<PAGE>
As filed with the Securities and Exchange Commission on October 4, 2000
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
PUGET SOUND ENERGY, INC. PUGET SOUND ENERGY CAPITAL TRUST II
(Exact name of registrant as specified (Exact name of registrant as specified
in its charter) in its charter)
-------------- --------------
Washington Delaware
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
91-0374630 To Be Applied For
(I.R.S. Employer Identification Number) (I.R.S. Employer Identification Number)
RICHARD L. HAWLEY RICHARD L. HAWLEY
411 - 108th Avenue N.E. 411 - 108th Avenue N.E.
Bellevue, Washington 98004-5515 Bellevue, Washington 98004-5515
(425) 454-6363 (425) 454-6363
(Name, address, including zip code, and (Name, address, including zip code, and
telephone number, telephone number,
including area code, of agent for including area code, of agent for
service) service)
--------------
It is respectfully requested that the Commission send copies of all notices,
orders and communications to:
Andrew Bor
Perkins Coie LLP
1201 Third Avenue, Suite 4800
Seattle, Washington 98101-3099
(206) 583-8888
--------------
Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective as determined by
market conditions and other factors.
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. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================
Title of Each Class Proposed Maximum Proposed Maximum Amount of
of Securities to Be Amount to Be Offering Price Aggregate Registration
Registered Registered (1)(2) Per Unit (1)(2)(3) Offering Price (1)(2)(3) Fee
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Senior Notes of Puget
Sound Energy, Inc. ....
----------------------------------------------------------------------------------------------------------
Subordinated Debentures
of Puget Sound Energy,
Inc. (4) ..............
----------------------------------------------------------------------------------------------------------
Trust Preferred
Securities of Puget
Sound Energy Capital
Trust II...............
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Guarantee of Puget Sound
Energy, Inc. with
respect to Trust
Preferred Securities of
Puget Sound Energy
Capital Trust II (5)...
----------------------------------------------------------------------------------------------------------
Total................... $500,000,000 100% $500,000,000 $132,000
==========================================================================================================
</TABLE>
(1) There are being registered hereunder such presently indeterminate
principal amount of Senior Notes and Subordinated Debentures, as well as
shares of Trust Preferred Securities, as may from time to time be issued
at indeterminate prices.
(2) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(o) under the Securities Act of 1933, which permits
the registration fee to be calculated on the basis of the maximum offering
price of all the securities listed, the table does not specify by each
class information as to the amount to be registered, proposed maximum
offering price per unit or proposed maximum aggregate offering price.
(3) Exclusive of accrued interest and distributions, if any.
(4) The Subordinated Debentures may be purchased by, and constitute assets of,
Puget Sound Energy Capital Trust II and may later be distributed under
certain circumstances to holders of Trust Preferred Securities.
(5) The Registration Statement is deemed to include the obligations of Puget
Sound Energy under the guarantee and certain backup undertakings under:
(1) the subordinated debt indenture pursuant to which the subordinated
debentures will be issued; (2) the subordinated debt debentures; and (3)
the declaration of trust of Puget Sound Energy Capital Trust II, including
Puget Sound Energy's obligations under such subordinated debt indenture to
pay costs, expenses, debts and liabilities of the trust (other than with
respect to the trust preferred securities and the common securities of
Puget Sound Energy Capital Trust II), which taken together provide a full
and unconditional guarantee of amounts due on the trust preferred
securities. No separate consideration will be received for the guarantee
and such backup undertakings. The guarantee is not traded separately.
--------------
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment that specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until this Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
================================================================================
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this Prospectus is not complete and may be changed. We may +
+not sell these securities until the corresponding Registration Statement +
+filed with the Securities and Exchange Commission is effective. This +
+Prospectus is not an offer to sell these securities and it is not soliciting +
+an offer to buy these securities in any state in which the offer or sale is +
+not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED OCTOBER 4, 2000
PROSPECTUS
[LOGO OF PUGET SOUND ENERGY]
PUGET SOUND ENERGY, INC.
Senior Notes
Subordinated Debentures
Guarantees
and
PUGET SOUND ENERGY CAPITAL TRUST II
Trust Preferred Securities
Guaranteed to the Extent Set Forth Herein By
Puget Sound Energy, Inc.
Offering Price: $500,000,000
-----------
Puget may offer, on one or more occasions:
. secured senior debt or unsecured subordinated debt securities consisting
of notes, debentures and other unsecured evidence of indebtedness, and
. guarantees of Puget Sound Energy with respect to trust preferred
securities of Puget Sound Energy Capital Trust II.
Puget Sound Energy Capital Trust II, which is a Delaware business trust, may
offer, on one or more occasions:
. trust preferred securities, which represent preferred undivided
beneficial interests in the assets of Puget Sound Energy Capital Trust
II.
For each type of security listed above, the amount, price and terms will be
determined at or prior to the time of sale.
Each time we offer any of these securities, we will set forth the specific
terms of these securities in one or more supplements to this prospectus. The
prospectus supplement or supplements also will set forth the names of any
underwriters, dealers or agents involved in the offering of the securities, the
compensation of these parties and any other special terms of the offering and
sale. You should read carefully this prospectus and the accompanying prospectus
supplement or supplements before you invest.
This prospectus may not be used to consummate sales of any of these
securities unless accompanied by a prospectus supplement.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.
-----------
The date of this prospectus is , 2000.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
Where You Can Find More Information........................................ 2
Puget Sound Energy......................................................... 3
Puget Sound Energy Capital Trust II........................................ 3
Use of Proceeds............................................................ 5
Ratios of Earnings to Fixed Charges........................................ 5
Description of Securities.................................................. 6
Plan of Distribution....................................................... 26
Legal Opinions............................................................. 28
Experts.................................................................... 28
</TABLE>
----------------
In this prospectus, "Puget" refers to Puget Sound Energy, Inc. and the
"trust" refers to Puget Sound Energy Capital Trust II. "We," "us" and "our"
refer to Puget Sound Energy, Inc. and Puget Sound Energy Capital Trust II.
You should rely only on the information contained or incorporated by
reference in this prospectus or any prospectus supplement. We have not
authorized anyone to provide you with different information, and if anyone does
provide you with different or inconsistent information, you should not rely on
it. You should not assume that the information in this prospectus or any
prospectus supplement is accurate after the date on the front cover of the
applicable document. We are not making an offer to sell these securities in any
jurisdiction in which the offer or sale is not permitted.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
Puget files reports, proxy statements and other information with the
Securities and Exchange Commission. These SEC filings are available over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document Puget files at the SEC's public reference room at 450 Fifth
Street N.W., Room 1024, Washington, D.C. 20549. Please call the SEC at 1-800-
SEC-0330 for more information on the public reference rooms and their copy
charges. You may also inspect Puget's SEC reports and other information at the
New York Stock Exchange, 20 Broad Street, New York, New York 10005.
In connection with this offering, we have filed with the SEC a registration
statement on Form S-3 under the Securities Act of 1933. As permitted by SEC
rules, this prospectus omits certain information included in the registration
statement. For a more complete understanding of the securities we may offer,
you should refer to the registration statement, including its exhibits.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file separately with it, which means we may disclose important
information by referring you to those other documents. The information we
incorporate by reference is considered to be part of this prospectus, except
for any information superseded by information in this prospectus. This
prospectus incorporates by reference the documents set forth below that Puget
has filed previously with the SEC. These documents contain important
information about Puget and its finances.
<TABLE>
<CAPTION>
SEC Filings (File No. 1-4393) Period/Date
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<S> <C>
Annual Report on Form 10-K.................... Year ended December 31, 1999
Quarterly Reports on Form 10-Q................ Quarter ended March 31, 2000
Quarter ended June 30, 2000
Current Report on Form 8-K.................... Filed February 11, 2000
Filed May 25, 2000
Filed July 3, 2000
Filed July 21, 2000
</TABLE>
The documents filed by Puget with the SEC pursuant to Sections 13(a), 13(c),
14 and 15 of the Securities Exchange Act of 1934 after the date of this
prospectus are also incorporated by reference into this prospectus.
You may request a copy of these filings at no cost by writing or telephoning
Puget at the following address:
Investor Relations
Puget Sound Energy, Inc.
411-108th Avenue N.E.
Bellevue, Washington 98004-5515
(425) 454-6363
You should rely only on the information contained or incorporated by
reference in this prospectus and the accompanying prospectus supplement. Puget
has not authorized anyone to provide you with information that is different
from this information.
Separate financial statements of the trust have not been included in this
prospectus. Puget and the trust do not consider such financial statements to be
helpful because:
. Puget beneficially owns directly or indirectly all of the undivided
beneficial interests in the assets of the trust (other than the
beneficial interests represented by the trust preferred securities). See
"Puget Sound Energy Capital Trust," "Description of Securities--Trust
Preferred Securities" and "Description of Securities--The Guarantee";
. Puget will guarantee the trust preferred securities such that the
holders of the trust preferred securities, with respect to the payment
of distributions and amounts upon liquidation, dissolution and winding-
up, are at least in the same position with regard to the assets of Puget
as a preferred shareholder of Puget;
2
<PAGE>
. in future filings under the Securities Exchange Act of 1934, an audited
footnote to Puget's annual financial statements will state that the
trust is wholly owned by Puget, that the sole assets of the trust are
the subordinated debentures of Puget having a specified total principal
amount, and that, considered together, the back-up undertakings,
including the guarantees, constitute a full and unconditional guarantee
by Puget of the trust's obligations under the trust preferred securities
issued by the trust; and
. the trust is a newly created special purpose entity, has no operating
history, no independent operations and is not engaged in, and does not
propose to engage in, any activity other than as described under "Puget
Sound Energy Capital Trust."
PUGET SOUND ENERGY
Puget Sound Energy, Inc., a Washington corporation, is an investor-owned
public utility, furnishing electric and gas service in a territory covering
approximately 6,000 square miles, principally in the Puget Sound region of
Washington state.
As of June 3, 2000, Puget had approximately 915,000 electric customers,
consisting of 810,200 residential, 99,200 commercial, 4,100 industrial and
approximately 1,500 other electric customers and approximately 580,000 gas
customers, consisting of 532,000 residential, 45,500 commercial, 3,000
industrial and approximately 100 gas transportation customers. For the 12
months ended June 30, 2000, Puget added approximately 16,600 electric customers
and approximately 25,000 gas customers, representing annualized growth rates of
1.9% and 4.6%, respectively. During the 12 months ended June 30, 2000, Puget's
billed retail revenues from electric utility operations were derived 47% from
residential customers, 37% from commercial customers, 14% from industrial
customers and 2% from other customers, and Puget's billed retail revenues from
gas utility operations were derived 60% from residential customers, 30% from
commercial customers, 8% from industrial customers and 2% from other customers.
During this period, the largest customer accounted for 1.8% of Puget's utility
operating revenues.
Gross electric utility plant at December 31, 1999, was approximately $ 4.0
billion, which consisted of 46% distribution, 28% generation, 15% transmission
and 11% general plant and other. Gross gas utility plant at December 31, 1999,
was approximately $1.4 billion, which consisted of 83% distribution, 5%
transmission and 12% general plant and other.
At December 31, 1999, Puget had 2,869 aggregate full-time-equivalent utility
employees. Our executive office is located at 411-108th Avenue N.E., Bellevue,
Washington 98004-5515, and our telephone number is (425) 454-6363.
PUGET SOUND ENERGY CAPITAL TRUST II
Puget Sound Energy Capital Trust II is a statutory business trust created
under the Delaware Business Trust Act by way of:
. a trust agreement executed by Puget, as sponsor, and the trustee of the
trust; and
. the filing of a certificate of trust with the Secretary of State of the
State of Delaware.
At the time of public issuance of the trust preferred securities, the trust
agreement will be amended and restated in its entirety and will be qualified as
an indenture under the Trust Indenture Act of 1939. Puget will directly or
indirectly acquire common securities of the trust in a total liquidation amount
equal to approximately 3% of the total capital of the trust. The trust exists
for the exclusive purposes of:
. issuing the trust preferred securities and common securities
representing undivided beneficial interests in the assets of the trust;
3
<PAGE>
. investing the gross proceeds of the common securities and the trust
preferred securities in the subordinated debentures; and
. engaging in only those other activities necessary or incidental thereto.
The trust has a term of approximately 55 years, but may terminate earlier as
provided in the amended and restated trust agreement.
The proceeds from the offering of the trust preferred securities and the sale
of the common securities may be used by the trust to purchase from Puget
subordinated debentures in a total principal amount equal to the total
liquidation preference of the common securities and the trust preferred
securities. The Puget debentures would bear interest at an annual rate equal to
the annual distribution rate of the common securities and the trust preferred
securities and would have certain redemption terms which correspond to the
redemption terms for the common securities and the trust preferred securities.
The subordinated debentures will rank subordinate in right of payment to all of
Puget's senior indebtedness (as defined in this prospectus). Distributions on
the common securities and the trust preferred securities may not be made unless
the trust receives corresponding interest payments on the subordinated
debentures from Puget. Puget will irrevocably guarantee, on a subordinated
basis and to the extent set forth in the guarantee, with respect to each of the
common securities and the trust preferred securities, the payment of
distributions, the redemption price, including all accrued or deferred and
unpaid distributions, and payment on liquidation, but only to the extent of
funds on hand at the trust. Each guarantee will be unsecured and will be
subordinate to all senior indebtedness of Puget. Upon the occurrence of certain
events (subject to the conditions to be described in an accompanying prospectus
supplement) the trust may be liquidated and the holders of the common
securities and the trust preferred securities could receive subordinated
debentures in lieu of any liquidating cash distribution.
Pursuant to the amended and restated trust agreement, the number of trustees
of the trust will initially be four. Two of the trustees will be persons who
are employees or officers of or who are affiliated with Puget and will be
referred to as the Puget trustees. The third trustee will be a financial
institution that is unaffiliated with Puget, which trustee will serve as
property trustee under the amended and restated trust agreement and as
indenture trustee for the purposes of compliance with the provisions of the
Trust Indenture Act of 1939. Initially, Bank One Trust Company, N.A. will be
the property trustee until removed or replaced by the holder of the common
securities. For the purpose of compliance with the provisions of the Trust
Indenture Act of 1939, Bank One Trust Company, N.A. will also act as guarantee
trustee. The fourth trustee, Bank One Delaware, Inc., will act as the Delaware
trustee for the purposes of the Delaware Business Trust Act, until removed or
replaced by the holder of the common securities. See "Description of
Securities--The Guarantee."
The property trustee will hold title to the subordinated debentures for the
benefit of the holders of the common securities and the trust preferred
securities and the property trustee will have the power to exercise all rights,
powers and privileges under the indenture as the holder of the subordinated
debentures. In addition, the property trustee will maintain exclusive control
of a segregated non-interest-bearing bank account to hold all payments made in
respect of subordinated debentures for the benefit of the holders of the common
securities and the trust preferred securities. The property trustee will make
payments of distributions and payments on liquidation, redemption and otherwise
to the holders of the common securities and the trust preferred securities out
of funds from the segregated non-interest-bearing bank account. The guarantee
trustee will hold the guarantees for the benefit of the holders of the common
securities and the trust preferred securities. Puget, as the direct or indirect
holder of all the common securities, will have the right to appoint, remove or
replace any of the trustees. Puget will also have the right to increase or
decrease the number of trustees, as long as the number of trustees shall be at
least three, a majority of which shall be Puget trustees. Puget will pay all
fees and expenses related to the trusts and the offering of the common
securities and the trust preferred securities.
The rights of the holders of the trust preferred securities, including
economic rights, rights to information and voting rights, are set forth in the
amended and restated trust agreement, the Delaware Business Trust Act and the
Trust Indenture Act of 1939.
4
<PAGE>
The Delaware trustee for the trust in the State of Delaware is Bank One
Delaware, Inc., Three Christiana Center, 201 North Walnut Street, Wilmington,
Delaware, 19801. The principal place of business of the trust will be c/o Puget
Sound Energy, Inc. 411-108th Avenue N.E., Bellevue, Washington 98004-5515.
USE OF PROCEEDS
The proceeds received by the trust from the sale of its trust preferred
securities and the common securities will be invested in the subordinated
debentures. As will be more specifically set forth in the applicable prospectus
supplement, Puget will use those borrowed amounts and the net proceeds from the
sale of senior notes offered hereby for its general corporate purposes,
including capital expenditures, investment in subsidiaries, working capital and
repayment of debt. Any specific allocation of the proceeds to a particular
purpose that has been made at the date of any prospectus supplement will be
described in the appropriate prospectus supplement.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth Puget's ratios of earnings to fixed charges
for the respective periods indicated:
<TABLE>
<CAPTION>
Twelve Months
Ended June 30, Years Ended December 31,
--------------- ------------------------------
2000 1999 1999 1998 1997(1) 1996(1) 1995
------- ------- ---- ---- ------- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges (2)(3)............ 2.7x 2.9x 2.7x 2.8x 2.5x 3.1x 2.6x
</TABLE>
--------
(1) The ratios for the years ended December 31, 1997 and 1996 include charges
incurred in connection with Puget's merger with Washington Energy Company
and its principal subsidiary, Washington Natural Gas Company. Had such
charges been excluded from earnings, the ratios of earnings to fixed
charges for such periods would have been 2.9x and 3.2x, respectively.
(2) As a result of the merger, each of Puget's ratios reflects the combined
operations of Puget and the Washington Energy Company. Because the
Washington Energy Company's fiscal year ended September 30, the combined
ratios for the two years ended December 31, 1996 reflect the fiscal years
ended December 31 for Puget and September 30 for the Washington Energy
Company.
(3) For purposes of computing the ratios of earnings to fixed charges, earnings
represent income from continuing operations before extraordinary items and
cumulative effect of changes in accounting principles plus applicable
income taxes and fixed charges. Fixed charges include all interest expense
and the proportion deemed representative of the interest factor of rent
expense.
5
<PAGE>
DESCRIPTION OF SECURITIES
Introduction
Specific terms of the debt securities consisting of the senior notes and
subordinated debentures, or the trust preferred securities, or any combination
of these securities and the irrevocable guarantees of Puget with respect to
each of the common securities and the preferred securities of the trust, for
which this prospectus is being delivered, will be set forth in an accompanying
prospectus supplement or supplements. The prospectus supplement will set forth
with regard to the particular offered securities, without limitation, the
following:
. in the case of debt securities, the designation, total principal amount,
denomination, maturity, premium, if any, any exchange, conversion,
redemption or sinking fund provisions, interest rate (which may be fixed
or variable), the time or method of calculating interest payments, the
right of Puget, if any, to defer payment or interest on the debt
securities and the maximum length of such deferral, put options, if any,
public offering price, ranking, any listing on a securities exchange and
other specific terms of the offering; and
. in the case of trust preferred securities, the designation, number of
shares, liquidation preference per security, initial public offering
price, any listing on a securities exchange, dividend rate (or method of
calculation thereof), dates on which dividends shall be payable and
dates from which dividends shall accrue, any voting rights, any
redemption, exchange, conversion or sinking fund provisions and any
other rights, preferences, privileges, limitations or restrictions
relating to a specific series of the trust preferred securities
including a description of the Puget guarantee.
Debt Securities
Senior notes will be issued under a senior note indenture. The subordinated
debentures will be issued under a subordinated debt indenture. The senior note
indenture and the subordinated debt indenture are sometimes referred to in this
prospectus individually as an "indenture" and collectively as the "indentures."
The following briefly summarizes the material provisions of the indentures
and the debt securities. You should read the more detailed provisions of the
applicable indenture, including the defined terms, for provisions that may be
important to you. You should also read the particular terms of a series of debt
securities, which will be described in more detail in the applicable prospectus
supplement. Copies of the indentures may be obtained from Puget or the
applicable trustee.
Unless otherwise provided in the applicable prospectus supplement, the
trustee under the senior note indenture will be State Street Bank and Trust
Company and the trustee under the subordinated debt indenture will be Bank One
Trust Company, N.A.
General
The indentures provide that debt securities of Puget may be issued in one or
more series, with different terms, in each case as authorized on one or more
occasions by Puget.
Federal income tax consequences and other special considerations applicable
to any debt securities issued by Puget at a discount will be described in the
applicable prospectus supplement.
The applicable prospectus supplement relating to any series of debt
securities will describe the following terms, where applicable:
. the title of the debt securities;
. whether the debt securities will be senior or subordinated debt;
. the total principal amount of the debt securities;
6
<PAGE>
. the percentage of the principal amount at which the debt securities will
be sold and, if applicable, the method of determining the price;
. the maturity date or dates;
. the interest rate or the method of computing the interest rate;
. the date or dates from which any interest will accrue, or how such date
or dates will be determined, and the interest payment date or dates and
any related record dates;
. the location where payments on the debt securities will be made;
. the terms and conditions on which the debt securities may be redeemed at
the option of Puget;
. any obligation of Puget to redeem, purchase or repay the debt securities
at the option of a holder upon the happening of any event and the terms
and conditions of redemption, purchase or repayment;
. any provisions for the discharge of Puget's obligations relating to the
debt securities by deposit of funds or United States government
obligations;
. whether the debt securities are to trade in book-entry form and the
terms and any conditions for exchanging the global security in whole or
in part for paper certificates;
. any material provisions of the applicable indenture described in this
prospectus that do not apply to the debt securities;
. any additional amounts with respect to the debt securities that Puget
will pay to a non-United States person because of any tax, assessment or
governmental charge withheld or deducted and, if so, any option of Puget
to redeem the debt securities rather than paying these additional
amounts;
. any additional events of default; and
. any other specific terms of the debt securities.
Exchange and Transfer
Debt securities may be presented for exchange. Registered debt securities may
be presented for registration of transfer at the offices of the applicable
trustee and, subject to the restrictions set forth in the debt security and in
the applicable prospectus supplement, without service charge, but upon payment
of any taxes or other governmental charges due in connection with the transfer,
subject to any limitations contained in the applicable indenture.
Payment
Distributions on the debt securities in registered form will be made at the
office or agency of the applicable trustee in its designated office. However,
at the option of Puget, payment of any interest may be made by check or by wire
transfer. Payment of any interest due on debt securities in registered form
will be made to the persons in whose name the debt securities are registered at
the close of business on the record date for such interest payments. Payments
made in any other manner will be specified in the prospectus supplement.
Governing Law
Each indenture and the debt securities will be governed by, and construed in
accordance with, the laws of the State of Washington unless the laws of another
jurisdiction shall mandatorily apply. The rights, duties and obligations of the
trustees under the indentures are governed by and construed in accordance with
the laws of the State of Washington.
7
<PAGE>
Senior Notes
General
The following summaries of some important provisions of the senior note
indenture (including its supplements) are not complete and are subject to, and
qualified in their entirety by, all of the provisions of the senior note
indenture, which is an exhibit to the registration statement of which this
prospectus forms a part. In addition, capitalized terms used in this section
and not otherwise defined in this prospectus shall have the meaning given to
them in the senior note indenture.
Security; Release Date
Until the release date (as described in the next paragraph), the senior notes
will be secured by one or more series of Puget's first mortgage bonds from
either or both of Puget's current first mortgage indentures issued and
delivered by Puget to the senior note trustee. See "Description of First
Mortgage Bonds." Upon the issuance of a series of senior notes prior to the
release date, Puget will simultaneously issue and deliver to the senior note
trustee, as security for all senior notes, a series of first mortgage bonds
that will have the same stated maturity date and corresponding redemption
provisions, and will be in the same total principal amount as the series of the
senior notes being issued. Any series of first mortgage bonds securing senior
notes may, but need not, bear interest. Any payment by Puget to the senior note
trustee of principal of, interest and/or premium, if any, on a series of first
mortgage bonds will be applied by the senior note trustee to satisfy Puget's
obligations with respect to principal of, interest and/or premium, if any, on
the corresponding senior notes.
The "release date" will be the date that all first mortgage bonds of Puget
issued and outstanding under its electric utility mortgage indenture with State
Street Bank and Trust Company as mortgage trustee and its gas utility mortgage
indenture with The Bank of New York Company, Inc. as mortgage trustee, other
than first mortgage bonds securing senior notes, have been retired (at, before
or after their maturity) through payment, redemption or otherwise. On the
release date, the senior note trustee will deliver to Puget, for cancellation,
all first mortgage bonds securing senior notes. Not later than 30 days
thereafter, the senior note trustee will provide notice to all holders of
senior notes of the occurrence of the release date. As a result, on the release
date, the first mortgage bonds securing senior notes will cease to secure the
senior notes. The senior notes will then become, at Puget's option, either:
. unsecured general obligations of Puget or
. will be secured by substitute first mortgage bonds issued under a
substitute mortgage indenture other than Puget's electric utility
mortgage or gas utility mortgage.
Each series of first mortgage bonds that secures senior notes will be secured
by a lien on certain property owned by Puget. See "Description of First
Mortgage Bonds--Priority and Security." Upon the payment or cancellation of any
outstanding senior notes, the senior note trustee will surrender to Puget for
cancellation an equal principal amount of the related series of first mortgage
bonds. Puget will not permit, at any time prior to the release date, the total
principal amount of first mortgage bonds securing senior notes held by the
senior note trustee to be less than the total principal amount of senior notes
outstanding. Following the release date, Puget will cause the mortgages to be
discharged and will not issue any additional first mortgage bonds under its
electric utility mortgage or gas utility mortgage. While Puget will be
precluded after the release date from issuing additional first mortgage bonds,
it will not be precluded under the senior note indenture or senior notes from
issuing or assuming other secured debt, or incurring liens on its property,
except to the extent indicated below under "--Certain Covenants of Puget--
Limitation on Liens."
Events of Default
The following constitute events of default under senior notes of any series:
(1) failure to pay principal of and premium, if any, on any senior note
of such series when due for five days;
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(2) failure to pay interest on any senior note of such series when due
for 30 days;
(3) failure to perform any other covenant or agreement of Puget in the
senior notes of such series for 90 days after written notice to Puget by
the senior note trustee or the holders of at least a majority in total
principal amount of the outstanding senior notes;
(4) prior to the release date, a default occurs under the gas utility
mortgage and the gas utility mortgage trustee or the holders of at least a
majority in principal amount of the outstanding senior notes give notice of
the default to the senior note trustee;
(5) prior to the release date, a default occurs under the electric
utility mortgage and the electric utility mortgage trustee or the holders
of at least a majority in total principal amount of the outstanding senior
notes give notice of the default to the senior note trustee;
(6) if any substituted mortgage bonds are outstanding, a default occurs
under the substitute mortgage and the trustee under the substitute mortgage
or the holders of at least a majority in total principal amount of the
outstanding senior notes give notice of the default to the senior note
trustee; and
(7) events of bankruptcy, insolvency or reorganization of Puget specified
in the senior note indenture.
If an event of default occurs and is continuing, either the senior note
trustee or the holders of a majority in total principal amount of the
outstanding senior notes may declare the principal amount of all senior notes
to be due and payable immediately.
The senior note trustee generally will be under no obligation to exercise any
of its rights or powers under the senior note indenture at the request or
direction of any of the holders of senior notes of such series unless those
holders have offered to the senior note trustee reasonable security or
indemnity. Subject to the provisions for indemnity and certain other
limitations contained in the senior note indenture, the holders of a majority
in principal amount of the outstanding senior notes of such series generally
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the senior note trustee, or of
exercising any trust or power conferred on the senior note trustee. The holders
of a majority in principal amount of the outstanding senior notes of such
series generally will have the right to waive any past default or event of
default (other than a payment default) on behalf of all holders of senior notes
of such series.
No holder of senior notes of a series may institute any action against Puget
under the senior note indenture unless:
(1) that holder gives to the senior note trustee advance written notice
of default and its continuance;
(2) the holders of not less than a majority in total principal amount of
senior notes of such series then outstanding affected by that event of
default request the senior note trustee to institute such action;
(3) that holder has offered the senior note trustee reasonable indemnity;
and
(4) the senior note trustee shall not have instituted such action within
60 days of such request.
Furthermore, no holder of senior notes will be entitled to institute any such
action if and to the extent that that action would disturb or prejudice the
rights of other holders of senior notes of such series.
Within 90 days after the occurrence of a default with respect to the senior
notes of a series, the senior note trustee must give the holders of the senior
notes of such series notice of any such default known to the senior note
trustee, unless cured or waived. The senior note trustee may withhold such
notice if it determines in good faith that it is in the interest of such
holders to do so except in the case of default in the payment of principal of,
and interest and/or premium, if any, on any senior notes of such series. Puget
is required to deliver to the senior note trustee each year a certificate as to
whether or not, to the knowledge of the officers signing such certificate,
Puget is in compliance with the conditions and covenants under the senior note
indenture.
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Modification
Except as provided in the paragraph below, Puget and the senior note trustee
cannot modify or amend the senior note indenture without the consent of the
holders of a majority in principal amount of the outstanding affected senior
notes. Puget and the senior note trustee cannot modify or amend the senior note
indenture without the consent of the holder of each outstanding senior note of
such series to:
(1) change the maturity date of any senior note of such series;
(2) reduce the rate (or change the method of calculation thereof) or
extend the time of payment of interest on any senior note of such series;
(3) reduce the principal amount of, or premium payable on, any senior
note of such series;
(4) change the coin or currency of any payment of principal of, and
interest and/or premium on any senior note of such series;
(5) change the date on which any senior note of such series may be
redeemed or repaid at the option of its holder or adversely affect the
rights of a holder to institute suit for the enforcement of any payment on
or with respect to any senior note of such series;
(6) impair the interest of the senior note trustee in the first mortgage
bonds securing the senior notes of such series held by it or, prior to the
release date, reduce the principal amount of any series of first mortgage
bond securing the senior notes of such series to an amount less than the
principal amount of the related series of senior notes or alter the payment
provisions of such first mortgage bonds in a manner adverse to the holders
of the senior notes; or
(7) modify the senior notes of such series necessary to modify or amend
the senior note indenture or to waive any past default to less than a
majority.
Puget and the senior note trustee can modify and amend the senior note
indenture without the consent of the holders in certain cases, including:
(1) to add to the covenants of Puget for the benefit of the holders or to
surrender a right conferred on Puget in the senior note indenture;
(2) to add further security for the senior notes of such series;
(3) to supply omissions, cure ambiguities or correct defects which
actions, in each case, are not prejudicial to the interests of the holders
in any material respect; or
(4) to make any other changes that are not prejudicial to the holders of
senior notes of such series.
Defeasance and Discharge
The senior note indenture provides that Puget will be discharged from any and
all obligations in respect to the senior notes of such series and the senior
note indenture (except for certain obligations such as obligations to register
the transfer or exchange of senior notes, replace stolen, lost or mutilated
senior notes and maintain paying agencies) if, among other things, Puget
irrevocably deposits with the senior note trustee, in trust for the benefit of
holders of senior notes of such series, money or certain United States
government obligations, or any combination of money or government obligations,
which through the payment of interest and principal on the deposits in
accordance with their terms must provide money in an amount sufficient, without
reinvestment, to make all payments of principal of, and any premium and
interest on, the senior notes on the dates such payments are due in accordance
with the terms of the senior note indenture and the senior notes of such
series. Unless all of the senior notes of such series are to be due within 90
days of such deposit by redemption or otherwise, Puget must also deliver to the
senior note trustee an opinion of counsel to the effect that the holders of the
senior notes of such series will not recognize income, gain or loss for federal
income tax purposes as a result of that defeasance or discharge of the senior
note indenture. Thereafter, the holders of senior notes must look only to the
deposit for payment of the principal of, and interest and any premium on, the
senior notes.
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Consolidation, Merger and Sale or Disposition of Assets
Puget may consolidate with or merge into, or sell or otherwise dispose of its
properties as or substantially as an entirety if:
(1) the successor or transferee corporation is a corporation organized
and existing under the laws of the United States of America, any state
thereof, or the District of Columbia,
(2) the new corporation assumes the due and punctual payment of the
principal of and premium and interest on all the senior notes and the
performance of every covenant of the senior note indenture to be performed
or observed by Puget,
(3) if prior to the release date, the new corporation assumes Puget's
obligations under its electric utility and gas utility mortgage with
respect to first mortgage bonds securing senior notes, and
(4) if after the release date and there are substitute first mortgage
bonds outstanding, the new corporation assumes Puget's obligations under
the substitute first mortgage with respect to substitute first mortgage
bonds securing senior notes.
The senior note indenture defines "all or substantially all" of the assets of
Puget as being 50% or more of the total assets of Puget as shown on its balance
sheet as of the end of the prior year. The senior note indenture specifically
permits any sale, transfer or other disposition during a calendar year of less
than 50% of total assets without the consent of the holders of the senior notes
and without the assumption by the transferee of Puget's obligations on the
senior notes and covenants contained in the senior note indenture.
Certain Covenants of Puget
Limitation on Liens
Puget cannot issue any first mortgage bonds other than first mortgage bonds
that secure senior notes. After the release date, Puget will be precluded from
issuing additional first mortgage bonds under its electric utility mortgage and
gas utility mortgage. Unless substitute first mortgage bonds are issued to
secure senior notes, Puget may not issue, assume, guarantee or permit to exist
after the release date any debt that is secured by any mortgage, security
interest, pledge or lien (each a "lien") of or upon any real property or other
depreciable asset used in Puget's electric and gas utility business, whether
owned at the date of the senior note indenture or thereafter acquired, without
in any such case effectively securing the senior notes (together with, if Puget
shall so determine, any other indebtedness of Puget ranking equally with the
senior notes) equally and ratably with such debt (but only so long as such debt
is so secured). The foregoing restriction will not apply to:
(1) liens on any property existing at the time of its acquisition (but
excluding any extension of or addition to such property unless the terms of
the mortgage as of the date of the acquisition of such property provide
that such mortgage shall be secured by such extensions or additions);
(2) liens to secure the payment of all or part of the purchase price of
property or to secure any debt incurred prior to, at the time of or within
180 days after the acquisition of such property for the purpose of
financing all or part of the purchase price of such property;
(3) liens secured by property used in the generation of electricity;
(4) liens existing as of the date of the senior note indenture;
(5) certain permitted encumbrances similar to the permitted encumbrances
under the electric utility mortgage;
(6) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any lien referred to in
clauses (1) through (5); provided, however, that the principal amount of
debt secured thereby may not exceed the principal amount of debt (plus any
premium or fee payable in connection with such extension, renewal or
replacement) so secured at the time of such
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extension, renewal or replacement; and provided, further, that such lien
must be limited to all or such part of the property which was subject to
the mortgage so extended, renewed or replaced (plus improvements on such
property);
(7) liens in favor of the United States, any state of the United States,
any other country or any political subdivision of any of the foregoing, to
secure partial, progress, advance or other payments under any contract or
statute; or
(8) liens securing industrial development, pollution control or similar
revenue bonds.
Notwithstanding the foregoing restriction, Puget may create, assume or incur
any lien not excepted above without equally and ratably securing the senior
notes if the aggregate amount of all debt then outstanding and secured by such
lien or any other lien not excepted above, together with all net sale proceeds
from sale-leaseback transactions which are not described in clause (1) or (2)
under "--Limitations on Sale-Leaseback Transactions" below, does not exceed 15%
of Puget's total consolidated capitalization as shown on its latest audited
consolidated balance sheet.
Limitation on Sale and Lease-Back Transactions
Unless substituted first mortgage bonds are issued to secure the senior
notes, after the release date Puget may not sell or transfer any real property
interest or other depreciable asset and take back a lease of such property
unless:
(1) the sale and leaseback transaction occurs within 180 days after the
later of the date of acquisition of such property or the date of the
completion of construction or commencement of full operations on such
property, or
(2) within 120 days after the sale and leaseback transaction, Puget
applies or causes to be applied to the retirement of debt of Puget (other
than debt which is subordinate in right of payment to senior notes) an
amount not less than the net proceeds of the sale of such property.
Notwithstanding the foregoing restriction, Puget may effect any sale and
leaseback transaction not excepted above if the net sale proceeds from the sale
and leaseback transaction, together with the net sale proceeds from all other
sale and leaseback transactions not excepted above and all debt then
outstanding and secured by mortgages not described in any of clauses (1)
through (8) under "--Limitations on Liens," does not exceed 15% of Puget's
total consolidated capitalization as shown on its latest audited consolidated
balance sheet. Puget may also effect any sale and leaseback transaction
involving a lease for a period, including renewals, of not more than 36 months.
Voting of First Mortgage Bonds Held by Senior Note Trustee
The senior note trustee, as the holder of first mortgage bonds securing
senior notes, will attend any meeting of bondholders under Puget's electric
utility mortgage and gas utility mortgage, or, at its option, will deliver its
proxy in connection therewith as it relates to matters with respect to which it
is entitled to vote or consent. The senior note trustee will vote all of the
electric utility bonds or gas utility bonds held by it, or will consent with
respect thereto, as directed by holders of a majority in total principal amount
of the outstanding senior notes; provided, however, that the senior note
trustee is not required to vote the electric utility or gas utility bonds of
any particular issue in favor of, or give consent to, any action except upon
notification by the senior note trustee to the holders of the related issue of
senior notes of such proposal and consent thereto of the holders of a majority
in principal amount of the outstanding senior notes of such issue.
Concerning the Senior Note Trustee
State Street Bank and Trust Company is both the senior note trustee under the
senior note indenture and the mortgage trustee under the electric utility
mortgage indenture, which is described below. Puget and its
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affiliates do not currently maintain any other banking relationships with State
Street Bank and Trust Company in the ordinary course of business, but Puget may
choose to do so in the future.
The senior note trustee may resign at any time by giving written notice to
Puget specifying the day on which the resignation is to take effect. The
resignation will take effect immediately upon the later of the appointment of a
successor senior note trustee and the day specified by the senior note trustee.
The senior note trustee may be removed at any time by a written instrument
filed with the senior note trustee and signed by the holders of at least a
majority in total principal amount of outstanding senior notes. In addition, if
no event of default has occurred and is continuing, Puget may remove the senior
note trustee upon notice to the holder of each senior note outstanding and the
senior note trustee, and appointment of a successor senior note trustee.
Description of the First Mortgage Bonds
General
The first mortgage bonds securing the senior notes are to be issued under
Puget's electric utility mortgage indenture or its gas utility mortgage
indenture, each as amended and supplemented by various supplemental indentures.
State Street Bank and Trust Company will act as the electric utility mortgage
trustee and The Bank of New York Company, Inc. will act as the gas utility
mortgage trustee.
The statements herein concerning these mortgage indentures are outlines and
are not complete and are subject to, and qualified in their entirety by, all of
the provisions of the electric utility and gas utility mortgage indentures,
which are exhibits to the registration statement of which this prospectus forms
a part. They make use of defined terms and are qualified in their entirety by
express reference to the mortgage indentures, copies of which are available
upon request to the senior note trustee.
First mortgage bonds securing senior notes will be issued as security for
Puget's obligations under the senior note indenture and will be immediately
delivered to and registered in the name of the senior note trustee. The first
mortgage bonds securing senior notes will be issued as security for senior
notes of a series and will secure the senior notes of that series until the
release date. The senior note indenture provides that the senior note trustee
shall not transfer any first mortgage bonds securing senior notes except to a
successor trustee, to Puget (as provided in the senior note indenture) or in
compliance with a court order in connection with a bankruptcy or reorganization
proceeding of Puget.
First mortgage bonds securing senior notes will correspond to the senior
notes of its related series in respect of principal amount, interest rate,
maturity date and redemption provisions. Upon payment of the principal or
premium, if any, or interest on senior notes of a series, the related first
mortgage bonds in a principal amount equal to the principal amount of such
senior notes will, to the extent of such payment of principal, premium or
interest, be deemed fully paid and the obligation of Puget to make such payment
shall be discharged.
The Electric Utility Mortgage Bonds
Priority and Security
The electric utility mortgage bonds securing senior notes of any series will
rank equally as to security with bonds of other series now outstanding or
issued later under the electric utility mortgage. This security is a direct
first lien on Puget's electric utility property and its electric franchises and
permits (other than certain property expressly excluded from the lien (such as
cash, securities, notes, accounts receivable and similar instruments;
conditional sales, appliance rental or lease agreements; materials and
supplies; merchandise held for the purpose of sale, lease or distribution; fuel
(including fissionable material) and personal property consumable in
operations; oil, gas and other minerals and timber under or upon lands of
Puget; office furniture
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and equipment, automobiles and similar transportation equipment; nonutility
property and certain property of a successor corporation in a merger or
consolidation. This lien is subject to excepted encumbrances (and certain other
limitations) as defined and described in the electric utility mortgage
indenture. It is also subject to the lien of the gas utility mortgage with
respect to Puget's gas utility property that was acquired in connection with
the merger with Washington Energy Company on February 10, 1997. The electric
utility mortgage indenture permits the acquisition of property subject to prior
liens.
Dividend Restriction
So long as any of the electric utility mortgage bonds are outstanding, Puget
shall not do either of the following, except out of net income available for
dividends on its common stock, accumulated after December 31, 1957, plus the
sum of $7,500,000:
. declare or pay any dividends (other than dividends payable in Puget's
common stock) or make any other distribution on any shares of its common
stock, or
. purchase, redeem or otherwise retire for consideration any shares of
stock.
Issuance of Electric Utility Mortgage Bonds and Withdrawal of Cash Deposited
Against Such Issuance
The principal amount of electric utility mortgage bonds that Puget may issue
under the electric utility mortgage is not limited, provided that the issuance
tests in the electric utility mortgage are satisfied. Electric utility mortgage
bonds may be issued from time to time against one or more of the following:
. 60% of unfunded net property additions;
. deposit of cash with the electric utility mortgage trustee; and
. 100% of unfunded electric utility mortgage bond credits.
The issuance of electric utility mortgage bonds against unfunded net
additions, with certain exceptions, is subject to net earnings available for
interest being at least two times the annual interest requirement on all
electric utility mortgage bonds and prior lien debt to be outstanding. Cash
deposited is withdrawable against 60% of unfunded net additions and 100% of
unfunded electric utility mortgage bond credits.
Depreciation Fund
Puget will pay cash or deliver electric utility mortgage bonds of any series
to the electric utility mortgage trustee by May 31 of each year in an amount
equal to the minimum provision for depreciation for the preceding year (i.e.,
an amount by which 15% of gross utility operating revenues of Puget, after
deducting cost of electricity purchased and rental and lease payments, exceeds
maintenance, repairs and renewals). Cash held in the depreciation fund may be
applied to the retirement of the electric utility mortgage bonds of certain of
the Secured Medium-Term Notes, Series A, certain of the Secured Medium-Term
Notes, Series B, certain of the Secured Medium-Term Notes, Series C, the 7.05%
Series due 2021, the 7.25% Series due 2021 and the 6.80% Series due 2022 (the
last three series were issued as collateral for City of Forsyth, Rosebud
County, Montana, Pollution Control Revenue Refunding Bonds) at a price not
exceeding the applicable regular redemption price thereof, or other electric
utility mortgage bonds at a price not exceeding the applicable special
redemption price thereof. In lieu of paying cash or delivering electric utility
mortgage bonds, Puget will have the option of satisfying this obligation
through the use of unfunded property additions or unfunded electric utility
mortgage bond credits, or both. Cash and electric utility mortgage bonds held
in such fund may also be withdrawn by using either of the aforesaid credits.
Modification of Mortgage
The rights of the bondholders under the electric utility mortgage may be
modified by Puget with the consent of the holders of 66 2/3% in total principal
amount of the electric utility bonds, and of not less than
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66 2/3% of the principal amount of each series affected. In general, however,
no modification of the terms of payment of principal or interest and no
modification affecting the lien or reducing the percentage required for
modification is effective against any bondholder without the bondholder's
consent.
Puget anticipates that its fuel costs may increase in the future, causing an
increase in revenue that may escalate the minimum provision for depreciation
out of proportion with Puget's reasonable maintenance and replacement needs. If
such an event occurs, Puget would propose to modify the electric utility
mortgage by reducing the amount of operating revenues used in determining the
minimum provision for depreciation by the amount of fuel costs. Thus, each
supplemental indenture for a new series of electric utility mortgage bonds will
provide that each holder consents to this anticipated modification. When Puget
obtains consents from the holders of 66 2/3% of each series of electric utility
mortgage bonds then outstanding, the modification will become effective.
Concerning the Mortgage Trustee
The State Street Bank and Trust Company is the mortgage trustee under the
electric utility mortgage indenture. Puget and its affiliates do not currently
maintain any other banking relationships with State Street Bank and Trust
Company in the ordinary course of business, but Puget may choose to do so in
the future.
The holders of a majority in total principal amount of the electric utility
mortgage bonds have the right to require the electric utility mortgage trustee
to enforce the electric utility mortgage, but the electric utility mortgage
trustee is entitled to receive reasonable indemnity and is not required to act
under certain circumstances.
Defaults
The electric utility mortgage defines the following as "defaults":
. failure to pay principal and premium when due;
. failure to pay interest for 30 days after becoming due;
. failure to pay any installment of any sinking or other purchase fund for
60 days;
. an unstayed continuance for 90 days after an entry of an order for
reorganization or an appointment of a trustee;
. certain events in bankruptcy, insolvency or reorganization;
. an unsatisfied continuance for 90 days after entry of a judgment in
excess of $100,000; and
. failure for 90 days after notice to observe other covenants or
conditions.
The electric utility mortgage indenture does not contain a provision
requiring any periodic evidence to be furnished as to the absence of default or
as to compliance with the terms thereof.
Gas Utility Mortgage Bonds
Priority and Security
The gas utility mortgage bonds securing senior notes of any series will rank
equally as to security with gas utility mortgage bonds of other series now
outstanding or issued later under the gas utility mortgage indenture. This
security is a direct first lien on all of Puget's gas utility property, on its
gas utility franchises and permits and on its gas purchase contracts (other
than certain property expressly excluded from the lien (such as cash,
securities, notes, accounts receivable and similar instruments; conditional
sales, appliance rental or lease agreements; material and supplies; merchandise
held for the purpose of sale, lease or distribution; gas or liquid hydrocarbons
in pipe lines and in storage; fuel and personal property consumable in
operations; oil, gas and
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other minerals and timber under or upon lands of Puget; office furniture and
equipment, automobiles and similar transportation equipment; nonutility
property and certain property of a successor corporation in a merger or
consolidation)). All property owned by Puget immediately prior to its merger
with Washington Energy Company on February 10, 1997 is excepted from the lien
of the gas utility mortgage . All property acquired by Puget after the merger
is also excepted from the lien, unless the property improves or replaces the
gas utility property owned by Washington Energy Company at the time of the
merger. This lien is subject to excepted encumbrances (and certain other
limitations) as defined and described in the gas utility mortgage indenture.
The mortgage indenture permits the acquisition of property subject to prior
liens, but this property will not be considered as additional property under
the gas utility mortgage until the prior lien is paid.
Dividend Restriction
If the aggregate amount of all the dividends, distributions and expenditures
listed below made since September 30, 1994 would exceed the aggregate amount of
the net income of Puget accumulated after September 30, 1994 plus the sum of
$20,000,000, Puget shall not do any of the following so long as any of Puget's
Secured Medium Term Notes, Series C, issued under the gas utility mortgage, are
outstanding:
. declare or pay any dividends (other than dividends payable in Puget's
common stock) or make any other distribution on any shares of its common
stock, or
. purchase, redeem or otherwise retire for consideration any shares of
stock (other than in exchange for, or from the net cash proceeds of,
other new shares of capital stock of Puget and other than any shares of
any class of stock ranking as to dividends or assets prior to Puget's
common stock required to be purchased, redeemed or otherwise retired for
any sinking fund or purchase fund for such class of stock).
Renewal Fund
Puget will pay cash and/or deliver gas utility mortgage bonds (taken at the
principal amount thereof) to the gas utility mortgage trustee for deposit into
a renewal fund on or before May 1 of each year in an amount equal to the
greater of:
(a) the aggregate amount of the minimum provision for depreciation (i.e.,
an amount computed at the rate of 2% per annum, or such other rate as may
be permitted or required by the Washington Utilities and Transportation
Commission, of the book value of depreciable gas utility property subject
to the lien of the gas utility mortgage and not to prior liens) from March
1, 1957 to the end of the next preceding calendar year; or
(b) the aggregate amount of retirements for the same period;
in excess of the greater of:
(A) the aggregate amounts for the minimum provision for depreciation or
retirements, whichever is greater, shown in the next preceding renewal fund
certificate filed with the gas utility mortgage trustee pursuant to the
requirements of Section 4.04 of the gas utility mortgage; or
(B) the aggregate amounts for the minimum provision for depreciation or
retirements, whichever is greater, shown in the latest certificate of
available net additions delivered to the gas utility mortgage trustee
pursuant to Section 2.01 of the gas utility mortgage;
less the aggregate amount of gas utility mortgage bonds retired by sinking fund
operations, not theretofore used as a credit on account of the renewal fund in
previous renewal fund certificates. The renewal fund obligation may be
satisfied in whole or in part by credits consisting of unfunded property
additions and/or unfunded gas utility mortgage bonds credits.
Any cash deposited in the renewal fund, if and to the extent that Puget at
the time does not have property additions available for use as a credit to
satisfy such renewal fund obligation, may, upon the written order of
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Puget, be applied by the gas utility mortgage trustee to the redemption of
certain gas utility mortgage bonds or, if not so applied pursuant to the
provisions of the gas utility mortgage, to the retirement of gas utility
mortgage bonds.
Issuance of Gas Bonds and Withdrawal of Cash Deposited Against Such Issuance
The principal amount of gas utility mortgage bonds issuable under the gas
utility mortgage is not limited, provided that the issuance tests in the gas
utility mortgage are satisfied. Gas utility mortgage bonds may be issued from
time to time against one or more of the following:
. 60% of unfunded net property additions;
. deposit of cash with the gas utility mortgage trustee; and
. 100% of unfunded gas utility mortgage bond credits.
With certain exceptions, the issuance of gas utility mortgage bonds is
subject to net earnings available for interest being at least:
(1) two times the annual interest requirements on all Gas Bonds and prior
lien debt to be outstanding; and
(2) 1.75 times the annual interest charges on all indebtedness of Puget
to be outstanding immediately after such issuance.
Cash deposited is withdrawable against 60% of unfunded net property additions
in the case of moneys on deposit with the gas utility mortgage trustee for the
purpose described above, 100% of the amount of unfunded net additions in the
case of any other trust moneys and 100% of unfunded gas utility mortgage bond
credits.
Modification of Mortgage
The rights of the bondholders under the gas utility mortgage may be modified
by Puget with the consent of the holders of 66 2/3% in total principal amount
of the gas utility mortgage bonds and of not less than 66 2/3% of the principal
amount of each series affected. In general, however, no modification of the
terms of payment of principal or interest and no modification affecting the
lien or reducing the percentage required for modification is effective against
any bondholder without the bondholder's consent.
Concerning the Mortgage Trustee
The Bank of New York Company, Inc. is the gas utility mortgage trustee under
the mortgage indenture. The Bank of New York Company, Inc. is one of the
lenders under Puget's revolving credit facility.
The holders of a majority in total principal amount of the electric utility
mortgage bonds have the right to require the gas utility mortgage trustee to
enforce the gas utility mortgage, but the electric utility mortgage trustee is
entitled to receive reasonable indemnity and is not required to act under
certain circumstances.
Defaults
The gas utility mortgage defines the following as "defaults":
. failure to pay principal and premium when due;
. failure to pay interest for ten days after becoming due;
. failure to pay any installment of any sinking or other purchase fund for
30 days after becoming due;
. certain events in bankruptcy, insolvency or reorganization;
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. failure to pay money due under any indebtedness other than gas utility
mortgage bonds in an amount of $500,000 or more or the failure to
perform any other agreement evidencing the indebtedness if Puget's
failure causes any payments to become due prior to the due date;
. an unsatisfied continuance for 90 days after entry of a judgment in
excess of $100,000;
. an unstayed continuance for 60 days after an entry of an order for
reorganization or an appointment of a trustee; and
. failure for 30 days after notice to observe other covenants and
conditions after notice.
The gas utility mortgage indenture does not contain a provision requiring any
periodic evidence to be furnished as to the absence of default or as to
compliance with the terms thereof.
Subordinated Debentures
The subordinated debentures will be issued under the subordinated debt
indenture and will rank subordinated and junior in right of payment, to the
extent set forth in the subordinated debt indenture, to all "senior
indebtedness" (as defined below) of Puget.
If Puget defaults in the payment of any distributions on any senior
indebtedness when it becomes due and payable after any applicable grace period,
then, unless and until the default is cured or waived or ceases to exist, Puget
cannot make a payment on account of or redeem or otherwise acquire the
subordinated debentures. The subordinated debt indenture provisions described
in this paragraph, however, do not prevent Puget from making sinking fund
payments in subordinated debentures acquired prior to the maturity of senior
indebtedness or, in the case of default, prior to such default and notice
thereof. If there is any insolvency, bankruptcy, liquidation or other similar
proceeding relating to Puget, its creditors or its property, then all senior
indebtedness must be paid in full before any payment may be made to any holders
of subordinated debentures. Holders of subordinated debentures must return and
deliver any payments received by them, other than in a plan of reorganization
or through a defeasance trust as described above, directly to the holders of
senior indebtedness until all senior indebtedness is paid in full.
"Senior indebtedness" means distributions on the following, whether
outstanding on the date of execution of the subordinated debt indenture or
thereafter incurred, created or assumed:
. indebtedness of Puget for money borrowed by Puget or evidenced by
debentures (other than the subordinated debentures), notes, bankers'
acceptances or other corporate debt securities or similar instruments
issued by Puget;
. capital lease obligations of Puget;
. obligations of Puget incurred for deferring the purchase price of
property, with respect to conditional sales, and under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business);
. obligations of Puget with respect to letters of credit;
. all indebtedness of others of the type referred to in the four preceding
clauses assumed by or guaranteed in any manner by Puget or in effect
guaranteed by Puget; or
. renewals, extensions or refundings of any of the indebtedness referred
to in the preceding five clauses unless, in the case of any particular
indebtedness, renewal, extension or refunding, under the express
provisions of the instrument creating or evidencing the same or the
assumption or guarantee of the same, or pursuant to which the same is
outstanding, such indebtedness or such renewal, extension or refunding
thereof is not superior in right of payment to the subordinated debt
securities.
The subordinated debt indenture does not limit the total amount of senior
indebtedness that may be issued. As of June 30, 2000, senior indebtedness of
Puget totaled approximately $1,939,860,000.
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Certain Covenants
If trust debt securities are issued to the trust or the trustee of the trust
in connection with the issuance of trust preferred securities of the trust,
Puget will covenant that it will not:
(1) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of
Puget's capital stock; or
(2) make any payment of principal, interest or premium, if any, on, or
repay or repurchase or redeem any debt securities (including guarantees of
indebtedness for money borrowed) of Puget that rank equal with or junior
to, that trust debt security (other than (a) any dividend, redemption,
liquidation, interest, principal or guarantee payment by Puget where the
payment is made by way of securities (including capital stock) that rank
equal with or junior to the securities on which such dividend, redemption,
interest, principal or guarantee payment is being made, and (b) payments
under Puget's guarantees of trust securities);
if at such time (A) there shall have occurred any event of which Puget has
actual knowledge that (i) with the giving of notice or the lapse of time,
or both, would constitute an event of default under the indentures and (ii)
in respect of which Puget shall not have taken reasonable steps to cure,
(B) Puget shall be in default with respect to its payment of any
obligations under the guarantees or (C) Puget will have given notice of its
selection of an extension period as provided in the indentures with respect
to the trust debt securities and will not have rescinded such notice, or
such extension period, or any extension thereof, shall be continuing.
Puget also covenants:
(1) to maintain directly or indirectly 100% ownership of the trust common
securities, provided that certain successors that are permitted pursuant to
the indentures may succeed to Puget's ownership of the common securities;
(2) not to voluntarily dissolve, wind-up or liquidate the trust, except:
(a) in connection with a distribution of the debt securities to the
holders of the trust preferred securities in liquidation of such trust,
or
(b) in connection with certain mergers, consolidations or
amalgamations permitted by the amended and restated trust agreement;
and
(3) to use its reasonable efforts, consistent with the terms and
provisions of the amended and restated trust agreement, to cause such trust
to remain classified as a grantor trust and not as an association taxable
as a corporation for United States federal income tax purposes.
Events of Default
The subordinated debt indenture provides that events of default regarding any
series of subordinated debentures include:
. failure to pay required interest on any subordinated debentures of such
series for 30 days;
. failure to pay principal other than a scheduled installment payment or
premium, if any, on any subordinated note of such series when due;
. failure to make any required scheduled installment payment on
subordinated notes of such series;
. failure to perform for 60 days after notice any other covenant in the
relevant indenture other than a covenant included in the relevant
indenture solely for the benefit of a series of subordinated debentures
other than such series;
. certain events of bankruptcy or insolvency, whether voluntary or not;
and
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. such trust is voluntarily or involuntarily dissolved, wound-up or
terminated, except in connection with the distribution of subordinated
debentures to the holders of the common securities and the trust
preferred securities in liquidation of the trust, the redemption of all
outstanding trust securities of the trust and certain mergers,
consolidation or amalgamations permitted by the declaration of that
trust.
If an event of default regarding subordinated debentures of any series issued
should occur and be continuing, either the subordinated debenture trustee or
the holders of 25% in the principal amount of outstanding subordinated
debentures of such series may declare each subordinated debenture of that
series due and payable.
Holders of a majority in principal amount of the outstanding subordinated
debentures of any series will be entitled to control certain actions of the
subordinated debenture trustee and to waive past defaults regarding such
series. The trustee generally will not be requested, ordered or directed by any
of the holders of subordinated debentures, unless one or more of such holders
shall have offered to the trustee reasonable security or indemnity.
Before any holder of any series of subordinated debentures may institute
action for any remedy, except payment on such holder's subordinated debentures
when due, the holders of not less than 25% in principal amount of the
subordinated debentures of that series outstanding must request the
subordinated note trustee to take action. Holders must also offer and give the
satisfactory security and indemnity against liabilities incurred by the trustee
for taking such action.
Puget is required to annually furnish the subordinated debenture trustee a
statement as to Puget's compliance with all conditions and covenants under the
subordinated debt indenture. The subordinated debenture trustee is required,
within 90 days after the occurrence of a default with respect to a series of
subordinated debentures, to give notice of all defaults affecting such series
of subordinated debentures to each holder of such series of debentures.
However, the subordinated debt indenture provides that the subordinated
debenture trustee may withhold notice to the holders of the subordinated
debentures of any series of any default affecting such series, except payment
on holders' subordinated debentures when due, if it considers withholding
notice to be in the interests of the holders of the subordinated debentures of
such series.
Consolidation, Merger or Sale of Assets
The subordinated debt indenture provides that Puget may consolidate with or
merge into, or sell, lease or convey its property as an entirety or
substantially as an entirety to, any other corporation if the successor
corporation assumes the obligations of Puget under the subordinated debentures
and the subordinated debt indenture and is organized and existing under the
laws of the United States of America, any U.S. state or the District of
Columbia.
Modification of the Indenture
The subordinated debt indenture permits Puget and the subordinated debenture
trustee to enter into supplemental indentures without the consent of the
holders of the subordinated debentures to:
. establish the form and terms of any series of securities under the
subordinated debt indenture;
. secure the subordinated debentures with property or assets;
. add covenants of Puget for the benefit of the holders of the
subordinated debentures;
. cure any ambiguity or correct or supplement any provision in the
indenture or any supplement to the indenture, provided that no such
action adversely affects the interests of the holders of the
subordinated debentures; and
. evidence and provide for the acceptance of a successor trustee.
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The subordinated debt indenture also permits Puget and the subordinated
debenture trustee, with the consent of the holders of at least a majority in
total principal amount of the subordinated debentures of all series then
outstanding and affected (voting as one class), to change in any manner the
provisions of the subordinated debt indenture or modify in any manner the
rights of the holders of the subordinated debentures of each such affected
series. Puget and the relevant trustee may not, without the consent of the
holder of each subordinated debenture affected, enter into any supplemental
indenture to:
. change the time of payment of the principal;
. reduce the principal amount of such subordinated debentures;
. reduce the rate or change the time of payment of interest on such
subordinated debentures; or
. impair the right to institute suit for the enforcement of any payment on
any subordinated debentures when due.
In addition, no such modification may reduce the percentage in principal
amount of the subordinated debentures of the affected series, the consent of
whose holders is required for any such modification or for any waiver provided
for in the subordinated debt indenture.
Prior to the acceleration of the maturity of any subordinated debentures, the
holders, voting as one class, of a majority in total principal amount of the
subordinated debentures with respect to which a default or event of default has
occurred and is continuing, may, on behalf of the holders of all such affected
subordinated debentures, waive any past default or event of default and its
consequences, except a default or an event of default in respect of a covenant
or provision of the applicable indenture or of any subordinated debenture that
cannot be modified or amended without the consent of the holder of each
subordinated debenture affected.
Defeasance, Covenant Defeasance and Discharge
The subordinated debt indenture provides that, at the option of Puget, Puget
will be discharged from all obligations in respect of the subordinated
debentures of a particular series then outstanding (except for certain
obligations to register the transfer of or exchange the subordinated debentures
of such series, to replace stolen, lost or mutilated subordinated debentures of
such series, to maintain paying agencies and to maintain the trust described
below) if Puget in each case irrevocably deposits in trust with the relevant
trustee money, and/or securities backed by the full faith and credit of the
United States which, through the payment of the principal thereof and the
interest thereon in accordance with their terms, will provide money in an
amount sufficient to pay all the principal and interest on the subordinated
debentures of such series on the stated maturities of such subordinated
debentures in accordance with the terms thereof.
To exercise this option, Puget is required to deliver to the relevant trustee
an opinion of independent counsel to the effect that the exercise of such
option would not cause the holders of the subordinated debentures of such
series to recognize income, gain or loss for United States federal income tax
purposes as a result of such defeasance, and such holders will be subject to
United States federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such defeasance had not occurred.
Trust Preferred Securities
General
The trust may issue, on one or more occasion, trust preferred securities
having terms described in the prospectus supplement relating thereto. The
amended and restated trust agreement of the trust will authorize the
establishment of no more than one series of trust preferred securities, having
such terms, including distributions, redemption, voting, liquidation rights and
such other preferred, deferred or other special rights or such rights or
restrictions as shall be set forth therein or otherwise established by the
trustees pursuant thereto.
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You should read the prospectus supplement relating to the trust preferred
securities for specific terms, including:
. the distinctive designation and the number of trust preferred securities
to be offered, which will represent undivided beneficial interests in
the assets of the trust;
. the annual distribution rate and the dates or date upon which such
distributions will be paid, provided, however, distributions on the
trust preferred securities will be paid quarterly in arrears to holders
of trust preferred securities as of a record date on which the trust
preferred securities are outstanding;
. whether distributions on trust preferred securities would be deferred
during any deferral of interest payments on the debt securities,
provided, however, that no such deferral, including extensions, if any,
may exceed 20 consecutive quarters nor extend beyond the stated maturity
date of the trust debt securities, and at the end of any such deferrals,
Puget will make all interest payments then accrued or deferred and
unpaid (including any compounded interest);
. the amount of any liquidation preference;
. the obligation, if any, of the trust to redeem trust preferred
securities as a result of the exercise by Puget of an option on the
corresponding debt securities and the price or prices at which, the
period or periods within which and the terms and conditions upon which
trust preferred securities will be purchased or redeemed, in whole or in
part, under such obligation;
. the period or periods within which and the terms and conditions, if any,
including the price or prices or the rate or rates of conversion or
exchange and the terms and conditions of any adjustments, upon which the
trust preferred securities shall be convertible or exchangeable at the
option of the holder of the trust preferred securities of other property
or cash;
. the voting rights, if any, of the trust preferred securities in addition
to those required by law and in the amended and restated trust
agreement, or set forth under a Puget's guarantee (as defined below);
. the additional payments, if any, that the trust will pay as a
distribution as necessary so that the net amounts received by the trust
and distributable to the holders of the trust preferred securities,
after all taxes, duties, assessments or governmental charges of whatever
nature (other than withholding taxes) have been paid will not be less
than the amount that would have been received and distributed by the
trust, and the amount the holders of the trust preferred securities
would have received, had no such taxes, duties, assessments or
governmental charges been imposed;
. the terms and conditions, if any, upon which the trust debt securities
may be distributed to holders of trust preferred securities; and
. any other relative rights, powers, preferences, privileges, limitations
or restrictions of the trust preferred securities not inconsistent with
the amended and restated trust agreement or applicable law.
All trust preferred securities offered hereby will be irrevocably guaranteed
by Puget, on a subordinated basis and to the extent set forth below under "The
Guarantee." Any applicable federal income tax considerations applicable to any
offering of the trust preferred securities will be described in the prospectus
supplement relating thereto. The total number of trust preferred securities
that the trust shall have authority to issue will be determined pursuant to the
terms of the amended and restated trust agreement.
Effect of Obligations Under the Debt Securities and the Guarantees
As will be set forth in the amended and restated trust agreement, the sole
purpose of the trust is to issue the common securities and the trust preferred
securities evidencing undivided beneficial interests in the assets of the
trust, and to invest the proceeds from such issuance and sale to acquire
directly the debt securities from Puget.
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As long as payments of interest and other payments are made when due on the
debt securities, such payments will be sufficient to cover distributions and
payments due on the common securities and the trust preferred securities
because of the following factors:
. the total principal amount of debt securities will be equal to the sums
of the total stated liquidation amount of the common securities and the
trust preferred securities;
. the interest rate and the interest and other payment dates on the debt
securities will match the distribution rate and distribution and other
payment dates for the common securities and the trust preferred
securities;
. Puget will pay all, and the trust shall not be obligated to pay,
directly or indirectly, its costs, expenses, debt and obligations (other
than with respect to the common securities and the trust preferred
securities); and
. the amended and restated trust agreement will further provide that the
Puget trustees will not take or cause or permit the trust to, among
other things, engage in any activity that is not consistent with the
purposes of the trust.
Payments of distributions (to the extent funds for distributions are
available) and other payments due on the trust preferred securities (to the
extent funds for other payments are available) are guaranteed by Puget as and
to the extent discussed under "The Guarantee" below. If Puget does not make
interest payments on the debt securities purchased by the trust, it is expected
that the trust will not have sufficient funds to pay distributions on the trust
preferred securities. The Puget guarantee, which is for purpose of ensuring
that the trust performs its obligations to pay distributions on the trust
preferred securities, does not apply to any payment of distributions unless and
until the trust has sufficient funds for the payment of distributions and other
payments on the trust preferred securities. The trust will have sufficient
funds only if and to the extent that Puget has made a payment of interest or
principal on the debt securities held by the trust as its sole asset. The Puget
guarantee, when taken together with Puget's obligations under the debt
securities and the related indenture and its obligations under the amended and
restated trust agreement, including its obligations to pay costs, expenses,
debts and liabilities of the trust (other than with respect to the common
securities and the trust preferred securities), provides a full and
unconditional guarantee of amounts on the trust preferred securities.
If Puget fails to make interest or other payments on the debt securities when
due (taking account of any extension period), the amended and restated trust
agreement will provide a mechanism whereby the holders of the trust preferred
securities may direct a property trustee to enforce its rights under the debt
securities. If a property trustee fails to enforce its rights under the debt
securities, a holder of trust preferred securities may, to the fullest extent
permitted by applicable law, institute a legal proceeding against Puget to
enforce a property trustee's rights under the debt securities without first
instituting any legal proceeding against a property trustee or any other person
or entity. Notwithstanding the foregoing, if an event of default has occurred
and is continuing under the amended and restated trust agreement, and such
event is attributable to the failure of Puget to pay interest or principal on
the debt securities on the date such interest or principal is otherwise payable
(or in the case of redemption on the redemption date), then a holder of trust
preferred securities may institute legal proceedings directly against Puget to
obtain payment. If Puget fails to make payments under the guarantee, the
guarantee provides a mechanism whereby the holders of the trust preferred
securities may direct the guarantee trustee to enforce its rights thereunder.
Any holder of trust preferred securities may institute a legal proceeding
directly against Puget to enforce the guarantee trustee's rights under the
guarantee without first instituting a legal proceeding against the trust, the
guarantee trustee, or any other person or entity.
The Guarantee
Set forth below is a summary of information concerning the guarantee that
will be executed and delivered by Puget for the benefit of the holders, from
time to time, of the trust preferred securities. The guarantee will be
qualified as an indenture under the Trust Indenture Act of 1939. Bank One Trust
Company, N.A will act as
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indenture trustee under the guarantee for the purpose of compliance with the
provisions of the Trust Indenture Act of 1939. This summary is not complete and
is subject in all respects to the provisions of, and is qualified in its
entirety by reference to, the guarantee, which is filed as an exhibit to the
Registration Statement of which this prospectus forms a part.
General
Puget will irrevocably agree to pay in full, on a subordinated basis to the
extent set forth herein, the guarantee payments (as described below) to the
holders of the trust preferred securities, as and when due, regardless of any
defense, right of set-off or counterclaim that the trust may have or assert
other than the defense of payment. The following payments with respect to the
trust preferred securities, to the extent not paid by or on behalf of the
trust, will be subject to a guarantee by Puget of:
(1) any accumulated and unpaid distributions required to be paid on the
trust preferred securities, to the extent that the trust has funds on hand
available therefor at such time;
(2) the redemption price with respect to any trust preferred securities
called for redemption to the extent that the trust has funds on hand
available therefor at such time; or
(3) upon a voluntary or involuntary dissolution, winding up or
liquidation of the trust (unless the debt securities are distributed to
holders of the trust preferred securities), the lesser of (a) the
liquidation distribution, to the extent that the trust has funds on hand
available for distribution at such time, and (b) the amount of assets of
the trust remaining available for distribution to holders of trust
preferred securities.
Puget's obligation to make a guarantee payment may be satisfied by direct
payment of the required amounts by Puget to the holders of the trust preferred
securities or by causing the trust to pay such amount to such holders.
The Puget guarantee will be an irrevocable guarantee on a subordinated basis
of the trust's obligations under the trust preferred securities, but will apply
only to the extent that the trust has funds sufficient to make such payments,
and is not a guarantee of collection. If Puget does not make interest payments
on the debt securities held by the trust, the trust will not be able to pay
distributions on the trust preferred securities and will not have funds legally
available therefor.
Puget has, through the guarantee, the amended and restated trust agreement,
the subordinated debentures and the indentures, taken together, fully,
irrevocably and unconditionally guaranteed all of the trust's obligations under
the trust preferred securities. No single document standing alone or operating
in conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
trust's obligations under the trust preferred securities.
Puget has also agreed separately to irrevocably and unconditionally guarantee
the obligations of the trust with respect to the common securities to the same
extent as the guarantee of the preferred securities, except that upon the
occurrence and during the continuation of an amended and restated trust
agreement event of default, holders of trust preferred securities shall have
priority over holders of common securities with respect to distributions and
payments on liquidation, redemption or otherwise.
Certain Covenants of Puget
Puget also will covenant that it will not:
(1) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of
Puget's capital stock; or
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(2) make any payment of principal, interest or premium, if any, on or
repay or repurchase or redeem any debt securities (including guarantees of
indebtedness for money borrowed) of Puget that rank equal with or junior to
the trust debt securities (other than (a) any dividend, redemption,
liquidation, interest, principal or guarantee payment by Puget where the
payment is made by way of securities (including capital stock) that rank
equal with or junior to the securities on which such dividend, redemption,
interest, principal or guarantee payment is being made, (b) payments under
the Puget guarantee of the trust securities, (c) as a result of a
reclassification of Puget's capital stock or the exchange or conversion of
one series or class of Puget's capital stock for another series or class of
Puget's capital stock and (d) the purchase of fractional interests in
shares of Puget's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or
exchanged);
if at such time (A) there shall have occurred any event of which Puget has
actual knowledge that (i) with the giving of notice or the lapse of time,
or both, would constitute a event of default under the indenture and (ii)
in respect of which Puget shall not have taken reasonable steps to cure,
(B) Puget shall be in default with respect to its payment of any
obligations under the guarantee; or (C) Puget shall have given notice of
its selection of an extension period as provided in the indenture with
respect to the debt securities and shall not have rescinded such notice, or
such extension period, or any extension thereof, shall be continuing.
Puget also will covenant to:
(1) maintain directly or indirectly 100% ownership of the trust common
securities, provided that certain successors that are permitted pursuant to
the indenture may succeed to Puget's ownership of the common securities,
(2) not voluntarily dissolve, wind up or liquidate the trust, except:
. in connection with a distribution of the debt securities to the
holders of the trust preferred securities in liquidation of the
trust, or
. in connection with certain mergers, consolidations or
amalgamations permitted by the amended and restated trust
agreement, and
(3) use its reasonable efforts, consistent with the terms and provisions
of the applicable amended and restated trust agreement, to cause the trust
to remain classified as a grantor trust and not as an association taxable
as a corporation for United States federal income tax purposes.
Amendments and Assignment
Except with respect to any changes that do not materially adversely affect
the rights of holders of the trust preferred securities (in which case no vote
will be required), the Puget guarantee of the trust preferred securities may
not be amended without the prior approval of the holders of not less than a
majority in total liquidation amount of such outstanding trust preferred
securities. All guarantees and agreements contained in the guarantee shall bind
the successors, assigns, receivers, trustees and representatives of Puget and
shall inure to the benefit of the holders of the trust preferred securities
then outstanding.
Termination of the Guarantee
Puget's guarantee of the trust preferred securities will terminate and be of
no further force and effect upon full payment of the redemption price of the
trust preferred securities, upon full payment of the amounts payable upon
liquidation of the trust or upon distribution of the debt securities to the
holders of the trust preferred securities in exchange for all of the trust
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 trust preferred
securities must restore payment of any sums paid under such trust preferred
securities or the guarantee.
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Events of Default
An event of default under Puget's guarantee of the trust preferred securities
will occur upon the failure of Puget to perform any of its payment or other
obligations thereunder. The holders of a majority in total liquidation amount
of the trust 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.
If the guarantee trustee fails to enforce Puget's guarantee of the trust
preferred securities, any holder of the trust preferred securities may
institute a legal proceeding directly against Puget to enforce its rights under
the guarantee without first instituting a legal proceeding against the trust,
the guarantee trustee or any other person or entity. In addition, any record
holder of trust preferred securities shall have the right, which is absolute
and unconditional, to proceed directly against Puget to obtain guarantee
payments, without first waiting to determine if the guarantee trustee has
enforced the guarantee or instituting a legal proceeding against the trust, the
guarantee trustee or any other person or entity. Puget has waived any right or
remedy to require that any action be brought just against the trust, or any
other person or entity before proceeding directly against Puget.
Status of the Guarantee
The Puget guarantee of the trust preferred securities will constitute an
unsecured obligation of Puget and will rank:
(1) equal to or subordinate and junior in right of payment to all other
liabilities of Puget, as applicable,
(2) equal with the most senior preferred stock now or hereafter issued by
Puget and with any guarantee now or hereafter entered into by Puget in
respect of any preferred or preference stock of any affiliate of Puget, and
(3) senior to Puget's common stock.
Puget's guarantee of the trust preferred securities 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 trust preferred securities. The guarantee will not be discharged
except by payment of the guaranteed payments in full to the extent not paid by
the trust or upon distribution of the debt securities to the holders of the
trust preferred securities. The guarantee does not place a limitation on the
amount of additional indebtedness that may be incurred by Puget.
PLAN OF DISTRIBUTION
Puget and/or the trust may sell the offered securities (1) through the
solicitation of proposals of underwriters or dealers to purchase the offered
securities; (2) through underwriters or dealers on a negotiated basis; (3)
through agents; or (4) directly to a limited number of purchasers or to a
single purchaser.
The prospectus supplement with respect to any offered securities will set
forth the terms of such offering, including:
. the name or names of any underwriters, dealers or agents;
. the purchase price of the offered securities and the proceeds to Puget
and/or the trust from their sale;
. any underwriting discounts and commissions and other items constituting
underwriters' compensation;
. any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers; and
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. any securities exchange on which such offered securities may be listed.
Any initial public offering price, discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
If underwriters are used in the sale, they will acquire the offered
securities for their own account and may resell them on one or more occasions
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
offered securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of 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 of such prospectus supplement. Unless otherwise set forth in the
prospectus supplement relating thereto, 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 the offered
securities if any are purchased.
If dealers are utilized in the sale of offered securities, Puget and/or the
trust will sell such offered securities to the dealers as principals. The
dealers may then resell such offered securities to the public at varying prices
to be determined by such dealers at the time of resale. The names of the
dealers and the terms of the transaction will be set forth in the prospectus
supplement relating thereto.
The offered securities may be sold directly by Puget and/or the trust or
through agents designated by Puget and/or the trust from time to time. Any
agent involved in the offer or sale of the offered securities in respect to
which this prospectus is delivered will be named, and any commissions payable
by Puget and/or the trust to such agent will be set forth, in the prospectus
supplement relating thereto. Unless otherwise indicated in the prospectus
supplement, any such agent will be acting on a best-efforts basis for the
period of its appointment.
The offered securities may be sold directly by Puget and/or the trust to
institutional investors or others, who may be deemed to be underwriters within
the meaning of the Securities Act with respect to any resale thereof. The terms
of any such sales will be described in the prospectus supplement relating
thereto.
Agents, dealers and underwriters may be entitled under agreements with Puget
and/or the trust to indemnification by Puget and/or the trust against certain
civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which such agents, dealers or
underwriters may be required to make in respect thereof. Agents, dealers and
underwriters may be customers of, engage in transactions with, or perform
services for Puget and/or the trust in the ordinary course of business.
The offered securities may also be offered and sold, if so indicated in the
applicable prospectus supplement, in connection with a remarketing upon their
purchase, in accordance with a redemption or repayment pursuant to their terms,
or otherwise, by one or more firms ("remarketing firms"), acting as principals
for their own accounts or as agents for Puget and/or the trust. Any remarketing
firm will be identified and the terms of its agreement, if any, with its
compensation will be described in the applicable prospectus supplement.
Remarketing firms may be deemed to be underwriters, as such term is defined in
the Securities Act, in connection with the offered securities remarketed
thereby. Remarketing firms may be entitled under agreements that may be entered
into with Puget and/or the trust to indemnification or contribution by Puget
and/or the trust against certain civil liabilities, including liabilities under
the Securities Act, and may be customers of, engage in transactions or perform
services for Puget and its subsidiaries in the ordinary course of business.
The offered securities may or may not be listed on a national securities
exchange. You should read the prospectus supplement for a discussion of this
matter. We cannot assure you there will be a market for any of the offered
securities.
27
<PAGE>
LEGAL OPINIONS
Opinions as to the legality of certain of the offered securities will be
rendered for Puget by Perkins Coie LLP, Seattle, Washington. Certain matters of
Delaware law relating to the validity of the trust preferred securities will be
passed upon on behalf of the trust by Skadden, Arps, Slate, Meagher & Flom LLP,
special Delaware counsel to the trust. Certain United States federal income
taxation matters may be passed upon for Puget and the trust by either Perkins
Coie LLP, tax counsel for Puget, or by special tax counsel to Puget and to the
trust, who will be named in the prospectus supplement. Certain legal matters
with respect to the offered securities will be passed upon by counsel for any
underwriters, dealers or agents, each of whom will be named in the related
prospectus supplement.
EXPERTS
The financial statements and financial statement schedule incorporated in
this prospectus by reference to Puget's Annual Report on Form 10-K for the year
ended December 31, 1999 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
28
<PAGE>
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[LOGO OF PUGET SOUND ENERGY]
--------------------------------------------------------------------------------
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<PAGE>
PUGET SOUND ENERGY, INC.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
<TABLE>
<S> <C>
Securities and Exchange Commission Fees.......................... $132,000
Listing fees..................................................... *
Printing fees.................................................... *
Trustee fees (including counsel fees)............................ *
Legal fees and expenses.......................................... *
Blue Sky fees and expenses....................................... *
Rating agency fees............................................... *
Independent accountant fees...................................... *
Miscellaneous.................................................... *
--------
Total.......................................................... $ *
========
</TABLE>
--------
* To be provided by amendment.
Item 15. Indemnification of Directors and Officers
Sections 23B.08.500 through 23B.08.600 of the Washington Business Corporation
Act (the "WBCA") authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities arising under the Securities Act of 1933, as amended (the
"Securities Act"). Section 6 of Puget's Bylaws (the "Bylaws"), provides for
indemnification of Puget's directors and officers to the maximum extent
permitted by Washington law.
Section 23B.08.320 of the WBCA authorizes a corporation to eliminate or limit
a director's personal liability to the corporation or its shareholders for
monetary damages for conduct as a director, except in certain circumstances
involving acts or omissions, intentional misconduct by a director or knowing
violations of law by a director or distributions illegal under Washington law,
or any transaction from which the director will personally receive a benefit in
money, property or services to which the director is not legally entitled.
Article X of Puget's Restated Articles of Incorporation, as amended (the
"Articles of Incorporation"), contains provisions implementing, to the fullest
extent permitted by Washington law, such limitations on a director's liability
to Puget and its shareholders.
Officers and directors of Puget are covered by insurance (with certain
exceptions and certain limitations) that indemnifies them against losses and
liabilities arising from certain alleged "wrongful acts," including alleged
errors or misstatements, or certain other alleged wrongful acts or omissions
constituting neglect or breach of duty.
The above discussion of the WBCA and the Bylaws and Articles of Incorporation
is not intended to be exhaustive and is qualified in its entirety by reference
to such statute, the Bylaws and the Articles of Incorporation.
II-1
<PAGE>
Item 16. List of Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
1.1* Form of Underwriting Agreement with respect to the offered securities
(other than the trust preferred securities).
1.2* Form of Underwriting Agreement with respect to the trust preferred
securities.
4.1 Indenture defining the rights of the holders of Puget's Senior Notes
(incorporated herein by reference to Exhibit 4-a to Quarterly Report
on Form 10-Q for the quarter ended June 30, 1998, Commission File No.
1-4393).
4.2 First and Second Supplemental Indentures defining the rights of the
holders of Puget's Senior Notes (incorporated herein by reference to
Exhibit 4-b to Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998, Commission File No. 1-4393; and Exhibit 4.26 to Current
Report on Form 8-K, dated March 4, 1999).
4.3 Fortieth through Seventy-seventh Supplemental Indentures defining the
rights of the holders of Puget's First Mortgage Bonds (incorporated
herein by reference to Exhibit 2-d to Registration No. 2-60200;
Exhibit 4-c to Registration No. 2-13347; Exhibits 2-e through and
including 2-k to Registration No. 2-60200; Exhibit 4-h to Registration
No. 2-17465; Exhibits 2-1, 2-m and 2-n to Registration No. 2-60200;
Exhibits 2-m to Registration No. 2-37645; Exhibit 2-o through and
including 2-s to Registration No. 2-60200; Exhibit 5-b to Registration
No. 2-62883; Exhibit 2-h to Registration No. 2-65831; Exhibit (4)-j-1
to Registration No. 2-72061; Exhibit (4)-a to Registration No. 2-
91516; Exhibit (4)-b to Annual Report on Form 10-K for the fiscal year
ended December 31, 1985, Commission File No. 1-4393; Exhibits (4)(a)
and (4)(b) to Puget's Current Report on Form 8-K, dated April 22,
1986; Exhibit (4)a to Puget's Current Report on Form 8-K, dated
September 5, 1986; Exhibit (4)-b to Puget's Quarterly Report on Form
10-Q for the quarter ended September 30, 1986, Commission File No. 1-
4393; Exhibit (4)-c to Registration No. 33-18506; Exhibit (4)-b to
Annual Report on Form 10-K for the fiscal year ended December 31,
1989, Commission File No. 1-4393; Exhibit (4)-b to Annual Report on
Form 10-K for the fiscal year ended December 31, 1990, Commission File
No. 1-4393; Exhibits (4)-b and (4)- c to Registration No. 33-45916;
Exhibit (4)-c to Registration No. 33-50788; Exhibit (4)-a to
Registration No. 33-53056; Exhibit 4.3 to Registration No. 33-63278;
Exhibit 4-c to Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998, Commission File No. 1-4393; and Exhibit 4.27 to Current
Report on Form 8-K, dated March 1, 1999).
4.4 Rights Agreement, dated as of January 15, 1991, between Puget and The
Chase Manhattan Bank, N.A., as Rights Agent (incorporated herein by
reference to Exhibit 2.1 to Registration Statement on Form 8-A filed
on January 17, 1991, Commission File No. 1-4393).
4.5 Amendment No. 1 dated as of August 30, 1991, to the Rights Agreement
dated as of January 15, 1991, between the Registrant and the Bank of
New York (as successor to The Chase Manhattan Bank, N.A.), as Rights
Agent (incorporated herein by reference to Exhibit 2.1 to Registration
Statement on Form 8 filed on August 30, 1991).
4.6 Amendment No. 2 dated as of October 18, 1995, to the Rights Agreement
dated as of January 15, 1991, between the Registrant and The Bank of
New York (as successor to The Chase Manhattan Bank, N.A.), as Rights
Agent (incorporated herein by reference to Exhibit 1 to Registration
Statement on Form 8-A/A filed on October 27, 1995).
4.7 Pledge Agreement dated August 1, 1991, between Puget and The First
National Bank of Chicago, as Trustee (incorporated herein by reference
to Exhibit (4)-j to Registration No. 33-45916).
4.8 Loan Agreement dated August 1, 1991, between the City of Forsyth,
Rosebud County, Montana and Puget (incorporated herein by reference to
Exhibit (4)-k to Registration No. 33-45916).
4.9 Statement of Relative Rights and Preferences for the Adjustable Rate
Cumulative Preferred Stock, Series B ($25 Par Value) (incorporated
herein by reference to Exhibit 1.1 to Registration Statement on Form
8-A filed February 14, 1994, Commission File No. 1-4393).
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
4.10 Statement of Relative Rights and Preferences for the Preference Stock,
Series R, $50 Par Value (incorporated herein by reference to Exhibit
1.5 to Registration Statement on Form 8-A filed February 14, 1994,
Commission File No. 1-4393).
4.11 Statement of Relative Rights and Preferences for the 7% Series
Preferred Stock Cumulative, $100 Par Value (incorporated herein by
reference to Exhibit 1.6 to Registration Statement on Form 8-A filed
February 14, 1994, Commission File No. 1-4393).
4.12 Pledge Agreement, dated as of March 1, 1992, by and between Puget and
Chemical Bank relating to a series of first mortgage bonds
(incorporated herein by reference to Exhibit 4.15 to Annual Report on
Form 10-K for the fiscal year ended December 31, 1993, Commission File
No. 1-4393).
4.13 Pledge Agreement, dated as of April 1, 1993, by and between Puget and
The First National Bank of Chicago, relating to a series of first
mortgage bonds (incorporated herein by reference to Exhibit 4.16 to
Annual Report on Form 10-K for the fiscal year ended December 31,
1993, Commission File No. 1-4393).
4.14 Form of Statement of Relative Rights and Preferences for the Series II
Cumulative Preferred Stock, $25 Par Value (incorporated herein by
reference to Annex F to the Joint Proxy Statement/Prospectus filed
February 1, 1996).
4.15 Form of Statement of Relative Rights and Preferences for the Series
III Cumulative Preferred Stock, $25 Par Value (incorporated herein by
reference to Annex F to the Joint Proxy Statement/Prospectus filed
February 1, 1996).
4.16 Indenture of First Mortgage dated as of April 1, 1957 (incorporated
herein by reference to Washington Natural Gas Company Exhibit 4-B,
Registration No. 2-14307).
4.17 Sixth Supplemental Indenture dated as of August 1, 1966 (incorporated
herein by reference to Washington Natural Gas Company Exhibit to Form
8-K for month of August 1966, File No. 0-951).
4.18 Twelfth Supplemental Indenture dated as of November 1, 1972
(incorporated herein by reference to Washington Natural Gas Company
Exhibit to Form 8-K for November 1972, File No. 0-951).
4.19 Seventeenth Supplemental Indenture dated as of August 9, 1978
(incorporated herein by reference to Washington Energy Company Exhibit
5-K.18, Registration No. 2-64428).
4.20 Twenty-sixth Supplemental Indenture dated as of September 1, 1990
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 4-B.19, Form 10-K for the year ended September 30, 1990, File
No. 0-951).
4.21 Twenty-seventh Supplemental Indenture dated as of September 1, 1990
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 4-B.20, Form 10-K for the year ended September 30, 1988, File
No. 0-951).
4.22 Twenty-eighth Supplemental Indenture dated as of July 31, 1991
(incorporated herein by reference to Washington Natural Gas Company
exhibit 4-A, Form 10-Q for the quarter ended March 31, 1993, File No.
0-951).
4.23 Twenty-ninth Supplemental Indenture dated as of June 1, 1993
(incorporated herein by reference to Exhibit 4-A of Washington Natural
Gas Company's S-3 Registration Statement, Registration No. 33-49599).
4.24 Thirtieth Supplemental Indenture dated as of August 15, 1995
(incorporated herein by reference to Exhibit 4-A of Washington Natural
Gas Company's S-3 Registration Statement, Registration No. 33-61859).
4.25* Form of Third Supplemental Indenture defining the rights of the
holders of Puget's Senior Notes.
4.26* Form of Seventy-eighth Supplemental Indenture defining the rights of
the holders of Puget's First Mortgage Bonds.
4.27 Certificate of Trust of Puget Sound Energy Capital Trust II, dated
October 3, 2000.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
4.28 Declaration of Trust of Puget Sound Energy Capital Trust II, dated
October 3, 2000.
4.29* Form of Amended and Restated Declaration of Trust of Puget Sound
Energy Capital Trust II.
4.30* Form of Indenture to be used in connection with the issuance of
Subordinated Debentures and Preferred Securities.
4.31* Form of Preferred Securities Guarantee Agreement.
4.32* Form of Common Securities Guarantee Agreement.
5.1 Opinion of Perkins Coie LLP regarding the legality of the Senior
Notes, the Subordinated Debentures and the Preferred Securities
Guarantee.
5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding the
legality of the Preferred Securities.
8.1* Opinion of Perkins Coie LLP regarding tax matters.
12.1 Statement setting forth computations of ratios of earnings to fixed
charges (incorporated herein by reference to Exhibit 12-a to Quarterly
Report on Form 10-Q for the quarter ended June 30, 2000).
23.1 Consent of Perkins Coie LLP (contained in opinion referenced as
Exhibit 5.1).
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (contained in
opinion referenced as Exhibit 5.2).
23.3 Consent of PricewaterhouseCoopers LLP.
24.1 Power of attorney (contained on signature page of Registration
Statement on page II-6).
25.1 Statement of Eligibility of The State Street Bank and Trust Company.
25.2 Statement of Eligibility of Bank One Trust Company, N.A.
25.3 Statement of Eligibility of Bank One Trust Company, N.A.
</TABLE>
--------
* To be filed by amendment or incorporated by reference in connection with the
offering of securities.
Item 17. Undertakings
The undersigned registrant 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, unless the information required to be included in
such post-effective amendment is contained in a periodic report filed by
the registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 and incorporated by reference in this registration
statement.
(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, unless such information required to be included in
such post-effective amendment is contained in a periodic report filed by
the registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 and incorporated herein by reference. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high and of the estimate
maximum offering range may be reflected in the form of a prospectus filed
with the Commissions pursuant to Rule 424(b) if, in the aggregate, the
changes in the volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
II-4
<PAGE>
(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.
(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 the purpose of determining any 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 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions described under Item 15 above,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the 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 registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of 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-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Puget Sound
Energy, Inc. certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunder duly authorized, in the City of Bellevue, State of Washington, on
October 4, 2000.
PUGET SOUND ENERGY, INC.
/s/ William S. Weaver
By: _________________________________
William S. Weaver
President and Chief Executive
Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes and
appoints Richard L. Hawley, Donald E. Gaines and Tommy G. Leong, and each of
them, with full power of substitution and resubstitution and full power to act
without the other, as his or her true and lawful attorney-in-fact and agent to
act in his or her name, place and stead and to execute in the name and on
behalf of each person, individually and in each capacity stated below, and to
file, any and all amendments to this registration statement, including any and
all post-effective amendments, or any registration statements to be filed in
connection with this registration statement pursuant to Rule 462 under the
Securities Act of 1933, as amended, 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-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and
thing, ratifying and confirming all that said attorneys-in-fact and agents or
any of them or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed by the following persons in the
capacities indicated below on the 4th day of October, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C> <C>
/s/ William S. Weaver President, Chief Executive Officer
____________________________________ (Principal Executive Officer)
William S. Weaver
/s/ Richard L. Hawley Vice President and Chief Financial
____________________________________ Officer
Richard L. Hawley (Principal Financial Officer)
/s/ James W. Eldredge Corporate Secretary and Controller
____________________________________ (Principal Accounting Officer)
James W. Eldredge
/s/ Douglas P. Beighle Director
____________________________________
Douglas P. Beighle
/s/ Charles W. Bingham Director
____________________________________
Charles W. Bingham
/s/ Phyllis J. Campbell Director
____________________________________
Phyllis J. Campbell
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C> <C>
/s/ Craig W. Cole Director
____________________________________
Craig W. Cole
/s/ Donald J. Covey Director
____________________________________
Donald J. Covey
/s/ Robert L. Dryden Director
____________________________________
Robert L. Dryden
/s/ John D. Durbin Director
____________________________________
John D. Durbin
/s/ John W. Ellis Director
____________________________________
John W. Ellis
/s/ Tomio Moriguchi Director
____________________________________
Tomio Moriguchi
/s/ Sally G. Narodick Director
____________________________________
Sally G. Narodick
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Puget Sound
Energy Capital Trust II certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunder duly authorized, in the City of Bellevue, State of
Washington, on October 4, 2000.
PUGET SOUND ENERGY CAPITAL TRUST II
/s/ Richard L. Hawley
By: _________________________________
Richard L. Hawley
Trustee
/s/ Donald E. Gaines
By: _________________________________
Donald E. Gaines
Trustee
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
1.1* Form of Underwriting Agreement with respect to the offered securities
(other than the trust preferred securities).
1.2* Form of Underwriting Agreement with respect to the trust preferred
securities.
4.1 Indenture defining the rights of the holders of Puget's Senior Notes
(incorporated herein by reference to Exhibit 4-a to Quarterly Report
on Form 10-Q for the quarter ended June 30, 1998, Commission File No.
1-4393).
4.2 First and Second Supplemental Indentures defining the rights of the
holders of Puget's Senior Notes (incorporated herein by reference to
Exhibit 4-b to Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998, Commission File No. 1-4393; and Exhibit 4.26 to Current
Report on Form 8-K, dated March 4, 1999).
4.3 Fortieth through Seventy-seventh Supplemental Indentures defining the
rights of the holders of Puget's First Mortgage Bonds (incorporated
herein by reference to Exhibit 2-d to Registration No. 2-60200;
Exhibit 4-c to Registration No. 2-13347; Exhibits 2-e through and
including 2-k to Registration No. 2-60200; Exhibit 4-h to Registration
No. 2-17465; Exhibits 2-1, 2-m and 2-n to Registration No. 2-60200;
Exhibits 2-m to Registration No. 2-37645; Exhibit 2-o through and
including 2-s to Registration No. 2-60200; Exhibit 5-b to Registration
No. 2-62883; Exhibit 2-h to Registration No. 2-65831; Exhibit (4)-j-1
to Registration No. 2-72061; Exhibit (4)-a to Registration No. 2-
91516; Exhibit (4)-b to Annual Report on Form 10-K for the fiscal year
ended December 31, 1985, Commission File No. 1-4393; Exhibits (4)(a)
and (4)(b) to Puget's Current Report on Form 8-K, dated April 22,
1986; Exhibit (4)a to Puget's Current Report on Form 8-K, dated
September 5, 1986; Exhibit (4)-b to Puget's Quarterly Report on Form
10-Q for the quarter ended September 30, 1986, Commission File No. 1-
4393; Exhibit (4)-c to Registration No. 33-18506; Exhibit (4)-b to
Annual Report on Form 10-K for the fiscal year ended December 31,
1989, Commission File No. 1-4393; Exhibit (4)-b to Annual Report on
Form 10-K for the fiscal year ended December 31, 1990, Commission File
No. 1-4393; Exhibits (4)-b and (4)- c to Registration No. 33-45916;
Exhibit (4)-c to Registration No. 33-50788; Exhibit (4)-a to
Registration No. 33-53056; Exhibit 4.3 to Registration No. 33-63278;
Exhibit 4-c to Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998, Commission File No. 1-4393; and Exhibit 4.27 to Current
Report on Form 8-K, dated March 1, 1999).
4.4 Rights Agreement, dated as of January 15, 1991, between Puget and The
Chase Manhattan Bank, N.A., as Rights Agent (incorporated herein by
reference to Exhibit 2.1 to Registration Statement on Form 8-A filed
on January 17, 1991, Commission File No. 1-4393).
4.5 Amendment No. 1 dated as of August 30, 1991, to the Rights Agreement
dated as of January 15, 1991, between the Registrant and the Bank of
New York (as successor to The Chase Manhattan Bank, N.A.), as Rights
Agent (incorporated herein by reference to Exhibit 2.1 to Registration
Statement on Form 8 filed on August 30, 1991).
4.6 Amendment No. 2 dated as of October 18, 1995, to the Rights Agreement
dated as of January 15, 1991, between the Registrant and The Bank of
New York (as successor to The Chase Manhattan Bank, N.A.), as Rights
Agent (incorporated herein by reference to Exhibit 1 to Registration
Statement on Form 8-A/A filed on October 27, 1995).
4.7 Pledge Agreement dated August 1, 1991, between Puget and The First
National Bank of Chicago, as Trustee (incorporated herein by reference
to Exhibit (4)-j to Registration No. 33-45916).
4.8 Loan Agreement dated August 1, 1991, between the City of Forsyth,
Rosebud County, Montana and Puget (incorporated herein by reference to
Exhibit (4)-k to Registration No. 33-45916).
4.9 Statement of Relative Rights and Preferences for the Adjustable Rate
Cumulative Preferred Stock, Series B ($25 Par Value) (incorporated
herein by reference to Exhibit 1.1 to Registration Statement on Form
8-A filed February 14, 1994, Commission File No. 1-4393).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
4.10 Statement of Relative Rights and Preferences for the Preference Stock,
Series R, $50 Par Value (incorporated herein by reference to Exhibit
1.5 to Registration Statement on Form 8-A filed February 14, 1994,
Commission File No. 1-4393).
4.11 Statement of Relative Rights and Preferences for the 7% Series
Preferred Stock Cumulative, $100 Par Value (incorporated herein by
reference to Exhibit 1.6 to Registration Statement on Form 8-A filed
February 14, 1994, Commission File No. 1-4393).
4.12 Pledge Agreement, dated as of March 1, 1992, by and between Puget and
Chemical Bank relating to a series of first mortgage bonds
(incorporated herein by reference to Exhibit 4.15 to Annual Report on
Form 10-K for the fiscal year ended December 31, 1993, Commission File
No. 1-4393).
4.13 Pledge Agreement, dated as of April 1, 1993, by and between Puget and
The First National Bank of Chicago, relating to a series of first
mortgage bonds (incorporated herein by reference to Exhibit 4.16 to
Annual Report on Form 10-K for the fiscal year ended December 31,
1993, Commission File No. 1-4393).
4.14 Form of Statement of Relative Rights and Preferences for the Series II
Cumulative Preferred Stock, $25 Par Value (incorporated herein by
reference to Annex F to the Joint Proxy Statement/Prospectus filed
February 1, 1996).
4.15 Form of Statement of Relative Rights and Preferences for the Series
III Cumulative Preferred Stock, $25 Par Value (incorporated herein by
reference to Annex F to the Joint Proxy Statement/Prospectus filed
February 1, 1996).
4.16 Indenture of First Mortgage dated as of April 1, 1957 (incorporated
herein by reference to Washington Natural Gas Company Exhibit 4-B,
Registration No. 2-14307).
4.17 Sixth Supplemental Indenture dated as of August 1, 1966 (incorporated
herein by reference to Washington Natural Gas Company Exhibit to Form
8-K for month of August 1966, File No. 0-951).
4.18 Twelfth Supplemental Indenture dated as of November 1, 1972
(incorporated herein by reference to Washington Natural Gas Company
Exhibit to Form 8-K for November 1972, File No. 0-951).
4.19 Seventeenth Supplemental Indenture dated as of August 9, 1978
(incorporated herein by reference to Washington Energy Company Exhibit
5-K.18, Registration No. 2-64428).
4.20 Twenty-sixth Supplemental Indenture dated as of September 1, 1990
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 4-B.19, Form 10-K for the year ended September 30, 1990, File
No. 0-951).
4.21 Twenty-seventh Supplemental Indenture dated as of September 1, 1990
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 4-B.20, Form 10-K for the year ended September 30, 1988, File
No. 0-951).
4.22 Twenty-eighth Supplemental Indenture dated as of July 31, 1991
(incorporated herein by reference to Washington Natural Gas Company
exhibit 4-A, Form 10-Q for the quarter ended March 31, 1993, File No.
0-951).
4.23 Twenty-ninth Supplemental Indenture dated as of June 1, 1993
(incorporated herein by reference to Exhibit 4-A of Washington Natural
Gas Company's S-3 Registration Statement, Registration No. 33-49599).
4.24 Thirtieth Supplemental Indenture dated as of August 15, 1995
(incorporated herein by reference to Exhibit 4-A of Washington Natural
Gas Company's S-3 Registration Statement, Registration No. 33-61859).
4.25* Form of Third Supplemental Indenture defining the rights of the
holders of Puget's Senior Notes.
4.26* Form of Seventy-eighth Supplemental Indenture defining the rights of
the holders of Puget's First Mortgage Bonds.
4.27 Certificate of Trust of Puget Sound Energy Capital Trust II, dated
October 3, 2000.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
4.28 Declaration of Trust of Puget Sound Energy Capital Trust II, dated
October 3, 2000.
4.29* Form of Amended and Restated Declaration of Trust of Puget Sound
Energy Capital Trust II.
4.30* Form of Indenture to be used in connection with the issuance of
Subordinated Debentures and Preferred Securities.
4.31* Form of Preferred Securities Guarantee Agreement.
4.32* Form of Common Securities Guarantee Agreement.
5.1 Opinion of Perkins Coie LLP regarding the legality of the Senior
Notes, the Subordinated Debentures and the Preferred Securities
Guarantee.
5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding the
legality of the Preferred Securities.
8.1* Opinion of Perkins Coie LLP regarding tax matters.
12.1 Statement setting forth computations of ratios of earnings to fixed
charges (incorporated herein by reference to Exhibit 12-a to Quarterly
Report on Form 10-Q for the quarter ended June 30, 2000).
23.1 Consent of Perkins Coie LLP (contained in opinion referenced as
Exhibit 5.1).
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (contained in
opinion referenced as Exhibit 5.2).
23.3 Consent of PricewaterhouseCoopers LLP.
24.1 Power of attorney (contained on signature page of Registration
Statement on page II-6).
25.1 Statement of Eligibility of The State Street Bank and Trust Company.
25.2 Statement of Eligibility of Bank One Trust Company, N.A.
25.3 Statement of Eligibility of Bank One Trust Company, N.A.
</TABLE>
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* To be filed by amendment or incorporated by reference in connection with the
offering of securities.
