal Reserve System, a "clearing corporation" within
the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of
Section 17A of the Securities Exchange Act of 1934. DTC
holds securities that its participants ("Participants")
deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts,
thereby eliminating the need for physical movement of
securities certificates. Direct Participants include
securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC
is owned by a number of its Direct Participants and by the
New York Stock Exchange, Inc., the American Stock Exchange,
Inc., and the National Association of Securities Dealers,
Inc. Access to the DTC system is also available to others
such as securities brokers and dealers, banks, and trust
companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or
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indirectly ("Indirect Participants"). The rules applicable
to DTC and its Participants are on file with the Securities
and Exchange Commission.
. . 3. Purchases of Book-Entry Notes under the DTC system
must be made by or through Direct Participants, which will
receive a credit for the Book-Entry Notes on DTC's records.
The ownership interest of each actual purchaser of each
Book-Entry Note ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from
DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the
transaction, as well as periodic statements of their
holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Book-Entry Notes are
to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing
their ownership interests in Book-Entry Notes, except in the
event that use of the book-entry system for the Book-Entry
Notes is discontinued.
. . 4. To facilitate subsequent transfers, all Book-Entry
Notes deposited by Participants with DTC are registered in
the name of DTC's partnership nominee, Cede & Co. The
deposit of Book-Entry Notes with DTC and their registration
in the name of Cede & Co. effect no change in beneficial
ownership. DTC has no knowledge of the actual Beneficial
Owners of the Book-Entry Notes; DTC's records reflect only
the identity of the Direct Participants to whose accounts
such Book-Entry Notes are credited which may or may not be
the Beneficial Owners. The Participants will remain
responsible for keeping account of their holdings on behalf
of their customers.
. . 5. Conveyance of notices and other communications by
DTC to Direct Participants, by Direct Participants to
Indirect Participants, and by Direct Participants and
Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to
time.
. . 6. Redemption notices shall be sent to Cede & Co. If
less than all of the Book-Entry Notes having the same
Original Issue Date and other terms are being redeemed,
DTC's practice is to determine by lot the amount of the
interest of each Direct Participant to be so redeemed.
. . 7. Neither DTC nor Cede & Co. will consent or vote
with respect to the Book-Entry Notes. Under its usual
procedures, DTC mails an Omnibus Proxy to the Company as
soon as possible after the record date. The Omnibus Proxy
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assigns Cede & Co.'s consenting or voting rights to those
Direct Participants to whose accounts the Book-Entry Notes
are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
. . 8. Principal and interest payments on the Book-Entry
Notes will be made to DTC. DTC's practice is to credit
Direct Participants' accounts on the date on which interest
is payable in accordance with the respective holdings shown
on DTC's records unless DTC has reason to believe that it
will not receive payment on such date. Payments by
Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the
case with securities held for the accounts of customers in
bearer form or registered in "street name", and will be the
responsibility of such Participant and not of DTC, the
Agents or the Company, subject to any statutory or
regulatory requirements as may be in effect from time to
time. Payment of principal and interest to DTC is the
responsibility of the Company and the Paying Agent.
Disbursement of such payments to Direct Participants shall
be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners shall be the
responsibility of Direct and Indirect Participants.
. . 9. DTC may discontinue providing its services as
securities depositary with respect to the Book-Entry Notes
at any time by giving reasonable notice to the Company and
the Trustee. Under such circumstances, in the event that a
successor securities depositary is not obtained,
Certificated Notes are required to be printed and delivered.
. . 10. The Company may decide to discontinue use of the
system and book-entry transfers through DTC (or a successor
securities depositary). In that event, Certificated Notes
will be printed and delivered.
The information in this section concerning DTC and DTC's
book-entry system has been obtained from sources (including DTC)
that the Company believes to be reliable, but the Company takes
no responsibility for the accuracy thereof.
None of the Company, the Trustee, the Agents or any agent
for payment on or registration of transfer or exchange of any
Global Security will have any responsibility or liability for any
aspect of the records relating to or payments made on account of
beneficial interests in such Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial
interests.
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PLAN OF DISTRIBUTION OF NOTES
The Notes are being offered on a continual basis by the
Company through Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Salomon Brothers Inc and Smith
Barney, Harris Upham & Co. Incorporated (the "Agents"), each of
which has agreed to use its reasonable best efforts to solicit
purchases of the Notes. The Notes will be issued at 100% of the
principal amount thereof unless otherwise specified in the
applicable Pricing Supplement. The Company will pay each Agent a
commission of .150% to .750% of the principal amount of the
Notes, depending on their maturity, sold through such Agent. The
Company may also sell Notes to an Agent acting as principal or to
a group of underwriters named in the applicable Pricing
Supplement for whom such Agent will act as representative, unless
otherwise specified in the applicable Pricing Supplement, at a
discount equal to the commission applicable to an agency sale of
a Note of identical maturity. Such Notes may be resold by each
Agent or such underwriters for resale to one or more investors or
other purchasers at varying prices related to prevailing market
prices at the time of such resale, as determined by such Agent.
Such Notes may also be resold by an Agent or such underwriters to
certain securities dealers at the public offering price set forth
in the applicable Pricing Supplement less the applicable
concession, expressed as a percentage of the principal amount of
the Notes. Unless otherwise specified in the applicable Pricing
Supplement, such concession allowed to any dealer will not be in
excess of 66 % of the discount to be received by the Agent from
the Company. In connection with the purchase of Notes by any
Agent as underwriter, such Agent may use a selling group and may
reallow any portion of the discount or commission payable to such
Agent to other dealers or purchasers. The offering price and
other selling terms for such resales may from time to time be
varied by such Agent. The Company also has agreed to reimburse
the Agents for certain expenses.
The Company will have the sole right to accept offers to
purchase Notes in whole or in part. Each Agent will have the
right, in its discretion reasonably exercised, to reject any
offer to purchase Notes received by it in whole or in part. The
Company reserves the right to withdraw, cancel or modify the
offer made hereby without notice.
The Notes will not have an established trading market when
issued. The Notes will not be listed on any securities exchange.
Each Agent may make a market in the Notes, but such Agent is not
obligated to do so and may discontinue any market-making at any
time without notice. There can be no assurance of a secondary
market for any Notes, or that the Notes will be sold.
The Agents and affiliates thereof engage in transactions
with and perform services for the Company and its affiliates in
the ordinary course of business.
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The Company has agreed to indemnify each Agent against
certain civil liabilities, including liabilities under the
Securities Act of 1933, as amended (the "Act"), or to contribute
to payments such Agent may be required to make in respect
thereof. Each Agent may be deemed to be an "underwriter" within
the meaning of the Act with respect to Notes sold through it.
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PROSPECTUS
Pennsylvania Electric Company
$450,000,000
First Mortgage Bonds
Secured Medium-Term Notes, Series D
(A Series of First Mortgage Bonds)
Cumulative Preferred Stock
Pennsylvania Electric Company (the "Company") intends to
offer from time to time (i) in one or more series, additional
first mortgage bonds ("New Bonds"), (ii) Secured Medium-Term
Notes, Series D as an additional series of first mortgage bonds
having maturities ranging from one year to 35 years from the date
of issuance ("Notes"; the New Bonds and the Notes are
collectively referred to herein as "Debt Securities"), and (iii)
additional shares of Cumulative Preferred Stock ("New Preferred
Stock"; the Debt Securities and New Preferred Stock are
collectively referred to herein as "Securities"). The aggregate
principal amount and stated value of all Securities to be offered
hereunder will not exceed $450,000,000.
The principal amount, interest rate, interest payment dates,
purchase price, maturity date, redemption terms and sinking fund
provisions, if any, and any of the specific provisions of each
series of New Bonds and of each issue of Notes, will be set forth
in one or more prospectus supplements (each, a "Prospectus
Supplement") to be filed with respect to each series of New Bonds
and each issuance and sale of Notes. The stated value, dividend
rate, redemption, sinking fund, if any, and other specific
provisions of each series of New Preferred Stock will also be set
forth in a Prospectus Supplement to be filed with respect to each
series of New Preferred Stock.
The terms upon which each series of New Bonds and New
Preferred Stock and each sale of Notes are offered, together with
the names of the underwriters of each series of New Bonds or New
Preferred Stock ("Underwriters") and agents for the Notes
("Agents") and the Underwriters' or Agents' commissions or
discounts, if applicable, and the securities exchanges, if any,
on which the New Bonds or New Preferred Stock will be listed,
will also be set forth in a Prospectus Supplement. See "Plan of
Distribution" regarding possible indemnification and contribution
arrangements for the Underwriters and Agents.
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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 New Bonds and New Preferred Stock will be offered by the
Underwriters named in a Prospectus Supplement. The net proceeds
from the sale of the New Bonds and New Preferred Stock, and any
applicable commissions or discounts, will be set forth in a
Prospectus Supplement.
The Notes may be offered on a continuing basis by the
Company through the Agents. The Notes may also be sold by the
Company to any Agent at negotiated discounts for its own account
or for resale to one or more investors or dealers. The Notes
will not be listed on any securities exchange. The Company or
the Agents may reject, in whole or in part, any offer to purchase
the Notes. See "Plan of Distribution".
The date of this Prospectus is June 25, 1993
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH
SUCH OFFER MAY NOT LAWFULLY BE MADE.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934 (the "1934 Act") and in
accordance therewith files reports and other information with the
Securities and Exchange Commission (the "Commission"). Such
reports and other information can be inspected and copied at the
public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 and at its regional
offices at 500 West Madison Street, Chicago, Illinois 60661 and
Seven World Trade Center, New York, New York 10048. Copies of
such material can also be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. Certain of the Company's
securities are listed on the Philadelphia Stock Exchange, Inc.,
where reports and other information concerning the Company may
also be inspected.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with
the Commission pursuant to the 1934 Act are incorporated herein
by reference:
The Company's Annual Report on Form 10-K for the year ended
December 31, 1992.
The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1993.
The Company's Current Reports on Form 8-K dated January 11,
1993, January 25, 1993, March 17, 1993, May 19, 1993, May
26, 1993 and June 23, 1993.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act prior to the
termination of the offering of the Securities shall be deemed to
be incorporated by reference herein and to be a part hereof from
the date of filing of such documents.
Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other
subsequently filed document which is deemed to be incorporated by
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reference herein or in a Prospectus Supplement modifies or
supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO
EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF
THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST OF
SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO
ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED BY REFERENCE IN THIS
PROSPECTUS, OTHER THAN EXHIBITS TO SUCH DOCUMENTS NOT
SPECIFICALLY INCORPORATED BY REFERENCE HEREIN. REQUESTS FOR SUCH
COPIES SHOULD BE DIRECTED TO PENNSYLVANIA ELECTRIC COMPANY, 1001
BROAD STREET, JOHNSTOWN, PENNSYLVANIA 15907, ATTENTION:
SECRETARY. THE COMPANY'S TELEPHONE NUMBER IS (814) 533-8111.
THE COMPANY
The Company, a public utility furnishing electric service
within the Commonwealth of Pennsylvania and a small portion of
New York State, is a subsidiary of General Public Utilities
Corporation ("GPU"), a holding company registered under the
Public Utility Holding Company Act of 1935 (the "Holding Company
Act"). The Company provides electric service within a territory
located in western, northern and south central Pennsylvania
having a population of about 1,500,000. The Company, as lessee
of the property of The Waverly Electric Light and Power Company,
a subsidiary, also serves a population of about 13,700 in
Waverly, New York. The Company's principal executive offices are
located at 1001 Broad Street, Johnstown, Pennsylvania 15907 and
its telephone number is (814) 533-8111.
For the year 1992, residential sales accounted for about 37%
of the Company's operating revenues from customers and 29% of
kilowatt-hour sales to customers; commercial sales accounted for
about 31% of operating revenues from customers and 29% of
kilowatt-hour sales to customers; industrial sales accounted for
about 29% of operating revenues from customers and 37% of
kilowatt-hour sales to customers; and sales to rural electric
cooperatives, municipalities (primarily for street and highway
lighting) and others accounted for about 3% of total operating
revenues from customers and 5% of kilowatt-hour sales to
customers. The revenues derived from the 25 largest customers in
the aggregate accounted for approximately 14% of operating
revenues from customers for the year 1992.
The electric generating and transmission facilities of the
Company and its affiliates, Metropolitan Edison Company and
Jersey Central Power & Light Company, are physically
interconnected and are operated as a single integrated and
coordinated system. The transmission facilities of the
integrated system are physically interconnected with neighboring
nonaffiliated utilities in Pennsylvania, New Jersey, Maryland,
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New York and Ohio. The Company is a member of the Pennsylvania-
New Jersey-Maryland Interconnection ("PJM") and the Mid-Atlantic
Area Council, an organization providing coordinated review of the
planning by utilities in the PJM area. The interconnection
facilities are used for substantial capacity and energy
interchange and purchased power transactions as well as emergency
assistance.
The Company owns 25% undivided interests in Unit No. 1 and
the inactive Unit No. 2 of the Three Mile Island nuclear
generating station near Middletown, Pennsylvania. The Company's
nuclear generating facilities are operated by GPU Nuclear
Corporation, a subsidiary of GPU.
FINANCING PROGRAM
Depending upon market conditions, the Company expects to
offer through June 30, 1995 all or a portion of the Securities up
to a maximum aggregate principal amount and stated value of
$450,000,000. The Company also expects to have short-term
borrowings outstanding from time to time during such period.
CERTAIN FINANCIAL INFORMATION(1)
(Dollars in Thousands)
Twelve
Months Ended
March 31,
Years Ended December 31, 1993
(unaudited)
1990 1991 1992
Income Summary:
Operating Revenues $817,923 $865,552 $896,337 $889,701
Net Income $108,712 $106,595 $99,744 $103,124
Ratio of Earnings to
Fixed Charges (2) 3.92 3.47 4.21 4.31
Ratio of Earnings
to Combined Fixed
Charges and Preferred
Stock Dividends (2) 3.17 2.97 3.56 3.65
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March 31, 1993
(unaudited)
Amount %
Capital Structure:
Long-term debt (including unamortized
net discount)(3) $612,646 45.0%
Preferred stock (including premium) 86,923 6.4
Common equity 661,576 48.6
Total $1,361,145 100.0%
___________________________
(1) This information should be read in conjunction with the Company's Annual
Report on Form 10-K for the year ended December 31, 1992.
(2) See "Coverage Ratios".
(3) Includes obligations due within one year.
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COVERAGE RATIOS
The Company's Ratio of Earnings to Fixed Charges for each of
the periods indicated was as follows:
Twelve Months Ended
March 31, 1993
Years Ended December 31, (unaudited)
1988 1989 1990 1991 1992
4.08 4.03 3.92 3.47 4.21 4.31
The Ratio of Earnings to Fixed Charges represents, on a pre-
tax basis, the number of times earnings cover fixed charges.
Earnings consist of Income Before Cumulative Effect of Accounting
Change, to which has been added fixed charges and taxes based on
income. Fixed charges consist of interest on funded
indebtedness, other interest, amortization of net discount on
debt and the interest portion of all rentals charged to income.
The Company's Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends for each of the periods indicated
was as follows:
Twelve Months Ended
March 31, 1993
Years Ended December 31, (unaudited)
1988 1989 1990 1991 1992
3.20 3.21 3.17 2.97 3.56 3.65
The Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends represents, on a pre-tax basis, the
number of times earnings cover fixed charges and preferred stock
dividends. Earnings consist of Income Before Cumulative Effect
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of Accounting Change, to which has been added fixed charges and
taxes based on income of the Company. Combined fixed charges and
preferred stock dividends consist of interest on funded
indebtedness, other interest, amortization of net discount on
debt, preferred stock dividends (increased to reflect the pre-tax
earnings required to cover such dividend requirements) and the
interest portion of all rentals charged to income.
USE OF PROCEEDS
The net proceeds of any offering of Securities pursuant to
this Prospectus will be used by the Company to repay outstanding
indebtedness, to redeem other outstanding senior securities of
the Company in accordance with the optional redemption provisions
thereof, for construction purposes, for other corporate purposes
or to reimburse the Company's treasury for funds previously
expended therefrom for such purposes.
DESCRIPTION OF SECURITIES
Description of Debt Securities
General
The Debt Securities will be issued under and secured by the
Indenture between the Company and Bankers Trust Company, Trustee,
dated as of January 1, 1942 (the "Original Indenture"), and
indentures supplemental thereto, including the supplemental
indenture or indentures creating the Debt Securities (herein
collectively referred to as the "Mortgage"). All of the first
mortgage bonds issued and outstanding under the Mortgage,
including the Debt Securities, are hereinafter referred to as the
"Bonds". The statements herein concerning the Bonds, the Debt
Securities and the Mortgage are brief summaries, make use of
terms defined in, and are qualified in their entirety by
reference to, the Mortgage.
The Debt Securities will be issuable only in registered
form, without coupons, in denominations of $1,000 for New Bonds
and $100,000 for Notes and in denominations exceeding such amount
in integral multiples of $1,000 thereof, and will be exchangeable
for other Debt Securities of the same series with the same
interest rate, maturity and other terms, in equal aggregate
principal amounts. No service charge will be made to holders of
Debt Securities for any transfer or exchange of Debt Securities,
but the Company may require payment of a sum sufficient to cover
any tax or governmental charge incident to the transfer or
exchange. Transfers and exchanges of Debt Securities may be made
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at the Corporate Trust Office of Bankers Trust Company, New York,
New York.
The maturity dates, interest rates, interest payment dates,
redemption provisions, if any, and the other terms and provisions
of each series of New Bonds and each issuance of Notes will be
set forth in a Prospectus Supplement.
Kind and Priority of Lien
All Bonds heretofore or hereafter issued and outstanding
under the Mortgage, including the Debt Securities, are, or when
duly issued will be, equally secured by the lien of the Mortgage,
which is a direct first lien on substantially all of the
Company's property and franchises (except cash, securities,
judgments, contracts, accounts and choses in action not
specifically subjected to its lien, certain personal property,
including merchandise, materials or supplies held or acquired for
sale or consumption, and automobiles and trucks), subject only to
(1) the Trustee's prior lien for its compensation and
reimbursement and (2) excepted encumbrances specified in the
Mortgage. The Mortgage contains provisions for subjecting to its
lien, subject to existing liens, property and franchises (except
such as are excluded as above-mentioned from the lien of the
Mortgage) which may be hereafter acquired by the Company, and
contains certain restrictions upon the acquisition of property
with respect to which certain prior lien bonds are outstanding.
No prior lien bonds are at present outstanding.
Release and Substitution of Property
The Company, without notice to or action by the Trustee,
may, with limitation, change or substitute contracts, leases and
rights-of-way, surrender or assent to the modification of any
right, license, franchise or permit, or dispose of property of a
limited nature; and may obtain a release of certain mortgaged
property from the lien of the Mortgage upon depositing not less
than the fair value thereof or, in certain cases, the
consideration received therefor, with the Trustee or a prior lien
holder. Such deposited cash may (1) be withdrawn against an
equal amount of bondable value of property additions, or equal
principal amounts of refundable prior lien bonds and Bonds
previously issued and theretofore or then retired; or (2) be used
for the purchase, payment or redemption of Bonds. If any such
deposited cash is not so withdrawn, used or applied within three
years after deposit with the Trustee, it shall be used or applied
by the Trustee to purchase, pay at maturity or redeem Bonds.
Dividend Restrictions
The Mortgage restricts cash dividends payable by the Company
on its common stock to the amount of the Company's accumulated
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earned surplus less $10,084,106. At March 31, 1993, $280,193,773
of the Company's retained earnings was available for payment of
common stock dividends.
Issuance of Additional Bonds
So long as the Company is not in default in the performance
of any covenant to be performed by it under the Mortgage and
obtains all requisite authority of governmental bodies, it may
issue additional Bonds to the extent of (1) 60% of bondable value
of property additions; (2) the principal amount of refundable
prior lien bonds deposited, retired or to be retired; (3) the
principal amount of Bonds then or theretofore retired; and (4)
the amount of cash deposited with the Trustee against the
issuance of Bonds. Bonds may be issued pursuant to (1) and (4),
and in certain cases pursuant to (2) and (3), above, only if net
earnings (calculated before income taxes but after deduction of
an amount equal to the greater of the actual book provision for
depreciation or the "minimum provision for depreciation") shall
be at least two times the annual interest requirements on Bonds
and prior lien bonds to be outstanding. Cash deposited against
the issuance of Bonds may be withdrawn by the Company in an
amount equal to the principal amount of Bonds which it would
otherwise be entitled to have authenticated and delivered; and
such cash may be applied to the purchase, payment at maturity or
redemption of Bonds.
The principal amount of additional Bonds issuable pursuant
to these provisions will be contained in a Prospectus Supplement.
Improvement Fund
The Company is required to deposit with the Trustee by
April 30 of each year cash equal to 1% of the aggregate principal
amount of Bonds issued prior to January 1 of such year (certain
Bonds excepted) less (1) 60% of the amount of bondable value of
property additions and/or (2) the principal amount of refundable
prior lien bonds and Bonds previously issued and theretofore or
then retired, which the Company then elects to take as a credit.
Cash so deposited may be (a) withdrawn within three years upon
the same basis as such a credit may be taken, or (b) used by the
Trustee for the purchase, payment at maturity or redemption of
Bonds. The Company has heretofore utilized bondable value of
property additions to satisfy this requirement and expects to
continue to do so in the future.
Maintenance Fund
The Company is required to make expenditures for property
additions and/or to deposit with the Trustee, cash (less, at the
option of the Company, credit for refundable prior lien bonds and
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<PAGE>
Bonds theretofore or then retired) in amounts equal to the
minimum provision for depreciation, computed cumulatively at the
end of each year. Cash so deposited with the Trustee may, during
the next succeeding three years, be withdrawn by the Company to
the extent that the amount theretofore expended for property
additions, as aforesaid, exceeds the minimum provision for
depreciation. The Company has, in the past, made sufficient
expenditures for property additions to meet its obligations with
respect to the minimum provision for depreciation, and no
deposits with the Trustee have been required in this connection.
The Company expects that this pattern will continue in the
future.
So long as any of the Bonds shall be outstanding, the term
"minimum provision for depreciation" with reference to any period
after 1948 means an amount equal to the greater of (1) 15% of
gross operating revenues during such period from the operation of
bondable property after deducting the aggregate cost of electric
energy purchased for resale during such period in connection with
the operation of such property, less an amount equal to charges
for current repairs and maintenance of such property, or (2) an
amount computed at the rate of 2.4% per annum of the depreciable
utility property of the Company as of January 1 of each year or
portion thereof embraced within such period.
Modification of Mortgage
With the consent of the holders of not less than 75% in
principal amount of the Bonds affected, the Company and the
Trustee are empowered to change the Mortgage in any way except
(a) to reduce the amount or extend the due dates of the principal
of or interest on the Bonds, or (b) to reduce the percentage of
bondholders required to effect changes in the Mortgage.
Defaults and Notice Thereof
Events of default include default in the payment of
principal and premium, if any, of any of the Bonds or any prior
lien bonds; default, for 60 days, in payment of interest on any
of the Bonds or beyond the period of grace on any prior lien
bonds; default, for 60 days after notice, in the performance of
any covenant in the Mortgage; and bankruptcy, insolvency or
reorganization (under certain circumstances) of the Company. The
Trustee may withhold notice to bondholders of default (except
default in payment of principal, premium, interest or sinking and
improvement fund installments) if its responsible officers think
it is in the interest of the bondholders to do so.
Concerning the Trustee
10
<PAGE>
The Trustee, Bankers Trust Company, is permitted to engage
in other transactions with the Company, except that if the
Trustee acquires any conflicting interest, as defined, it must
eliminate it or resign and is required in certain cases to share
with the bondholders the benefits of payments received within
four months prior to default. Bankers Trust Company is also a
depositary of the Company and certain of its affiliates and has
in the past made, and may in the future make, loans to the
Company and certain of its affiliates.
A majority in principal amount of the Bonds is necessary to
require the Trustee to take action to enforce the lien of the
Mortgage. The Trustee may require reasonable indemnification
before being required to enforce the lien of the Mortgage.
Holders of not less than 25% in principal amount of outstanding
Bonds or the Trustee may declare the principal and interest of
all outstanding Bonds due upon the occurrence of a completed
default, but the holders of a majority in principal amount of the
outstanding Bonds may, under certain circumstances, including the
curing of such default, annul any such declaration.
Satisfaction and Discharge of Mortgage
Upon the Company's making due provision for the payment of
all of the Bonds and paying all other sums due under the
Mortgage, the Mortgage shall cease to be of further effect and
may be satisfied and discharged of record. Holders of Bonds may
wish to consult with their own tax advisers regarding possible
tax effects in the event of a defeasance of the Mortgage.
Evidence as to Compliance with Mortgage Provisions
While the Mortgage does not require that evidence be
furnished at stated intervals to the Trustee as to the absence of
a default or as to compliance with each of the terms of the
Mortgage, the Company furnishes the Trustee annually with a
compliance certificate required by the Trust Indenture Act of
1939, as amended. The Mortgage does require that the Company
furnish a certificate to the Trustee that the Company is not in
default under the Mortgage only in connection with certain
applications under the Mortgage made to the Trustee, such as for
the authentication of additional Bonds, certain withdrawals of
cash and certain releases of property. In addition, the
improvement fund, maintenance fund and recording provisions of
the Mortgage require that the Company furnish an annual filing to
the Trustee that the Company is in compliance with these
provisions. The Mortgage also requires that each certificate or
opinion furnished under the Mortgage contain a statement as to
compliance with the condition or covenant of the Mortgage to
which the certificate or opinion relates.
11
<PAGE>
12
<PAGE>
Description of New Preferred Stock
General
The authorized preferred stock of the Company consists of
11,435,000 shares without par value having a maximum aggregate
stated value of $250,000,000 ("Preferred Stock"), of which
865,000 shares having an aggregate stated value of $86,923,000
were outstanding at December 31, 1992.
The Transfer Agent for the New Preferred Stock will be
Mellon Bank, N.A., Pittsburgh, Pennsylvania.
The stated value, dividend rate, redemption, sinking fund,
if any, and the other terms and provisions of each series of New
Preferred Stock will be set forth in a Prospectus Supplement.
The following statements are summaries of certain provisions
of the Company's Restated Articles of Incorporation ("Restated
Articles") which are incorporated herein by reference and the
following statements are qualified in their entirety by such
reference.
The New Preferred Stock, any additional shares of Preferred
Stock which may hereafter be issued, and the presently
outstanding Preferred Stock will be of equal rank. The
preferential claim of each share of Preferred Stock, in the event
of involuntary liquidation, dissolution or winding up of the
Company, will be equal to the stated value of such share together
with all accrued and unpaid dividends thereon. All shares of any
particular series will be identical except as to the date or
dates from which dividends thereon will be cumulative. Different
series may vary as to dividend rates, redemption provisions,
amounts payable upon voluntary or involuntary liquidation,
dissolution or winding up (which may be different depending upon
whether such action is voluntary or involuntary), sinking fund
provisions, conversion or other special rights and stated value
per share.
Dividend Rights
The holders of Preferred Stock of each series are entitled
to receive when and as declared by the Board of Directors out of
funds legally available for the payment of dividends, and in
preference to any dividends or distributions on the common stock,
dividends at the annual rate per share fixed for such series and
no more, payable quarterly on the first day of March, June,
September and December. Dividends on Preferred Stock are
cumulative.
No dividends may be declared on shares of any series of
Preferred Stock for any quarterly dividend period unless
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<PAGE>
dividends shall likewise be declared on all shares of all series
of Preferred Stock, ratably in proportion to the respective
annual dividend rates fixed therefor, to the extent that such
shares are entitled to receive dividends for such quarterly
dividend period.
Redemption Provisions
The New Preferred Stock will be redeemable at the option of
the Company in whole or in part at any time or from time to time,
at such dates and at such prices as are set forth in a Prospectus
Supplement.
If any dividends are in arrears on outstanding Preferred
Stock, the Company may not redeem less than all the outstanding
Preferred Stock and may not acquire for value any Preferred Stock
except in accordance with an offer (which may vary with respect
to shares of different series) made to all holders of Preferred
Stock. In case of redemption of only a part of any series of
Preferred Stock, the shares to be redeemed shall be selected by
lot. Upon the giving of due notice of redemption of any shares
of Preferred Stock and the deposit in trust of the amount
required to effect such redemption, such shares are no longer
deemed to be outstanding.
Voting Rights
Holders of Preferred Stock have no voting rights except as
required by the Pennsylvania Business Corporation Law, as
amended, which, in general, provides for class voting rights with
respect to charter amendments (other than amendments permitted to
be made by action of the Board of Directors without shareholder
approval) which would (i) authorize the Board of Directors to
determine the relative rights and preferences as between series
of any preferred or special class of stock; (ii) make any change
in the preferences, limitations, or special rights, other than
preemptive rights or the right to vote cumulatively (no such
preemptive rights or cumulative voting rights presently exist)
adverse to such holder; (iii) authorize a new class or series
having a preference as to dividends or assets which is senior to
the shares held by them; or (iv) increase the number of
authorized shares of any class or series having a preference as
to dividends or assets which is senior in any respect to the
shares held by them. The holders of Preferred Stock are also
entitled to vote as a class in the case of a proposed merger or
consolidation if the plan of merger or consolidation contains any
provisions which, if contained in a proposed charter amendment,
would entitle them to vote as a class.
In addition, the Company's Restated Articles contains the
following provisions with respect to voting rights:
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<PAGE>
(a) Upon default of four quarterly dividends on the
Preferred Stock, and until no dividends are in default,
holders of the Preferred Stock are entitled to elect a
majority of the directors of the Board of Directors.
(b) Without the consent of holders of two-thirds of
the total voting power of the outstanding Preferred Stock,
the Company may not: (i) authorize any new class of stock
ranking prior to or on a parity with the Preferred Stock or
any security convertible into shares of any such stock; or
(ii) change any of the terms of outstanding Preferred Stock
in a manner prejudicial thereto provided that a change
prejudicial to less than all outstanding series of Preferred
Stock requires such consent of holders of only such series
as are so affected; or (iii) issue any additional shares of
Preferred Stock unless (1) the net earnings of the Company
(after provision for all taxes and after specified
provisions for depreciation and amortization) applicable to
the payment of dividends on shares of the Preferred Stock,
determined in accordance with good accounting practice, for
a period of twelve consecutive months within the fifteen
calendar months immediately preceding such action shall have
been at least equal to three times the annual dividend
requirements on all shares of the Preferred Stock which
would then be outstanding after giving effect to the
issuance of the shares proposed to be issued, and (2) the
net earnings of the Company (after provision for all taxes
and after specified provisions for depreciation and
amortization) available for the payment of interest charges
on the Company's indebtedness, determined in accordance with
good accounting practice, shall have been at least one and
one-half times the sum of annual interest charges on
interest-bearing indebtedness of the Company and the annual
dividend requirements on all shares of Preferred Stock and
of all other classes of stock ranking prior to or on a
parity with the Preferred Stock, including the shares
proposed to be issued, and (3) the aggregate of stated
capital and surplus applicable to common stock and other
stock subordinate to the Preferred Stock is not less than
the involuntary liquidating value of all Preferred Stock to
be outstanding after giving effect to such issue.
(c) Without the consent of holders of a majority of
the total voting power of the outstanding Preferred Stock,
the Company may not: (i) increase the total authorized
number of shares of Preferred Stock; or (ii) issue or assume
any securities representing unsecured indebtedness (except
to refund outstanding unsecured securities issued or assumed
by the Company, or to redeem all outstanding Preferred
Stock) if immediately thereafter (A) the total outstanding
principal amount of all outstanding unsecured debt
securities issued or assumed by the Company would exceed 20%
of the aggregate of the total principal amount of all
outstanding secured indebtedness issued or assumed by the
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Company and the capital and surplus of the Company, or (B)
the total outstanding principal amount of all such unsecured
securities issued or assumed by the Company of maturities of
less than ten years (an unsecured security with an original
maturity in excess of ten years not being regarded as a
security of a maturity of less than ten years until it is
within three years of maturity) would exceed 10% of such
aggregate; or (iii) sell all or substantially all of its
assets, or merge or consolidate with or into any other
corporation, unless required by the Commission under the
Public Utility Holding Company Act of 1935, provided that
such majority consent shall not be required for the
acquisition by the Company of franchises or assets of
another corporation, or merger of another corporation into
the Company pursuant to certain Pennsylvania laws, if such
acquisition or merger or the issuance and assumption of all
securities to be issued or assumed in connection therewith
is authorized by the Commission, or in the absence of such
authorization if the net plant of such other corporation on
its books does not exceed 2% of the total capitalization of
the Company immediately prior to such acquisition.
The relative voting power of each share of Preferred Stock
for purposes of all votes or consents is in the same proportion
to all the outstanding shares of Preferred Stock as the ratio of
(i) the stated value of such share to (ii) the aggregate stated
value of all outstanding shares of Preferred Stock.
Liquidation Rights
After payment to creditors or provision therefor and before
any distribution to the holders of the common stock or any other
stock subordinate to the New Preferred Stock, the holder of each
share of the New Preferred Stock is entitled to receive in cash,
in the event of any voluntary liquidation, dissolution or winding
up, the amount per share at which such share could at the time be
redeemed at the option of the Company, and in the event of any
involuntary liquidation, dissolution or winding up, the sum of
the stated value per share, together, in each case, with an
amount equal to all dividends thereon accrued and unpaid to the
date of such liquidation, dissolution or winding up.
Limitation on Payment of Dividends on Common Stock
Under the Restated Articles, no dividends may be paid on
common stock unless dividends on all outstanding Preferred Stock
to and including the then quarterly dividend period and payments
in any mandatory redemption of the New Preferred Stock to and
including the preceding annual mandatory redemption period have
been paid or declared and set aside for payment. In addition,
the Mortgage and Restated Articles contain restrictions on the
payment of common stock dividends with the Mortgage being the
16
<PAGE>
most restrictive. See "Description of Debt Securities - Dividend
Restrictions." Moreover, the Restated Articles contain a
restriction which operates, on a sliding scale basis, when the
Company's Common Stock Equity (as defined) is, or as a result of
a specific dividend would be, less than 25% of the Company's
Total Capitalization (as defined).
No dividend or other distribution on any stock subordinate
to the Preferred Stock (other than dividends payable in stock
subordinate to Preferred Stock) may be paid, and no stock
subordinate to the Preferred Stock may be acquired for value,
unless dividends on all outstanding Preferred Stock have been
paid or declared and set apart for payment for all past quarter-
yearly dividend periods, and unless, after giving effect to such
dividend, distribution or acquisition, the stated capital
applicable to all outstanding stock subordinate to the Preferred
Stock plus the surplus of the Company (including capital or paid
in surplus and regardless of availability for payment of
dividends) shall in the aggregate be at least equal to the
involuntary liquidating value of all outstanding Preferred Stock.
Liability for Further Calls or Assessments
The New Preferred Stock, when duly issued, will be fully
paid and non-assessable.
Preemptive or Other Subscription Rights
Shares of any series of Preferred Stock will not entitle the
holders thereof to any preemptive or other subscription rights.
Conversion Rights
Prior to the issuance of a series of Preferred Stock, the
Board of Directors may fix conversion rights with respect to the
shares of such series. No conversion rights have been granted
with respect to any outstanding series of Preferred Stock, nor
will the New Preferred Stock have any such conversion rights.
PLAN OF DISTRIBUTION
The Company may solicit offers from time to time to purchase
New Bonds or New Preferred Stock to be reoffered for sale to the
public through underwriting syndicates led by one or more
managing Underwriters or through one or more Underwriters acting
alone. Unless otherwise set forth in a Prospectus Supplement,
the Underwriters will be obligated to purchase all New Bonds or
17
<PAGE>
New Preferred Stock offered at such time, subject to certain
conditions precedent. The Company may sell New Bonds or New
Preferred Stock
to one or more Underwriters for public offering and sale by them
or through dealers or agents. The managing Underwriter or
Underwriters with respect to the offer and sale of New Bonds or
New Preferred Stock and the members of the underwriting
syndicate, if any, will be named in the Prospectus Supplement
relating thereto. The Prospectus Supplement relating thereto
will also describe the discounts and commissions to be allowed or
paid to the Underwriters, all other items constituting
underwriting compensation and the discounts and commissions to be
allowed or paid to dealers, if any.
Notes may be offered on a continuing basis by the Company
through the Agents, each of which will agree to use its
reasonable best efforts to solicit offers to purchase Notes. The
Company may also sell Notes to any of the Agents at negotiated
discounts for its own account or for resale to one or more
investors at varying prices related to prevailing market prices
at the time of resale, as determined by such Agent, or for resale
to one or more dealers at a discount, as determined by such
Agent. The Agents with respect to the offer and sale of any
issue of Notes will be named in the Prospectus Supplement
relating thereto. The Prospectus Supplement relating thereto
will also describe the discounts and commissions to be allowed or
paid to the Agents and all other items constituting Agents'
compensation.
Under agreements which may be entered into by the Company,
Underwriters who participate in the distribution of New Bonds or
New Preferred Stock and Agents who participate in the
distribution of the Notes may be entitled to indemnification by
the Company against certain civil liabilities, including
liabilities under the Securities Act of 1933, or to contribution
by the Company with respect to payments which the Underwriters or
Agents may be required to make in respect thereof.
EXPERTS
The consolidated financial statements and financial
statement schedules included in the Company's Form 10-K Annual
Report for the year ended December 31, 1992 are incorporated
herein by reference in reliance on the report of Coopers &
Lybrand, independent accountants, given on the authority of said
firm as experts in auditing and accounting. The report of
Coopers & Lybrand, included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1992 contains
explanatory paragraphs related to certain contingencies which
have resulted from the accident at Unit No. 2 of the Three Mile
18
<PAGE>
Island nuclear generating station and the change in the method of
accounting for unbilled revenues in 1991.
The statements as to matters of law and legal conclusions in
"Description of Securities" in this Prospectus have been prepared
under the supervision of, and reviewed by, Ballard Spahr Andrews
& Ingersoll, and such statements are included herein upon the
authority of such counsel.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by
Berlack, Israels & Liberman, New York, New York and Ballard Spahr
Andrews & Ingersoll, Philadelphia, Pennsylvania and for any
Underwriters or Agents by Reid & Priest, New York, New York.
Berlack, Israels & Liberman and Reid & Priest will rely on
Ballard Spahr Andrews & Ingersoll with respect to matters of
Pennsylvania law.
19<PAGE>
No dealer, salesperson or any other person has been authorized to
give any information or to make any representation, other than
those contained in this Prospectus Supplement (including any
accompanying Pricing Supplement) and the Prospectus, in
connection with the offer contained herein, and, if given or
made, such other information or representations must not be
relied upon as having been authorized by the Company or by any of
the Agents. Neither the delivery of this Prospectus Supplement
(including any accompanying Pricing Supplement) and the
Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no
change in the affairs of the Company since the date as of which
information is given in this Prospectus Supplement (including any
accompanying Pricing Supplement) and the Prospectus. This
Prospectus Supplement (including any accompanying Pricing
Supplement) and the Prospectus do not constitute an offer or
solicitation by anyone in any jurisdiction in which the person
making such offer or solicitation is not qualified to do so or to
anyone to whom it is unlawful to make such offer or solicitation.
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TABLE OF CONTENTS Page
Prospectus Supplement
Description of Secured Medium-Term Notes, Series D . . . . . S-2
Plan of Distribution of Notes . . . . . . . . . . . . . . . . S-5
Prospectus
Available Information . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference . . . . . . . . 2
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Financing Program . . . . . . . . . . . . . . . . . . . . . . . 3
Certain Financial Information . . . . . . . . . . . . . . . . . 3
Coverage Ratios . . . . . . . . . . . . . . . . . . . . . . . . 4
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 4
Description of Securities . . . . . . . . . . . . . . . . . . . 4
Plan of Distribution . . . . . . . . . . . . . . . . . . . . 10
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . 10<PAGE>
$450,000,000
Pennsylvania
Electric Company
Secured Medium-Term Notes,
Series D
(A Series of First Mortgage Bonds)
Due From One Year to 35 Years
From Date of Issue
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PROSPECTUS SUPPLEMENT
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MERRILL LYNCH & CO.
SALOMON BROTHERS INC
SMITH BARNEY, HARRIS UPHAM & CO.
Incorporated
September 22, 1995<PAGE>
