FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
X Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1996
OR
Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the transition period from _________ to ________
Commission File Number 1-5007
TAMPA ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
FLORIDA 59-0475140
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
TECO Plaza
702 N. Franklin Street
Tampa, Florida 33602
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (813)228-4111
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
The aggregate market value of the voting stock held by
nonaffiliates of the registrant as of February 28, 1997 was zero.
As of February 28, 1997, there were 10 shares of the registrant's
common stock issued and outstanding, all of which were held,
beneficially and of record, by TECO Energy, Inc.
DOCUMENTS INCORPORATED BY REFERENCE
None<PAGE>
PART I
Item 1. BUSINESS.
Tampa Electric Company (Tampa Electric or the company) was
incorporated in Florida in 1899 and was reincorporated in 1949.
As a result of a restructuring in 1981, the company became a
subsidiary of TECO Energy, Inc. (TECO Energy), a diversified
energy-related holding company. The company is a public utility
operating within the state of Florida and is engaged in the
generation, purchase, transmission, distribution and sale of
electric energy. The retail territory served comprises an area of
about 2,000 square miles in west central Florida, including
substantially all of Hillsborough County and parts of Polk, Pasco
and Pinellas Counties, and has an estimated population of over
one million. The principal communities served are Tampa, Winter
Haven, Plant City and Dade City. In addition, the company engages
in wholesale sales to other utilities. The company has three
electric generating stations in or near Tampa, one electric
generating station in southwestern Polk County, Florida, and two
electric generating stations located near Sebring, a city located
in Highlands County in south central Florida.
Power Engineering & Construction, Inc. (PEC), a Florida
corporation formed in late 1996, is a wholly owned subsidiary of
the company and is engaged in the engineering and construction of
transmission and distribution facilities outside of the company's
service territory. Operations of PEC in 1996 were not
significant.
The company had 2,798 employees as of Dec. 31, 1996, of
which 1,142 were represented by the International Brotherhood of
Electrical Workers (IBEW) and 292 by the Office and Professional
Employees International Union.
In 1996, approximately 48 percent of the company's total
operating revenue was derived from residential sales, 29 percent
from commercial sales, 9 percent from industrial sales and 14
percent from other sales including bulk power sales for resale.
The sources of operating revenue for the years indicated
were as follows:
(millions) 1996 1995 1994
Residential $ 539.7 $ 523.3 $ 505.5
Commercial 321.3 316.1 316.8
Industrial-Phosphate 59.6 61.7 58.3
Industrial-Other 43.3 45.0 50.0
Other retail sales
of electricity 83.5 82.0 80.7
Sales for resale 93.3 80.0 70.4
Deferred revenues (34.2) (50.8) --
Other 6.4 35.0 13.2
$1,112.9 $1,092.3 $1,094.9
No significant part of the company's business is dependent
upon a single customer or a few customers, the loss of any one or
more of whom would have a significantly adverse effect on the
company, except IMC-Agrico, a large phosphate producer
representing four percent of 1996 operating revenues.
In May 1996, IMC-Agrico issued a request for proposals (RFP)
for electric power to serve load currently served by the company
and others. The company has made load-retention proposals that it
believes are competitively priced and attractive because of the
flexibility offered. The company continues to have discussions
with IMC-Agrico. While it is unclear how this process will
develop, the ultimate impact on the company is not expected to be
significant. See the further discussion on page 12.
The company's business is not a seasonal one, but winter
peak loads are experienced due to fewer daylight hours and colder
temperatures, and summer peak loads are experienced due to use of
air conditioning and other cooling equipment.
Regulation
The retail operations of the company are regulated by the
Florida Public Service Commission (FPSC), which has jurisdiction
over retail rates, the quality of service, issuances of
securities, planning, siting and construction of facilities,
accounting and depreciation practices and other matters.
The company is also subject to regulation by the Federal
Energy Regulatory Commission (FERC) in various respects including
wholesale power sales, certain wholesale power purchases,
transmission services and accounting and depreciation practices.
Federal, state and local environmental laws and regulations
cover air quality, water quality, land use, power plant,
substation and transmission line siting, noise and aesthetics,
solid waste and other environmental matters. See Environmental
Matters on pages 7 and 8.
TECO Transport Corporation (TECO Transport), TECO Coal
Corporation (TECO Coal) and TECO Power Services Corporation (TECO
Power Services), subsidiaries of TECO Energy, sell transportation
services, coal, and generating capacity and energy, respectively,
to the company and to third parties. The transactions between the
company and these affiliates and the prices paid by the company
are subject to regulation by the FPSC and FERC, and any charges
deemed to be imprudently incurred may not be allowed to be
recovered from the company's customers. See Utility Regulation on
pages 17 through 20.
Competition
The company's retail business is substantially free from
direct competition with other electric utilities, municipalities
and public agencies. At the present time, the principal form of
competition at the retail level consists of natural gas for
residences and businesses and the self-generation option
available to larger users of electric energy. Such users may seek
to expand their options through legislative and/or regulatory
initiatives that would permit competition at the retail level.
The company intends to take all appropriate actions to retain and
expand its retail business, including managing costs and
providing high quality service to retail customers. Such action
could, with the approval of the FPSC, include the use of load
retention and/or economic development service contracts and
tariffs to reduce the loss of existing load and/or acquire
additional load. The company does not expect the effect of such
actions to have a significant affect on its operations. See the
description of the IMC-Agrico request for proposals on page 12.
There is presently active competition in the wholesale power
markets in Florida, and this is increasing largely as a result of
the Energy Policy Act of 1992 and related federal initiatives.
This act removed certain regulatory barriers to independent power
producers, and required utilities to transmit power from such
producers, utilities and others to wholesale customers as more
fully described below. The company's wholesale business is
largely dependent on access to transmission systems owned by
others and it has generally supported the regulatory efforts
described below to implement open access to transmission. The
company is also continuing its efforts to reduce costs, again
with the view of increasing its wholesale business in an
increasingly competitive market.
In April 1996, the FERC issued its Final Rule on Open Access
Non-Discriminatory Transmission, Stranded Costs, Open Access
Same-time Information System (OASIS) and Standards of Conduct.
These rules work together to open access for wholesale power
flows on transmission systems. Utilities owning transmission
facilities (including the company) are required to provide
services to wholesale transmission customers comparable to those
they provide to themselves on comparable terms and conditions
including price. Among other things, the rules require
transmission services to be unbundled from power sales and owners
of transmission systems must take transmission service under
their own transmission tariffs.
Transmission system owners are also required to implement an
OASIS system providing, via the Internet, access to transmission
service information (including price and availability), and to
rely exclusively on their own OASIS system for such information
for purposes of their own wholesale power transactions. To
facilitate compliance, owners must implement Standards of Conduct
to ensure that personnel involved in marketing of wholesale power
are functionally separated from personnel involved in
transmission services and reliability functions. The company,
together with other utilities, has implemented an OASIS system
and believes it is in compliance with the Standards of Conduct.
Retail Pricing
In general, the FPSC's pricing objective is to set rates at
a level that allows the utility to collect total revenues equal
to its cost of providing service, including a reasonable return
on invested capital.
The costs of owning, operating and maintaining the utility
system, other than fuel, purchased power and certain
environmental compliance costs of providing electric service are
recovered through base rates. The costs intended to be covered by
base rates include operation and maintenance expenses,
depreciation and taxes, as well as a return on the company's
investment in assets used and useful in providing electric
service (rate base). The rate of return on rate base, which is
intended to approximate the company's weighted cost of capital,
includes its costs for debt and preferred stock, deferred income
taxes at a zero cost rate and an allowed return on common equity.
Base prices are determined in FPSC price setting hearings which
occur at irregular intervals at the initiative of the company,
the FPSC or other parties. See the discussion of the FPSC-approved
agreements covering 1995 through 1999 on pages 18 and 19.
Fuel, conservation, certain environmental and certain
purchased power costs are recovered through levelized monthly
charges established pursuant to the FPSC's cost recovery clauses.
These charges, which are reset semi-annually in an FPSC hearing,
are based on estimated costs of fuel, environmental compliance,
conservation programs, and purchased power and estimated customer
usage for a specific recovery period, with a true-up adjustment
to reflect the variance of actual costs from the projected
charges.
The FPSC may disallow recovery of any costs that it
considers imprudently incurred.
Fuel
About 98 percent of the company's generation for 1996 was
from its coal-fired units. About the same level is anticipated
for 1997.
The company's average fuel cost per million BTU and average
cost per ton of coal burned have been as follows:
Average cost
per million BTU: 1996 1995 1994 1993 1992
Coal $ 2.01 $ 2.15 $ 2.22 $ 2.26 $ 2.23
Oil $ 3.68 $ 2.76 $ 2.49 $ 2.69 $ 2.76
Gas -- -- -- $ 3.52 $ 2.43
Composite $ 2.05 $ 2.16 $ 2.22 $ 2.27 $ 2.24
Average cost per ton
of coal burned $46.71 $50.97 $53.39 $54.55 $53.65
The company's generating stations burn fuels as follows:
Gannon Station burns low-sulfur coal; Big Bend Station burns coal
of a somewhat higher sulfur content; Polk Power Station burns
high-sulfur coal which is gasified; Hookers Point Station burns
low-sulfur oil; Phillips Station burns oil of a somewhat higher
sulfur content; and Dinner Lake Station, which was placed on
long-term reserve standby in March 1994, burned natural gas and
oil.
Coal. The company burned approximately 8.0 million tons of
coal during 1996 and estimates that its coal consumption will be
7.9 million tons for 1997. During 1996, the company purchased
approximately 58 percent of its coal under long-term contracts
with six suppliers, including TECO Coal, and 42 percent of its
coal in the spot market or under intermediate-term purchase
agreements. About 16 percent of the company's 1996 coal
requirements were supplied by TECO Coal. During December 1996,
the average delivered cost of coal (including transportation) was
$42.59 per ton, or $1.87 per million BTU. The company expects to
obtain approximately 60 percent of its coal requirements in 1997
under long-term contracts with six suppliers, including TECO
Coal, and the remaining 40 percent in the spot market. The
company's long-term coal contracts provide for revisions in the
base price to reflect changes in a wide range of cost factors and
for suspension or reduction of deliveries if environmental
regulations should prevent the company from burning the coal
supplied, provided that a good faith effort has been made to
continue burning such coal. The company estimates that about 12
percent of its 1997 coal requirements will be supplied by TECO
Coal. For information concerning transactions with affiliated
companies, see Note I on page 38.
In 1996, about 64 percent of the company's coal supply was
deep-mined, approximately 33 percent was surface-mined and three
percent was a processed oil by-product known as petroleum coke.
Federal surface-mining laws and regulations have not had any
material adverse impact on the company's coal supply or results
of its operations. The company, however, cannot predict the
effect on the market price of coal of any future mining laws and
regulations. Although there are reserves of surface-mineable coal
dedicated by suppliers to the company's account, high-quality
coal reserves in Kentucky that can be economically surface-mined
are being depleted and in the future more coal will be
deep-mined. This trend is not expected to result in any
significant additional costs to the company.
Oil. The company had supply agreements through Dec. 31, 1996
for No. 2 fuel oil and No. 6 fuel oil for its four combustion
turbine units, Polk Station, Hookers Point Station and Phillips
Station at prices based on Gulf Coast Cargo spot prices.
Contracts for the supply of No. 2 and No. 6 fuel oil through Dec.
31, 1997 are expected to be finalized in early 1997. The price
for No. 2 fuel oil deliveries taken in December 1996 was $31.90
per barrel, or $5.50 per million BTU. The price for No. 6 fuel
oil deliveries taken in December 1996 was $21.98 per barrel, or
$3.48 per million BTU.
Franchises
The company holds franchises and other rights that, together
with its charter powers, give it the right to carry on its
retail business in the localities it serves. The franchises are
irrevocable and are not subject to amendment without the consent
of the company, although, in certain events, they are subject to
forfeiture.
Florida municipalities are prohibited from granting any
franchise for a term exceeding 30 years. If a franchise is not
renewed by a municipality, the franchisee has the statutory right
to require the municipality to purchase any and all property used
in connection with the franchise at a valuation to be fixed by
arbitration. In addition, all of the municipalities except for
the cities of Tampa and Winter Haven have reserved the right to
purchase the company's property used in the exercise of its
franchise, if the franchise is not renewed.
The company has franchise agreements with 13 incorporated
municipalities within its retail service area. These agreements
have various expiration dates ranging from December 2005 to
September 2021, including the agreement with the city of Tampa,
which expires in August 2006. The company has no reason to
believe that any of these franchises will not be renewed.
Franchise fees payable by the company, which totaled
$20.1 million in 1996, are calculated using a formula based
primarily on electric revenues.
Utility operations in Hillsborough, Pasco, Pinellas and Polk
Counties outside of incorporated municipalities are conducted in
each case under one or more permits to use county rights-of-way
granted by the county commissioners of such counties. There is no
law limiting the time for which such permits may be granted by
counties. There are no fixed expiration dates for the
Hillsborough County and Pinellas County agreements. The
agreements covering electric operations in Pasco and Polk
counties expire in September 2010 and March 2004, respectively.
Environmental Matters
The company's operations are subject to county, state and
federal environmental regulations. The Hillsborough County
Environmental Protection Commission and the Florida Environmental
Regulation Commission are responsible for promulgating
environmental regulations and coordinating most of the
environmental regulation functions performed by the various
departments of state government. The Florida Department of
Environmental Protection (FDEP) is responsible for the
administration and enforcement of the state regulations. The U.S.
Environmental Protection Agency (EPA) is the primary federal
agency with environmental responsibility.
The company has all required environmental permits. In
addition, monitoring programs are in place to assure compliance
with permit conditions. The company has been identified as one of
numerous potentially responsible parties (PRP) with respect to
seven Superfund Sites. While the total costs of remediation at
these sites may be significant, the company shares potential
liability with other PRPs, many of which have substantial assets.
Accordingly, the company expects that its liability in connection
with these sites will not be significant.
Expenditures. During the five years ended Dec. 31, 1996, the
company spent $159.3 million on capital additions to meet
environmental requirements, including $102.7 million for the Polk
Power Station project. Environmental expenditures are estimated
at $6 million for 1997 and $8 million in total for 1998 through
2001. These totals exclude amounts required to comply with the 1990
amendments to the Clean Air Act.
The company is complying with the Phase I emission
limitations imposed by the Clean Air Act Amendments which became
effective Jan. 1, 1995 by using blends of lower-sulfur coal,
controlling stack emissions and using emission allowances.
In 1995, the company successfully integrated Big Bend Unit
Three into the existing scrubber on Big Bend Unit Four. This
resulted in an additional scrubbed unit at a fraction of the cost
of a new scrubber. Also as part of its Phase I compliance plan,
the company has a long-term contract for the purchase of low-sulfur coal.
The company is currently evaluating options to comply with
Phase II sulfur dioxide emission standards imposed by the Clean
Air Act Amendments set for the year 2000. The options include
potentially having to scrub additional capacity. The company is
evaluating equipment and technologies to accomplish compliance in
the most cost effective manner. The company is also evaluating
options to comply with Phase II of the Clean Air Act Amendments
for nitrogen oxide reductions. These options include combustion
modifications and retrofit control technology. While the
company's capital expenditure estimates for the 1997-2001 period,
discussed on pages 16 and 17, include $30 million for compliance
with Phase II of the Clean Air Act Amendments,the actual level of
required expenditures is uncertain at this time. The cost of
compliance with Phase II is expected to have little impact on the
company's prices.
In addition to recovering certain prudently incurred
environmental costs through base rates, the company may petition
the FPSC for recovery of certain other environmental compliance
costs on a current basis pursuant to a statutory environmental
cost recovery procedure.
Merger of TECO Energy with Lykes Energy, Inc.
In November 1996, TECO Energy announced an agreement with
Lykes Energy, Inc. (LEI) to merge it into TECO Energy in a tax-free,
stock-for-stock transaction with an equity value of $300
million. This merger, to be accounted for as a pooling of
interests, was approved by both companies' boards of directors
and in December 1996 by the Lykes Energy shareholders. Approval
by TECO Energy shareholders is not required.
The principal subsidiary of LEI is Peoples Gas System (PGS),
a regulated retail natural gas distributor in Florida. PGS is
Florida's largest natural gas distribution company with retail
operations in all of the state's major metropolitan communities
and over 200,000 customers. It recorded annual sales of 86 Bcf of
natural gas in fiscal 1996. Other subsidiaries include Peoples
Gas Company, a propane business, and a unit involved in natural
gas marketing.
TECO Energy plans to merge PGS into Tampa Electric
immediately after the merger between TECO Energy and LEI, and
thereafter operate PGS as a separate business unit. This merger
will permit the company to better meet its customers' needs
through a broader range of energy services. In particular, it
will allow full service with either gas or electric energy to
wholesale customers in peninsular Florida and to retail customers
in the limited area served by both the company and PGS.
The merger is subject to certain closing conditions with
closing expected by mid-year 1997.
Item 2. PROPERTIES.
The company believes that its physical properties are
adequate to carry on its business as currently conducted. The
properties are generally subject to liens securing long-term
debt.
At Dec. 31, 1996, the company had five electric generating
plants and four combustion turbine units in service with a total
net winter generating capability of 3,650 MWs, including Big Bend
(1,745-MW capability from four coal units), Gannon (1,205-MW
capability from six coal units), Hookers Point (212-MW capability
from five oil units), Phillips (34-MW capability from two diesel
units), Polk (250-MW capability from one integrated gasification
combined cycle unit (IGCC)) and four combustion turbine units
located at the Big Bend and Gannon stations (204 MWs). The
capability indicated represents the demonstrable dependable load
carrying abilities of the generating units during winter peak
periods as proven under actual operating conditions. Units at
Hookers Point went into service from 1948 to 1955, at Gannon from
1957 to 1967, and at Big Bend from 1970 to 1985. The Polk IGCC
unit began commercial operation in September 1996. In 1991, the
company purchased two power plants (Dinner Lake and Phillips)
from the Sebring Utilities Commission (Sebring). Dinner Lake
(11-MW capability from one natural gas unit) and Phillips were placed
in service by Sebring in 1966 and 1983, respectively. In March
1994, Dinner Lake Station was placed on long-term reserve
standby.
The company owns 180 substations having an aggregate
transformer capacity of 16,235,857 KVA. The transmission system
consists of approximately 1,208 pole miles of high voltage
transmission lines, and the distribution system consists of 6,866
pole miles of overhead lines and 2,538 trench miles of
underground lines. As of Dec. 31, 1996, there were 513,117 meters
in service. All of this property is located in Florida.
All plants and important fixed assets are held in fee except
that title to some of the properties are subject to easements,
leases, contracts, covenants and similar encumbrances and minor
defects, of a nature common to properties of the size and
character of those of the company.
The company has easements for rights-of-way adequate for the
maintenance and operation of its electrical transmission and
distribution lines that are not constructed upon public highways,
roads and streets. It has the power of eminent domain under
Florida law for the acquisition of any such rights-of-way for the
operation of transmission and distribution lines. Transmission
and distribution lines located in public ways are maintained
under franchises or permits.
The company has a long-term lease for its office building in
downtown Tampa, Florida, that serves as its headquarters.
Item 3. LEGAL PROCEEDINGS.
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted during the fourth quarter of 1996 to
a vote of the company's security holders, through the
solicitation of proxies or otherwise.<PAGE>
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
All of the company's common stock is owned by TECO Energy
and, therefore, there is no market for the stock.
The company pays dividends substantially equal to its net
income applicable to common stock to TECO Energy. Such dividends
totaled $134.9 million for 1996 and $115.2 million for 1995. See
Note C on page 34 for a description of restrictions on dividends
on the company's common stock.
Item 6. SELECTED FINANCIAL DATA.
(millions)
Year ended
Dec. 31, 1996 1995 1994 1993 1992
Operating
revenues(1) $1,112.9 $1,092.3 $1,094.9 $1,041.3 $1,005.7
Net income $ 141.6 $ 133.7 $ 110.1(2) $ 106.7 $ 110.8
Total assets $2,723.2 $2,639.2 $2,417.8 $2,267.5* $2,104.7*
Long-term debt $ 661.1 $ 583.1 $ 607.3 $ 606.6* $ 591.5*
* These balances have been restated to reflect the current year
presentation.
(1) Amounts shown in 1996 and 1995 are after deferral of revenues of
$34.2 million and $50.8 million, respectively, in accordance with
FPSC-approved plans described in the Utility Regulation section
on pages 17 through 19.
(2) 1994 net income includes the effect of a corporate restructuring
charge of $13.1 million, after tax.<PAGE>
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
This Management's Discussion and Analysis contains forward-looking
statements. These forward-looking statements are subject to the
inherent uncertainties in predicting future results and conditions.
Certain factors that could cause actual results to differ materially
from those projected in these forward-looking statements are set forth
below in the Investment Considerations section.
EARNINGS SUMMARY
The company's net income for 1996 was $141.6 million, six percent
higher than in 1995, after the deferral of $34.2 million of revenues
in 1996. Total energy sales were five percent higher than in 1995,
while non-fuel operating and maintenance expenses were one percent
lower. Allowance for funds used during construction (AFUDC) of $22.9
million was up from $19.3 million in 1995 and $5.7 million in 1994 due
to the additional investment in Polk Unit One discussed in the Capital
Expenditures section.
Net income for 1995 of $133.7 million was 21 percent higher than
1994's, after the deferral of $50.8 million of revenues in 1995. Two-percent
customer growth and favorable weather increased retail energy
sales 5 percent. In addition, non-fuel operations and maintenance
expenses were 5 percent below 1994's level as the company benefited
from the 1994 restructuring efforts.
The company recorded a one-time $21.3 million pretax
restructuring charge ($13.1 million after tax) in the fourth quarter
of 1994. The restructuring program included a reduction in staffing
levels and other cost reductions. Approximately 70 percent of the
charge represents costs associated with retirement benefits.
OPERATING RESULTS
The company's 1996 operating income increased almost six percent
after the deferral of $34.2 million of revenues under the agreements
described in the Utility Regulation section. Two-percent customer
growth and colder than normal weather early in the year contributed to
five percent higher total energy sales. Non-fuel operations and
maintenance expenses were one percent below 1995 levels, despite a
full quarter of operations of the Polk Power Station, reflecting the
continued focus on aggressive cost management throughout the company.
Operating income also increased because of the inclusion of the Polk
Power Station in rate base for earnings purposes upon commencement of
commercial operation late in the third quarter.
In 1996, the company successfully completed the construction of
the 250-megawatt, state-of-the-art, clean-coal technology Polk Power
Station. The addition of this facility will cause an increase in
1997's operating expenses. However, during the first two years of
operations the U. S. Department of Energy (DOE) will provide funding
that will offset a portion of the non-fuel operations and maintenance
expenses associated with the facility. Agreements approved by the
Florida Public Service Commission (FPSC) allowing full recovery of
capital costs and operations and maintenance expenses associated with
the plant described in the Utility Regulation section are in place.
The company's 1995 operating income increased 11 percent over
1994's. Higher base revenues from retail customer growth, favorable
weather, and an improved economy together with lower operating
expenses contributed to the improved results after the deferral of
$50.8 million of revenues.
Operating Results 1996 Change 1995 Change1994
(millions)
Revenues $1,112.9(1) 1.9% $1,092.3(1) - .2%$1,094.9
Operating expenses 940.3 1.2% 929.0 -2.0% 947.8
Operating income 172.6 5.7% 163.3 11.0% 147.1
Restructuring charge
(included in operating
expenses above) -- -- -- -- 21.3
Operating income before
restructuring charge $ 172.6 5.7% $ 163.3 -3.0%$ 168.4
(1) 1996 and 1995 revenues are net of $34.2 million and $50.8 million,
respectively, of revenues deferred under agreements as described in
the Utility Regulation section.
Operating Revenues
The company's 1996 revenues increased almost two percent to $1.1
billion, after the deferral of $34.2 million of revenues, reflecting
customer growth of more than two percent and increased retail energy
usage. The company's 1995 revenues decreased slightly as the deferral
of $50.8 million of revenues offset increased energy sales.
The economy in the company's service area continued to grow in
1996 due to increased employment from corporate relocations and
expansions. Combined residential and commercial energy sales grew by
more than three percent in 1996. Non-phosphate industrial sales
declined in 1996 due to the closure of a brewery at the end of 1995.
Sales to the phosphate industry decreased in 1996 reflecting the
closure of some depleted phosphate mines and reduced production at
several processing plants. Energy sales to the phosphate industry are
expected to increase in 1997 over 1996 levels from increased
production to meet continued strong domestic and international demand
for phosphate products. After 1997 sales are expected to decline
slowly as mining activity migrates out of the company's service area.
In 1996 sales to the phosphate customer group represented about five
percent of total operating revenues.
In May IMC-Agrico, a large phosphate producer representing four
percent of 1996 revenues, issued a request for proposals (RFP) for
electric power to serve load currently served by the company and
others. Some portions of the services identified in the RFP are not
permitted under current Florida laws and utility regulation. The
company has made load-retention proposals that it believes to be
competitively priced and attractive because of the flexibility
offered, and continues to have discussions with IMC-Agrico. While it
is unclear how this process will develop, the ultimate impact on the
company is not expected to be material. For a general description of
competition see the Utility Competition section.
The company's and independent forecasts indicate that in 1997 the
Tampa Electric service area economy is expected to grow moderately at
rates higher than the country as a whole. The local economy continues
to benefit from a good labor market, available land, good access
through airport and port facilities and aggressive economic
development activities by the communities served by the company.
Based on the expected continued growth of the local economy with
both population and business activity increases, the company projects
retail energy sales growth of more than two percent annually for the
next five years. This forecast includes combined energy sales growth
in the residential and commercial sectors of almost three percent
annually as the company's service area economy becomes more service
oriented. Growth in energy sales to non-phosphate industrial customers
is expected in 1997 after the 1996 decline.
Non-fuel revenues from sales to other utilities were $36 million
in 1996, $34 million in 1995 and $33 million in 1994. Energy sold to
other utilities increased in 1996 due to weather-related demand and
lower Tampa Electric fuel costs. A shift from broker system economy
sales to longer-term, higher-margin wholesale power sales resulted in
a seven percent increase in revenues in 1996. In 1995 energy sold to
other utilities increased because of higher generating unit
availability and lower fuel costs.
Signing additional longer-term wholesale power sales agreements
remains a priority; in recent years 11 bulk power sales contracts of
varying size and duration have been added. Competitive pricing of
coal-fired generation has allowed the company to market available
capacity successfully.
Megawatt-Hour Sales:
1996 Change 1995 Change 1994
(thousands)
Residential 6,607 4.0% 6,352 6.8% 5,947
Commercial 4,815 2.2% 4,710 2.8% 4,583
Industrial 2,304 -2.4% 2,362 3.7% 2,278
Other 1,203 2.3% 1,176 4.6% 1,124
Total retail 14,929 2.3% 14,600 4.8% 13,932
Sales for resale 3,241 19.8% 2,706 28.7% 2,102
Total energy sold 18,170 5.0% 17,306 7.9% 16,034
Retail customers 506.0 2.2% 495.2 2.0% 485.7
(average)
Operating Expenses
Effective cost management and improved efficiency continue to be
the company's principal objectives. Other operating and maintenance
expenses declined in 1996 from the continuing focus on managing costs
in all areas of the company and the restructuring actions taken in
1994.
Operating Expenses:
1996 Change 1995 Change 1994
(millions)
Fuel $383.1 -.3% $384.3 -1.3% $389.3
Purchased power 49.0 10.4% 44.4 32.9% 33.4
Total fuel cost 432.1 .8% 428.7 1.4% 422.7
Other operating expenses 164.2 .6% 163.3 -4.8% 171.6
Maintenance 65.5 -5.9% 69.6 -4.5% 72.9
Depreciation 120.2 6.1% 113.3 -1.6% 115.1
Taxes, federal and
state income 71.3 7.7% 66.2 15.3% 57.4
Taxes, other than income 87.0 -1.0% 87.9 1.3% 86.8
Operating expenses 940.3 1.2% 929.0 .3% 926.5
Restructuring charge - - -. - 21.3
Total operating expenses $940.3 1.2% $929.0 -2.0% $947.8
Aggressive cost management reduced non-fuel operations and
maintenance expenses more than one percent in 1996, despite the
additional expenses related to the operation of the Polk Power
Station. In 1995 non-fuel operations and maintenance expenses declined
almost five percent from 1994 levels before the restructuring charge.
The $11.6-million reduction in 1995 was primarily from lower payroll
and employee-related expenses as a result of 217 fewer positions than
in 1994.
In both 1996 and 1995 the company achieved lower costs from
equipment redesign and enhancements, work redesign efforts including
the streamlining of maintenance programs, the sharing of manpower
resources in power generation facilities and the use of new
technologies throughout the company.
In 1996 the savings realized from these efforts more than offset
increased operations and maintenance expenses from the Polk Power
Station. Over the next several years, non-fuel operations and
maintenance expenses are expected to remain at 1996 levels.
During the first two years of operations, when specified domestic
coals will be evaluated for use in the gasifier, the company will
receive up to a total of $20 million from DOE for operations and
maintenance expenses of the Polk Power Station. Based on current
forecasts this funding is expected to offset a significant portion of
the non-fuel operating costs of the new plant during this period.
Total operating expenses in 1994 included the $21.3 million
restructuring charge discussed in the Earnings Summary section and the
first annual $4.0-million charge to a transmission and distribution
property storm-damage reserve in accordance with regulatory directives
described in the Utility Regulation section.
Depreciation expense increased $6.9 million in 1996 from normal
plant additions and the completion of the Polk Power Station.
Depreciation expense in 1995 decreased as certain shorter-lived assets
were fully amortized. This decrease more than offset the impact of
normal additions to plant and equipment. The company's efforts to
reduce capital investment in recent years have limited additions to
all asset classes. Depreciation expense is projected to increase again
in 1997 as a result of a full year of depreciation of the Polk Power
Station.
Changes in taxes other than those on income reflected increased
state gross receipts taxes and franchise fees associated with higher
energy sales, changes in property values and decreases in payroll
related taxes as a result of the 1994 restructuring. Taxes other than
those on income are expected to increase in 1997 as a result of the
property taxes associated with the Polk Power Station.
Total system fuel cost in 1996 was less than one percent higher
than in 1995 despite a five-percent increase in total energy sales.
The success in controlling fuel cost is a result of the company's use
of lower-priced coals and the mix in operating generating units.
Average coal costs, on a cents-per-million BTU basis, declined more
than six percent in 1996 after a three-percent decrease in 1995. Fuel
and purchased power cost rose one percent in 1995 despite a five-percent rise
in retail energy sales.
The company purchased more power in both 1996 and 1995 primarily
to meet weather-related demand. Substantially all fuel and purchased
power expenses were recovered through the fuel adjustment clause.
Nearly all of the company's generation in the last three years
has been from coal, and the fuel mix will continue to be substantially
coal. External forecasts indicate relatively stable coal prices during
the next few years compared to oil or gas prices. The company
continues to work to reduce its fuel cost through effective contract
management, use of non-traditional fuels such as petroleum coke and
tire-derived fuel, and increased purchases of coal in the lower-cost
spot market
Coal Contract Buyout:
In December 1994, the company bought out a long-term coal supply
contract which would have expired in 2004 for a payment of $25.5
million and entered into two new contracts with the supplier. The coal
supplied under the new contracts is competitive in price with coals of
comparable quality.
As a result of this buyout the company's customers will benefit
from anticipated savings of more than $40 million, net of the buyout
costs, through the year 2004. The FPSC has authorized the recovery of
the buyout costs plus carrying costs through the fuel adjustment
clause during the years 1995 through 2004.
NON-OPERATING ITEMS
Other Income (Expense)
Other income consisted mostly of allowance for other funds used
during construction (AFUDC) of $16.5 million in 1996, $13.7 million in
1995, and $3.5 million in 1994. With the construction of Polk Unit One
now complete, AFUDC will decline to minimal levels for the next
several years.
Interest Charges
Interest charges were $47.3 million in 1996, up 10 percent from
1995 due to higher short-term debt balances and rates. In 1996 and
1995 interest expense included $3.8 million and $1.5 million,
respectively, of interest accrued on the revenues deferred under the
FPSC-approved plans described in the Utility Regulation section.
Income Taxes
Total income tax expense, as described in Note G on pages 37 and
38, of $71.1 million increased from $66.0 million in 1995 and $58.7
million in 1994 primarily due to higher pretax income.
MERGER OF TECO ENERGY WITH LYKES ENERGY, INC.
In November 1996, TECO Energy announced an agreement with Lykes
Energy, Inc. (LEI) to merge it into TECO Energy in a tax-free, stock-for-stock
transaction with an equity value of $300 million. This
merger, to be accounted for as a pooling of interests, was approved by
both companies' boards of directors and in December 1996 by the Lykes
Energy shareholders. Approval by TECO Energy shareholders is not
required.
The principal subsidiary of LEI is Peoples Gas System (PGS), a
regulated retail natural gas distributor in Florida. PGS is Florida's
largest natural gas distribution company with retail operations in all
of the state's major metropolitan communities and over 200,000
customers. It recorded annual sales of 86 Bcf of natural gas in fiscal
1996.
TECO Energy plans to merge PGS into Tampa Electric immediately
after the merger between TECO Energy and LEI, and thereafter operate
PGS as a separate business unit. This merger will permit the company
to better meet its customers' needs through a broader range of energy
services. In particular, it will allow full service with either gas or
electric energy to wholesale customers in peninsular Florida and to
retail customers in the limited area served by both the company and
PGS.
The merger is subject to certain closing conditions with closing
expected by mid-year 1997.
ACCOUNTING STANDARDS
FAS 121
FAS 121, Accounting for Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of (FAS 121), effective for years
beginning after Dec. 15, 1995, requires that long-lived assets and
certain intangibles to be held and used by the company be reviewed for
impairment. The company periodically assesses whether there has been a
permanent impairment of these assets. No write-down of assets due to
impairment was required in 1996.
CAPITAL EXPENDITURES
The company's 1996 capital expenditures of $203 million included
$22.9 million of AFUDC.
The company spent $75 million in 1996 on construction of the
Polk Power Station, a 250-megawatt coal-gasification plant which
entered commercial service late in the third quarter. The capital cost
of the plant to the company including AFUDC was $508 million, which is
net of the construction funding from the Department of Energy under
its Clean Coal Technology Program.
The company spent an additional $105 million in 1996 for
equipment and facilities to meet its growing customer base and for
generating equipment improvements.
<PAGE>
The company estimates total capital expenditures for ongoing
operations to be $116 million in 1997 and $470 million during the
1998-2001 period, mainly for distribution facilities to meet customer
growth and generation reliability programs. At the end of 1996, the
company had outstanding commitments of about $7 million for capital
programs.
The company's capital expenditure projections include about $30
million over the 1997-2000 period to comply with Phase II of the Clean
Air Act as described in the Environmental Compliance section. However,
the level of capital expenditures that will actually be required for
compliance is uncertain at this time.
Capital requirements for PGS are not reflected in the above
projections. Capital investment plans for this company are still being
developed. In recent years, the capital invested by PGS was about $25
million annually. Capital expenditures are expected to be above
historical levels as opportunities to grow this business are
identified.
ENVIRONMENTAL COMPLIANCE
The company is subject to various environmental regulations and
believes that it is substantially in compliance with the currently
applicable standards of the respective environmental enforcement
agencies and that potential environmental liabilities are not
significant.
The company is complying with the Phase I emission limitations
imposed by the Clean Air Act Amendments which became effective Jan.
1, 1995 by using blends of lower-sulfur coal, controlling stack
emissions and owning emission allowances.
In 1995, the company successfully integrated Big Bend Unit Three
into the existing scrubber on Big Bend Unit Four. This resulted in an
additional scrubbed unit at a fraction of the cost of a new scrubber.
The company is currently evaluating options to comply with Phase
II sulfur dioxide emission standards set for the year 2000. The
options include potentially scrubbing additional capacity. The company
is evaluating equipment and technologies to accomplish compliance in
the most cost effective manner. The company is also evaluating options
to comply with Phase II of the Clean Air Act Amendments for nitrogen
oxide reductions. These options include combustion modifications and
retrofit control technology. While the company's estimates reflected
in the Capital Expenditure section include up to $30 million for
compliance with Phase II of the Clean Air Act Amendments, the actual
level of required expenditures is uncertain at this time. The cost of
compliance with Phase II is expected to have little impact on the
company's prices.
UTILITY REGULATION
Return on Equity (ROE) and Other Regulatory Agreements:
1994
In March 1994 the FPSC issued an order which changed the
company's authorized ROE to an 11.35-percent midpoint with a range of
10.35 percent to 12.35 percent, while leaving in effect the rates it
had previously established. The FPSC also ordered a $4.0-million
annual accrual to establish an unfunded storm damage reserve for
transmission and distribution property.
<PAGE>
In July 1994 the FPSC issued an order approving an agreement
between its staff and the company to cap the utility's authorized
regulatory ROE at 12.45 percent for calendar year 1994 with any
earnings above that amount to be used to increase the storm damage
reserve. The company did not exceed the 12.45-percent cap in 1994 and
therefore accrued only the $4.0 million to the storm damage reserve.
Rate Stabilization Strategy
Building on the 1994 approach, the company's objective has been
to place the Polk Power Station in service without increasing the
total price for electric service while securing the opportunity to
earn a fair return. A number of actions, discussed in the Operating
Expenses section, were taken to manage costs. Another key component of
the strategy to accomplish this objective has been the deferral of
certain revenues. With the agreements approved by the FPSC in 1995 and
1996, the objectives of stabilizing prices through 1999 and securing
fair earnings opportunities during this period were accomplished.
1995
In 1995 the FPSC approved a plan submitted by the company to
defer certain revenues for 1995. Under this plan the company's allowed
ROE increased to an 11.75-percent midpoint with a range of 10.75
percent to 12.75 percent. For 1995 an initial $15 million of revenues
were deferred as well as 50 percent of actual revenues in excess of a
ROE of 11.75 percent up to a net earned ROE of 12.75 percent and all
actual revenues above a ROE of 12.75 percent. In 1995 the company
deferred $50.8 million of revenues under this plan. The deferred
revenues accrue interest at the 30-day commercial paper rate specified
in the Florida Administrative Code.
Also as part of this plan the company's oil backout tariff was
eliminated Jan. 1, 1996, an annual revenue reduction of about $12
million.
1996 - 1999
In May 1996 the FPSC issued an order approving an agreement among
the company, the Florida Office of Public Counsel (OPC) and the
Florida Industrial Power Users Group (FIPUG) on a multi-year base rate
freeze and refund plan. Under this plan, base rates were frozen
through 1998 and the company's customers began receiving a $25-million
refund starting in October 1996 over a 12-month period. The refund
consists of $10 million of revenues deferred from 1995 and $15 million
of 1996 revenues.
In addition, the agreement set forth a multi-year plan for
allocating revenues based on the company's ROE. For the years 1996
through 1998, the company retains all revenues contributing to a ROE
up to 11.75 percent. Any additional revenues will be allocated
according to a formula.
In 1996, 40 percent of any actual revenues contributing to a ROE
in excess of 11.75 percent were included in 1996 revenues. The
remaining 60 percent were deferred for use in 1997 and 1998. Under
this allocation $34.2 million of 1996 revenues were deferred. About
$65 million of revenues deferred from 1996 and 1995, after the effect
of the $25-million refund are available for use in 1997 and 1998. It
is expected that the company will recognize $30 million to $35 million
of previously deferred revenues in 1997.
In 1997, 40 percent of any revenues that contribute to a ROE in
excess of 11.75 percent up to 12.75 percent will be included in 1997
revenues. The remaining 60 percent will be deferred for use in 1998 as
will any revenues contributing to a ROE in excess of 12.75 percent.
The same 40 percent allocation will be made in 1998 after taking into
account any deferred revenues not used in previous years. The
remaining 60 percent, as well as any revenues contributing to a ROE in
excess of 12.75 percent will be refunded to customers in 1999.
In October 1996 the FPSC unanimously approved an agreement among
the company, OPC and FIPUG that resolved all pending regulatory issues
associated with the Polk Power Station.
The agreement allows the full recovery of all of the expected
capital costs, and operations and maintenance expenses associated with
the Polk Power Station. The agreement also calls for an extension of
the base rate freeze established in the May agreement through 1999.
The company has the option of filing an application with the FPSC on
or after July 1, 1999 for authorization to adjust base rates after
Jan. 1, 2000.
Under the October agreement, the $25-million refund established
in the May agreement remains intact and, in addition, customers will
receive a $25-million temporary base rate reduction to be reflected as
a credit on customer bills over a 15-month period beginning Oct. 1,
1997. This temporary base rate reduction will be netted against any
refunds that otherwise might have been made in 1999 under the May
agreement.
The October agreement closely parallels the ROE formula in the
May agreement. In 1999, 60 percent of the revenues contributing to a
ROE in excess of 12.0 percent will be refunded to customers in 2000
along with any 1999 revenues which contribute to a ROE above 12.75
percent. The company agreed to remove from rate base the $5-million investment
made in land at Port Manatee. This land has value for uses other than
as a power plant site, and will continue to be recorded as an asset
of the company. A citizens task force recommended using previously
mined land in Polk County over the Manatee site as the preferred
location for the Polk Power Station.
Environmental Cost Recovery Clause
In August the FPSC approved the recovery of $3.0 million of the
company's environmental compliance costs through the environmental
cost recovery clause. These are new costs incurred by the company to
comply with environmental regulations enacted subsequent to its most
recent full regulatory price setting proceeding but not included in
current rates. The company plans to seek continuing recovery of these
types of costs through this clause until the next full regulatory
price setting proceeding. Under the October 1996 agreement the
earliest any such new prices could be in effect is in the year 2000.
Utility Competition:
The company's retail business is substantially free from direct
competition with other electric utilities, municipalities and public
agencies. At the present time, the principal form of competition at
the retail level consists of natural gas for residences and businesses
and the self-generation option available to larger users of electric
energy. Such users may seek to expand their options through
legislative and/or regulatory initiatives that would permit
competition at the retail level. The company intends to take all
appropriate actions to retain and expand its retail business,
including managing costs and providing high quality service to retail
customers. Such action could, with the approval of the FPSC, include
the use of load retention and/or economic development service
contracts and tariffs to reduce the loss of existing load and/or
acquire additional load. See the description of the IMC-Agrico request
for proposals in the Operating Revenues section.
There is presently active competition in the wholesale power
markets in Florida, and this is increasing largely as a result of the
Energy Policy Act of 1992 and related federal initiatives. This Act
removed certain regulatory barriers to independent power producers and
required utilities to transmit power from such producers, utilities
and others to wholesale customers as more fully described below. The
company continues its cost reduction efforts to increase its wholesale
business, which is dependent on access to transmission systems owned
by others.
In April 1996 the Federal Energy Regulatory Commission (FERC)
issued its Final Rule on Open Access Non-discriminatory Transmission,
Stranded Costs, Open Access Same-time Information System (OASIS) and
Standards of Conduct. These rules work together to open access for
wholesale power flows on transmission systems. Utilities owning
transmission facilities (including the company) are required to
provide services to wholesale transmission customers comparable to
those they provide to themselves on comparable terms and conditions
including price. Among other things, the rules require transmission
services to be unbundled from power sales and owners of transmission
systems must take transmission service under their own transmission
tariffs.
Transmission system owners are also required to implement an
OASIS system providing, via the Internet, access to transmission
service information (including price and availability), and to rely
exclusively on their own OASIS system for such information for
purposes of their own wholesale power transactions. To facilitate
compliance, owners must implement Standards of Conduct to ensure that
personnel involved in marketing of wholesale power are functionally
separated from personnel involved in transmission services and
reliability functions. The company, together with other utilities, has
implemented an OASIS system and believes it is in compliance with the
Standards of Conduct.
FERC Proceedings:
In July 1996 FERC's final rule on open access mandated that all
public utilities file transmission service tariffs with terms and
conditions that conform with FERC's "pro forma" tariffs. The company
received interventions and protests from various parties to the
implementing tariffs it filed. On Jan. 29, 1997, FERC ordered minor
revisions in the terms and conditions of these tariffs. The rates
proposed by the company had previously become effective on July 10,
1996, subject to refund.
The company has intervened and protested the rates filed by
Florida Power and Light Company and Florida Power Corporation.
<PAGE>
FINANCING ACTIVITY
The company's 1996 year-end capital structure was 40 percent
debt, 59 percent common equity and 1 percent preferred equity. The
company's objective is to maintain a capital structure over time that
will support its current credit ratings.
Credit Ratings/Senior Debt
Duff & Phelps Moody's Standard & Poor's
AA+ Aa2 AA
In December 1996 the Polk County Industrial Development Authority
issued $75 million of Solid Waste Disposal Facility Revenue Bonds for
the benefit of the company. The bonds were issued at a tax-exempt rate
of 5.85% and will mature on Dec. 1, 2030. The proceeds of the issue
were used to repay short-term debt incurred during the construction of
the Polk Power Station.
In April 1996, the company retired $35 million aggregate par
value 8.0% Series E and 7.44% Series F preferred stock at redemption
prices of $102.00 and $101.00 respectively.
As a part of its risk management program the company had entered
into an interest rate exchange agreement to moderate its exposure to
interest rate changes. This agreement expired in early 1996.
Currently, the company is not a party to and does not own any
derivative instruments.
LIQUIDITY, CAPITAL RESOURCES
The company met cash needs during 1996 largely with internally
generated funds, short-term debt and capital contributions from its
parent.
At Dec. 31, 1996 the company had bank credit lines of $180
million, all of which was available.
The company anticipates meeting its capital requirements for
ongoing operations in 1997 through 2001 substantially from internally
generated funds.
INVESTMENT CONSIDERATIONS
The following are certain of the factors which could affect the
company's future results. They should be considered in connection with
evaluating forward-looking statements contained in this Management's
Discussion and Analysis and elsewhere in this Report and otherwise
made by or on the behalf of the company since these factors, among
others, could cause actual results and conditions to differ materially
from those projected in these forward-looking statements.
General Economic Conditions. The company's business is dependent
on general economic conditions. In particular, the projected growth in
the company's service area is important to the realization of
forecasts for annual energy sales growth for 1997 and beyond. An
unanticipated downturn in the area's economy could adversely affect
the company's performance through time.
Weather Variations. The company's business is affected by
variations in general weather conditions and unusually severe weather.
In particular, energy sales are sensitive to variations in weather
conditions. The company forecasts energy sales on the basis of normal
weather, which represents a long-term historical average. Significant
variations from normal weather could have a material impact on energy
sales. Unusual weather, such as hurricanes, could also have an effect
on operating costs as well as sales.
Potential Competitive Changes. The electric industry has been
undergoing certain restructuring. Competition in wholesale power sales
has been introduced on a national level. Some states have mandated or
encouraged competition at the retail level. While there is active
wholesale competition in Florida, the retail electric business has
remained substantially free from direct competition. Changes in the
competitive environment occasioned by legislation, regulation or
market conditions, however, particularly with respect to retail
competition, could adversely affect the company's business and its
performance.
Regulatory Actions. The company operates in a highly regulated
industry. Its retail operations, including the prices it charges, are
regulated by the FPSC, and its wholesale power sales and transmission
services are subject to regulation by FERC. Changes in regulatory
requirements or adverse regulatory actions could have an adverse
affect on the company's performance.
Commodity Price Changes. The company's business is sensitive to
changes in certain commodity prices. Fuel costs used for generation
are mostly affected by the cost of coal. The company is able to pass
the cost of fuel through to retail customers, but increases in fuel
costs affect electric prices and therefore the competitive position of
electricity against other energy sources. On the wholesale side, the
ability to make sales and the margins on power sales are affected by
the cost of coal to the company particularly as it relates to the cost
of oil and gas to other power producers.
Environmental Matters. The company is subject to regulation by
various governmental authorities dealing with air, water and other
environmental matters. Changes in and compliance with these
regulations may impose additional costs on the company, or result in
the curtailment of certain activities.
<PAGE>
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Page
No.
Report of Independent Accountants 24
Balance Sheets, Dec. 31, 1996 and 1995 25
Statements of Income for the years ended
Dec. 31, 1996, 1995 and 1994 26
Statements of Cash Flows for the years ended
Dec. 31, 1996, 1995 and 1994 27
Statements of Retained Earnings for the years ended
Dec. 31, 1996, 1995 and 1994 28
Statements of Capitalization, Dec. 31, 1996 and 1995 28-30
Notes to Financial Statements 31-39
Financial Statement Schedules have been omitted since they are
not required, are inapplicable or the required information is
presented in the financial statements or notes thereto.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
of Tampa Electric Company,
We have audited the balance sheets of Tampa Electric Company, (a
wholly owned subsidiary of TECO Energy, Inc.) as of Dec. 31, 1996 and
1995, and the related statements of income, cash flows, retained
earnings and capitalization for each of the three years in the period
ended Dec. 31, 1996. These financial statements are the responsibility
of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
Tampa Electric Company as of Dec. 31, 1996 and 1995, and the results
of its operations and its cash flows for each of the three years in
the period ended Dec. 31, 1996, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
Certified Public Accountants
Tampa, Florida
Jan. 15, 1997<PAGE>
BALANCE SHEETS
(millions)
Assets
Dec. 31, 1996 1995
Property, Plant and Equipment,
At Original Cost
Utility plant in service $3,536.6 $2,930.2
Construction work in progress 40.2 475.2
3,576.8 3,405.4
Accumulated depreciation (1,298.5) (1,203.3)
2,278.3 2,202.1
Other property 6.0 .9
2,284.3 2,203.0
Current Assets
Cash and cash equivalents .1 3.8
Receivables, less allowance
for uncollectibles 128.8 120.3
Inventories, at average cost
Fuel 57.0 70.0
Materials and supplies 41.2 38.7
Prepayments 3.5 3.5
230.6 236.3
Deferred Debits
Unamortized debt expense 17.4 18.3
Deferred income taxes 102.9 94.6
Regulatory asset-tax related 44.8 36.9
Other 43.2 50.1
208.3 199.9
$2,723.2 $2,639.2
Liabilities and Capital
Capital
Common stock $ 935.4 $ 851.9
Retained earnings 191.7 188.2
1,127.1 1,040.1
Preferred stock, redemption not required 20.0 55.0
Long-term debt, less amount due
within one year 661.1 583.1
1,808.2 1,678.2
Current Liabilities
Long-term debt due within one year 1.0 26.0
Notes payable 98.6 144.5
Accounts payable 117.3 117.4
Customer deposits 52.9 51.3
Interest accrued 12.1 8.9
Taxes accrued 7.4 16.5
289.3 364.6
Deferred Credits
Deferred income taxes 359.5 331.8
Investment tax credits 53.8 58.5
Regulatory liability-tax related 80.6 84.5
Other 131.8 121.6
625.7 596.4
$2,723.2 $2,639.2
The accompanying notes are an integral part of the financial
statements.<PAGE>
STATEMENTS OF INCOME
(millions)
Year ended Dec. 31, 1996 1995 1994
Operating Revenues
Residential $ 539.7 $ 523.3 $ 505.5
Commercial 321.3 316.1 316.8
Industrial-Phosphate 59.6 61.7 58.3
Industrial-Other 43.3 45.0 50.0
Sales for resale 93.3 80.0 70.4
Deferred and other revenues 55.7 66.2 93.9
1,112.9 1,092.3 1,094.9
Operating Expenses
Operation
Fuel 383.1 384.3 389.3
Purchased power 49.0 44.4 33.4
Other 164.2 163.3 171.6
Restructuring charge -- -- 21.3
Maintenance 65.5 69.6 72.9
Depreciation 120.2 113.3 115.1
Taxes-Federal and state income 71.3 66.2 57.4
Taxes-Other than income 87.0 87.9 86.8
940.3 929.0 947.8
Operating Income 172.6 163.3 147.1
Other Income (Expense)
Allowance for other funds
used during construction 16.5 13.7 3.5
Other income (expense), net (.2) (.4) (1.2)
16.3 13.3 2.3
Income before interest charges 188.9 176.6 149.4
Interest Charges
Interest on long-term debt 39.3 38.2 36.9
Other interest 14.4 10.3 4.6
Allowance for borrowed funds
used during construction (6.4) (5.6) (2.2)
47.3 42.9 39.3
Net Income 141.6 133.7 110.1
Preferred dividend
requirements 1.8 3.6 3.6
Balance Applicable to
Common Stock $ 139.8 $ 130.1 $ 106.5
The accompanying notes are an integral part of the financial
statements.
<PAGE>
STATEMENTS OF CASH FLOWS
(millions)
Year ended Dec. 31, 1996 1995 1994
Cash Flows from
Operating Activities
Net income $141.6 $ 133.7 $ 110.1
Adjustments to reconcile net
income to net cash
Depreciation 120.2 113.3 115.1
Deferred income taxes 7.6 (13.8) (14.1)
Restructuring charge and
other cost reductions -- -- 21.3
Investment tax credits, net (4.7) (4.8) (5.4)
Allowance for funds used
during construction (22.9) (19.3) (5.7)
Deferred clause revenues
(expenses) 4.0 (12.4) 19.9
Deferred revenue 34.2 50.8 --
Coal contract buyout 2.7 2.0 (25.5)
Refund to customers (6.0) -- (2.4)
Receivables, less allowance
for uncollectibles (8.5) (16.8) (5.3)
Fuel inventory 13.0 25.8 (18.4)
Taxes accrued (9.1) 14.4 (10.2)
Accounts payable (.1) 3.6 27.8
Other (12.5) 25.1 18.1
259.5 301.6 225.3
Cash Flows from
Investing Activities
Capital expenditures (203.4) (334.5) (230.8)
Allowance for funds used
during construction 22.9 19.3 5.7
(180.5) (315.2) (225.1)
Cash Flows from
Financing Activities
Proceeds from contributed
capital from parent 83.0 76.0 111.0
Proceeds from long-term debt 78.0 .6 .7
Repayment of long-term debt (25.3) (.2) (.2)
Net increase (decrease)in
short-term debt (45.9) 52.7 10.3
Redemption of preferred stock (35.5) -- --
Dividends (137.0) (118.8) (119.4)
(82.7) 10.3 2.4
Net increase (decrease)
in cash and cash equivalents (3.7) (3.3) 2.6
Cash and cash equivalents at
beginning of year 3.8 7.1 4.5
Cash and cash equivalents at
end of year $ .1 $ 3.8 $ 7.1
Supplemental Disclosure of Cash Flow Information
Cash paid during the year for:
Interest $ 39.4 $ 42.6 $ 39.8
Income taxes $ 83.9 $ 71.2 $ 83.9
The accompanying notes are an integral part of the financial
statements.<PAGE>
STATEMENTS OF RETAINED EARNINGS
(millions)
Year ended Dec. 31, 1996 1995 1994
Balance, Beginning of Year $187.1(1) $173.3 $182.6(2)
Add-Net income 141.6 133.7 110.1
328.7 307.0 292.7
Deduct-Cash dividends on
capital stock
Preferred 2.1 3.6 3.6
Common 134.9 115.2 115.8
137.0 118.8 119.4
Balance, End of Year $191.7 $188.2 $173.3
(1) The Retained Earnings balance was reduced by $1.1 million
related to the retirement of preferred stock Series E and F on
April 29, 1996. See Statements of Capitalization below.
(2) The Retained Earnings balance at Jan. 1, 1994 was restated to
reflect a net $.3 million reclassification of stock issuance
expense and additional paid in capital in accordance with a FERC
audit recommendation. See Note B on page 33.
The accompanying notes are an integral part of the financial statements.
STATEMENTS OF CAPITALIZATION
Capital Stock
Outstanding Cash Dividends
Dec.31, 1996 Paid in 1996(1)
Current
Redemption Per
Price Shares Amount(2) Share Amount(2)
Common stock-Without par value
25 million shares
authorized N/A 10 $935.4 N/A $135.0
Preferred Stock-$100 Par Value
1.5 million shares authorized
4.32% Cumulative,
Series A $103.75 49,600 $ 5.0 $4.32 $ .2
4.16% Cumulative,
Series B $102.875 50,000 5.0 $4.16 .2
4.58% Cumulative,
Series D $101.00 100,000 10.0 $4.58 .5
8.00% Cumulative,
Series E (3) -- -- -- -- .5 (3)
7.44% Cumulative,
Series F (3) -- -- -- -- .7 (3)
199,600 $20.0 $2.1
Preferred Stock - No Par
2.5 million shares authorized, none outstanding.
Preference Stock - No Par
2.5 million shares authorized, none outstanding.
_________________
(1) Quarterly dividends paid on Feb. 15, May 15, Aug. 15 and Nov. 15.
(2) Millions.
(3) Amounts paid in 1996 for Series E and F reflect dividends paid through
April 29, 1996, the date that these series were redeemed.
<PAGE>
STATEMENTS OF CAPITALIZATION (continued)
In April 1996, the company retired $35 million aggregate par value of 8.00%
Series E and 7.44% Series F preferred stock at redemption prices of $102.00 and
$101.00 per share, respectively.
At Dec. 31, 1996, preferred stock had a carrying amount of $20.0 million
and an estimated fair market value of $12.6 million. The estimated fair market
value of preferred stock was based on quoted market prices.
Long-Term Debt Outstanding at Dec. 31, Due 1996 1995
First mortgage bonds (issuable in series):
5 1/2% 1996 $ -- $ 25.0
7 3/4% 2022 75.0 75.0
5 3/4% 2000 80.0 80.0
6 1/8% 2003 75.0 75.0
Installment contracts payable(2)
5 3/4% 2007 24.1 24.4
7 7/8% Refunding bonds(3) 2021 25.0 25.0
8% Refunding bonds(3) 2022 100.0 100.0
6 1/4% Refunding bonds(4) 2034 86.0 86.0
5.85% 2030 75.0 --
Variable rate: 3.56% for 1996 and
3.81% for 1995(1) 2025 51.6 51.6
Variable rate: 3.43% for 1996 and
3.72% for 1995(1) 2018 54.2 54.2
Variable rate: 3.67% for 1996 and
3.90% for 1995(1)(5) 2020 20.0 16.9
Unamortized debt premium (discount), net (3.8) (4.0)
662.1 609.1
Less amount due within one year(6) 1.0 26.0
Total long-term debt $ 661.1 $ 583.1
(1) Composite year-end interest rate.
(2) Tax-exempt securities.
(3) Proceeds of these bonds were used to refund bonds with interest
rates of 11 5/8% - 12 5/8%. For accounting purposes, interest
expense has been recorded using blended rates of 8.28%-8.66% on
the original and refunding bonds, consistent with regulatory
treatment.
(4) Proceeds of these bonds were used to refund bonds with an
interest rate of 9.9% in February 1995. For accounting purposes,
interest expense has been recorded using a blended rate of 6.52%
on the original and refunding bonds, consistent with regulatory
treatment.
(5) This amount is recorded net of $3.1 million on deposit with
trustee at Dec. 31, 1995.
(6) Of the amount due in 1997, $.8 million may be satisfied by the
substitution of property in lieu of cash payments.
Substantially all of the property, plant and equipment of the
company is pledged as collateral. Maturities and annual sinking fund
requirements of long-term debt for the years 1998, 1999, 2000 and 2001
are $1.1 million, $1.1 million, $81.1 million, and $1.1 million,
respectively. Of these amounts $.8 million per year for 1998 through
2001 may be satisfied by the substitution of property in lieu of cash
payments.
<PAGE>
STATEMENTS OF CAPITALIZATION (continued)
At Dec. 31, 1996, total long-term debt had a carrying amount of
$661.1 million and an estimated fair market value of $701.5 million.
The estimated fair market value of long-term debt was based on quoted
market prices for the same or similar issues, on the current rates
offered for debt of the same remaining maturities, or for long-term
debt issues with variable rates that approximate market rates, at
carrying amounts. The carrying amount of long-term debt due within one
year approximated fair market value because of the short maturity of
these instruments.
The company had an interest rate exchange agreement, which
expired Jan. 11, 1996, to reduce the cost of $100 million of fixed
rate long-term debt. The agreement reduced interest expense by $2.3
million per year in 1995 and 1994.
The accompanying notes are an integral part of the financial
statements.<PAGE>
NOTES TO FINANCIAL STATEMENTS
A. Summary of Significant Accounting Policies
Basis of Accounting
Tampa Electric Company (Tampa Electric or the company) maintains
its accounts in accordance with recognized policies prescribed or
permitted by the Florida Public Service Commission (FPSC) and the
Federal Energy Regulatory Commission (FERC). These policies conform
with generally accepted accounting principles in all material
respects.
The impact of Financial Accounting Standard (FAS) No. 71,
Accounting for the Effects of Certain Types of Regulation, has been
minimal in the company's experience, but when cost recovery is ordered
over a period longer than a fiscal year, costs are recognized in the
period that the regulatory agency recognizes them in accordance with
FAS 71. Also as provided in FAS 71, the company has deferred revenues
in accordance with various regulatory agreements approved by the FPSC
in 1995 and 1996. In the future, these revenues will be recognized as
allowed under the terms of the agreements.
The company's retail and wholesale businesses are regulated by
the FPSC and the FERC, respectively. Prices allowed by both agencies
are generally based on recovery of prudent costs incurred plus a
reasonable return on invested capital.
The use of estimates is inherent in the preparation of financial
statements in accordance with generally accepted accounting
principles.
Revenues and Fuel Costs
Revenues include amounts resulting from cost recovery clauses
which provide for monthly billing charges to reflect increases or
decreases in fuel, purchased capacity, oil backout, conservation and
environmental costs. These adjustment factors are based on costs
projected by the company for a specific recovery period. Any over-recovery
or under-recovery of costs plus an interest factor are taken
into account in the process of setting adjustment factors for
subsequent recovery periods. Over-recoveries of costs are recorded as
deferred credits and under-recoveries of costs are recorded as
deferred debits.
In August 1996, the FPSC approved the company's petition for
recovery of certain environmental compliance costs through the
environmental cost recovery clause. These are new costs incurred by
the company to comply with environmental regulations enacted
subsequent to its most recent full regulatory price setting proceeding
but not included in current rates. The company plans to seek
continuing recovery of these types of costs through this clause until
the next full regulatory price setting proceeding.
On May 10, 1995, the FPSC approved the termination of the oil
backout clause effective Jan. 1, 1996. Any oil backout project costs
incurred beginning Jan 1, 1996 were no longer recovered through the
cost recovery clause.
In December 1994, the company bought out a long-term coal supply
contract which would have expired in 2004 for a lump sum payment of
$25.5 million and entered into two new contracts with the supplier.
The coal supplied under the new contracts is competitive in price with
coals of comparable quality. As a result of this buyout, the company's
customers will benefit from anticipated net fuel savings of more than
$40 million through the year 2004. In February 1995, the FPSC
authorized the recovery of the $25.5 million buy-out amount plus
carrying costs through the Fuel and Purchased Power Cost Recovery
Clause over the ten-year period beginning April 1, 1995. In 1996 and
1995, $2.7 million and $2 million, respectively, of buy-out costs were
amortized to expense.
Certain other costs incurred by the company are allowed to be
recovered from customers through prices approved in the regulatory
process. These costs are recognized as the associated revenues are
billed.
The company accrues base revenues for services rendered but
unbilled to provide a closer matching of revenues and expenses.
In May 1996, the FPSC issued an order approving an agreement
among the company, the Office of Public Counsel (OPC) and the Florida
Industrial Power Users Group (FIPUG) regarding 1996 earnings. This
agreement provides for a $25-million revenue refund to customers to be
made over the 12-month period beginning Oct. 1, 1996. This refund
consists of $15 million of revenues deferred from 1996 and $10 million
of revenues deferred from 1995, plus accrued interest.
In October 1996, the FPSC approved an agreement among the
company, OPC and FIPUG that resolved all pending regulatory issues
associated with the Polk Power Station. The agreement allows the full
recovery of all of the expected capital costs and operations and
maintenance expenses associated with the Polk Power Station, and calls
for an extension of the base rate freeze established in the May
agreement through 1999. Under the October agreement, the $25-million
refund established in the May agreement remains intact and customers
will receive a $25-million temporary base rate reduction to be
reflected as a credit on customer bills over a 15-month period
beginning Oct. 1, 1997.
Depreciation
The company provides for depreciation primarily by the straight-line
method at annual rates that amortize the original cost, less net
salvage, of depreciable property over its estimated service life. The
provision for utility plant in service, expressed as a percentage of
the original cost of depreciable property, was 3.9% for 1996 and 1995,
and 4.2% for 1994.
The original cost of utility plant retired or otherwise disposed
of and the cost of removal less salvage are charged to accumulated
depreciation.
Asset Impairment
FAS 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets Disposed Of (FAS 121), effective for years
beginning after Dec. 15, 1995, requires that long-lived assets and
certain intangibles to be held and used by the company be reviewed for
impairment. The company periodically assesses whether there has been a
permanent impairment of these assets. No write-down of assets due to
impairment was required in 1996.
Deferred Income Taxes
The company utilizes the liability method in the measurement of
deferred income taxes. Under the liability method, the temporary
differences between the financial statement and tax bases of assets
and liabilities are reported as deferred taxes measured at current tax
rates. The company is a regulated enterprise, and its books and
records reflect approved regulatory treatment, including certain
adjustments to accumulated deferred income taxes and the establishment
of a corresponding regulatory tax liability reflecting the amount
payable to customers through future rates.
<PAGE>
Investment Tax Credits
Investment tax credits have been recorded as deferred credits and
are being amortized to income tax expense over the service lives of
the related property.
Allowance for Funds Used During Construction (AFUDC)
AFUDC is a non-cash credit to income with a corresponding charge
to utility plant which represents the cost of borrowed funds and a
reasonable return on other funds used for construction. The rate used
to calculate AFUDC is revised periodically to reflect significant
changes in the company's cost of capital. The rate was 7.79% for 1996
and 1995, and 7.28% for 1994. The base on which AFUDC is calculated
excludes construction work in progress which has been included in rate
base.
Short-Term Investments
There were no short-term investments or available-for-sale
securities at Dec. 31, 1996 or 1995.
Reclassifications and Restatements
Certain 1995 and 1994 amounts were reclassified or restated to
conform with current year presentation.
B. Common Stock
The company is a wholly owned subsidiary of TECO Energy, Inc.
Common Stock Issue
Shares Amount Expense
(thousands)
Balance Dec. 31, 1993 10 $666.3 $(1.7)
Contributed capital from parent 111.0 --
Reclassification to other
capital accounts(1) -- .3
Balance Dec. 31, 1994 10 777.3 (1.4)
Contributed capital from parent 76.0 --
Balance Dec. 31, 1995 10 853.3 (1.4)
Contributed capital from parent 83.0 --
Costs associated with Preferred
Stock retirements (2) -- .5
Balance Dec. 31, 1996 10 $936.3 $ (.9)
(1) In 1994, a FERC audit recommended that $.3 million of net costs
be reclassified from common stock issuance expense and
additional paid in capital, to retained earnings. The issuance
expense related to a retired series of preferred stock.
(2) In April 1996, the company retired $35 million aggregate par
value of 8.00% Series E and 7.44% series F preferred stock. In
connection with this retirement, $.5 million of associated
issuance costs were recognized.
<PAGE>
C. Retained Earnings
The company's Restated Articles of Incorporation and certain
series of the company's first mortgage bond issues contain provisions
that limit the dividend payment on the company's common stock and the
purchase or retirement of the company's capital stock. At Dec. 31,
1996, substantially all of the company's retained earnings were
available for dividends on its common stock.
D. Retirement Plan
The company is a participant in the comprehensive retirement
plan of TECO Energy, which has a non-contributory defined benefit
retirement plan which covers substantially all employees. Benefits are
based on employees' years of service and average final earnings.
TECO Energy's policy is to fund the plan within the guidelines
set by ERISA for the minimum annual contribution and the maximum
allowable as a tax deduction by the IRS. The company's share of net
pension expense, excluding the restructuring charge, was $1.8 million
for 1996, $0.2 million for 1995 and $0.9 million for 1994. The
company's portion of pension expense related to the restructuring
charge in 1994 was $12.7 million. About 67 percent of plan assets were
invested in common stocks and 33 percent in fixed income investments
at Dec. 31, 1996.
Components of net pension expense, reconciliation of the funded
status and the accrued pension liability are presented below for TECO
Energy consolidated.
Components of Net Pension Expense
(millions)
1996 1995 1994
Service cost
(benefits earned during the period) $ 9.4 $ 7.2 $ 8.8
Interest cost on projected
benefit obligations 18.8 17.3 15.8
Less: Return on plan assets
Actual 43.4 66.4 (3.7)
Less net amortization of unrecognized
transition asset and deferred return 18.6 43.3 (25.8)
Net return on assets 24.8 23.1 22.1
Net pension expense 3.4 1.4 2.5
Effect of restructuring charge (.9) -- 13.3
Net pension expense recognized
in the Consolidated Statements
of Income $ 2.5 $ 1.4 $15.8
<PAGE>
Reconciliation of the Funded Status of the Retirement Plan and the
Accrued Pension Prepayment/(Liability)
(millions)
Dec. 31, Dec. 31,
1996 1995
Fair market value of plan assets $ 320.5 $ 286.7
Projected benefit obligation (262.2) (260.2)
Excess of plan assets over projected
benefit obligation 58.3 26.5
Less unrecognized net gain from past
experience different from that assumed 65.9 33.4
Less unrecognized prior service cost (11.7) (7.1)
Less unrecognized net transition asset
(being amortized over 19.5 years) 8.5 9.5
Accrued pension prepayment/(liability) $ (4.4) $ (9.3)
Accumulated benefit obligation
(including vested benefits of
$196.7 for 1996 and $193.2 for 1995) $ 220.0 $ 215.2
Assumptions Used in Determining Actuarial Valuations
1996 1995
Discount rate to determine projected
benefit obligation 7.75% 7.3%
Rates of increase in compensation levels 3.3-5.3% 3.3-5.3%
Plan asset growth rate through time 9% 9%
E. Postretirement Benefit Plan
The company currently provides certain postretirement health care
benefits for substantially all employees retiring after age 55 meeting
certain service requirements. The company contribution toward health
care coverage for most employees retiring after Jan. 1, 1990 is
limited to a defined dollar benefit based on years of service.
Postretirement benefit levels are substantially unrelated to salary.
The company reserves the right to terminate or modify the plan in
whole or in part at any time.
Components of Postretirement Benefit Cost (millions)
1996 1995 1994
Service cost (benefits earned
during the period) $ 1.3 $ 1.2 $ 1.5
Interest cost on projected
benefit obligations 4.3 4.8 4.1
Amortization of transition obligation
(straight line over 20 years) 1.9 2.0 2.1
Amortization of actuarial (gain)/loss .3 .2 .2
Net periodic postretirement
benefit expense 7.8 8.2 7.9
Effect of restructuring charge -- -- 2.6
Net periodic postretirement
benefit expense recognized in
the Statements of Income $ 7.8 $ 8.2 $10.5
<PAGE>
Reconciliation of the Funded Status of the Postretirement Benefit Plan
and the Accrued Liability (millions)
Dec. 31, Dec. 31,
1996 1995
Accumulated postretirement benefit obligation
Active employees eligible to retire $ (2.4) $ (2.2)
Active employees not eligible to retire (18.6) (22.6)
Retirees and surviving spouses (37.8) (41.8)
(58.8) (66.6)
Less unrecognized net gain/(loss)
from past experience (9.2) (16.7)
Less unrecognized transition obligation (29.6) (33.9)
Liability for accrued postretirement benefit $(20.0) $(16.0)
Assumptions used in Determining Actuarial Valuations
Discount rate to determine projected
benefit obligation 7.75% 7.35%
The assumed health care cost trend rate for medical costs prior
to age 65 was 10.25% in 1996 and decreases to 5.75% in 2002 and
thereafter. The assumed health care cost trend rate for medical costs
after age 65 was 7.25% in 1996 and decreases to 5.75% in 2002 and
thereafter.
A 1 percent change in the medical trend rates would produce a
7 percent ($0.4 million) change in the aggregate service and interest
cost for 1996 and an 8 percent ($4.7 million) change in the
accumulated postretirement benefit obligation as of Dec. 31, 1996.
F. Restructuring Charge
In 1994, the company implemented a corporate restructuring program
which resulted in a $21.3 million charge ($13.1 million after tax).
The cost of this restructuring program included 225 early retirements,
the elimination of other positions and other cost control initiatives.
Approximately $1.7 million of this charge was paid in 1994 and $3.8
million in 1995. No amount remained payable at the end of 1996. The
impact on pension cost resulting from the restructuring as determined
under the provisions of FAS 88, "Accounting for Settlements and
Curtailments of Defined Benefit Pension Plans and for Termination
Benefits," was approximately $13.0 million. The impact on
postretirement benefits as determined under FAS 106, "Accounting for
Postretirement Benefits Other Than Pensions," was approximately $2.6
million. These amounts are included as part of the total charge of
$21.3 million. See Note D on pages 34 and 35, and Note E on pages 35
and 36.
<PAGE>
G. Income Tax Expense
The company is included in the filing of a consolidated Federal income
tax return with its parent and affiliates. The company's income tax
expense is based upon a separate return computation. Income tax
expense consists of the following components:
(millions) Federal State Total
1996
Currently payable $ 58.1 $ 10.1 $ 68.2
Deferred 6.7 .9 7.6
Amortization of investment
tax credits (4.7) - (4.7)
Total income tax expense $ 60.1 $ 11.0 71.1
Included in other income, net (.2)
Included in operating expenses $ 71.3
1995
Currently payable $ 72.1 $ 12.5 $ 84.6
Deferred (11.8) (2.0) (13.8)
Amortization of investment
tax credits (4.8) - (4.8)
Total income tax expense $ 55.5 $ 10.5 66.0
Included in other income, net (.2)
Included in operating expenses $ 66.2
1994
Currently payable $ 68.3 $ 9.9 $ 78.2
Deferred (11.1) (3.0) (14.1)
Investment tax credits (.6) -- (.6)
Amortization of investment
tax credits (4.8) -- (4.8)
Total income tax expense $ 51.8 $ 6.9 58.7
Included in other income, net 1.3
Included in operating expenses $ 57.4
Deferred taxes result from temporary differences in the
recognition of certain liabilities or assets for tax and financial
reporting purposes. The principal components of the company's deferred
tax assets and liabilities recognized in the balance sheet are as
follows:
Dec. 31, Dec. 31,
(millions) 1996 1995
Deferred tax assets(1)
Property related $ 84.4 $ 76.6
Leases 5.4 5.5
Insurance reserves 7.2 6.6
Early capacity payments 2.2 2.2
Other 3.7 3.7
Total deferred income tax assets 102.9 94.6
Deferred income tax liabilities(1)
Property related (401.7) (361.5)
Other 42.2 29.7
Total deferred income tax liabilities (359.5) (331.8)
Accumulated deferred income taxes $(256.6) $(237.2)
_________________
(1) Certain property related assets and liabilities have been netted.
The total income tax provisions differ from amounts computed by
applying the federal statutory tax rate to income before income taxes
for the following reasons:
(millions) 1996 1995 1994
Net income $141.6 $133.7 $110.1
Total income tax provision 71.2 66.0 58.7
Income before income taxes $212.8 $199.7 $168.8
Income taxes on above at federal
statutory rate (35% for 1996,
1995 and 1994) $ 74.5 $ 70.0 $ 59.1
Increase (decrease) due to
State income tax, net of federal
income tax 7.2 6.8 4.5
Amortization of investment tax
credits (4.7) (4.8) (4.8)
Equity portion of AFUDC (5.8) (4.9) (1.4)
Other (.1) (1.1) 1.3
Total income tax provision $ 71.1 $ 66.0 $ 58.7
Provision for income taxes as
a percent of income before
income taxes 33.4% 33.0% 34.8%
H. Short-Term Debt
Notes payable consisted exclusively of commercial paper with
weighted average interest rates of 5.40% and 5.69% at Dec. 31, 1996
and Dec. 31, 1995, respectively. The carrying amount of notes payable
approximated fair market value because of the short maturity of these
instruments. Unused lines of credit at Dec. 31, 1996 were $180
million. Certain lines of credit require commitment fees ranging from
.05% to .075% on the unused balances.
I. Related Party Transactions (millions)
Net transactions with affiliates are as follows:
1996 1995 1994
Fuel and interchange related, net $154.9 $166.4 $180.0
Administrative and general, net $ 10.1 $ 11.8 $ 9.0
Amounts due from or to affiliates of the company at year-end are as
follows:
1996 1995
Accounts receivable $ 2.3 $ 2.6
Accounts payable $ 17.7 $ 23.9
Accounts receivable and accounts payable were incurred in the ordinary
course of business and do not bear interest.
<PAGE>
J. Pending Merger
In November 1996, TECO Energy announced an agreement with Lykes
Energy, Inc. (LEI) to merge it into TECO Energy in a tax-free,
stock-for-stock transaction with an equity value of $300 million. This
merger, to be accounted for as a pooling of interests, was approved by
both companies' boards of directors and in December 1996 by the Lykes
Energy shareholders. Approval by TECO Energy shareholders is not
required.
The principal subsidiary of LEI is Peoples Gas System (PGS), a
regulated retail natural gas distributor in Florida. PGS is Florida's
largest natural gas distribution company with retail operations in all
of the state's major metropolitan communities and over 200,000
customers. It recorded annual sales of 86 Bcf of natural gas in fiscal
1996.
TECO Energy plans to merge PGS into Tampa Electric
immediately after the merger between TECO Energy and LEI, and
thereafter to operate PGS as a separate business unit.
The merger is subject to certain closing conditions with closing
expected by mid-year 1997.
K. Commitments and Contingencies
The company has made certain commitments in connection with its
continuing capital improvements program. Capital expenditures are
estimated to be $116 million for 1997 and $470 million for 1998
through 2001 for equipment and facilities to meet customer growth.
This includes commitments of approximately $7 million at the end of
1996.
Capital requirements for PGS are not reflected in the above
projections. Capital investment plans for this company are still being
developed.<PAGE>
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
During the period from Jan. 1, 1995 to the date of this report,
the company has not had and has not filed with the Commission a report
as to any changes in or disagreements with accountants on accounting
principles or practices, financial statement disclosure or auditing
scope or procedure.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
(a) Information concerning Directors of Tampa Electric is as
follows:
Principal Occupation During
Last Five Years and Director
Name Age Other Directorships Held Since
Girard F. Anderson 65 President and Chief Operating 1994
Officer, TECO Energy, Inc.;
formerly Executive Vice President
-Utility Operations, TECO Energy,
Inc. and President and Chief
Operating Officer, Tampa Electric
Company
DuBose Ausley 59 Chairman, Ausley & McMullen 1992
(attorneys), Tallahassee, Florida;
formerly Chairman Macfarlane,
Ausley, Ferguson & McMullen
(attorneys), Tallahassee, Florida
and President of a predecessor firm;
also a director of Sprint Corporation
and Capital City Bank Group Inc.
Sara L. Baldwin 65 Private Investor; formerly 1980
Vice President, Baldwin and
Sons, Inc. (insurance agency),
Tampa, Florida
Hugh L. Culbreath 75 Retired; formerly Chairman of 1971
the Board of TECO Energy, Inc.
and Tampa Electric Company
James L. Ferman, Jr. 53 President, Ferman Motor Car 1985
Company, Inc. (automobile
dealerships), Tampa, Florida;
also a director of The Bank of
Tampa and its holding company,
The Tampa Banking Company
<PAGE>
Edward L. Flom 67 Retired; formerly Chairman 1980
of the Board and Chief Executive
Officer, Florida Steel
Corporation (production and
fabrication of steel products),
Tampa, Florida; also a director
of Outback Steakhouse, Inc.
Henry R. Guild, Jr. 68 President and Director, Northeast1980
Investment Management, Inc. (private
trustees and family investment
advisers), Boston, Massachusetts
Timothy L. Guzzle 60 Chairman of the Board and 1988
Chief Executive Officer,
Tampa Electric Company and
TECO Energy, Inc.; also a director
of NationsBank Corporation
Dennis R. Hendrix 57 Chairman of the Board and formerly 1995
Chief Executive Officer and
President, PanEnergy Corp
interstate gas pipeline),
Houston, Texas;
also a director of Texas Eastern
Products Pipeline Company, general
partner of TEPPCO Partners, LP, a
publicly traded limited partnership
Robert L. Ryan 53 Senior Vice President and 1991
Chief Financial Officer,
Medtronic, Inc. (medical
devices manufacturer),
Minneapolis, Minnesota;
formerly Vice President-Finance,
Union Texas Petroleum Holdings,
Inc. (independent oil and gas
exploration and production),
Houston, Texas; also a director
of Inter-Regional Financial Group,
Inc. and United Healthcare Corporation
William P. Sovey 63 Vice Chairman and Chief Executive 1996
Officer and formerly President
and Chief Operating Officer,
Newell Co. (consumer products),
Freeport, Illinois; also a director
of Acme Metals, Inc.
J. Thomas Touchton 58 Managing Partner, The 1987
Witt-Touchton Company (private
investment partnership), Tampa,
Florida; also a director of
17 Merrill Lynch-sponsored
mutual funds
John A. Urquhart 68 President, John A. Urquhart 1991
Associates (management
consultants), Fairfield,
Connecticut and Vice Chairman and
Director of Enron Corp. (diversified
natural gas company), Houston, Texas;
formerly Senior Vice President,
G. E. Industrial & Power Systems,
General Electric Company; also a
director of Hubbell Incorporated and
Aquarion Company
James O. Welch, Jr. 65 Retired; formerly Vice Chairman, 1976
RJR Nabisco, Inc. and Chairman,
Nabisco Brands, Inc.; also a
director of Kmart Corporation and
Vanguard Group of Investment Companies
The term of office of each director extends to the next annual
meeting of shareholders, scheduled to be held on April 16, 1997, and
until a successor is elected and qualified. At present, all the
directors of the company are also directors of TECO Energy.
(b) Information concerning the current executive officers of the
company is as follows:
Current Positions and
Principal Occupations
Name Age During Last Five Years
Timothy L. Guzzle 60 Chairman of the Board and
Chief Executive Officer;
also Chairman of the
Board and Chief Executive
Officer of TECO Energy, Inc.
Keith S. Surgenor 49 President and Chief
Operating Officer, 1994 to
date; and prior thereto, Vice
President-Human Resources.
Charles R. Black 46 Vice President-Energy Supply,
January 1997 to date; and
prior
thereto, Vice President-Project
Management.
William N. Cantrell 44 Director Peoples Gas Companies
Transition Team, 1996 to date;
Vice President-Energy Supply,
1994 to January 1997; and
prior
thereto, Vice President-Energy
Resource Planning.
<PAGE>
Roger A. Dunn 54 Vice President-Human
Resources,
1995 to date; also
Vice President-Human Resources
of TECO Energy, Inc., 1995 to
date; and prior thereto,
Senior Vice President-
Human Resources and
Corporate Affairs of LTV
Corporation (steel
manufacturer), Cleveland, Ohio.
Gordon L. Gillette 37 Vice President-Regulatory
And Business Strategy, 1996 to
date;
Vice President-Regulatory
Affairs,
1994 to 1996; and prior
thereto,
Director-Project Services,
TECO Power Services
Corporation.
William L. Griffin 42 Vice President-Controller,
1996 to date; also Vice
President-Controller, TECO
Energy, Inc, 1994 to
date; and
prior thereto, Vice President
and Group Controller,
Automatic Transmission
Systems,
a division of Borg-Warner
Automotive Corporation.
(automobile parts
manufacturer), Chicago,
Illinois.
Roger H. Kessel 60 General Counsel and Secretary,
1992
to date; Also Senior Vice
President-General Counsel and
Secretary of TECO Energy,
Inc.,
April 1995 to date.
Alan D. Oak 50 Vice President, Treasurer and
Chief Financial Officer;
also Senior Vice President-
Finance and Chief Financial
Officer of TECO
Energy, Inc.
John B. Ramil 41 Vice President-Energy Services
and Planning, 1994 to date;
Vice President-Energy Services
and Bulk Power, 1994;
Director-Resource Planning,
1993 to 1994; and prior
thereto, Director-Power
Resource Planning.
Harry I. Wilson 58 Vice President-Energy
Delivery, 1996
to date; and prior thereto,
Vice President-Transmission
and Distribution.
There is no family relationship between any of the persons named
in response to Item 10. The term of office of each officer extends to
and expires at the meeting of the Board of Directors following the
next annual meeting of shareholders, scheduled to be held on April 16,
1997, and until a successor is elected and qualified.
Item 11. EXECUTIVE COMPENSATION.
The following tables set forth certain compensation information
for the Chief Executive Officer of the company and each of the four
other most highly compensated executive officers of the company.<PAGE>
Summary Compensation Table
<TABLE>
Long-Term
Compensation
Annual Compensation Awards
<CAPTION>
Other Res- Shares
Annual tricted Underlying All Other
Name and Compen- Stock Options Comp-
Principal Position Year Salary Bonus sation (1) Awards(2) /SARs(#)(3) sation(4)
<S> <C> <C> <C> <C> <C> <C> <C>
Timothy L. Guzzle(5) 1996 $526,250 $480,000 $491,150 $32,010
Chairman of the Board 1995 493,750 415,000 $50,925 60,000 31,092
Chief Executive Officer 1994 468,750 384,000 40,000 28,703
Keith S. Surgenor(5) 1996 295,000 215,000 206,800 14,199
President and Chief 1995 272,500 195,000 45,664 25,000 17,994
Operating Officer 1994 215,376 225,000 12,000 13,986
Roger H. Kessel(5) 1996 248,500 163,000 143,350 11,063
General Counsel and 1995 238,500 135,000 44,765 17,000 9,052
Secretary 1994 228,750 150,000 14,000 10,257
Alan D. Oak(5) 1996 241,750 160,000 143,350 15,248
Vice President, 1995 225,000 135,000 44,264 17,000 14,432
Treasurer and Chief 1994 201,750 130,000 13,000 12,905
Financial Officer
Roger A. Dunn(5)(6) 1996 202,500 90,000 108,100 9,186
Vice President- 1995 89,502 42,000 15,000 462
Human Resource
</TABLE>
<PAGE>
_________________
(1) Participants in the company car program received a one-time cash
payment in connection with its elimination in 1995. The amount set
forth includes this payment, which in the case of the four executive
officers listed was $40,890.
(2) The reported values of the restricted stock awards were determined
using the closing market price of the Common Stock on the date of
grant. Restricted stock holdings and the values thereof based on the
closing price of the Common Stock on Dec. 31, 1996 are as follows:
Mr. Guzzle, 20,900 shares ($504,213); Mr. Surgenor, 8,800 shares
($212,300); Mr. Kessel, 6,100 shares ($147,163); Mr. Oak, 6,100
shares ($147,163); and Mr. Dunn, 4,600 shares ($110,975). The shares
granted to Messrs. Guzzle, and Kessel will vest on December 1, 1998
and January 1, 1999, respectively; the other shares listed above will
vest more than three years after the date of grant. Holders of
restricted stock receive the same dividends as holders of other
shares of Common Stock.
(3) Stock appreciation rights that can only be exercised during limited
periods following a change in control of the Corporation ("LSAR"s)
were awarded in tandem with the options granted. Upon exercise of an
LSAR, the holder is entitled to an amount based upon the highest
price paid or offered for Common Stock during the 30-day period
preceding a change in control of the Corporation, as defined under
"Employment and Change in Control Arrangements" below. The exercise
of an option or an LSAR results in a corresponding reduction in the
other.
(4) The reported amounts for 1996 consist of $924 of premiums paid by the
company to the Executive Supplemental Life Insurance Plan for each of
the named executive officers, with the balance in each case being
employer contributions under the TECO Energy Group Retirement Savings
Plan and Retirement Savings Excess Benefit Plan.
(5) Includes compensation for services as an officer of TECO Energy.
(6) Mr. Dunn began employment as Vice President-Human Resources in July
1995.<PAGE>
Aggregated Option/SAR Exercises In Last Fiscal
Year and Fiscal Year-End Option/SAR Value
Number of
Shares Value of
Underlying Unexercised
Unexercised In-The-Money
Options/SARs Options/SARs
at Year-End(#) at Year-End
Value
Shares Acquired Realized Exercisable/ Exercisable/
Name On Exercise(#) ($) Unexercisable Unexercisable
Timothy L. Guzzle 80,000 615,000 140,000/0 $345,000/0
Keith S. Surgenor 14,000 167,250 77,000/0 330,000/0
Roger H. Kessel 0 0 137,000/0 930,313/0
Alan D. Oak 26,000 158,750 43,000/0 125,625/0
Roger A. Dunn 0 0 15,000/0 37,500/0
Pension Table
The following table shows estimated annual benefits payable
under the company's pension plan arrangements for the named executive
officers other than Messrs. Guzzle, Kessel and Dunn.
Final Three Years of Service
Years Average
Earnings 5 10 15 20 or more
$100,000 $ 15,000 $ 30,000 $ 45,000 $ 60,000
150,000 22,500 45,000 67,500 90,000
200,000 30,000 60,000 90,000 120,000
250,000 37,500 75,000 112,500 150,000
300,000 45,000 90,000 135,000 180,000
350,000 52,500 105,000 157,500 210,000
400,000 60,000 120,000 180,000 240,000
450,000 67,500 135,000 202,500 270,000
500,000 75,000 150,000 225,000 300,000
550,000 82,500 165,000 247,500 330,000
600,000 90,000 180,000 270,000 360,000
650,000 97,500 195,000 292,500 390,000
700,000 105,000 210,000 315,000 420,000
750,000 112,500 225,000 337,500 450,000
The annual benefits payable to each of the named executive
officers are equal to a stated percentage of such officer's final
average earnings multiplied by his number of years of service, up to a
stated maximum. The amounts shown in the table are based on 3% of
such earnings and a maximum of 20 years of service. The amounts
payable to Mr. Guzzle are based on 6% of earnings and a maximum of 10
years of service; the amounts payable to Mr. Kessel are based on 5% of
earnings and a maximum of 12 years of service; and the amounts payable
to Mr. Dunn are based on 4% or earnings and a maximum of 10 years of
service. Final average earnings are based on the greater of (i) the
officer's final 36 months of earnings or (ii) the officer's highest
three consecutive calendar years of earnings out of the five calendar
years preceding retirement.
The earnings covered by the pension plan arrangements are the
same as those reported as salary and bonus in the summary compensation
table above. Years of service for the named executive officers are as
follows: Mr. Guzzle (9 years), Mr. Surgenor (8 years), Mr. Kessel (7
years), Mr. Oak (23 years) and Mr. Dunn (2 years). The pension benefit
is computed as a straight-life annuity commencing at the officer's
normal retirement age and is reduced by the officer's Social Security
benefits. The normal retirement age is 62 for Messrs. Guzzle and
Kessel and 63 for Messrs. Surgenor, Oak and Dunn. The pension plan
arrangements also provide death benefits to the surviving spouse of an
officer equal to 50% of the benefit payable to the officer. If the
officer dies during employment before reaching his normal retirement
age, the benefit is based on the officer's service as if his
employment had continued until such age. The death benefit is payable
for the life of the spouse. If Mr. Guzzle's employment is terminated
by TECO Energy without cause or by Mr. Guzzle for good reason (as such
terms are defined in Mr. Guzzle's employment agreement referred to
below), his age and service for purposes of determining benefits under
the pension plan arrangements are increased by two years.
The present value of the portion of the officer's pension
benefit that is in excess of the amount payable under the company's
qualified retirement plan is, at the election of the officer, payable
in the form of a lump sum.
Employment and Change in Control Arrangements
TECO Energy has severance agreements with the named executive
officers under which payments will be made under certain circumstances
following a change in control of TECO Energy. A change in control
means in general the acquisition by any person of 30% or more of the
Common Stock, the change in a majority of the directors or the
approval by the shareholders of a merger or consolidation of TECO
Energy in which TECO Energy's shareholders do not have majority voting
power in the surviving entity or of the liquidation or sale of the
assets of TECO Energy. Each of these officers is required, subject to
the terms of the severance agreements, to remain in the employ of TECO
Energy for one year following a potential change in control (as
defined) unless a change in control earlier occurs. The severance
agreements provide that in the event employment is terminated by TECO
Energy without cause (as defined) or by one of these officers for good
reason (as defined) following a change in control, TECO Energy will
make a lump sum severance payment to the officer of three times annual
salary and bonus. Upon such termination, the severance agreements also
provide for: (i) a cash payment equal to the additional retirement
benefit which would have been earned under TECO Energy's retirement
plans if employment had continued for three years following the date
of termination and (ii) participation in the life, disability,
accident and health insurance plans of TECO Energy for such period
except to the extent such benefits are provided by a subsequent
employer.
In addition, the terms of the restricted stock awarded to the
named executive officers provide for full vesting upon a change in
control. These officers will also receive a payment to compensate for
the additional taxes, if any, payable on the benefits received under
the severance agreements and any other benefits contingent on a change
in control as a result of the application of the excise tax associated
with Section 280G of the Internal Revenue Code.
TECO Energy has an employment agreement with Mr. Guzzle
providing that if his employment is terminated by TECO Energy without
cause or by Mr. Guzzle for good reason, he will receive benefits
similar to those provided under the severance agreements described
above based upon a level of two times annual salary and bonus and a
two-year benefit continuation period. Consistent with his employment
agreement, certain of Mr. Guzzle's option grants provide for a two-year
exercise extension period in the event of such a termination.
Compensation of Directors
Directors of TECO Energy and the company who are not employees
or former employees of the company, TECO Energy or any of its
subsidiaries are paid a combined annual retainer of $27,000 and a fee
of $750 for attendance at each meeting of the Board of TECO Energy,
$750 for each meeting of the Board of the company and $1,000 for
attendance at each meeting of a Committee of the Board on which they
serve. Directors may elect to defer these amounts with earnings
credited at either the 90-day U.S. Treasury bill rate or a rate equal
to the total return on TECO Energy's common stock. Subject to approval
of the 1997 Director Equity Plan (the "Plan") discussed below, the
Board has voted, with respect to compensation for 1997, to provide
each eligible director the opportunity to elect to receive all or a
portion (in 25% increments) of the director's cash compensation in
shares of TECO Energy common stock.
TECO Energy has an agreement with Mr. Culbreath under which he
will provide consulting services to TECO Energy through December 31,
2000 for compensation at a rate of $175,000 per year. Mr. Culbreath
served as Chief Executive Officer of TECO Energy until April 1989 and
retired as an employee in April 1990 at which time the consulting
relationship commenced. The agreement provides a severance benefit (in
the event of termination of Mr. Culbreath's consultancy following a
change in control of TECO Energy) equal to the total compensation that
would have been payable over the remaining term of the agreement. This
benefit is payable under the same circumstances as the benefits
described under "Executive Compensation Employment and Change in
Control Agreements" above and will be reduced to the extent that such
benefit, taking into account any other compensation provided by TECO
Energy, would not be deductible by TECO Energy pursuant to Section
280G of the Internal Revenue Code.
1991 Director Stock Option Plan and 1997 Director Equity Plan.
All non-employee directors of the company or TECO Energy participate
in TECO Energy's 1991 Director Stock Option Plan (the "1991 Plan"),
which provides automatic annual grants of options to purchase shares
of TECO Energy common stock to such directors. The exercise price is
the fair market value of the common stock on the date of grant,
payable in whole or in part in cash or TECO Energy common stock. The
plan provides for an initial grant of options for 10,000 shares to
each new director and an annual grant of options for 2,000 shares to
each continuing director. Grants are made on the first trading day of
TECO Energy common stock after each annual meeting of shareholders.
The options are exercisable immediately and expire ten years after
grant or earlier as provided in the plan following termination of
service on the Board.
The TECO Energy Board has adopted, subject to TECO Energy
shareholder approval, the 1997 Director Equity Plan as an amendment
and restatement of the 1991 Plan. Approval of the Plan would amend the
1991 Plan to expand the types of awards available to be granted and
replace the current fixed formula grant by giving the Board
discretionary authority to determine the amount and timing of awards
under the Plan.
Directors' Retirement Plan. All directors who have completed 60
months of service as a director of TECO Energy and who are not
employees or former employees of TECO Energy or any of its
subsidiaries are eligible to participate in the TECO Energy, Inc.
Directors' Retirement Plan (the "Directors' Retirement Plan"). Under
this plan, a retired director or his or her surviving spouse will
receive a monthly retirement benefit at the rate of $20,000 per year.
Such payments will continue for the lesser of the number of months the
director served as a director or 120 months, but payments will in any
event cease upon the death of the director or, if the director's
spouse survives the director, the death of the spouse.
The TECO Energy Board has terminated the Directors' Retirement
Plan for active directors, subject to shareholder approval of the 1997
Director Equity Plan. If such Plan is approved, active directors who
participate in the Directors' Retirement Plan will receive a one-time
payment, made 50% in TECO Energy common stock and 50% in cash, of the
present value of the income stream they would have received under the
plan based on their length of service as of December 31, 1996. At the
election of the director, the cash portion of this payment could be
deferred in the same manner as the retainer and meeting fees or paid
in TECO Energy common stock. The aggregate value of the cash and TECO
Energy common stock that would be payable in connection with the
termination of the Directors' Retirement Plan is approximately $1.1
million.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
All outstanding shares of Tampa Electric's common stock are
owned by TECO Energy. As of Jan. 31, 1997, none of the directors or
executive officers of Tampa Electric or TECO Energy owned any shares
of the preferred stock of Tampa Electric.
The following table sets forth the shares of TECO Energy common
stock beneficially owned as of Jan. 31, 1997 by directors and
nominees, the executive officers named in the summary compensation
table and Tampa Electric's directors and executive officers as a
group. Except as otherwise noted, such persons have sole investment
and voting power over the shares. The number of shares of TECO
Energy's common stock beneficially owned by any director or executive
officer or by all directors and executive officers as a group does
not exceed 1% of such shares outstanding at Jan. 31, 1997.
<PAGE>
Name Shares (1)
Girard F. Anderson 157,304(2)(3)
DuBose Ausley 23,727
Sara L. Baldwin 22,918(4)
Hugh L. Culbreath 77,800(5)
James L. Ferman, Jr. 28,207(6)
Edward L. Flom 24,172(7)
Henry R. Guild, Jr. 123,579(8)
Timothy L. Guzzle 199,041(2)(9)
Dennis R. Hendrix 12,500
Robert L. Ryan 22,000(10)
William P. Sovey 11,000
J. Thomas Touchton 24,000(11)
John A. Urquhart 23,499(12)
James O. Welch, Jr. 28,600(13)
Keith S. Surgenor 98,025(2)(14)
Roger H. Kessel 145,414(2)
Alan D. Oak 79,175(2)(15)
Roger A. Dunn 23,893(2)
24 directors and executive
officers as a group (including
those named above) 1,288,917(2)(16)
__________________
(1) The amounts listed include the following shares that are
subject to options granted under TECO Energy's stock option
plans: Mr. Anderson, 112,000 shares; Mr. Ausley, 18,000 shares;
Mrs. Baldwin and Messrs. Culbreath, Ferman, Flom, Guild, Ryan,
Touchton and Welch, 20,000 shares each; Messrs. Hendrix and
Sovey, 10,000 shares each; Mr. Guzzle, 140,000 shares; Mr.
Urquhart, 17,200 shares; Mr. Surgenor, 77,000 shares; Mr.
Kessel, 137,000 shares; Mr. Oak, 43,000 shares; Mr. Dunn,
15,000 shares; and all directors and executive officers as a
group, 910,100 shares.
(2) The amounts listed include the following shares that are held
by benefit plans of TECO Energy for an officer's account: Mr.
Guzzle, 2,041 shares; Mr. Anderson, 8,684 shares; Mr. Surgenor,
2,717 shares; Mr. Kessel, 2,314 shares; Mr. Oak, 9,945 shares;
Mr. Dunn, 257 shares; and all directors and executive officers
as a group, 51,124 shares.
(3) Includes 800 shares owned by Mr. Anderson's wife, as to which
shares he disclaims any beneficial interest.
(4) Includes 350 shares held by a trust of which Mrs. Baldwin is a
trustee.
(5) Includes 8,000 shares owned by Mr. Culbreath's wife, as to
which shares he disclaims any beneficial interest.
(6) Includes 2,584 shares owned jointly by Mr. Ferman and his wife.
Also includes 903 shares owned by Mr. Ferman's wife, as to
which shares he disclaims any beneficial interest.
(7) Includes 1,596 shares owned by Mr. Flom's wife, as to which
shares he disclaims any beneficial interest. Also includes
1,388 shares owned by a Revokable Living Trust of which Mr.
Flom is the sole trustee.
(8) Includes 101,179 shares held by trusts of which Mr. Guild is a
trustee. Of these shares, 49,800 are held for the benefit of
Mr. Culbreath and are also included in the number of shares
beneficially owned by him.
(9) Includes 34,100 shares owned by a Revocable Living Trust of
which Mr. Guzzle is a trustee.
(10) Includes 2,000 shares owned jointly by Mr. Ryan and his wife.
(11) Includes 4,000 shares owned by a Revocable Living Trust of
which Mr. Touchton is the sole trustee.
(12) Includes 1,000 shares owned by Mr. Urquhart's wife, as to which
shares he disclaims any beneficial interest.
(13) Includes 2,000 shares owned by a charitable foundation of which
Mr. Welch is a trustee.
(14) Includes 9,403 shares owned jointly by Mr. Surgenor and his
wife.
(15) Includes 20,130 shares owned by a Revocable Living Trust of
which Mr. Oak's wife is the sole trustee.
(16) Includes a total of 13,987 shares owned jointly with spouses
and 1,169 shares owned jointly with parent and sibling. Also
includes a total of 23,899 shares owned by spouses, as to which
shares beneficial interest is disclaimed.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
During 1996, Mr. Ausley served as Chairman of Macfarlane, Ausley,
Ferguson & McMullen and of a successor to that firm, Ausley &
McMullen, both of which rendered legal services to TECO Energy and its
subsidiaries during 1996.
In addition, reference is made to Note I on page 38.<PAGE>
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K.
(a) 1. Financial Statements - See index on page 23.
2. Financial Statement Schedules - See index on page 23.
3. Exhibits
*3.1 Articles of Incorporation (Exhibit 3.1 to
Registration Statement No. 2-70653).
*3.2 Bylaws, as amended, effective July 18, 1995 (Exhibit
3, Form 10-Q for the quarter ended June 30, 1995 of
Tampa Electric Company).
*4.1 Indenture of Mortgage among Tampa Electric Company,
State Street Trust Company and First Savings & Trust
Company of Tampa, dated as of Aug. 1, 1946 (Exhibit
7-A to Registration Statement No. 2-6693).
*4.2 Thirteenth Supplemental Indenture, dated as of Jan.
1, 1974, to Exhibit 4.1 (Exhibit 2-g-l, Registration
Statement No. 2-51204).
*4.3 Sixteenth Supplemental Indenture, dated as of Oct.
30, 1992, to Exhibit 4.1 (Exhibit 4.1, Form 10-Q for
the quarter ended Sept. 30, 1992 of Tampa Electric
Company).
*4.4 Eighteenth Supplemental Indenture, dated as of May 1,
1993, to Exhibit 4.1 (Exhibit 4.1, Form 10-Q for the
quarter ended June 30, 1993).
*4.5 Installment Purchase and Security Contract between
the Hillsborough County Industrial Development
Authority and Tampa Electric Company, dated as of
March 1, 1972 (Exhibit 4.9, Form 10-K for 1986 of
Tampa Electric Company).
*4.6 First Supplemental Installment Purchase and Security
Contract, dated as of Dec. 1, 1974 (Exhibit 4.10,
Form 10-K for 1986 of Tampa Electric Company).
*4.7 Third Supplemental Installment Purchase Contract,
dated as of May 1, 1976 (Exhibit 4.12, Form 10-K for
1986 of Tampa Electric Company).
*4.8 Installment Purchase Contract between the
Hillsborough County Industrial Development Authority
and Tampa Electric Company, dated as of Aug. 1, 1981
(Exhibit 4.13, Form 10-K for 1986 of Tampa Electric
Company).
*4.9 Amendment to Exhibit A of Installment Purchase
Contract, dated as of April 7, 1983 (Exhibit 4.14,
Form 10-K for 1989 of Tampa Electric Company).
*4.10 Second Supplemental Installment Purchase Contract,
dated as of June 1, 1983 (Exhibit 4.11, Form 10-K for
1994 of Tampa Electric Company).
*4.11 Third Supplemental Installment Purchase Contract,
dated as of Aug. 1, 1989 (Exhibit 4.16, Form 10-K for
1989 of Tampa Electric Company).
*4.12 Installment Purchase Contract between the
Hillsborough County Industrial Development Authority
and Tampa Electric Company, dated as of Jan. 31, 1984
(Exhibit 4.13, Form 10-K for 1993 of Tampa Electric
Company).
*4.13 First Supplemental Installment Purchase Contract,
dated as of Aug. 2, 1984 (Exhibit 4.14, Form 10-K for
1994 of Tampa Electric Company).
*4.14 Second Supplemental Installment Purchase Contract,
dated as of July 1, 1993 (Exhibit 4.3, Form 10-Q for
the quarter ended June 30, 1993).
*4.15 Loan and Trust Agreement among the Hillsborough
County Industrial Development Authority, Tampa
Electric Company and NCNB National Bank of Florida,
dated as of Sept. 24, 1990 (Exhibit 4.1, Form 10-Q
for the quarter ended Sept. 30, 1990 of Tampa
Electric Company).
*4.16 Loan and Trust Agreement, dated as of Oct. 26, 1992
among the Hillsborough County Industrial Development
Authority, Tampa Electric Company and NationsBank of
Florida, N.A., as trustee (Exhibit 4.2, Form 10-Q for
the quarter ended Sept. 30, 1992 of Tampa Electric
Company).
*4.17 Loan and Trust Agreement, dated as of June 23, 1993,
among the Hillsborough County Industrial Development
Authority, Tampa Electric Company and NationsBank of
Florida, N.A., as trustee (Exhibit 4.2, Form 10-Q for
the quarter ended June 30, 1993 of Tampa Electric
Company).
4.18 Loan and Trust Agreement, dated as of Dec. 1, 1996,
among the Polk County Industrial Development
Authority, Tampa Electric Company and the Bank of New
York, as trustee.
*10.1 1980 Stock Option and Appreciation Rights Plan, as
amended on July 18, 1989 (Exhibit 28.1, Form 10-Q for
the quarter ended June 30, 1989 of TECO Energy,
Inc.).
*10.2 Directors' Retirement Plan, as amended effective July
1, 1995 (Exhibit 10.1, Form 10-Q for the quarter
ended June 30, 1995 of Tampa Electric Company).
10.3 TECO Energy Group Supplemental Executive Retirement
Plan, as amended and restated as of Oct. 16, 1996.
10.4 TECO Energy Group Supplemental Retirement Benefits
Trust Agreement, as amended and restated as of Jan.
15, 1997.
*10.5 Annual Incentive Compensation Plan for TECO Energy
and subsidiaries, as revised January 1993 (Exhibit
10.2, Form 10-Q for the quarter ended March 31, 1994
of Tampa Electric Company).
*10.6 TECO Energy, Inc. Group Supplemental Disability
Income Plan, dated as of March 20, 1989 (Exhibit
10.19, Form 10-K for 1988 of Tampa Electric Company).
*10.7 Forms of Severance Agreements between TECO Energy,
Inc. and certain senior executives, as amended and
restated as of March 20, 1996.
*10.8 TECO Energy, Inc. 1991 Director Stock Option Plan as
amended on Jan. 21, 1992 (Exhibit 10.20, Form 10-K
for 1991 of Tampa Electric Company).
10.9 Supplemental Executive Retirement Plan for T.L.
Guzzle, as amended and restated as of Oct. 16, 1996.
10.10 Supplemental Executive Retirement Plan for R.H.
Kessel, as amended and restated as of Jan. 15, 1997.
*10.11 Supplemental Executive Retirement Plan for H.L.
Culbreath, as amended on April 27, 1989 (Exhibit
10.14, Form 10-K for 1989 of TECO Energy, Inc.).
10.12 Supplemental Executive Retirement Plan for A.D. Oak,
as amended and restated as of Oct. 16, 1996.
10.13 Supplemental Executive Retirement Plan for K.S.
Surgenor, as amended and restated as of Oct. 16,
1996.
*10.14 Terms of T.L. Guzzle's employment, dated as of July
20, 1993 (Exhibit 10, Form 10-Q for the quarter ended
June 30, 1993 of Tampa Electric Company).
10.15 Supplemental Executive Retirement Plan for G.F.
Anderson, as amended and restated as of Oct. 16,
1996.
*10.16 TECO Energy Directors' Deferred Compensation Plan, as
amended and restated effective April 1, 1994 (Exhibit
10.1, Form 10-Q for the quarter ended March 31, 1994
of Tampa Electric Company).
*10.17 TECO Energy, Inc. Annual Incentive Compensation Plan,
revised January 1993 (Exhibit 10.2, Form 10-Q for the
quarter ended March 31, 1994 of Tampa Electric
Company.
*10.18 TECO Energy Group Retirement Savings Excess Benefit
Plan, as amended and restated effective Aug. 1, 1994
(Exhibit 10.20, Form 10-K for 1994 of Tampa Electric
Company).
*10.19 Severance Agreement between TECO Energy, Inc. and H.
L. Culbreath, dated as of April 28, 1989 (Exhibit
10.24, Form 10-K for 1989 of TECO Energy, Inc.).
10.20 Supplemental Executive Retirement Plan for R.A. Dunn,
as amended and restated as of Jan. 15, 1997.
*10.21 Form of Nonstatutory Stock Option under the TECO
Energy, Inc. 1996 Equity Incentive Plan (Exhibit
10.1, Form 10-Q for the quarter ended June 30, 1996
of Tampa Electric Company).
*10.22 Form of Restricted Stock Agreement between TECO
Energy, Inc. And certain senior executives under the
TECO Energy, Inc. 1996 Equity Incentive Plan (Exhibit
10.2, Form 10-Q for the quarter ended June 30, 1996
of Tampa Electric Company).
*10.23 Form of Restricted Stock Agreement between TECO
Energy, Inc. And G. F. Anderson under the TECO
Energy, Inc. 1996 Equity Incentive Plan (Exhibit
10.3, Form 10-Q for the quarter ended June 30, 1996
of Tampa Electric Company).
12. Ratio of earnings to fixed charges.
23. Consent of Independent Accountants.
24.1 Power of Attorney.
24.2 Certified copy of resolution authorizing Power of
Attorney.
27. Financial Data Schedule (EDGAR filing only).
_____________
* Indicates exhibit previously filed with the Securities and
Exchange Commission and incorporated herein by reference.
Exhibits filed with periodic reports of Tampa Electric
Company and TECO Energy, Inc. were filed under Commission
File Nos. 1-5007 and 1-8180, respectively.
Executive Compensation Plans and Arrangements
Exhibits 10.1 through 10.23 above are management contracts or
compensatory plans or arrangements in which executive officers or
directors of TECO Energy, Inc. and its subsidiaries participate.
(b) The company filed the following reports on Form 8-K during the
last quarter of 1996.
The registrant filed a Current Report on Form 8-K dated Oct. 9,
1996 reporting under "Item 5. Other Events" announcing the
Florida Public Service Commission's vote to approve the
agreement among the registrant, the Office of Public Counsel and
the Florida Industrial Power Users Group which resolves all
regulatory issues related to a prudence review of the
registrant's Polk Power Station, extends the current base rate
freeze through 1999 and provides for a temporary reduction in
base rates.
The registrant filed a Current Report on Form 8-K dated Nov. 21,
1996 reporting under "Item 5. Other Events" that TECO Energy,
Inc. (TECO Energy), the parent company of the registrant, and
Lykes Energy, Inc. (LEI) entered into an Agreement and Plan of
Merger pursuant to which the registrant will acquire LEI through
the merger of LEI with and into the registrant or, subject to
certain conditions, with a wholly owned subsidiary of TECO
Energy.
The registrant filed a Current Report on Form 8-K dated Dec. 5,
1996 reporting under "Item 5. Other Events" announcing approval
by the shareholders of LEI of the previously announced merger of
LEI with TECO Energy, parent of the registrant.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized on the 26th day of March, 1997.
TAMPA ELECTRIC COMPANY
By T. L. GUZZLE*
T. L. GUZZLE, Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons on behalf
of the registrant and in the capacities indicated on March 26, 1997:
Signature Title
T. L. GUZZLE* Chairman of the Board,
T. L. GUZZLE Director and Chief Executive
Officer (Principal Executive
Officer)
A. D. OAK* Vice President, Treasurer
A. D. OAK and Chief Financial Officer
(Principal Financial Officer)
/s/ W. L. GRIFFIN Vice President-Controller
W. L. GRIFFIN (Principal Accounting Officer)
G. F. ANDERSON* Director
G. F. ANDERSON
C. D. AUSLEY* Director
C. D. AUSLEY
S. L. BALDWIN* Director
S. L. BALDWIN
H. L. CULBREATH* Director
H. L. CULBREATH
J. L. FERMAN, JR.* Director
J. L. FERMAN, JR.
E. L. FLOM* Director
E. L. FLOM
<PAGE>
H. R. GUILD, JR.* Director
H. R. GUILD, JR.
D. R. HENDRIX* Director
D. R. HENDRIX
R. L. RYAN* Director
R. L. RYAN
W. P. SOVEY* Director
W. P. SOVEY
J. T. TOUCHTON* Director
J. T. TOUCHTON
J. A. URQUHART* Director
J. A. URQUHART
J. O. WELCH, JR.* Director
J. O. WELCH, JR.
*By: /s/ W. L. GRIFFIN
W. L. GRIFFIN, Attorney-in-fact
<PAGE>
INDEX TO EXHIBITS
Exhibit Page
No. Description No.
3.1 Articles of Incorporation (Exhibit 3.1 to *
Registration Statement No. 2-70653).
3.2 Bylaws, as amended, effective July 18, 1995 *
(Exhibit 3, Form 10-Q for the quarter ended June 30,
1995 of Tampa Electric Company).
4.1 Indenture of Mortgage among Tampa Electric *
Company, State Street Trust Company and First Savings &
Trust Company of Tampa, dated as of Aug. 1, 1946
(Exhibit 7-A to Registration Statement No. 2-6693).
4.2 Thirteenth Supplemental Indenture, dated as of *
Jan. 1, 1974, to Exhibit 4.1 (Exhibit 2-g-l,
Registration Statement No. 2-51204).
4.3 Sixteenth Supplemental Indenture, dated as of *
Oct. 30, 1992, to Exhibit 4.1 (Exhibit 4.1,
Form 10-Q for the quarter ended Sept. 30, 1992
of Tampa Electric Company).
4.4 Eighteenth Supplemental Indenture, dated as of May 1, *
1993, to Exhibit 4.1 (Exhibit 4.1, Form 10-Q for the
quarter ended June 30, 1993).
4.5 Installment Purchase and Security Contract *
between and the Hillsborough County Industrial
Development Authority and Tampa Electric Company,
dated as of March 1, 1972 (Exhibit 4.9, Form 10-K
for 1986 of Tampa Electric Company).
4.6 First Supplemental Installment Purchase and *
Security Contract, dated as of Dec. 1, 1974
(Exhibit 4.10, Form 10-K for 1986 of
Tampa Electric Company).
4.7 Third Supplemental Installment Purchase Contract, *
dated as of May 1, 1976 (Exhibit 4.12, Form 10-K
for 1986 of Tampa Electric Company).
4.8 Installment Purchase Contract between the *
Hillsborough County Industrial Development
Authority and Tampa Electric Company, dated
as of Aug. 1, 1981 (Exhibit 4.13, Form 10-K for
1986 of Tampa Electric Company).
4.9 Amendment to Exhibit A of Installment Purchase *
Contract, dated as of April 7, 1983 (Exhibit 4.14,
Form 10-K for 1989 of Tampa Electric Company).
4.10 Second Supplemental Installment Purchase Contract, *
dated as of June 1, 1983 (Exhibit 4.11, Form 10-K for
1994 of Tampa Electric Company).
4.11 Third Supplemental Installment Purchase Contract, *
dated as of Aug. 1, 1989 (Exhibit 4.16, Form 10-K
for 1989 of Tampa Electric Company).
4.12 Installment Purchase Contract between the *
Hillsborough County Industrial Development
Authority and Tampa Electric Company, dated
as of Jan. 31, 1984 (Exhibit 4.13, Form 10-K
for 1993 of Tampa Electric Company).
4.13 First Supplemental Installment Purchase Contract, *
dated as of Aug. 2, 1984 (Exhibit 4.14, Form 10-K for
1994 of Tampa Electric Company).
4.14 Second Supplemental Installment Purchase Contract, *
dated as of July 1, 1993 (Exhibit 4.3, Form 10-Q
for the quarter ended June 30, 1993).
4.15 Loan and Trust Agreement among the Hillsborough *
County Industrial Development Authority,
Tampa Electric Company and NCNB National
Bank of Florida, dated as of Sept. 24, 1990
(Exhibit 4.1, Form 10-Q for the quarter ended
Sept. 30, 1990 of Tampa Electric Company).
4.16 Loan and Trust Agreement, dated as of *
Oct. 26, 1992 among the Hillsborough County
Industrial Development Authority, Tampa Electric
Company and NationsBank of Florida, N.A., as
trustee (Exhibit 4.2, Form 10-Q for the quarter
ended Sept. 30, 1992 of Tampa Electric Company).
4.17 Loan and Trust Agreement, dated as of June 23, *
1993, among the Hillsborough County Industrial
Development Authority, Tampa Electric Company and
NationsBank of Florida, N.A., as trustee (Exhibit 4.2,
Form 10-Q for the quarter ended June 30, 1993 of Tampa
Electric Company).
4.18 Loan and Trust Agreement, dated as of Dec. 1, 1996, 63
among the Polk County Industrial Development Authority,
Tampa Electric Company and the Bank of New York, as
trustee.
10.1 1980 Stock Option and Appreciation Rights Plan, *
as amended on July 18, 1989 (Exhibit 28.1,
Form 10-Q for the quarter ended June 30, 1989 of
TECO Energy, Inc.).
10.2 Directors' Retirement Plan, as amended effective *
July 1, 1995 (Exhibit 10.1, Form 10-Q for the quarter
ended June 30, 1995 of Tampa Electric Company).
10.3 TECO Energy Group Supplemental Executive Retirement Plan, 157
as amended and restated as of Oct. 16, 1996.
10.4 TECO Energy Group Supplemental Retirement 169
Benefits Trust Agreement as amended and restated as of
Jan. 15, 1997.
10.5 Annual Incentive Compensation Plan for TECO Energy and *
subsidiaries, as revised January 1993 (Exhibit 10.2,
Form 10-Q for the quarter ended March 31, 1994 of Tampa
Electric Company).
10.6 TECO Energy, Inc. Group Supplemental Disability *
Income Plan, dated as of March 20, 1989 (Exhibit 10.19,
Form 10-K for 1988 of Tampa Electric Company).
10.7 Forms of Severance Agreements between TECO Energy, Inc. *
and certain senior executives, as amended and restated
as of March 20, 1996.
10.8 TECO Energy, Inc. 1991 Director Stock Option Plan *
as amended on Jan. 21, 1992 (Exhibit 10.20, Form 10-K
for 1991 of Tampa Electric Company).
10.9 Supplemental Executive Retirement Plan for 183
T.L. Guzzle, as amended and restated as of Oct. 16,
1996.
10.10 Supplemental Executive Retirement Plan for 190
R.H. Kessel, as amended and restated as of Jan. 15,
1997.
10.11 Supplemental Executive Retirement Plan for *
H.L. Culbreath, as amended on April 27, 1989 (Exhibit
10.14, Form 10-K for 1989 of TECO Energy, Inc.).
10.12 Supplemental Executive Retirement Plan for 197
A.D. Oak, as amended and restated as of Oct. 16, 1996.
10.13 Supplemental Executive Retirement Plan for 204
K.S. Surgenor, as amended and restated as of Oct. 16,
1996.
10.14 Terms of T.L. Guzzle's employment, dated *
as of July 20, 1993 (Exhibit 10, Form 10-Q for the
quarter ended June 30, 1993 of Tampa Electric Company).
10.15 Supplemental Executive Retirement Plan for 211
G.F. Anderson, as amended and restated as of Oct. 16,
1996.
10.16 TECO Energy Directors' Deferred Compensation Plan, *
as amended and restated effective April 1, 1994
(Exhibit 10.1, Form 10-Q for the quarter ended March 31,
1994 of Tampa Electric Company).
10.17 TECO Energy, Inc. Annual Incentive Compensation Plan, *
revised January 1993 (Exhibit 10.2, Form 10-Q for the
quarter ended March 31, 1994 of Tampa Electric Company).
10.18 TECO Energy Group Retirement Savings Excess Benefit *
Plan, as amended and restated effective Aug. 1, 1994
(Exhibit 10.20, Form 10-K for 1994 of Tampa Electric
Company).
10.19 Severance Agreement between TECO Energy, Inc. and *
H.L. Culbreath, dated as of April 28, 1989 (Exhibit
10.24, Form 10-K for 1989 of TECO Energy, Inc.).
10.20 Supplemental Executive Retirement Plan for R.A. Dunn,217
as amended and restated as of Jan. 15, 1997.
10.21 Form of Nonstatutory Stock Option under the TECO Energy,*
Inc. 1996 Equity Incentive Plan (Exhibit 10.1, Form 10-Q
for the quarter ended June 30, 1996 of Tampa Electric
Company).
10.22 Form of Restricted Stock Agreement between TECO Energy,*
Inc. And certain senior executives under the TECO
Energy, Inc. 1996 Equity Incentive Plan (Exhibit 10.2,
Form 10-Q for the quarter ended June 30, 1996 of Tampa
Electric Company).
10.23 Form of Restricted Stock Agreement between TECO Energy,*
Inc. And G. F. Anderson under the TECO Energy, Inc. 1996
Equity Incentive Plan (Exhibit 10.3, Form 10-Q for the
quarter ended June 30, 1996 of Tampa Electric Company).
<PAGE>
12. Ratio of earnings to fixed charges. 224
23. Consent of Independent Accountants. 225
24.1 Power of Attorney. 226
24.2 Certified copy of resolution authorizing Power 228
of Attorney.
27. Financial Data Schedule (EDGAR filing only).
_____________
* Indicates exhibit previously filed with the Securities and
Exchange Commission and incorporated herein by reference.
Exhibits filed with periodic reports of Tampa Electric Company
and TECO Energy, Inc. were filed under Commission File Nos.
1-5007 and 1-8180, respectively.
<PAGE>
Exhibit 4.18
Execution Copy
LOAN AND TRUST AGREEMENT
among
POLK COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
and
TAMPA ELECTRIC COMPANY
and
THE BANK OF NEW YORK, as Trustee
Dated as of December 1, 1996
And Providing for the Issue of
$75,000,000
Polk County Industrial Development Authority
Solid Waste Disposal Facility Revenue Bonds
(Tampa Electric Company Project),
Series 1996
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I: INTRODUCTION AND DEFINITIONS . . . . . . . . . . . . 1
Section 101. Description of the Agreement and the Parties 1
Section 102. Definitions . . . . . . . . . . . . . . . . 1
ARTICLE II: THE ASSIGNMENT AND PLEDGE. . . . . . . . . . . . . . . . 8
Section 201. The Assignment and Pledge of Revenues and
Fund 8
Section 202. Creation of Subordinated Security Interest 8
Section 203. Pledge of First Mortgage Bonds . . . . . . 9
Section 204. Further Assurances. . . . . . . . . . . . 9
Section 205. Defeasance . . . . . . . . . . . . . . . . 9
Section 206. Termination of Subordinated Security
Interest 10
Section 207. Release of First Mortgage Bonds . . . . . . 10
ARTICLE III: THE BORROWING . . . . . . . . . . . . . . . . . . . . . 11
Section 301. The Bonds . . . . . . . . . . . . . . . . . 11
(a) Details of the Bonds . . . . . . . . . 11
(b) Form of Bonds . . . . . . . . . . . . . 12
(c) Registration of Bonds in the Book-Entry
Only System . . 12
(d) Interest on the Bonds . . . . . . . . . 15
(e) Daily Interest Rate . . . . . . . . . . 15
(i) Determination of Daily
Interest Rate . . . . . . 15
(ii) Adjustment to Daily Interest
Rate . . . . . . . . 16
(iii) Notice of Adjustment to
Daily Interest Rate 16
(f) Weekly Interest Rate . . . . . . . . . 17
(i) Determination of Weekly
Interest 17
(ii) Adjustment to Weekly
Interest Rate . . . . . . .18
(iii) Notice of Adjustment to
Weekly Interest Rate Period 18
(g) Short-Term Interest Rate . . . . . . . 19
(i) Determination of Short-Term
Segments and Short-Term \
Interest Rates 19
(ii) Adjustment to Short-Term
Interest Rates . . . . . 20
(iii) Notice of Adjustment to
Short-Term Interest Rate
Period . 20
(iv) Adjustment from Short-Term
Interest Rate Period . 21
(h) Long-Term Interest Rate . . . . . . . . 22
(i) Determination of Long-Term
Interest Rate . . . . . 22
(ii) Adjustment to or
Continuation of Long-Term
Interest Rate . . . . . . . 22
(iii) Notice of Adjustment to or
Continuation of Long-Term
Interest Rate Period . 23
(i) (Reserved) . . . . . . . . . . . . 24
(j) Determinations of Remarketing Agent
Binding . . . . . . 24
(k) Failure to Adjust Interest Rate 24
Section 302. Purchase of Bonds . . . . . . . . . 25
(a) Daily Interest Rate Period . . 25
(b) Weekly Interest Rate Period . . 25
(c) On Day Next Succeeding the Last
Day of Each Short-Term Segment or
Long-Term Interest Rate Period . . . 26
i<PAGE>
(d) On Day Next Succeeding Last Day of Each
Short-Term Interest Rate Period 26
(e) Irrevocable Notice or Failure to
Give Notice Deemed to be Tender of Bond 27
(f) Purchase of Bonds Delivered to
Remarketing Agent . . . 27
(g) Purchase of Bonds Delivered to the
Tender Agent . . . . 27
(h) Duty of Paying Agent to Hold Purchase
Price for Bondowner . 28
(i) Duty of Remarketing Agent to Hold
Purchase Price for Bondowner . 28
(j) Delivery of Purchased Bonds . 28
Section 303. Redemption of the Bonds . . . . . 29
(a) Optional Redemption . . . . . 29
(i) During a Daily or Weekly
Interest Rate Period . . 29
(ii) During a Short-Term
Interest Rate Period 29
(iii)During a Long-Term
Interest Rate Period 29
(b) Mandatory Redemption on First Day of
Certain Interest Rate Periods 30
(c) Mandatory Redemption of Bonds Not
in Authorized Denominations . 30
(d) Redemption Price with Respect to
Certain Redemptions . 31
(e) Special Mandatory Redemption Upon
Taxability . . . . . 31
(f) Extraordinary Optional Redemption . . 31
(g) Payment of Redemption Price and Accrued
Interest . . . 33
(h) Waiver of Redemption by Bondowner . . . 33
(i) Notice of Redemption . . . . . . . 33
(j) Partial Redemption of Bonds . . . . 34
(k) Purchase by Company In Lieu of
Redemption . . . . . . . 34
(l) Selection of Bonds for Redemption . . . 35
Section 304. Application of Bond Proceeds . . . . . . . 36
Section 305. Reserved . . . . . . . . . . . . . . . . . 36
Section 306. Debt Service Fund . . . . . . . . . . . . . 36
Section 307. Reserved. . . . . . . . . . . . . . . . . . 37
Section 308. First Mortgage Bond Fund . . . . . . . . . 37
Section 309. Expenses of Issue . . . . . . . . . . . . . 37
Section 310. Application of Moneys . . . . . . . . . . . 37
Section 311. Payments by the Company . . . . . . . . . . 38
(a) Debt Service . . . . . . . . . . . . . 38
(b) Additional Payments . . . . . . . . . . 39
(c) Company's Purchase of Bonds . . . . . . 39
Section 312. Unconditional Obligation . . . . . . . . . 39
Section 313. Remarketing of Bonds Tendered . . . . . . . 39
(a) Notice of Tendered Bonds . . . . . . . 39
(b) Remarketing of Bonds by the
Remarketing Agent . . . 40
(c) Procedure and Sources of Payment 40
(d) No Sales After Events of Default 41
Section 314. Mutilated, Destroyed, Lost or Stolen Bonds 41
Section 315. Temporary Bonds . . . . . . . . . . . . . . 42
Section 316. Cancellation and Destruction of Bonds . . 42
Section 317. Refunding Bonds . . . . . . . . . . . . . . 42
ARTICLE IV: THE PROJECT . . . . . . . . . . . . . . . . . . . . . . 42
Section 401. Construction Fund . . . . . . . . . . . . . 42
Section 402. Payments From Construction Fund . . . . . . 43
Section 403. Items of Cost . . . . . . . . . . . . . . . 43
ii<PAGE>
Section 404. Disbursements . . . . . . . . . . . . . 44
Section 405. Reliance on Requisitions . . . . . . . . . 45
Section 406. Completion of the Project . . . . . . . . . 45
Section 407. Transfer of Money from Fund on Repurchase or
Redemption of Bonds . . . . . . . . . . 46
Section 408. Rebate . . . . . . . . . . . . . . . . . . 47
Section 409. Maintenance and Modifications of Project
by Company . 48
Section 410. Removal of Portions of the Project . . 48
Section 411. Assignment, Leasing and Sale by the Company 48
ARTICLE V: THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . 49
Section 501. Representations by the Company . . . . 49
Section 502. Access to the Project . . . . . . . . 50
Section 503. Company To Maintain Its Corporate Existence;
Conditions Under Which Exceptions Permitted . . . . . . . . 50
Section 504. Indemnification Covenants . . . . . . 50
Section 505. Consent to Assignment of Contract Rights by
the Authority . . . . . . . . . . . . . . . 51
Section 506. Obligations of Company Hereunder
Unconditional. . . . 51
Section 507. Tax Status of Bonds . . . .. . . . 52
Section 508. Continuing Disclosure . . .. . . . . . 52
ARTICLE VI: THE AUTHORITY. . . . . . . . . . . . . 53
Section 601. Representations by the Authority 53
Section 602. No Warranty of Condition or Suitability by the
Authority . . . . . . . . . . . . . . . . . 53
Section 603. Payment of Principal, Premium and Interest 53
Section 604. Authority To Use Best Efforts To Require
Company To Make Payments . . . . . . . . . 53
Section 605. Take Further Action . . . . . . . . . . . . 54
Section 606. No Disposition of Revenues. . . . . . . . . 54
Section 607. No Extensions . . . . . . . . . . . . . . . 54
Section 608. Covenant To Perform Further Acts. . . . . . 54
Section 609. Faithful Performance . . . . . . . . . . . 55
ARTICLE VII: THE TRUSTEE AND PAYING AGENTS;
REMARKETING AGENT; TENDER AGENT; REGISTRAR. . . . . . . . . . . . . . . . 55
Section 701. Conditions of Trust . . . . . . . . . . . . 55
Section 702. Reimbursement of Administrative Expenses . 58
Section 703. Trustee To Give Notice to Bondowners in
Event of Default . . . . . . . . . . . . . 58
Section 704. Trustee's Right To Intervene; First
Mortgage Bonds . 58
Section 705. Successor Trustee Upon Merger, Etc. . . 59
Section 706. Resignation of Trustee. . . . . . . . . 59
Section 707. Removal of Trustee . . . . . . . . . . 60
Section 708. Appointments of Successor Trustee . . . 60
Section 709. Acceptance by Successor Trustee . . . . 61
Section 710. Reliance Upon Instruments . . . . . . . 61
Section 711. Former Trustee No Longer Custodian or
Paying Agent . 61
Section 712. Directions From Company; Company May
Perform . . . . 61
Section 713. Trading in Bonds by Trustee, Tender
Agent, Paying Agent, Registrar or
Remarketing Agent . . . . . . . . . 62
Section 714. Appointment and Duties of Paying Agent 62
Section 715. Qualification of Paying Agent . . . . . 63
Section 716. Appointment and Duties of Tender Agent 64
iii<PAGE>
Section 717. Qualification of Tender Agent . . . 65
Section 718. Appointment and Duties of Remarketing Agent 66
Section 719. Qualifications of Remarketing Agent . . . . 67
Section 720. Appointment and Duties of Registrar . . . 67
Section 721. Qualifications for Registrar . . . . . . 68
Section 722. Entities Serving in More Than One Capacity 69
ARTICLE VIII: SECURITY FOR AND INVESTMENT OF MONEY. . . . . . . . 69
Section 801. All Money Held In Trust . . . . . . . . . 69
Section 802. Permitted Investments . . . . . . . . . . 69
Section 803. Balance After Bonds Have Been Paid . . . 70
ARTICLE IX: DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . 70
Section 901. Events of Default . . . . . . . . . . . . 70
(a) Debt Service on Bonds; Required
Purchase . . . . . . . 70
(b) First Mortgage Bonds . . . . . . . . 70
(c) Other Obligations . . . . . . . . . . 70
(d) Appointment of Receiver . . . . . . . 71
(e) Voluntary Bankruptcy . . . . . . . . 71
(f) Involuntary Bankruptcy . . . . . . . 71
Section 902. Trustee May Institute Suits . . . . . . . 72
Section 903. Remedies on Events of Default . . . . . . 73
Section 904. Bondowners To Direct Trustee . . . . . . 74
Section 905. Receiver for the Revenues of the Authority
From the Project . . . . . . . . . . . . . 74
Section 906. Application of Moneys . . . . . . . . . . . 74
Section 907. Trustee as Representative of the Bondowners 76
Section 908. Enforcement by Bondowners . . . . . . . . . 76
Section 909. Rights To Continue . . . . . . . . . . . . 77
Section 910. Waivers of Default . . . . . . . . . . . . 77
Section 911. Agreement To Pay Attorneys' Fees and
Expenses . 77
Section 912. Remedies in Article IX in Addition to
Remedies in the First Mortgage . . . . . . 78
ARTICLE X: THE BONDOWNERS . . . . . . . . . . . . . . . . . . . . . 78
Section 1001. Action by Bondowners . . . . . . . . . . . 78
Section 1002. Ownership of Bonds . . . . . . . . . . . . 79
ARTICLE XI: SUPPLEMENTAL AGREEMENTS. . . . . . . . . . . . . . . . . 79
Section 1101. Supplemental Agreements Without Consent or
Notice to Bondowners . . . . . . . . . . . 79
Section 1102. Supplemental Agreements With Consent of
Majority of Bondowners . . . . . . . . . 80
Section 1103. Consents by Trustee, Tender Agent, Etc. . 81
Section 1104. Notice of Amendments to Rating Agencies . 81
ARTICLE XII: MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 81
Section 1201. Notices . . . . . . . . . . . . . . . . . 81
Section 1202. Successors and Assigns . . . . . . . . . . 82
Section 1203. Agreement Not for the Benefit of Other
Parties . . . 82
Section 1204. No Recourse Against Authority 82
Section 1205. Payments Due, Conversion Dates or
Notices on Nonbusiness Days . . . . . . 82
Section 1206. Severability . . . . . . . . . . . . . . 83
Section 1207. Counterparts . . . . . . . . . . . . . . 83
iv<PAGE>
Section 1208. Captions . . . . . . . . . . . . . . . 83
Section 1209. Florida Law to Govern . . . . . . . . 83
Section 1210. Time . . . . . . . . . . . . . . . . . . 83
Exhibit A Description of the Project . . . . . . . . . . . . . . 87
Exhibit B Form of Bond . . . . . . . . . . . . . . . . . . . . B-1
v<PAGE>
ARTICLE I: INTRODUCTION AND DEFINITIONS.
Section 101. Description of the Agreement and the Parties. This LOAN
AND TRUST AGREEMENT (the "Agreement") is entered into as of December 1, 1996,
by the POLK COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY, a public body corporate
and politic and a public instrumentality created pursuant to the laws of the
State of Florida (the "Authority"), TAMPA ELECTRIC COMPANY, a Florida
corporation (the "Company") and THE BANK OF NEW YORK, as trustee, a New York
corporation duly organized and existing under the laws of the State of New
York and having its designated corporate trust office in the City of
Jacksonville, Florida, which is authorized under such laws to exercise
corporate trust powers and is subject to examination by federal authorities
(said banking association and any bank or trust company becoming successor
trustee under this Agreement, the "Trustee").
This Agreement provides for the following transactions:
(a) the Authority's issue of the Bonds;
(b) the Authority's loan of the proceeds of the Bonds to the
Company for the purpose of financing the Project;
(c) the Company's repayment of the loan of Bond proceeds from
the Authority through payment to the Trustee or the Paying Agent of all
amounts necessary to pay principal, premium, if any, and interest on the Bonds
issued by the Authority;
(d) the Company's grant of a subordinated security interest in
the Project to secure its obligations under this Agreement; and
(e) the Authority's assignment to the Trustee in trust for the
benefit and security of the Bondowners of the Revenues to be received
hereunder and the rights to receive the same and the security therefor.
In consideration of the mutual agreements contained in this Agreement
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the Authority, the Company and the Trustee agree as set forth
herein for their own benefit and for the benefit of the Bondowners.
Section 102. Definitions. In addition to terms defined elsewhere
herein, the following terms have the following meanings in this Agreement,
unless the context otherwise requires:
"Act" means the Constitution of the State of Florida, Chapter 69-1510,
Laws of Florida, as amended, the Florida Industrial Development Financing Act,
Parts II and III of Chapter 159, Florida Statutes, and other applicable
provisions of law.
"Administrative Expenses" means the direct, out-of-pocket expenses
incurred by the Authority pursuant to this Agreement and reasonable in amount
and the compensation of the Trustee, the Paying Agent, the Registrar, the
Remarketing Agent and the Tender Agent and the direct, out-of-pocket expenses
of the Trustee, including fees and disbursements of its counsel, incurred by
the Trustee and reasonable in amount.
1<PAGE>
"Authorized Denominations" means with respect to any Long-Term Interest
Rate Period, $5,000 or any multiple thereof; with respect to any Daily
Interest Rate Period or Weekly Interest Rate Period, $100,000 or any multiple
thereof; and, with respect to any Short-Term Interest Rate Period, $100,000 or
any multiple of $5,000 in excess of $100,000.
"Authorized Officer" means: (i) in the case of the Authority, the
Chairman or the Secretary, and when used with reference to an act or document
of the Authority also means any other person authorized to perform the act or
execute the document; and (ii) in the case of the Company, the President, any
Vice President, the Treasurer, any Assistant Treasurer or the Secretary and
any other person designated by one of the foregoing officers.
"Bond Counsel" means any nationally recognized bond counsel selected by
the Company and satisfactory to the Trustee and the Authority.
"Bondowners" means the registered owners of the Bonds from time to time
as shown in the books kept by the Registrar as transfer agent.
Any reference to a majority or a particular percentage or proportion of
the Bondowners shall mean the holders at the particular time of a majority or
of the specified percentage or proportion in aggregate principal amount of all
Bonds then outstanding under this Agreement, exclusive of any such Bonds held
by the Remarketing Agent or the Tender Agent (to the extent that they are
holding Bonds in their respective capacities as such), the Company or the
Authority or any agent or affiliate of said parties; provided, however, that
for the purpose of determining whether the Trustee shall be protected in
relying upon any direction or consent given or action taken by Bondowners,
only the Bonds which such Trustee knows are so held shall be so excluded.
"Bond Resolution" means the resolution adopted by the Authority on
November 21, 1996 authorizing the issuance of the Bonds.
"Bonds" means the $75,000,000 Polk County Industrial Development
Authority Solid Waste Disposal Facility Revenue Bonds (Tampa Electric Company
Project), Series 1996 and any Bond or Bonds duly issued in exchange or
replacement therefor.
"Business Day" means a day on which banks in each of the cities in which
the designated offices of the Trustee, the Paying Agent and, if applicable,
the Tender Agent and Remarketing Agent are located are not required or
authorized to remain closed and on which the New York Stock Exchange is not
closed.
"Chairman" means the person at the time occupying the office of Chairman
or Vice Chairman of the Authority or any successor to the principal functions
thereof.
"Certified Resolution" means a copy of a resolution or resolutions
certified by the Secretary of the Authority, under its seal, to have been duly
adopted by the Authority and to be in full force and effect on the date of
such certification.
"Construction Fund" means the fund established with the Trustee pursuant
to Section 401.
2<PAGE>
"Continuing Disclosure Agreement" shall mean that certain Continuing
Disclosure Agreement between the Company and the Trustee dated the date of
issuance and delivery of the Bonds, as originally executed and as it may be
amended from time to time in accordance with the terms thereof.
"Counsel" means an attorney at law (who may be of counsel to the
Authority or the Company) satisfactory to the Trustee.
"County" means Polk County, Florida.
"Daily Interest Rate" has the meaning assigned in Section 301.
"Daily Interest Rate Period" means each period during which Bonds bear
interest at Daily Interest Rates.
"Debt Service Fund" means the fund established with the Trustee or the
Paying Agent pursuant to Section 306.
"Duff & Phelps" means Duff & Phelps Credit Rating Co. a corporation
organized and existing under the laws of the State of Illinois, its successors
and assigns, and if such corporation shall be dissolved or liquidated or shall
no longer perform the functions of a securities rating agency, "Duff & Phelps"
shall be deemed to refer to any other nationally recognized securities rating
agency designated by the Company, with notice to the Trustee and the
Authority.
"Federal Tax Statement" means the Statement as to Tax-Exempt Status of
the Bonds executed by the Company in connection with the original issuance of
the Bonds and delivered to the Authority and the Trustee.
"First Mortgage" means the Indenture of Mortgage, dated as of August 1,
1946, as heretofore and hereafter supplemented and amended, currently by and
between the Company and State Street Bank and Trust Company as trustee.
"First Mortgage Bond Fund" means the fund established with the Trustee
pursuant to Section 308.
"First Mortgage Bonds" means the first mortgage bonds to be created by a
supplemental indenture to the First Mortgage and, at the option of the
Company, delivered to the Trustee pursuant to Section 203 as security for the
Company's obligation to pay the principal of, premium, if any, and interest on
the Bonds.
"Government or Equivalent Obligations" means (i) obligations issued or
guaranteed by the United States of America; and (ii) certificates evidencing
ownership of the right to the payment of the principal of and interest on
obligations described in clause (i), provided that such obligations are held
in the custody of a bank or trust company satisfactory to the Trustee or the
Authority, as the case may be, in a special account separate from the general
assets of such custodian.
"Interest Payment Date" means (i) with respect to any Daily Interest
Rate Period, the first Business Day of each calendar month, (ii) with respect
to any Weekly Interest Rate Period, the first Wednesday of each calendar
month, or if such Wednesday shall not be a Business Day, the next succeeding
3<PAGE>
Business Day, (iii) with respect to any Long-Term Interest Rate Period, the
first day of the sixth calendar month following the effective date of such
Long-Term Interest Rate Period, and the first day of each successive sixth
calendar month, if any, of such Long-Term Interest Rate Period, (iv) with
respect to any Short-Term Segment, the Business Day next succeeding the last
day thereof and (v) with respect to each Interest Rate Period, in addition to
the other dates described above, the day next succeeding the last day of each
Interest Rate Period. Interest shall be payable through each Interest Payment
Date on the basis of a year of 365 or 366 days and actual days elapsed in
Short-Term, Daily and Weekly Interest Rate Periods and a 360-day year
consisting of twelve 30-day months in Long-Term Interest Rate Periods.
"Interest Rate Period" means any Daily Interest Rate Period, Weekly
Interest Rate Period, Short-Term Interest Rate Period and Long-Term Interest
Rate Period.
"IRC" means the Internal Revenue Code of 1986, as it may be amended from
time to time.
"Long-Term Interest Rate" has the meaning assigned in Section 301.
"Long-Term Interest Rate Period" means each period during which a Long-
Term Interest Rate is in effect, which shall be a period of more than 270 days
as determined by the Company.
"Maturity Date" means December 1, 2030.
"Moody's" means Moody's Investors Service, Inc., a corporation organized
and existing under the laws of the State of Delaware, its successors and
assigns, and, if such corporation shall be dissolved or liquidated or shall no
longer perform the functions of a securities rating agency, "Moody's" shall be
deemed to refer to any other nationally recognized securities rating agency
designated by the Company, with notice to the Trustee and the Authority.
"Officer's Certificate" means a certificate signed by the Chairman of
the Authority.
"Outstanding" when used to modify Bonds, refers to Bonds issued under
this Agreement, excluding: (i) Bonds which have been exchanged, replaced or
delivered to the Trustee for credit against a principal payment; (ii) Bonds
which have been paid; (iii) Bonds which have become due and for the payment of
which moneys have been duly provided to the Trustee or the Paying Agent; and
(iv) Bonds for which there have been irrevocably set aside sufficient funds,
or Government or Equivalent Obligations bearing interest at such rates, and
with such maturities as will provide sufficient funds, without reinvestment,
to pay or redeem them, provided, however, that if any such Bonds are to be
redeemed prior to maturity, the Company shall have taken all action necessary
to redeem such Bonds and notice of such redemption shall have been duly mailed
in accordance with this Agreement or irrevocable instructions so to mail shall
have been given to the Trustee.
"Paying Agent" means the Paying Agent designated from time to time
pursuant to Section 714. "Principal Office" of the Paying Agent means the
office thereof designated as such in writing to the Authority, the Trustee,
the Remarketing Agent and the Company.
4<PAGE>
"Permitted Investments" means (a) Government or Equivalent Obligations,
(b) certificates of deposit or other interest-bearing obligations of any bank
or trust company (including the Trustee and the trustee under the First
Mortgage) authorized to engage in the banking business which shall have a
combined capital, surplus and undivided profits aggregating not less than ten
million dollars ($10,000,000), (c) bonds and other obligations issued by or by
authority of any state of the United States, any territory or possession of
the United States, including the Commonwealth of Puerto Rico and agencies
thereof, or any political subdivision of any of the foregoing, (d) commercial
paper and other corporate debt securities rated, on the date of purchase, in
one of the highest two categories by Moody's or S&P, (e) repurchase agreements
with respect to any of the foregoing obligations or securities with any
banking or financial institution (which may include the Trustee and the
trustee under the First Mortgage) which has a combined capital, surplus and
undivided profits of not less than ten million dollars ($10,000,000),
(f) auction-rate preferred stock rated, on the date of purchase, in the
highest category by Moody's or S&P, (g) participation in 28-day auction-rate
tax-exempt funds rated, on the date of purchase, in the highest category by
Moody's or S&P, or (h) money market funds rated at least AAm or AAm-G by S&P.
"Project" means, collectively, certain solid waste disposal facilities
of the Unit including any structures, machinery, fixtures, improvements and
equipment, all as described in Exhibit A attached hereto, as the same may be
amended from time to time, together with all additions thereto and
substitutions therefor, less any deletions therefrom, as they may at any time
exist.
"Rebate Year" means the year ending December 31.
"Record Date" means with respect to any Interest Payment Date in respect
of a Daily Interest Rate Period, a Weekly Interest Rate Period or a Short-Term
Segment, the Business Day next preceding such Interest Payment Date and, with
respect to any Interest Payment Date in respect of a Long-Term Interest Rate
Period, the fifteenth day next preceding such Interest Payment Date.
"Registered Owner" means the person or persons in whose name or names a
particular Bond shall be registered on the books of the Authority kept for
that purpose in accordance with the terms of this Agreement.
"Registrar" means the registrar appointed in accordance with Section
720. "Principal Office" of the Registrar shall mean the office thereof
designated as such in writing to the Authority, the Trustee, the Remarketing
Agent and the Company.
"Remarketing Agent" means the corporation, association, partnership or
firm acting as Remarketing Agent as provided herein, which may be the Company
and any successor Remarketing Agent appointed from time to time pursuant to
Section 718. "Principal Office" of the Remarketing Agent means the office
designated as such in writing to the Authority, the Trustee, the Paying Agent
and the Company.
"Revenues" means and includes all payments by or on behalf of the
Company to or for the account of the Authority under this Agreement and all
other revenues derived by the Authority from or in connection with this
Agreement, including the income thereon and the investment thereof, if any,
5<PAGE>
and any moneys received on the First Mortgage Bonds but not including payments
with respect to the indemnification or reimbursement of certain expenses of
the Authority under Sections 311(b)(i), 504 and 911 of this Agreement or under
any other guaranty or indemnification agreement.
"S&P" means Standard & Poor's, a division of The McGraw-Hill Companies,
Inc., its successors and their assigns, and, if such entity shall no longer
perform the functions of a securities rating agency, "S&P" shall be deemed to
refer to any other nationally recognized securities rating agency designated
by the Company, with notice to the Trustee and the Authority.
"Secretary" means the person at the time occupying the office of the
Secretary or Assistant Secretary of the Authority or any successor to the
principal functions thereof.
"Short-Term Interest Rate Period" means each period, comprised of one or
more Short-Term Segments, during which Bonds bear interest at Short-Term
Interest Rates.
"Short-Term Segment" means a period from one to 270 days within a Short-
Term Interest Rate Period during which a Short-Term Interest Rate is in
effect.
"State" means the State of Florida.
"Tender Agent" means the tender agent appointed in accordance with
Section 716. "Principal Office" of the Tender Agent shall mean the office
thereof designated in writing to the Authority, the Trustee, the Remarketing
Agent and the Company.
"Treasury Rate" means the interest rate applicable to 13-week United
States Treasury bills determined by the Indexing Agent on the basis of the
average per annum discount rate at which such 13-week Treasury bills shall
have been sold at the most recent Treasury auction.
"Trustee" means The Bank of New York the designated corporate trust
office of which is located in the City of Jacksonville, Florida, and its
successor or successors as Trustee hereunder.
"UCC" means the Florida Uniform Commercial Code.
"Unit" means the integrated coal gasification combined cycle power plant
owned by the Company and located in southwest Polk County, and related support
facilities, as they may at any time exist.
"Weekly Interest Rate Period" means each period during which Bonds bear
interest at Weekly Interest Rates.
Words importing persons include firms, associations and corporations,
and the singular and plural form of words shall be deemed interchangeable
wherever appropriate.
6<PAGE>
ARTICLE II: THE ASSIGNMENT AND PLEDGE.
Section 201. The Assignment and Pledge of Revenues and Funds. The
Authority assigns and pledges to the Trustee in trust upon the terms hereof
(a) all Revenues to be received from the Company or derived from any security
provided hereunder, including the subordinated security interest granted by
the Company herein in the Project, and (b) all rights to receive such Revenues
and the proceeds of such rights. This assignment and pledge does not include
the rights of the Authority pursuant to Sections 311(b)(i), 504 and 911.
Section 202. Creation of Subordinated Security Interest. As security
for the performance by the Company of its obligations under this Agreement,
the Company hereby grants to the Authority a subordinated security interest in
the Project and in each component thereof. It is agreed that the security
interest hereby granted (including the Authority's rights of possession or
repossession of the Project or any rights conferred upon the Authority under
the UCC or otherwise) is hereby made, and shall at all times be, subject to
(i) the rights of the holders of the first mortgage bonds of the Company,
including the First Mortgage Bonds, issued and outstanding or to be issued
under the lien of the First Mortgage and (ii) any future security interest or
lien created to secure any indebtedness or other obligations of the Company
now existing or hereinafter issued or incurred under any indenture or other
instrument which expressly provides that any such security interest or lien
securing such indebtedness or obligations shall be superior to the security
interest hereby granted; provided that nothing in said First Mortgage or in
such other instrument or indenture or in this section shall affect or diminish
the obligations of the Company under this Agreement.
Section 203. Pledge of First Mortgage Bonds.
(a) In order to provide collateral security for the Company's obligations to
make payments of principal, premium, if any, and interest on the Bonds, as
required under this Agreement, the Company may elect to issue and deliver to
the Trustee a series of First Mortgage Bonds (i) registered in the name of the
Trustee, (ii) which shall have the same stated rate or rates of interest prior
to maturity, payable at the same times, and (iii) which shall become due in
the same principal amount or amounts, either by redemption, through operation
of a sinking fund or by maturity, on the same date or dates, as the Bonds.
The First Mortgage Bonds shall be held subject to the terms and provisions of
this Agreement and the First Mortgage.
(b) To exercise the election described in Subsection 203(a), the
Company shall, not less than 14 days prior to the proposed date of delivery of
the First Mortgage Bonds (i) give to the Authority and the Trustee and Moody's
written notice that shall designate the date on which such series of First
Mortgage Bonds shall be delivered and (ii) deliver to the Trustee and the
Authority a written opinion of Bond Counsel to the effect that such election
and the delivery of such series of First Mortgage Bonds will not cause the
interest on the Bonds to become includable in gross income for federal income
tax purposes.
Section 204. Further Assurances. The Company, the Authority and the
Trustee shall from time to time execute, deliver and register, record and file
such instruments as the Authority or the Trustee may reasonably require to
7<PAGE>
confirm, perfect or maintain the security created or intended to be created
hereby.
Section 205. Defeasance. When there are in the Debt Service Fund
sufficient funds, or Government or Equivalent Obligations in such principal
amounts, bearing interest at such rates and with such maturities as will
provide sufficient funds to pay or redeem the Bonds in full, and when all the
rights hereunder of the Authority, the Trustee, the Remarketing Agent, the
Tender Agent and the Paying Agent have been provided for, upon written notice
from the Company to the Authority and the Trustee, the Bondowners shall cease
to be entitled to any benefit or security under this Agreement except the
right to receive payment of the funds deposited and held for payment and other
rights which by their nature cannot be satisfied prior to or simultaneously
with termination of the lien hereof, the security interests created by this
Agreement (except in such funds and investments) shall terminate, and the
Authority and the Trustee shall execute and deliver such instruments as may be
necessary to discharge the lien and security interests created hereunder;
provided, however, that if any such Bonds are to be redeemed prior to the
maturity thereof, the Trustee shall have taken all action necessary to redeem
such Bonds and notice of such redemption shall have been duly mailed in
accordance with this Agreement or irrevocable instructions so to mail shall
have been given to the Trustee and the Paying Agent. Upon such defeasance,
the funds and investments required to pay or redeem the Bonds in full shall be
irrevocably set aside for that purpose, subject, however, to Section 803, and
moneys held for defeasance shall be invested only as provided above in this
section. Any funds or property held by the Trustee or the Paying Agent and
not required for payment or redemption of the Bonds in full shall be
distributed to the Company as provided in Section 803.
Section 206. Termination of Subordinated Security Interest. Upon
satisfaction by the Company of all its obligations under this Agreement, or
upon the satisfaction of the conditions as provided in Section 205, the
Trustee shall cause the execution and delivery to the Company of such
documents as shall be necessary to effect or to evidence the termination of
the subordinated security interest, provided, however, that the subordinated
security interest shall, upon the written request of the Company, be released
with respect to any part of the Project which has been released from the lien
of the First Mortgage pursuant to the provisions thereof or from the lien of
any future security interest or lien superior to the security interest hereby
granted. Upon written request of the Company, accompanied by evidence of the
release of the lien of the First Mortgage or other prior security interest or
lien on any part of the Project, the Trustee shall execute and deliver to the
Company releases or confirmatory certificates that such property is free of
such subordinated security interest.
Section 207. Release of First Mortgage Bonds. To the extent that (a)
Bonds have been paid or become due and sufficient moneys are held by the
Trustee in trust for the payment thereof, (b) Bonds are deemed to have been
paid in accordance with Section 205 and (c) Bonds (other than Bonds which have
been redeemed or called for redemption) have been delivered to, or have been
acquired by, the Trustee and canceled and other Bonds of the same series shall
not be issuable in lieu thereof, in substitution therefor, in exchange
therefor or upon registration of transfer thereof, the obligation of the
Company to make payments with respect to the principal, premium, if any, and
interest on the First Mortgage Bonds, if issued, shall be satisfied and
8<PAGE>
discharged and the Trustee shall release and surrender to the Company First
Mortgage Bonds in an aggregate principal amount equal to the aggregate
principal amount of such Bonds, bearing the same rate or rates of interest as
such Bonds and becoming due, either by redemption through operation of a
sinking fund or by maturity, on the same date or dates as such Bonds.
ARTICLE III: THE BORROWING.
Section 301. The Bonds.
(a) Details of the Bonds. (i) The Bonds shall be issued upon the
Authority's written request in fully registered form and shall be numbered
from 1 upwards in the order of their issuance, or in any other manner deemed
appropriate by the Paying Agent and the Authority. The Bonds shall be
issuable as fully registered bonds without coupons in Authorized
Denominations.
(ii) Each Bond shall be dated December 1, 1996 and shall
mature, subject to prior redemption, upon the terms and conditions hereinafter
set forth, on the Maturity Date. Each Bond shall bear interest from the
Interest Payment Date to which interest has been paid or duly provided for
next preceding its date of authentication, unless (A) such date shall be prior
to the first Interest Payment Date, in which case such Bond shall bear
interest from December 1, 1996 or (B) such date of authentication shall be an
Interest Payment Date to which interest on the Bonds has been paid in full or
duly provided for, in which case such Bond shall bear interest from such date
of authentication; provided, however, that if, as shown by the records of the
Trustee, interest on the Bonds shall be in default, Bonds issued in exchange
for Bonds surrendered for transfer or exchange shall bear interest from the
last date to which interest has been paid in full or duly provided for on the
Bonds or, if no interest has been paid or duly provided for on the Bonds, from
December 1, 1996. Each Bond shall bear interest on overdue principal.
(iii) The Bonds shall be signed on behalf of the Authority
by the manual or facsimile signature of the Chairman and the Secretary and the
corporate seal of the Authority or a facsimile thereof shall be engraved or
otherwise reproduced thereon. The authenticating certificate of the Paying
Agent shall be manually signed on behalf of the Paying Agent as authenticating
agent.
(iv) In case any officer whose manual or facsimile
signature shall appear on any Bond shall cease to be such officer before the
delivery thereof, such manual or facsimile signature shall nevertheless be
valid and sufficient for all purposes as if he or she had remained in office
until after such delivery.
(v) Subject to Subsection 301(c), the principal of,
premium, if any, and interest on the Bonds shall be payable in any coin or
currency of the United States of America which, at the respective dates of
payment thereof, is legal tender for the payment of public and private debts,
and such principal and premium, if any, shall be payable at the Principal
Office of the Paying Agent, or its successor in trust. Payment of interest on
any Interest Payment Date on any Bond shall be made to the Bondowner thereof
9<PAGE>
as of the close of business on the Record Date immediately prior thereto and
shall be made (A) by check or draft mailed on the Interest Payment Date to
such Bondowner at his address as it appears on the registration books of the
Authority or at such other address as is furnished the Registrar in writing by
such Bondowner not later than the close of business on the Record Date
immediately prior to an Interest Payment Date, or (B) except for interest in
respect of a Long-Term Interest Rate Period, transmitted by wire transfer to
the accounts with commercial banks located within the United States of America
of those Bondowners which shall have provided wire transfer instructions to
the Paying Agent prior to the close of business on such Record Date, but, in
the case of interest payable in respect of a Short-Term Segment, only upon
presentation of such Bond for exchange or transfer in accordance with the
provisions hereof, except, in each case, that, if and to the extent that there
shall be a default in the payment of the interest due on such Interest Payment
Date, such defaulted interest shall be paid to the Bondowners in whose names
any such Bonds are registered at the close of business on the fifth (5th)
Business Day next preceding the date of payment of such defaulted interest.
(b) Form of Bonds. The Bonds shall be issued in substantially
the form set forth in Exhibit B attached hereto with appropriate modifications
to reflect the Interest Rate Period of the Bonds in effect from time to time.
(c) Registration of Bonds in the Book-Entry Only System. (i)
The provisions of this Subsection 301(c) shall apply with respect to any Bond
registered to CEDE & CO. or any other nominee of The Depository Trust Company
("DTC") while the Book-Entry Only System (meaning the system of registration
described in paragraph (ii) of this Subsection 301(c)) is in effect. The
Book-Entry Only System shall be in effect for any Interest Rate Period if so
specified by the Company prior to conversion to that Interest Rate Period,
subject to the provisions below concerning termination of the Book-Entry Only
System. Until it revokes such specification in its discretion, the Company
hereby specifies that the Book-Entry Only System shall be in effect while the
Bonds are in Daily, Weekly, Short-Term, or Long-Term Interest Periods.
(ii) The Bonds shall be issued in the form of separate
single authenticated fully registered Bonds in substantially the form provided
for in Subsection 301(b) and in the amount of each separate stated maturity of
such Bonds. On the date of original delivery thereof or date of conversion of
the Bonds to an Interest Rate Period in which the Book-Entry Only System is in
effect, as applicable, the Bonds shall be registered in the registry books of
the Registrar in the name of CEDE & CO., as nominee of The Depository Trust
Company as agent for the Authority in maintaining the Book-Entry Only System.
With respect to Bonds registered in the registry books kept by the Registrar
in the name of CEDE & CO., as nominee of DTC, the Authority, the Paying Agent,
the Company and the Trustee shall have no responsibility or obligation to any
Participant (which means securities brokers and dealers, banks, trust
companies, clearing corporations and various other entities, some of whom or
their representatives own DTC) or to any Beneficial Owner (which means, when
used with reference to the Book-Entry Only System, the person who is
considered the beneficial owner of the Bonds pursuant to the arrangements for
book entry determination of ownership applicable to DTC) with respect to the
following: (A) the accuracy of the records of DTC, CEDE & CO. or any
Participant with respect to any ownership interest in the Bonds, (B) the
delivery to any Participant, any Beneficial Owner or any other person, other
than DTC, of any notice with respect to the Bonds, including any notice of
10<PAGE>
redemption, or (C) the payment to any Participant, any Beneficial Owner or any
other person, other than DTC, of any amount with respect to the principal or
premium, if any, or interest on the Bonds. The Paying Agent shall pay all
principal and premium, if any, and interest on the Bonds only to or upon the
order of DTC, and all such payments shall be valid and effective fully to
satisfy and discharge the Authority's obligations with respect to the
principal of and premium, if any, and interest on Bonds to the extent of the
sum or sums so paid. No person other than DTC shall receive an authenticated
Bond evidencing the obligation of the Authority to make payments of principal
and premium, if any, and interest pursuant to this Agreement. Upon delivery
by DTC to the Trustee of written notice to the effect that DTC has determined
to substitute a new nominee in place of CEDE & CO., the words "CEDE & CO." in
this Agreement shall refer to such new nominee of DTC.
(iii) Upon receipt by the Trustee or the Paying Agent of
written notice from DTC to the effect that DTC is unable or unwilling to
discharge its responsibilities, the Paying Agent shall issue, transfer and
exchange Bonds as requested by DTC in appropriate amounts, and whenever DTC
requests the Authority, the Paying Agent and the Trustee to do so, the
Trustee, the Paying Agent and the Authority will, at the expense of the
Company, cooperate with DTC in taking appropriate action after reasonable
notice (A) to arrange for a substitute bond depository willing and able upon
reasonable and customary terms to maintain custody of the Bonds or (B) to make
available Bonds registered in whatever name or names the Bondowners
transferring or exchanging Bonds shall designate.
(iv) In the event the Company determines that the
Beneficial Owners should be able to obtain Bond certificates, the Company may
so notify DTC, the Authority, the Paying Agent and the Trustee, whereupon DTC
will notify the Participants of the availability through DTC of Bond
certificates. In such event, the Paying Agent shall issue, transfer and
exchange Bond certificates as requested by DTC in appropriate amounts and in
authorized denominations. Whenever DTC requests the Paying Agent to do so,
the Paying Agent will cooperate with DTC in taking appropriate action after
reasonable notice to make available Bonds registered in whatever name or names
the Beneficial Owners transferring or exchanging Bonds shall designate.
(v) Notwithstanding any other provision of this Agreement
to the contrary, so long as any Bond is registered in the name of CEDE & CO.,
as nominee of DTC, all payments with respect to the principal of and premium,
if any, and interest on such Bond and all notices with respect to such Bond
shall be made and given, respectively, to DTC as provided in the Letter of
Representation (the "Representation Letter"), as from time to time in effect.
The form of such Representation Letter may be modified in a manner consistent
with the provisions of this Agreement upon conversion or reconversion of the
Bonds to an Interest Rate Period in which the Book-Entry Only System is in
effect.
(vi) Notwithstanding any provision in Section 303 to the
contrary, so long as all of the Bonds Outstanding are held in the Book-Entry
Only System, if less than all of such Bonds of any one maturity are to be
redeemed upon any redemption of Bonds hereunder, the particular Bonds or
portions of Bonds of such maturity to be redeemed shall be selected by DTC in
such manner as DTC may determine.
11<PAGE>
(vii) So long as the Book-Entry Only System is in effect, a
Beneficial Owner shall elect to have its Bonds purchased or tendered through
its Participant to the Tender Agent and shall effect delivery by causing the
Participant to transfer the Participant's interest in the Bonds on DTC's books
to the Tender Agent. The requirement for physical delivery of Bonds in
connection with a demand for purchase or a mandatory purchase will be deemed
satisfied when the ownership rights in the Bonds are transferred by
Participants on DTC's records.
(d) Interest on the Bonds. (i) The Bonds shall bear interest
from and including the Date of the Bonds as shown on Exhibit B until payment
of the principal or redemption price thereof shall have been made or provided
for in accordance with the provisions hereof, whether at maturity, upon
redemption or otherwise. Interest on the Bonds shall be paid on each Interest
Payment Date. During any Interest Rate Period other than a Long-Term Interest
Rate Period, interest on the Bonds shall be computed upon the basis of a 365
or 366-day year, as applicable, for the number of days actually elapsed.
During any Long-Term Interest Rate Period, interest on the Bonds shall be
computed upon the basis of a 360-day year, consisting of twelve (12) thirty
(30) day months.
(ii) In the manner hereinafter provided, the term of the
Bonds will be divided into consecutive Interest Rate Periods during which the
Bonds shall bear interest at the Daily Interest Rate, the Weekly Interest
Rate, the Short-Term Interest Rate or the Long-Term Interest Rate. The first
Interest Rate Period shall commence on the date of initial authentication and
delivery of the Bonds hereunder and shall be an Interest Rate Period elected
by the Company. The Bonds shall initially bear interest at the rate or rates
per annum established in accordance with such election by the Company and the
provisions of this Agreement, except that the notice requirements of this
Section 301 shall not be applicable.
(e) Daily Interest Rate. (i) Determination of Daily
Interest Rate. During each Daily Interest Rate Period, the Bonds shall bear
interest at the Daily Interest Rate, which shall be determined by the
Remarketing Agent either on each Business Day for such Business Day or on the
next preceding Business Day for the Business Day next succeeding such date of
determination and may be determined by the Remarketing Agent for any day that
is not a Business Day on any such day during which there shall be active
trading in tax-exempt obligations comparable to the Bonds for such day. The
Daily Interest Rate shall be the interest rate determined by the Remarketing
Agent to be the lowest interest rate which in its judgment, on the basis of
prevailing financial market conditions, would permit the sale of Bonds during
the Daily Interest Rate Period at a price (without regard to accrued interest)
equal, as nearly as practicable, to the principal amount thereof; provided,
however, that (A) with respect to any day that is not a Business Day, if the
Remarketing Agent shall not have determined a Daily Interest Rate for such
day, the Daily Interest Rate shall be the same as the Daily Interest Rate for
the immediately preceding day, (B) if, for any reason, a Daily Interest Rate
so determined for any day shall be held to be invalid or unenforceable by a
court of law or if the Remarketing Agent shall not have determined a Daily
Interest Rate, the Daily Interest Rate for such day shall be the same as the
Daily Interest Rate for the immediately preceding Daily Interest Rate Period;
and (C) in no event shall the Daily Interest Rate exceed 14% per annum. The
Remarketing Agent shall provide the Company, the Trustee and Paying Agent with
12<PAGE>
immediate telephonic notice of each Daily Interest Rate, as determined, which
notice shall be promptly confirmed in writing.
(ii) Adjustment to Daily Interest Rate. At any time, the
Company, by written direction to the Authority, the Paying Agent, the Trustee
and the Remarketing Agent, may elect that the Bonds shall bear interest at a
Daily Interest Rate. Such direction (A) shall specify the effective date of
such adjustment to a Daily Interest Rate (which shall be (1) a Business Day
not earlier than the 15th day following the fifth Business Day after the date
of receipt by the Paying Agent and the Trustee of such direction, (2) in the
case of an adjustment from a Long-Term Interest Rate Period, the day
immediately following the last day of the then current Long-Term Interest Rate
Period or a day on which the Bonds would be redeemable pursuant to Section
303(a)(iii) if such adjustment should not occur and (3) in the case of an
adjustment from a Short-Term Interest Rate Period, either (a) the day
immediately following the last day of the then current Short-Term Interest
Rate Period as determined in accordance with Section 301(g)(iv)(I) or (b) for
each Bond, the day immediately following the last day of the last Short-Term
Segment for such Bond in the then current Short-Term Interest Rate Period as
determined in accordance with Section 301(g)(iv)(II)); and (B) if given during
a Long-Term Interest Rate Period, may specify a date or dates prior to such
effective date on or prior to which Bondowners of the Bonds may deliver,
pursuant to Section 302(c), (1) notice regarding the purchase of such Bonds
and (2) such Bonds. During each Daily Interest Rate Period commencing on a
date so specified or determined and ending on the day immediately preceding
the effective date of the next succeeding Interest Rate Period, the interest
rate borne by the Bonds shall be a Daily Interest Rate.
(iii) Notice of Adjustment to Daily Interest Rate Period.
The Paying Agent shall give notice of an adjustment to a Daily Interest Rate
Period to Bondowners not less than 15 days prior to the effective date (or
each effective date in the case of an adjustment from a Short-Term Interest
Rate Period in accordance with the alternative set forth in clause II of
Section 301(g)(iv)) of such Daily Interest Rate Period. Such notice shall
state (1) that the interest rate on the Bonds will be adjusted to a Daily
Interest Rate, (2) the effective date of such Daily Interest Rate Period, (3)
the method by which the Daily Interest Rate shall be determined, (4) the
Interest Payment Dates after such effective date, (5) that Bondowners will
have the right to have their Bonds purchased on such effective date, (6) the
procedures of such purchase, (7) that, subsequent to such effective date,
Bondowners will have the right to require the purchase of Bonds on any
Business Day, (8) the procedures of such purchase, and (9) the redemption
provisions set forth in Section 303 which will apply during such Daily
Interest Rate Period. The Paying Agent shall give notice of any mandatory
redemptions of the Bonds which will apply on such effective date in accordance
with the provisions of Section 303.
(f) Weekly Interest Rate. (i) Determination of Weekly
Interest Rate. During each Weekly Interest Rate Period, the Bonds shall bear
interest at the Weekly Interest Rate, which shall be determined by the
Remarketing Agent no later than 9:30 a.m. on the first day of each new Weekly
Interest Rate Period and thereafter no later than 9:30 a.m. on the Business
Day next preceding Wednesday of each week during such period. The Weekly
Interest Rate shall be the interest rate determined by the Remarketing Agent
to be the lowest interest rate which in its judgment, on the basis of
13<PAGE>
prevailing financial market conditions, would permit the sale of Bonds during
the Weekly Interest Rate Period at a price (without regard to accrued
interest) equal, as nearly as practicable, to the principal amount thereof;
provided, however, that (A) if the Remarketing Agent shall not have determined
a Weekly Interest Rate for any period or if, for any reason, a Weekly Interest
Rate so determined for any period shall be held to be invalid or unenforceable
by a court of law, the Weekly Interest Rate for such period shall be the same
as the Weekly Interest Rate for the immediately preceding period, and (B) in
no event shall the Weekly Interest Rate exceed 14% per annum. The first
Weekly Interest Rate determined for each Weekly Interest Rate Period shall
apply to the period commencing on the first day of such period and ending on
the next succeeding Tuesday. Thereafter, each Weekly Interest Rate shall
apply to the period commencing on Wednesday and ending on the next succeeding
Tuesday; provided, however, if any such Tuesday shall be the day next
preceding the first Wednesday of a month which shall not be a Business Day,
then the Weekly Interest Rate for such period shall not end on such Tuesday,
but shall continue to the day next preceding the first Business Day next
succeeding such Wednesday and the Weekly Interest Rate for the next succeeding
period shall apply to the period commencing on such first Business Day and
provided, further, if a Weekly Interest Rate Period shall end on a day other
than Tuesday, the last Weekly Interest Rate for such Weekly Interest Rate
Period shall apply to the period commencing on the Wednesday preceding the
last day of such Weekly Interest Rate Period and ending on such last day. The
Remarketing Agent shall provide the Company, the Trustee and the Paying Agent
with immediate telephonic notice of each Weekly Interest Rate, as determined,
which notice shall be promptly confirmed in writing.
(ii) Adjustment to Weekly Interest Rate. At any time, the
Company, by written direction to the Authority, the Paying Agent, the Trustee
and the Remarketing Agent, may elect that the Bonds shall bear interest at a
Weekly Interest Rate. Such direction (A) shall specify the effective date of
such adjustment to a Weekly Interest Rate (which shall be (1) a Business Day
not earlier than the 15th day following the fifth Business Day after the date
of receipt by the Paying Agent and the Trustee of such direction, (2) in the
case of an adjustment from a Long-Term Interest Rate Period, the day
immediately following the last day of the then current Long-Term Interest Rate
Period or a day on which the Bonds would be redeemable pursuant to
Section 303(a)(iii) if such adjustment should not occur and (3) in the case of
an adjustment from a Short-Term Interest Rate Period, either (a) the day
immediately following the last day of the then current Short-Term Interest
Rate Period as determined in accordance with Section 301(g)(iv)(I) or (b) for
each Bond, the day immediately following the last day of the last Short-Term
Segment for such Bond in the then current Short-Term Interest Rate Period as
determined in accordance with Section 301(g)(iv)(II); and (B) if given during
a Long-Term Interest Rate Period, may specify a date or dates prior to such
effective date on or prior to which Bondowners of the Bonds may deliver,
pursuant to Section 302(c), (1) notice regarding the purchase of such Bonds
and (2) such Bonds. During each Weekly Interest Rate Period commencing on a
date so specified or determined and ending on the day immediately preceding
the effective date of the next succeeding Interest Rate Period, the interest
rate borne by the Bonds shall be a Weekly Interest Rate.
(iii) Notice of Adjustment to Weekly Interest Rate Period.
The Paying Agent shall give notice of an adjustment to a Weekly Interest Rate
Period to Bondowners not less than 15 days prior to the effective date (or
14<PAGE>
each effective date in the case of an adjustment from a Short-Term Interest
Rate Period in accordance with the alternative set forth in clause II of
Section 301(g)(iv)) of such Weekly Interest Rate Period. Such notice shall
state (1) that the interest rate on the Bonds will be adjusted to a Weekly
Interest Rate, (2) the effective date of such Weekly Interest Rate Period, (3)
the method by which the Weekly Interest Rate shall be determined, (4) the
Interest Payment Dates after such effective date, (5) that Bondowners will
have the right to have their Bonds purchased on such effective date, (6) the
procedures of such purchase, (7) that, subsequent to such effective date,
Bondowners will have the right to require the purchase of Bonds on any
Business Day upon not less than seven days' notice, (8) the procedures of such
purchase, and (9) the redemption provisions set forth in Section 303 which
will apply during such Weekly Interest Rate Period. The Paying Agent shall
give notice of any mandatory redemption of the Bonds which will apply on such
effective date in accordance with the provisions of Section 303.
(g) Short-Term Interest Rate. (i) Determination of Short-
Term Segments and Short-Term Interest Rates. (A) During each Short-Term
Interest Rate Period, each Bond shall bear interest during each Short-Term
Segment for such Bond at the Short-Term Interest Rate for such Bond. The
Short-Term Segment and Short-Term Interest Rate for each Bond shall be
determined by the Remarketing Agent on the first day of each Short-Term
Segment or on a Business Day selected by the Remarketing Agent not more than
five Business Days prior to the first day of such Short-Term Segment. Each
Short-Term Segment shall be a period of not more than 270 days, as determined
by the Company and reported to the Remarketing Agent, or if the Company does
not so report its determination, as determined by the Remarketing Agent based
on its judgment of prevailing financial market conditions to be the period
which, together with all other Short-Term Segments for all Bonds then
Outstanding, will most likely result in the lowest overall interest expense on
the Bonds over the next succeeding 270 days; provided, however, that any such
Bond purchased on behalf of the Company and remaining unsold in the hands of
the Remarketing Agent as of the close of business on the effective date of the
Short-Term Segment for such Bond shall have a Short-Term Segment of one day
or, if such Short-Term Segment would not end on a day immediately preceding a
Business Day, a Short-Term Segment of more than one day ending on the day
immediately preceding the next Business Day; provided, further, however, that
(x) each Short-Term Segment shall end on either a day which immediately
precedes a Business Day or on the day prior to the Maturity Date, and (y) if
for any reason a Short-Term Segment for any Bond so determined shall be held
to be invalid or unenforceable by a court of law, or if the Remarketing Agent
fails to determine a Short-Term Segment such Short-Term Segment shall be one
day in length.
(B) The Short-Term Interest Rate for each Short-Term Segment for
each Bond shall be the rate of interest determined by the Remarketing Agent to
be the lowest interest rate which in its judgment, on the basis of prevailing
financial market conditions, would permit the sale of such Bond for such
Short-Term Segment at a price (without regard to accrued interest) equal, as
nearly as practicable, to the principal amount thereof; provided, however,
that (x) if for any reason a Short-Term Interest Rate so determined for any
Short-Term Segment shall be held to be invalid or unenforceable by a court of
law or if the Remarketing Agent fails to determine the Short-Term Interest
Rate, the Short-Term Segment shall automatically convert to a period of one
day and the Short-Term Interest Rate shall be equal to 100% of the Prime
15<PAGE>
Commercial Paper A-1/P-1 (30 day) rate shown in the table captioned "Short-
Term Tax-Exempt Yields" in the edition of The Bond Buyer published on the day
on which such rate is determined or, if such rate is not published on that
day, the most recent publication of such rate; and (y) in no event shall any
Short-Term Interest Rate be greater than 14% per annum.
(C) The Remarketing Agent shall provide the Company, the Trustee
and the Paying Agent with immediate telephonic notice of each Short-Term
Segment and Short-Term Interest Rate, as determined, which notice shall be
promptly confirmed in writing.
(ii) Adjustment to Short-Term Interest Rates. At any time,
the Company, by written direction to the Authority, the Paying Agent, the
Trustee and the Remarketing Agent, may elect that the Bonds shall bear
interest at Short-Term Interest Rates. Such direction (A) shall specify the
effective date of the Short-Term Interest Rate Period during which the Bonds
shall bear interest at Short-Term Interest Rates (which shall be (1) a
Business Day not earlier than the 15th day following the fifth Business Day
after the date of receipt by the Paying Agent and the Trustee of such
direction, and (2) in the case of an adjustment from a Long-Term Interest Rate
Period, the day immediately following the last day of the then current Long-
Term Interest Rate Period or a day on which the Bonds would be redeemable
pursuant to Section 303(a)(iii) if such adjustment should not occur; provided,
however, that, if prior to the Company making such election any Bonds shall
have been called for redemption and such redemption shall not have theretofore
been effected, the effective date of such Short-Term Interest Rate Period
shall not precede such redemption date); and (B) if given during a Long-Term
Interest Rate Period, may specify the date prior to such effective date on or
prior to which Bondowners of the Bonds may deliver, pursuant to Section 302,
(1) notice regarding the election to have their Bonds purchased and (2) such
Bonds. During each Short-Term Interest Rate Period commencing on the date so
specified and ending, with respect to each Bond, on the day immediately
preceding the effective date of the next succeeding Interest Rate Period with
respect to such Bond, each Bond shall bear interest at a Short-Term Interest
Rate during each Short-Term Segment for such Bond.
(iii) Notice of Adjustment to Short-Term Interest Rate
Period. The Paying Agent shall give notice of an adjustment to a Short-Term
Interest Rate Period to Bondowners not less than 15 days prior to the
effective date of such Short-Term Interest Rate Period. Such notice shall
state (1) that during such Short-Term Interest Rate Period, each Bond will
have consecutive Short-Term Segments during each of which such Bond will bear
a Short-Term Interest Rate, (2) the effective date of such Short-Term Interest
Rate Period, (3) that Bondowners will have the right to have their Bonds
purchased on such effective date, (4) the procedures of such purchase, (5)
that, for each Bond, a Short-Term Segment and a Short-Term Interest Rate
therefor will be determined not later than the first day of each such Short
Term Segment, (6) how such Short-Term Segments and Short-Term Interest Rates
may be obtained from the Remarketing Agent, (7) that interest on each Bond
will be paid on the day next succeeding each Short-Term Segment but only upon
presentation of such Bond, (8) that, subsequent to such effective date, each
Bond shall be purchased on the day following the last day of each Short-Term
Segment with respect thereto unless the Bondowner of such Bond shall elect to
retain such Bond, (9) the procedures of such election, and (10) the redemption
provisions set forth in Section 303 that will apply to the Bonds during such
16<PAGE>
Short-Term Interest Rate Period. The Paying Agent shall give notice of any
mandatory redemptions of the Bonds which will apply on such effective date in
accordance with the provisions of Section 303.
(iv) Adjustment from Short-Term Interest Rate Period. As a
condition precedent to the election during a Short-Term Interest Rate Period
to adjust to a different Interest Rate Period for the Bonds pursuant to
Section 301(e)(ii), (f)(ii) or (h)(ii), the Company shall select, which
selection shall be contained in the Company's notice given pursuant to Section
301(e)(ii), (f)(ii) or (h)(ii), as the case may be, an alternative from the
immediately succeeding clauses (I) and (II) and, in accordance with such
selection, the Remarketing Agent shall effect one of such alternatives: (I)
determine Short-Term Segments of such duration that, as soon as possible, all
Short-Term Segments shall end on the same date, not less than the 15th day
following the fifth Business Day after the receipt by the Paying Agent and the
Trustee of the direction of the Company effecting such election; or (II)
determine Short-Term Segments, that will, in the judgment of the Remarketing
Agent, best promote an orderly transition to the next succeeding Interest Rate
Period. If the alternative in clause (I) above shall be selected, the date on
which all Short-Term Segments so determined shall end shall be the last day of
the then current Short-Term Interest Rate Period and the day next succeeding
such date shall be the effective date of the Daily Interest Rate Period, the
Weekly Interest Rate Period or the Long-Term Interest Rate Period elected by
the Company. If the alternative in clause (II) above shall be selected,
beginning not less than the 15th day following the fifth Business Day after
the receipt by the Paying Agent and the Trustee of the direction of the
Company effecting such election, the day next succeeding the last day of the
then current Short-Term Segment with respect to each Bond shall be, with
respect to such Bond, the effective date of the Daily Interest Rate Period,
the Weekly Interest Rate Period or the Long-Term Interest Rate Period elected
by the Company. The Remarketing Agent, promptly upon the determination
thereof, shall give written notice of such last day and such effective dates
to the Authority, the Company, the Paying Agent and the Trustee.
(v) During any period with respect to the transition of
the Bonds from a Short-Term Interest Rate Period to the next succeeding
Interest Rate Period in accordance with the alternative set forth in clause
(II) of Section 301(g)(iv), Bonds bearing interest at a Short-Term Interest
Rate shall be governed by the provisions of this Agreement applicable to
Short-Term Interest Rate Periods and Bonds bearing interest at the Daily
Interest Rate, Weekly Interest Rate or Long-Term Interest Rate, as the case
may be, shall be governed by the provisions of this Agreement applicable to
such Interest Rate Periods.
(h) Long-Term Interest Rate. (i) Determination of Long-Term
Interest Rate. During each Long-Term Interest Rate Period, the Bonds shall
bear interest at the Long-Term Interest Rate determined by the Remarketing
Agent on a Business Day selected by it, not more than 15 days prior to the
first day of such Long-Term Interest Rate Period. The Long-Term Interest Rate
shall be the rate determined by the Remarketing Agent on such date and filed
on such date with the Paying Agent, the Trustee and the Company, by written
notice or by telephone promptly confirmed by telecopy or other writing, as
being the lowest interest rate which, in the judgment of the Remarketing
Agent, on the basis of prevailing financial market conditions, would permit
the sale of the Bonds on such Business Day at a price (without regard to
17<PAGE>
accrued interest) equal, as nearly as practicable, to the principal amount
thereof, and in no event shall the Long-Term Interest Rate exceed 14% per
annum.
(ii) Adjustment to or Continuation of Long-Term Interest
Rate. At any time, the Company, by written direction to the Authority, the
Paying Agent, the Trustee and the Remarketing Agent, may elect that the Bonds
shall bear, or continue to bear, interest at a Long-Term Interest Rate, and if
it shall so elect, shall determine the duration of the Long-Term Interest Rate
Period during which the Bonds shall bear interest at such Long-Term Interest
Rate. As a part of such election, the Company also may determine that the
initial Long-Term Interest Rate Period shall be followed by successive Long-
Term Interest Rate Periods and, if the Company so elects, shall specify the
duration of each such successive Long-Term Interest Rate Period as provided in
this paragraph (ii). Such direction shall (A) specify the effective date of
each Long-Term Interest Rate Period (which shall be (1) a Business Day not
earlier than the 15th day following the fifth Business Day after the date of
receipt by the Paying Agent and the Trustee of such direction, (2) in the case
of an adjustment from a Short-Term Interest Rate Period, either (a) the day
immediately following the last day of the then current Short-Term Interest
Rate Period as determined in accordance with Section 301(g)(iv)(I) or (b) for
each Bond, the day immediately following the last day of the last Short-Term
Segment for such Bond in the then current Short-Term Interest Rate Period as
determined in accordance with Section 301(g)(iv)(II) and (3) in the case of an
adjustment from a Long-Term Interest Rate Period, the day immediately
following the last day of the then current Long-Term Interest Rate Period or a
day on which the Bonds would be redeemable pursuant to Section 303(a)(iii) if
such adjustment should not occur; provided, however, that if prior to the
Company's making such election, any Bonds shall have been called for
redemption and such redemption shall not have theretofore been effected, the
effective date of such Long-Term Interest Rate Period shall not precede such
redemption date); (B) shall specify the last day of such Long-Term Interest
Rate Period, or, if successive Long-Term Interest Rate Periods shall have been
designated, the last day of each such Long-Term Interest Rate Period (which
shall be either the day prior to the Maturity Date, or a day which both
immediately precedes a Business Day and is more than 270 days after the
effective date thereof); and (C) if given during a Long-Term Interest Rate
Period, may specify a date or dates prior to such effective date on or prior
to which Bondowners may deliver, pursuant to Section 302(c), (1) notice
regarding the purchase of such Bonds and (2) such Bonds. If the Company shall
designate successive Long-Term Interest Rate Periods, but shall not, with
respect to the second or any subsequent Long-Term Interest Rate Period,
specify any of the information described in clauses (A), (B) or (C) above, the
Company, by written direction to the Authority, the Paying Agent, the Trustee
and the Remarketing Agent, given not later than the fifth Business Day
preceding the 16th day prior to the first day of such successive Long-Term
Interest Rate Period, shall specify any of such information not previously
specified with respect to such Long-Term Interest Rate Period. During the
Long-Term Interest Rate Period commencing and ending on the dates so
determined and during each successive Long-Term Interest Rate Period, if any,
the interest rate borne by the Bonds shall be a Long-Term Interest Rate. If,
by the fifth Business Day preceding the 15th day prior to the last day of any
Long-Term Interest Rate Period, the Paying Agent and the Trustee shall not
have received notice of the Company's election that, during the next
succeeding Interest Rate Period, the Bonds shall bear interest at a Daily
18<PAGE>
Interest Rate, a Weekly Interest Rate, a Short-Term Interest Rate or a Long-
Term Interest Rate, the next succeeding Interest Rate Period shall be a Short-
Term Interest Rate Period with a Short-Term Segment that has a duration of one
day.
(iii) Notice of Adjustment to or Continuation of Long-Term
Interest Rate Period. The Paying Agent shall give notice of an adjustment to
a (or the continuation of another) Long-Term Interest Rate Period to
Bondowners not less than 15 days prior to the effective date (or each
effective date in the case of an adjustment from a Short-Term Interest Rate
Period in accordance with the alternative set forth in clause II of Section
301(g)(iv)) of such Long-Term Interest Rate Period. Such notice shall state
(1) that the interest rate on the Bonds will be adjusted to or continue to be,
a Long-Term Interest Rate, (2) the effective date and the last day of such
Long-Term Interest Rate Period, (3) that the Long-Term Interest Rate for such
Long-Term Interest Rate Period will be determined on or prior to the effective
date thereof, (4) how such Long-Term Interest Rate may be obtained from the
Remarketing Agent, (5) the Interest Payment Dates after such effective date,
(6) that Bondowners will have the right to have their Bonds purchased on such
effective date, (7) the procedures of such purchase, (8) that, during such
Long-Term Interest Rate Period, Bondowners will not have the right to require
the purchase of Bonds, except on the day following the last day of such Long-
Term Interest Rate Period, and (9) the redemption provisions set forth in
Section 303 which will apply during such Long-Term Interest Rate Period. The
Trustee shall give notice of any mandatory redemptions of the Bonds which will
apply on such effective date in accordance with the provisions of Section 303.
(i) (Reserved).
(j) Determinations of Remarketing Agent Binding. The
establishment and determination of each Daily Interest Rate, Weekly Interest
Rate, Long-Term Interest Rate and Short-Term Interest Rate by the Remarketing
Agent, shall be conclusive and binding upon the Remarketing Agent, the Paying
Agent, the Trustee, the Authority, the Company and the Bondowners.
(k) Failure to Adjust Interest Rate. (i) In the event that an
attempted adjustment from the Weekly Interest Rate Period or the Daily
Interest Rate Period to another Interest Rate Period as herein provided does
not become effective, the Weekly Interest Rate Period or the Daily Interest
Rate Period then in effect, as the case may be, shall continue in effect.
(ii) In the event that an attempted adjustment from the Short-Term
Interest Rate Period does not become effective, the affected Bonds shall
remain in the Short-Term Interest Rate Period, and automatically convert to a
Short-Term Segment of one day.
(iii) In the event that an attempted adjustment from the Long-Term
Interest Rate Period to another Interest Rate Period or the continuation of
the Long-Term Interest Rate Period as herein provided does not become
effective for any reason, including the failure to determine a Long-Term
Interest Rate, the affected Bonds shall automatically be subject to purchase
by the Company in lieu of redemption as provided in Subsection 303(k) and
thereafter, unless otherwise directed by the Company, shall automatically
convert to the Short-Term Interest Rate Period with a Short-Term Segment of
one day. In such event, the Remarketing Agent shall immediately notify the
19<PAGE>
Company, the Tender Agent, the Trustee and the Paying Agent of the failure to
adjust from the Long-Term Interest Rate.
(iv) Notwithstanding any direction in this Subsection 301(k) to the
contrary, any purchases of Bonds or mandatory redemptions of Bonds (and
purchases in lieu of certain mandatory redemptions) which would have taken
place on the proposed effective date of such adjustment shall take place as if
such attempted adjustment were in fact effective.
Section 302. Purchase of Bonds.
(a) Daily Interest Rate Period. During any Daily Interest Rate Period and
on the day (which must be a Business Day) next succeeding the last day of each
Daily Interest Rate Period, any Bond shall be purchased from its Bondowner by
the Tender Agent or the Remarketing Agent on any Business Day at a purchase
price equal to the principal amount thereof plus accrued interest, if any, to
the date of purchase, upon (i) delivery by the Bondowner to the Tender Agent
at its Principal Office or the Remarketing Agent at its Principal Office, by
no later than 11:00 a.m., on such Business Day, of an irrevocable written
notice or an irrevocable telephonic notice, which states the principal amount
and number of such Bond, and (ii) delivery of such Bond to the Tender Agent
(if such notice was delivered to the Tender Agent) at its Principal Office or
the Remarketing Agent (if such notice was delivered to the Remarketing Agent)
at its Principal Office, accompanied by an instrument of transfer thereof, in
form satisfactory to the Tender Agent or the Remarketing Agent, as the case
may be, executed in blank by the Bondowner thereof with the signature of such
Bondowner guaranteed by a bank, trust company or member firm of the New York
Stock Exchange, at or prior to 12:00 noon, on such Business Day.
(b) Weekly Interest Rate Period. During any Weekly Interest
Rate Period and on the day (which must be a Business Day) next succeeding the
last day of each Weekly Interest Rate Period, any Bond shall be purchased from
its Bondowner by the Tender Agent on any Business Day at a purchase price
equal to the principal amount thereof plus accrued interest, if any, to the
date of purchase, upon (i) delivery by the Bondowner to the Tender Agent at
its Principal Office of an irrevocable written notice or an irrevocable
telephonic notice, promptly confirmed by telecopy or other writing, which
states the principal amount and number of such Bond and the date on which the
same shall be purchased, which date shall be a Business Day not prior to the
seventh day next succeeding the date of the delivery of such notice to the
Tender Agent, and (ii) delivery of such Bond to the Tender Agent at its
Principal Office, accompanied by an instrument of transfer thereof, in form
satisfactory to the Tender Agent, executed in blank by the Bondowner thereof
with the signature of such Bondowner guaranteed by a bank, trust company or
member firm of the New York Stock Exchange, at or prior to 10:00 a.m., on the
date specified in such notice.
(c) On Day Next Succeeding the Last Day of Each Short-Term
Segment or Long-Term Interest Rate Period. On the day next succeeding the
last day of each Short-Term Segment or Long-Term Interest Rate Period, any
Bond shall be purchased from its Bondowner by the Tender Agent, at a purchase
price equal to the principal amount thereof plus accrued interest, if any, to
the date of purchase upon (i) delivery by the Bondowner of such Bond to the
Tender Agent at its Principal Office on or prior to the date specified for
20<PAGE>
such delivery in the notice of the adjustment of such Interest Rate Period
delivered pursuant to Section 301(e)(iii), (f)(iii), (g)(iii), or (h)(iii),
or, if no such date shall have been so specified, (A), in the case of a Short-
Term Segment, 3:00 p.m., on the second Business Day (or if a Short-Term
Segment has a term of only one day, then not later than 3:00 p.m., on the
Business Day) prior to such day or (B), in the case of a Long-Term Interest
Rate Period, on or prior to the seventh day preceding the first day of the
next succeeding Interest Rate Period, of an irrevocable written notice or an
irrevocable telephonic notice promptly confirmed by telecopy or other writing,
which states the principal amount and number of such Bond, and (ii) delivery
of such Bond to the Tender Agent at its Principal Office, accompanied by an
instrument of transfer thereof, in form satisfactory to the Tender Agent,
executed in blank by the Bondowner thereof with the signature of such
Bondowner guaranteed by a bank, trust company or member firm of the New York
Stock Exchange, at or prior to 10:00 a.m., on the date specified for such
delivery in the notice of the adjustment of such Interest Rate Period
delivered pursuant to Section 301(e)(iii), (f)(iii), (g)(iii) or (h)(iii), or,
if no such date shall have been so specified, on the first day of the next
succeeding Interest Rate Period.
(d) On Day Next Succeeding Last Day of Each Short-Term Interest
Rate Period. On the day next succeeding the last day of each Short-Term
Interest Rate Period for a Bond, such Bond shall be purchased from its
Bondowner by the Tender Agent, at a purchase price equal to the principal
amount thereof plus accrued interest, if any, to the date of purchase unless
such Bondowner shall deliver to the Tender Agent at its Principal Office not
later than 3:00 p.m., on the second Business Day (or if a Short-Term Segment
has a term of only one day, then not later than 3:00 p.m., on the Business
Day) prior to such day, such Bond together with written notice which states
the principal amount and number of such Bond and that such Bond shall not be
so purchased. The purchase price of any Bond so purchased shall be payable
only upon surrender of such Bond to the Tender Agent at its Principal Office,
accompanied by an instrument of transfer thereof, in form satisfactory to the
Tender Agent, executed in blank by the Bondowner thereof with the signature of
such Bondowner guaranteed by a bank, trust company or member firm of the New
York Stock Exchange.
(e) Irrevocable Notice or Failure to Give Notice Deemed to be
Tender of Bond. The giving of notice as provided in Section 302(a), (b) or
(c) or the failure to give notice as provided in Section 302(d) shall
constitute the irrevocable tender for purchase of each Bond with respect to
which such notice shall have been given or not given, as the case may be,
irrespective of whether such Bond shall be delivered as provided in such
sections. Upon the purchase as provided in such sections by the Tender Agent
or the Remarketing Agent, as the case may be, of each Bond so deemed to be
tendered, such Bond shall cease to bear interest payable to the former
Bondowner thereof, who thereafter shall have no rights with respect thereto,
other than the right to receive the purchase price thereof upon surrender of
such Bond to the Tender Agent or the Remarketing Agent, as the case may be,
and such Bond shall be no longer outstanding.
(f) Purchase of Bonds Delivered to Remarketing Agent. On the
date Bonds are to be purchased pursuant to Section 302(a) by the Remarketing
Agent, the Remarketing Agent shall purchase, but only from the funds specified
in the next sentence, such Bonds from the Bondowners thereof at a purchase
21<PAGE>
price equal to the principal amount thereof plus accrued interest, if any, to
the date of purchase. Funds for the payment of such purchase price shall be
derived first from the proceeds of the sale of such Bonds pursuant to
Section 313, and second from moneys furnished by the Company to the
Remarketing Agent pursuant to Section 311 of this Agreement. If sufficient
funds are not available to the Remarketing Agent for the purchase of all Bonds
tendered, no purchase shall be consummated.
(g) Purchase of Bonds Delivered to the Tender Agent. On the
date Bonds are to be purchased pursuant to Section 302 by the Tender Agent,
the Tender Agent shall purchase, but only from the funds specified in the next
sentence, such Bonds from the Bondowners thereof at a purchase price equal to
the principal amount thereof plus accrued interest, if any, to the date of
purchase. Funds for the payment of such purchase price shall be derived first
from proceeds of the sale of such Bonds pursuant to Section 313, and second
from moneys furnished by the Company to the Paying Agent pursuant to
Section 311. If sufficient funds are not available to the Tender Agent for
the purchase of all Bonds tendered, no purchase shall be consummated.
(h) Duty of Paying Agent to Hold Purchase Price for Bondowner.
It shall be the duty of the Paying Agent to hold in a separate trust account
the moneys for the purchase price of any Bond required to be delivered to the
Tender Agent in accordance with this Section 302 or Section 303(k) and not so
delivered, without liability for interest thereon, for the benefit of the
former Bondowner, who shall thereafter be restricted exclusively to such
moneys, for any claim of whatever nature on his part under this Agreement or
on, or with respect to, such Bond. Any moneys so deposited with and held by
the Paying Agent not so applied to the purchase of Bonds within one year after
the date of purchase shall be paid by the Paying Agent to the Company upon the
written direction of an Authorized Officer of the Company and thereafter the
former Bondowners shall be entitled to look only to the Company for payment of
such purchase price, and then only to the extent of the amount so repaid, and
the Company shall not be liable for any interest thereon and shall not be
regarded as a trustee of such moneys and the Paying Agent shall have no
further responsibility with respect to such moneys.
(i) Duty of Remarketing Agent to Hold Purchase Price for
Bondowner. It shall be the duty of the Remarketing Agent to hold in a
separate trust account the moneys for the purchase price of any Bond required
to be delivered to the Remarketing Agent in accordance with Section 302(a) and
not so delivered, without liability for interest thereon, for the benefit of
the former Bondowner, who shall thereafter be restricted exclusively to such
moneys, for any claim of whatever nature on his part under this Agreement or
on, or with respect to, such Bond. Any moneys so deposited with and held by
the Remarketing Agent not so applied to the purchase of Bonds within one year
after the date of purchase shall be paid by the Remarketing Agent to the
Company upon the written direction of an Authorized Officer of the Company and
thereafter the former Bondowners shall be entitled to look only to the Company
for payment of such purchase price, and then only to the extent of the amount
so repaid, and the Company shall not be liable for any interest thereon and
shall not be regarded as a trustee of such moneys and the Remarketing Agent
shall have no further responsibility with respect to such moneys.
(j) Delivery of Purchased Bonds. (i) Bonds sold by the
Remarketing Agent pursuant to Section 313 shall be delivered to the purchasers
22<PAGE>
thereof. Bonds purchased by the Remarketing Agent with moneys from the
Company (and not from the proceeds of remarketed Bonds) shall, at the
direction of the Company, be (A) delivered to the Remarketing Agent for
remarketing, (B) canceled or (C) delivered to the Company.
(ii) Bonds purchased by the Tender Agent with moneys from
the Company (and not from the proceeds of remarketed Bonds) shall, at the
direction of the Company, be (A) delivered to the Remarketing Agent for
remarketing, (B) canceled or (C) delivered to the Company.
Section 303. Redemption of the Bonds.
(a) Optional Redemption. (i) During a Daily or Weekly Interest Rate
Period. On any Business Day during a Daily Interest Rate Period or a Weekly
Interest Rate Period, and on the day next succeeding the last day of each such
Interest Rate Period, the Bonds shall be subject to optional redemption by the
Authority, at the written direction of the Company, in whole or in part, at
100% of their principal amount, plus accrued interest, if any, to the
redemption date.
(ii) During a Short-Term Interest Rate Period. On the day
next succeeding the last day of any Short-Term Segment with respect to any
Bond, such Bond shall be subject to optional redemption by the Authority, at
the written direction of the Company, in whole or in part, at 100% of its
principal amount plus accrued interest, if any, to the redemption date.
(iii) During a Long-Term Interest Rate Period. During any
Long-Term Interest Rate Period, and on the day next succeeding the last day of
each Long-Term Interest Rate Period, the Bonds shall be subject to optional
redemption by the Authority, at the written direction of the Company, during
the periods specified below, in whole at any time or in part from time to
time, at the redemption prices (expressed as percentages of principal amount)
hereinafter indicated plus accrued interest, if any, to redemption date:
Length of Long-Term
Interest Rate Period
(expressed in years) Redemption Prices
greater than 15 after 10 years at 102%, declining by
1% on each succeeding anniversary to
100% and thereafter at 100%
less than or equal to 15 after 8 years at 102%, declining by
and greater than 12 1% on each succeeding anniversary to
100% and thereafter at 100%
less than or equal to 12 after 6 years at 101%, declining by
and greater than 9 1% on the next anniversary to 100%
and thereafter at 100%
less than or equal to 9 and after 4 years at 100-1/2%, declining
greater than 6 by 1/2 of 1% on the next anniversary
to 100% and thereafter at 100%
23<PAGE>
less than or equal to 6 and after 2 years at 100-1/2%, declining
greater than 3 by 1/2 of 1% on the next anniversary
to 100% and thereafter at 100%
less than or equal to 3 and
greater than 1 after 1 year at 100%
1 year or less only on day next succeeding last day
of period at 100%
(b) Mandatory Redemption on First Day of Certain Interest Rate
Periods. The Bonds shall be subject to mandatory redemption by the Authority
at the redemption prices specified in Section 303(d) as follows: (i) on the
first day of each Long-Term Interest Rate Period which follows a Daily
Interest Rate Period, a Weekly Interest Rate Period or a Long-Term Interest
Rate Period (other than a Long-Term Interest Rate Period immediately
succeeding a Long-Term Interest Rate Period of more than one year in duration,
both of which shall be equal in length, as nearly as possible taking into
account the requirements of Section 301(h)(ii)); (ii) on the first day of each
Daily Interest Rate Period and Weekly Interest Rate Period which follows a
Long-Term Interest Rate Period; and (iii) on the first day of each Short-Term
Interest Rate Period; provided, that there shall not be so redeemed (A) Bonds
which shall have been purchased in accordance with Section 302 on such
redemption date or on any day during the 10-day period preceding such
redemption date, (B) Bonds or portions of principal amount thereof which will
be in Authorized Denominations on such redemption date with respect to which
the Tender Agent shall have received directions not to so redeem the same from
the owners thereof in accordance with Section 303(h), (C) Bonds issued in
exchange for or upon the registration of transfer of Bonds and such portions
of principal amount referred to in clauses (A) and (B) above, and (D) Bonds or
such portions of principal amount thereof purchased by the Company in
accordance with Section 303(k).
(c) Mandatory Redemption of Bonds Not in Authorized
Denominations. That portion of any Bond which causes such Bond to be not then
in an Authorized Denomination shall be subject to mandatory redemption by the
Authority at the redemption prices specified in Section 303(d) on the first
day of each Daily Interest Rate Period, Weekly Interest Rate Period,
Short-Term Interest Rate Period and Long-Term Interest Rate Period.
(d) Redemption Price with Respect to Certain Redemptions. Any
redemption pursuant to Section 303(b) or (c) shall be at the redemption price
of 100% of the principal amount of the Bonds or, in the case of a redemption
on the first day of an Interest Rate Period which shall be preceded by a
Long-Term Interest Rate Period and which shall commence prior to the day
originally established as the last day of such preceding Long-Term Interest
Rate Period, at a redemption price equal to the redemption price set forth in
Section 303(a)(iii) which would have been applicable to the Bonds on such
redemption date if such preceding Long-Term Interest Rate Period had continued
to the day originally established as its last day.
(e) Special Mandatory Redemption Upon Taxability. If, as a
result of the failure of the Company to observe any covenant, agreement or
representation in this Agreement, a court of competent jurisdiction or any
administrative agency finally determines (such determination not to be
24<PAGE>
considered final unless the Company has been given written notice and, if it
so desires, has been afforded an opportunity, at the Company's expense, to
contest, either directly or in the name of any Bondowner, any such
determination or until the conclusion of any appellate review if sought by the
Company) that the interest payable on any Bond is includable for federal
income tax purposes in the gross income, as defined in Section 61 of the IRC,
of any Bondowner (other than a "substantial user" of the Project or a "related
person," as defined in the IRC), the Bonds shall be subject to special
mandatory redemption prior to maturity, as a whole, or in part if such partial
redemption will preserve the exclusion from gross income for federal income
tax purposes of interest on the remaining Bonds outstanding (and if in part,
to be selected by the Paying Agent or by DTC, as applicable, by lot or in any
other customary manner as determined by the Paying Agent or by DTC, as
applicable) at a redemption price equal to the principal amount thereof, plus
interest accrued to the redemption date, without premium. The Company will
give notice to the Authority, the Trustee and the Paying Agent in writing of
the amount of Bonds to be redeemed and of the date selected for such
redemption not later than 90 days after the date of such final determination,
such redemption date to be not more than 90 days after the date of such
written notice.
(f) Extraordinary Optional Redemption. The Bonds are subject to
redemption prior to maturity at the option of the Company, by notice to the
Trustee, the Paying Agent and the Authority, in whole, at any time, at a
redemption price equal to the principal amount of the outstanding Bonds, plus
accrued interest thereon to the date of redemption, without premium, on any
date selected by the Company, but not less than 45 days after nor more than
180 days after the Company shall have given notice of its exercise of the
right to make such prepayment. The Company may exercise its right to cause
the Bonds to be redeemed at its option, if
(i) in the opinion of the Company, the continued operation
by the Company of the Unit is impracticable, uneconomical or undesirable due
to (A) the imposition of taxes or other liabilities or burdens not being
imposed as of the date of the Bonds, (B) changes in technology or in the
economic availability of raw materials or operating supplies or equipment or
(C) destruction of or damage to all or a substantial portion of the Unit;
provided, however, that the Company may not exercise its right to redeem the
Bonds for reasons described in this clause (i) if any portion of the
redemption price is to be paid from the proceeds of tax-exempt Bonds; or
(ii) all or substantially all of the Unit shall have been
condemned or taken by eminent domain; or
(iii) the operation by the Company of the Unit shall have
been prevented from carrying on normal operations at such Unit for a period of
six months or more; or
(iv) in the event the First Mortgage Bonds have been
issued, all or substantially all the mortgaged and pledged property
constituting bondable property (as defined in the First Mortgage) which at the
time shall be subject to the lien of the First Mortgage as a first lien shall
be released from the lien of the First Mortgage pursuant to the provisions
thereof, and available moneys in the hands of the trustee or trustees at the
time serving as such under the First Mortgage, including any moneys deposited
25<PAGE>
by the Company available for the purpose, are sufficient to redeem all the
first mortgage bonds of all series issued pursuant to the First Mortgage at
the redemption prices (together with accrued interest to the date of
redemption) specified therein applicable to the redemption thereof upon the
happening of such event.
For purposes of clause (i) of this Subsection 303(f), the "opinion of
the Company" shall be expressed to the Authority and the Trustee by delivery
of a certified copy of a resolution of the Board of Directors of the Company
or the Executive Committee thereof stating that it is the opinion of said
Board of Directors or Executive Committee that the circumstances, situations
or conditions described in subclause (A), (B) or (C) of such clause (i) exist
to the extent required for the Company to exercise the option provided.
(g) Payment of Redemption Price and Accrued Interest. Whenever
Bonds are called for redemption, the accrued interest thereon shall become due
on the redemption date and shall be paid from the Debt Service Fund to the
extent available therein. To the extent not otherwise provided, the Company
shall deposit with the Paying Agent prior to the redemption date a sufficient
sum to pay the redemption price of and accrued interest on the Bonds.
(h) Waiver of Redemption by Bondowner. Any Bondowner may direct
the Tender Agent not to redeem its Bonds (or portions of principal amount
thereof in Authorized Denominations) pursuant to Section 303(b) by delivering
to the Tender Agent at its Principal Office on or prior to the date on which
the notice specified in Section 302 is required to be delivered for Bonds to
be purchased (or in the case of any Bond bearing interest at a Short-Term
Interest Rate, not to be purchased) on the date for such redemption, a written
instrument which (1) states that such person is the Bondowner and specifies
the number and denomination of such Bond, (2) states that such Bondowner has
knowledge of the Interest Rate Period to commence on such redemption date, (3)
if applicable, that the redemption price will be at a premium, and (4) directs
the Authority not to redeem such Bond or portion of principal amount thereof
specified therein. Any instrument delivered to the Tender Agent in accordance
with this section shall be irrevocable with respect to the redemption for
which such instrument was delivered and shall be binding upon subsequent
owners of such Bond or portion of principal amount thereof, including Bonds
issued in exchange therefor or upon the registration of transfer thereof; but
such instrument shall have no effect upon any subsequent redemption of Bonds.
(i) Notice of Redemption. (i) Notice of the call for any
redemption of Bonds or any portion thereof (which shall be in Authorized
Denominations, except as provided in Section 303(c)) pursuant to this Section
303 identifying the Bonds or portions thereof to be redeemed, specifying the
redemption date, the redemption price, the place and manner of payment and
that from the redemption date interest will cease to accrue, shall be given by
the Paying Agent by mailing a copy of the redemption notice by first-class
mail to the owner of each Bond to be redeemed in whole or in part at the
address shown on the registration books. In the case of a redemption pursuant
to Section 303(b) or (c), such notice shall be given as a part of the notice
given pursuant to Section 301(e)(iii), (f)(iii), (g)(iii) or (h)(iii), and, in
the case of any other redemption hereunder, such notice shall be given at
least 15 days prior to the date fixed for redemption to the owners of Bonds to
be redeemed; provided, however, that failure to duly give such notice, or any
defect therein, shall not affect the validity of any proceedings for the
26<PAGE>
redemption of Bonds with respect to which no such failure or defect occurred.
Upon presentation and surrender of Bonds so called for redemption in whole or
in part at the place or places of payment, such Bonds or portions thereof
shall be redeemed.
(ii) With respect to any notice of redemption of Bonds in
accordance with Section 303(b), such notice, in addition, shall state (A) the
Interest Rate Period to commence on such redemption date, (B) that Bondowners
may direct the Paying Agent not to so redeem Bonds and the procedures for
doing so, and (C) that all Bonds so called for redemption shall be redeemed,
except (1) Bonds which shall have been purchased in accordance with Section
302 on such redemption date or on any day during the 10-day period preceding
such redemption date, (2) Bonds or portions of principal amount thereof which
will be in Authorized Denominations on such redemption date with respect to
which the Tender Agent shall have received direction not to so redeem the same
from the owners thereof in accordance with Section 303(h), (3) Bonds issued in
exchange for or upon the registration of transfer of Bonds referred to in
clauses (1) and (2) above, and (4) Bonds or such portions of principal amount
thereof purchased by the Company in accordance with Section 303(k).
(iii) Any notice mailed as provided in this section shall be
conclusively presumed to have been duly given, whether or not the Bondowner
receives the notice.
(j) Partial Redemption of Bonds. (i) In case a Bond is of a
denomination larger than the minimum Authorized Denomination, all or a portion
of such Bond may be redeemed provided the principal amount not being redeemed
is in an Authorized Denomination.
(ii) Upon surrender of any Bond for redemption in part
only, the Paying Agent shall authenticate and deliver to the owner thereof,
without cost to the Bondowner, a new Bond or Bonds of Authorized Denominations
in aggregate principal amount equal to the unredeemed portion of the Bond
surrendered.
(k) Purchase by Company In Lieu of Redemption. (i) Bonds or
portions thereof called for and subject to redemption pursuant to Section
303(b) shall be purchased by the Company on the date upon which such Bonds or
portions of Bonds were to have been redeemed at a purchase price equal to the
price at which such Bonds or portions of Bonds were to have been redeemed, if
the Company shall give written notice to the Trustee, the Paying Agent, the
Tender Agent and the Remarketing Agent before such date specifying the
principal amount of Bonds or portions of Bonds to be so purchased.
(ii) Bonds or portions thereof called for and subject to
purchase by the Company pursuant to Section 301(k)(iii) shall be purchased by
the Company on the date of the failure to convert from or determine the Long-
Term Interest Rate at a purchase price equal to the principal amount thereof.
(iii) The Tender Agent shall pay the purchase price of Bonds
or portions thereof to be so purchased by the Company from moneys deposited
with the Tender Agent by the Company (which moneys must be deposited with the
Tender Agent by the Company on or prior to such purchase date). If sufficient
funds are not available for the purchase of all Bonds tendered on any delivery
date on which Bonds are to be purchased, no purchase shall be consummated.
27<PAGE>
(iv) Bonds or portions thereof purchased by the Tender
Agent pursuant to this Section 303(k) shall be delivered by the Tender Agent
to or for the account of the Company within five (5) Business Days thereafter.
(v) Any other provisions of this Agreement to the contrary
notwithstanding, Bonds or portions thereof purchased by the Company pursuant
to this Section 303(k) shall not be remarketed or delivered by the Paying
Agent to the purchasers thereof except in Authorized Denominations (which may
be accomplished by exchanging, by or at the direction of the Company, Bonds or
portions thereof which are not in such Authorized Denominations for a Bond or
Bonds which are in Authorized Denominations in accordance with the provisions
of this Agreement).
(vi) Bonds or portions of Bonds to be purchased by the
Company which are not delivered to the Tender Agent on the date on which such
Bonds or portions of Bonds were to have been redeemed shall be deemed to have
been purchased by the Company, and the Company shall be the owner of such
Bonds or portions of Bonds for all purposes under this Agreement, but subject
to the provisions of this Agreement, whereupon interest accruing after such
date on such Bonds or portions of Bonds shall no longer be payable to the
former owners thereof but shall be paid to the Company. Subject to and in
accordance with the provisions of this Agreement, the Paying Agent shall
authenticate a new Bond or Bonds in an aggregate principal amount equal to the
principal amount of Bonds or portions of Bonds purchased in accordance with
this Section 303(k), whether or not the Bonds or portions of Bonds so
purchased are presented by the owners thereof, bearing a number or numbers not
contemporaneously outstanding. The Paying Agent shall maintain a record of
the serial numbers of the Bonds or portions of Bonds deemed to have been
purchased by the Company, together with the names and addresses of the former
owners thereof.
(l) Selection of Bonds for Redemption. Subject to the provisions of
Section 301(c)(vi) if less than all of the Bonds are called for redemption,
the Paying Agent shall select the Bonds or portions thereof to be redeemed, in
such manner as in the Paying Agent's sole discretion it shall deem appropriate
and fair. The Paying Agent shall promptly notify the Authority and the
Company in writing of the Bonds or portions thereof selected for redemption;
provided, however, that in connection with any redemption of Bonds the Paying
Agent shall first select for redemption any Bonds held by the Tender Agent or
the Remarketing Agent, if any for the account of the Company or held of record
by the Company. If it is determined that one or more, but not all, of the
portions of principal amount represented by any such Bond is to be called for
redemption, then, upon notice of intention to redeem such portion or portions,
the owner of such Bond shall forthwith surrender such Bond to the Paying Agent
for (a) payment to such Bondowner of the redemption price of the portion or
portions of principal amount called for redemption, and (b) delivery to such
Bondowner of a new Bond or Bonds in the aggregate principal amount of the
unredeemed balance of the principal amount of the Bond. New Bonds
representing the unredeemed balance of the principal amount of such Bonds
shall be issued to the owner thereof, without charge therefor. If the owner
of any such Bond shall fail to present such Bond to the Paying Agent for
payment and exchange as aforesaid, such Bond shall, nevertheless, become due
and payable on the date fixed for redemption to the extent of the portion or
portions of principal amount called for redemption (and to that extent only).
28<PAGE>
Section 304. Application of Bond Proceeds. Upon the receipt of the
proceeds of the initial sale of the Bonds, including accrued interest, if any,
the Authority shall make payments from such proceeds as follows: (a) a sum
equal to the accrued interest, if any, on the Bonds shall be deposited in the
Debt Service Fund; and (b) the balance shall be deposited in the Construction
Fund.
Section 305. Reserved.
Section 306. Debt Service Fund.
(a) A Debt Service Fund is hereby established and maintained by the Trustee
if the Trustee also serves as the Paying Agent, and otherwise the Debt Service
Fund shall be established and maintained by the Paying Agent, and moneys shall
be deposited therein as provided in this Agreement. Accrued interest, if any,
received upon the sale of Bonds shall be deposited in the Debt Service Fund.
The moneys in the Debt Service Fund and any investments held as part of such
Fund shall be held in trust and, except as otherwise provided, shall be
applied solely to the payment of the principal, redemption premium, if any,
and interest on the Bonds. If at any time the amount deposited by the Company
in the Debt Service Fund with respect to payments currently due pursuant to
Section 311 is in excess of the amount required to be so deposited, the
Trustee or the Paying Agent, as appropriate, shall, upon the request of the
Company, transfer such excess to the Company unless there is then an Event of
Default known to the Trustee or the Paying Agent, as appropriate, with respect
to payments to the Debt Service Fund or to the Trustee, the Paying Agent or
the Authority, in which case the excess shall be applied to such payments.
(b) The Company shall deposit moneys into the Debt Service Fund
for the payment of Bonds in immediately available funds at the opening of
business on the date on which the payment is required to be made hereunder.
Section 307. Reserved.
Section 308. First Mortgage Bond Fund. A First Mortgage Bond Fund is
hereby established with the Trustee. There shall be deposited to the credit
of the First Mortgage Bond Fund all payments, if any, made on the First
Mortgage Bonds, if any. The moneys in the First Mortgage Bond Fund shall be
held by the Trustee in trust in the Debt Service Fund and applied first to the
amounts which the Company may be required to pay to the Trustee or the Paying
Agent, as appropriate, and the balance, if any, shall be applied to the
redemption of Bonds and, pending such application, shall be subject to a lien
and charge in favor of the Bondowners.
Section 309. Expenses of Issue. The Company shall pay from its own
funds all expenses of issue of the Bonds, including underwriting charges as
may be agreed, in excess of the expenses permitted to be paid from the
proceeds of the Bonds. No more than 2% of the proceeds of the Bonds shall be
used to pay such expenses.
Section 310. Application of Moneys. If available moneys in the Debt
Service Fund are not sufficient on any day to pay all principal, redemption
premium, if any, and interest on the Outstanding Bonds then due or overdue,
such moneys (other than any sum in the Debt Service Fund irrevocably set aside
29<PAGE>
for the redemption of particular Bonds or required to purchase Bonds under
outstanding purchase contracts) shall, after payment of all charges and
disbursements of the Trustee and Paying Agent in accordance with this
Agreement, be applied first to the payment of interest, including interest on
overdue principal, in the order in which the same became due (pro rata with
respect to interest which became due at the same time) and second to the
payment of principal and redemption premiums, if any, without regard to the
order in which the same became due (in proportion to the amounts due). For
this purpose interest on overdue principal shall be treated as coming due on
the first day of each month. Whenever moneys are to be applied pursuant to
this section, such moneys shall be applied by the Trustee or the Paying Agent
from time to time, having due regard to the amount of such moneys available
for application and the likelihood of additional moneys becoming available for
such application in the future. Whenever the Trustee or the Paying Agent
shall apply such moneys pursuant to this section, it shall fix the date (which
shall be the first of a month unless the Trustee or the Paying Agent shall
deem another date more suitable) upon which such application is to be made,
and upon such date interest on the amounts of principal paid on such date
shall cease to accrue. The Trustee or the Paying Agent shall give such notice
as it may deem appropriate of the fixing of any such date. When interest or a
portion of the principal is to be paid on an overdue Bond, the Paying Agent
may require presentation of the Bond for endorsement of the payment.
Section 311. Payments by the Company.
(a) Debt Service. (i) Not later than the opening of business on the
Business Day on which a payment of principal or interest is due, the Company
shall pay or cause to be paid to the Trustee or the Paying Agent, as
appropriate, for deposit in the Debt Service Fund an amount available on such
payment date equal to such payment less the amount, if any, in the Debt
Service Fund and available therefor.
(ii) The payments to be made under the foregoing subsection
shall be appropriately adjusted to reflect the date of issue of Bonds, accrued
interest deposited in the Debt Service Fund, if any, and any purchase or
redemption of Bonds so that there will be available on each payment date in
the Debt Service Fund the amount necessary to pay the interest and principal
and premium, if any, due or coming due on the Bonds and so that accrued
interest will be applied to the installments of interest to which it is
applicable.
(iii) At any time when any principal of the Bonds is
overdue, the Company shall also have a continuing obligation to pay to the
Trustee or the Paying Agent, as appropriate, for deposit in the Debt Service
Fund an amount equal to interest on the overdue principal but the installment
payments required under this section shall not otherwise bear interest.
Redemption premiums shall not bear interest.
(iv) Payments by the Company to the Trustee or the Paying
Agent, as appropriate, for deposit in the Debt Service Fund under this
Agreement shall discharge the obligation of the Company to the extent of such
payments; provided, that if any moneys are invested in accordance with this
Agreement and a loss results therefrom so that there are insufficient funds to
30<PAGE>
pay principal and interest on the Bonds when due, the Company shall supply the
deficiency.
(b) Additional Payments. (i) Within thirty (30) days after
notice from the Authority, the Company shall pay to the Authority all
expenditures (except general administrative expenses or overhead) reasonably
incurred by the Authority by reason of this Agreement.
(ii) Within thirty (30) days after notice from the Trustee,
the Company shall pay to the Trustee its reasonable fees and expenses as set
forth in Section 702 of this Agreement.
(iii) Within thirty (30) days after notice from the Paying
Agent, the Company shall pay to the Paying Agent its reasonable fees and
expenses, as set forth in Section 702 of this Agreement.
(c) Company's Purchase of Bonds. If the amount received by the
Paying Agent or the Remarketing Agent for the purchase of Bonds tendered
pursuant to Section 302 is not sufficient to pay the purchase price of such
Bonds on the date when due, the Company shall pay the amount of such
deficiency to the Paying Agent or the Remarketing Agent, as the case may be,
in accordance with Section 313(c). Bond certificates shall not be issued,
transferred or exchanged with respect to Bonds the purchase price of which has
been paid by the Company ("Borrower Bonds") until transferred pursuant to the
following sentence. Borrower Bonds shall, upon written instructions of the
Company to the Paying Agent, be canceled or transferred to the Remarketing
Agent for delivery to or at the direction of any purchaser of such Bonds from
the Company. Any Borrower Bond shall not be subject to purchase under Section
302.
Section 312. Unconditional Obligation. To the extent permitted by law,
the obligation of the Company to make payments to the Authority, the Paying
Agent and the Trustee under this Agreement shall be absolute and
unconditional, shall be binding and enforceable in all circumstances
whatsoever, shall not be subject to setoff, recoupment or counterclaim and
shall be a general obligation of the Company to which the full faith and
credit of the Company are pledged.
Section 313. Remarketing of Bonds Tendered.
(a) Notice of Tendered Bonds. By 11:00 a.m., on the date the Tender Agent
receives notice by any Bondowner in accordance with Section 302(a) and
promptly but in no event later than the Business Day following the day on
which the Tender Agent receives notice from any Bondowner of its demand to
have the Tender Agent purchase Bonds pursuant to Section 302(b) or (c) and
promptly after the Tender Agent receives notice from any Bondowner under
Section 302(d) of its election not to have a Bond purchased, the Tender Agent
shall give telegraphic, telecopy or telephonic notice to the Remarketing Agent
and the Company specifying the principal amount of Bonds which such Bondowner
has demanded to have purchased or not to have purchased, as the case may be,
and shall promptly deliver a copy of such written notice from the Bondowner to
the extent received to each of such parties. Not later than 12:00 noon, on
the date on which Bonds are to be purchased pursuant to Section 302(a), and
not later than 3:00 p.m., on the Business Day next preceding the date on which
Bonds are to be purchased under Section 302(b), (c) or (d), the Remarketing
Agent shall give telegraphic or telephonic notice, promptly confirmed in
31<PAGE>
writing, to the Paying Agent, the Trustee and the Company specifying the
names, addresses, and taxpayer identification numbers of the purchasers of,
and the principal amount and denominations of, such Bonds, if any, to be sold
by it pursuant to subsection (b) of this section, the purchase price at which
the Bonds are to be sold, and their date of sale.
(b) Remarketing of Bonds by the Remarketing Agent. Upon the
giving of notice to the Remarketing Agent by any Bondowner in accordance with
Section 302(a), the Remarketing Agent shall offer for sale and use its best
efforts to sell at the best available price the Bonds referred to in such
notice on the date on which such Bonds are to be purchased as provided in
Section 302(a). Upon the giving of notice to the Tender Agent by any
Bondowner in accordance with Section 302(a), (b) or (c) and the giving of
notice to the Remarketing Agent as provided in Section 313(a) with respect to
such notices, and upon each date upon which Bonds are to be purchased in
accordance with Section 302(d) unless the Tender Agent gives notice to the
Remarketing Agent as provided in Section 313(a) that a Bondowner has elected
not to have a Bond purchased under Section 302(d), the Remarketing Agent shall
offer for sale and use its best efforts to sell at the best available price
such Bonds on the date such Bonds are to be purchased in accordance with
Section 302.
(c) Procedure and Sources of Payment. Not later than 12:00
noon, on the date of purchase of Bonds tendered pursuant to Section 302, the
Remarketing Agent shall give notice to the Company, the Paying Agent, the
Tender Agent and the Trustee, promptly confirmed in writing to the Company, of
the aggregate amount which the Remarketing Agent has received for the purchase
of such Bonds. If the Paying Agent has not received such notice from the
Remarketing Agent by 1:00 P.M., on the purchase date for the purchase of Bonds
tendered to the Tender Agent, the Paying Agent will arrange to obtain an
amount from the Company, at the time and in the manner described in the
following sentence, which is sufficient to purchase all Bonds tendered to the
Tender Agent pursuant to Section 302. Not later than 2:00 P.M., on the
purchase date, the Company shall pay to the Paying Agent in immediately
available funds the amount necessary to purchase the Bonds tendered to the
Tender Agent pursuant to Section 302, for which the Remarketing Agent has not
received the purchase price, and the Company shall pay to the Remarketing
Agent in immediately available funds the amounts necessary to purchase the
Bonds tendered to the Remarketing Agent pursuant to Section 302(a) for which
the Remarketing Agent has not received the purchase price. The Remarketing
Agent shall transfer to the Paying Agent all amounts received by the
Remarketing Agent for the purchase of Bonds tendered to the Tender Agent in
immediately available funds by 3:00 P.M., on the purchase date, provided,
however, that in the event that any Bond is sold by the Remarketing Agent at a
price in excess of the purchase price thereof, such excess shall be paid to
the Company.
(d) No Sales After Events of Default. Anything in this
Agreement to the contrary notwithstanding, if there shall have occurred and be
continuing an Event of Default described in the first paragraph of Section
901, there shall be no sales of Bonds pursuant to this section.
Section 314. Mutilated, Destroyed, Lost or Stolen Bonds. In the event
any Bond or temporary Bond is mutilated, lost, stolen or destroyed, the Paying
Agent may authenticate a new Bond duly executed by the Authority of like date
32<PAGE>
and denomination as that mutilated, lost, stolen or destroyed; provided that,
in the case of any mutilated Bond, such mutilated Bond shall first be
surrendered to the Paying Agent, and in the case of any lost, stolen or
destroyed Bond, there shall be first furnished to the Paying Agent evidence of
such loss, theft or destruction satisfactory to the Paying Agent, together
with indemnity to the Authority and the Paying Agent satisfactory to them. In
the event any such Bond shall have matured, instead of issuing a duplicate
Bond, the Paying Agent on behalf of the Authority may pay the same without
surrender thereof. The Authority and the Paying Agent may charge the
Bondowner with their reasonable fees and expenses in this connection. The
Authority shall cooperate with the Paying Agent in connection with the issue
of replacement Bonds, but nothing in this section shall be construed in
derogation of any rights which the Authority, the Company or the Paying Agent
may have to receive indemnification against liability, or payment or
reimbursement of expenses, in connection with the issue of a replacement Bond.
All Bonds shall be held and owned upon the express condition that the
foregoing provisions are, to the extent permitted by law, exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Bonds, and shall preclude any and all other rights or remedies.
Section 315. Temporary Bonds. Pending preparation of definitive Bonds,
or by agreement with the purchasers of all Bonds, the Authority may issue and,
upon its request, the Paying Agent shall authenticate, in lieu of definitive
Bonds, one or more temporary printed or typewritten Bonds in Authorized
Denominations of substantially the tenor recited above. Upon request of the
Authority, the Paying Agent shall authenticate definitive Bonds in exchange
for any temporary Bonds upon surrender of an equal principal amount of
temporary Bonds. Until so exchanged, temporary Bonds shall have the same
rights, remedies and security hereunder as definitive Bonds.
Section 316. Cancellation and Destruction of Bonds. All Bonds paid or
redeemed, either at or before maturity shall be delivered to the Paying Agent
when such payment or redemption is made, and such Bonds, together with all
Bonds purchased by the Paying Agent and all Bonds surrendered in any exchanges
or transfers, shall thereupon be promptly canceled. Bonds so canceled may at
any time be cremated or otherwise destroyed by the Paying Agent, which shall
execute a certificate of cremation or destruction in duplicate by the
signature of one of its authorized officers describing the Bonds so cremated
or otherwise destroyed, and one executed certificate shall be filed with the
Company and the other executed certificate shall be retained by the Paying
Agent.
Section 317. Refunding Bonds. The Authority may issue, and expressly
reserves the right to issue, to the extent permitted by law, refunding bonds
under another indenture to refund all or any principal amount of the Bonds;
provided, however, that the net proceeds of any such bonds used to refund all
or any principal amount of the Bonds shall be paid directly to the Trustee for
the Bondowners and shall not come into the possession or control of the
Company.
33<PAGE>
ARTICLE IV: THE PROJECT.
Section 401. Construction Fund. A Construction Fund is hereby
established and maintained by the Trustee and moneys shall be deposited
therein as provided by this Agreement.
The moneys in the Construction Fund shall be held by the Trustee in
trust and, subject to the provisions of Sections 403 and 404 of this
Agreement, shall be applied to the payment of the cost of the Project and,
pending such application, shall be subject to a lien and charge in favor of
the holders of the Bonds issued and outstanding under this Agreement and for
the further security of such holders until paid out or transferred as herein
provided.
Section 402. Payments From Construction Fund. Payment of the cost of
the Project shall be made from the Construction Fund. All payments from the
Construction Fund shall be subject to the provisions and restrictions set
forth in this Article.
Section 403. Items of Cost. For the purposes of this Agreement, the
cost of the Project shall embrace all the costs, but only the costs, permitted
by the Act of acquiring, constructing and installing the Project and, without
intending thereby to limit or restrict any proper definition of such cost
under the Act, shall include:
(a) Payment to the Company of such amounts, if any, as shall be
necessary to reimburse the Company in full for all advances and payments
made by it or for its account at any time prior to or after the delivery
of the Bonds for expenditures in connection with the acquisition of any
property required for the Project, including payment of any short-term,
temporary or other borrowings, bonds, notes or other evidences of
indebtedness (including any unpaid fees, charges or costs in connection
therewith), the proceeds of which have been applied to the payment of
items of the cost of the Project, the preparation of plans and
specifications for the Project (including any preliminary study or
planning of the Project or any aspect thereof and any reports or
analyses concerning the Project), the acquisition, construction and
installation of the Project including reimbursement to the Company for
allowance for interest paid on indebtedness incurred for the Project
during construction prior to the date of the Bonds, interest on the
Bonds during construction which shall mean a period beginning with the
date of delivery of the Bonds and ending on the date the acquisition,
construction and installation for the Project shall have been completed,
except if the Project shall consist of facilities which will be placed
in service at different times, the date of which interest may be paid
from Bond proceeds will be the date upon which the facilities financed
from Bond proceeds will be placed in service and all real or personal
property deemed necessary in connection with the Project, or any one or
more of said expenditures (including architectural, engineering and
supervisory services).
(b) Payment for labor, services, materials and supplies used or
furnished in site improvement and in the acquisition, construction and
installation of the Project, all as provided in the plans and
specifications therefor, payment for the cost of the acquisition,
34<PAGE>
construction and installation of utility services or other facilities,
and all real and personal property deemed necessary in connection with
the Project and payment for the miscellaneous expenses incidental to any
of the foregoing items.
(c) To the extent not paid by a contractor in connection with
any part of the Project, payment of the premiums on all insurance
required to be taken out and maintained until the completion date, or
reimbursement thereof, if paid by the Company.
(d) Payment of the taxes, assessments and other charges, if any,
that may become payable until the completion date, or reimbursement
thereof, if paid by the Company.
(e) Payment of expenses incurred with approval of the Company in
seeking to enforce any remedy against any contractor or subcontractor in
respect of any default under a contract relating to the Project.
(f) Payment, as they become due, of the fees and expenses of the
Paying Agent properly incurred under this Agreement that may become due
until the Completion Date.
(g) Payment of any other costs and expenses relating to the
acquisition, construction and installation of the Project (including
testing).
(h) Payment of costs of issuing the Bonds, but only in an amount
not in excess of 2% of the sale proceeds of the Bonds.
Section 404. Disbursements. Payments from the Construction Fund shall
be made by the Trustee to or upon the order of the Company in accordance with
the provisions of this Section, but no such payment shall be made unless and
until the Trustee shall receive a requisition, prepared and signed by an
Authorized Officer of the Company, stating:
(a) the item number of each such payment;
(b) the name of the person, firm or corporation to whom each
such payment is due;
(c) the respective amounts to be paid;
(d) the purpose by general classification for which each
obligation to be paid was incurred;
(e) that obligations in the stated amounts have been incurred
and are presently due and payable and that each item thereof is a proper
charge against the Construction Fund and has not been the subject of a
previous withdrawal from the Construction Fund;
(f) that to the best of his knowledge, there has not been filed
with or served upon the Company notice of any lien, right or attachment
upon, or claim affecting the right of any such persons, firms or
corporations to receive payment of, the respective amounts stated in
35<PAGE>
such requisition which has not been released or will not be released
simultaneously with the payment of such obligation;
(g) that, after giving effect to such requisition, not less than
95% of the proceeds of the Bonds and any investment earnings thereon
will have been used to provide "solid waste disposal facilities" within
the meaning of Section 142(a)(6) of the IRC; and
(h) that after giving effect to the payment of the requisition,
the use of all proceeds of the Bonds and any investment earnings thereon
complies with the limitations contained in the Federal Tax Statement.
Upon receipt of any such requisition, the Trustee shall pay such
obligation from the Construction Fund. If prior to payment of any items in a
requisition the Company should for any reason desire not to pay such item, the
Company shall give written notice of such decision to the Trustee (and the
Trustee may conclusively rely upon such written notice). In making any
disbursement the Trustee shall pay each such obligation directly to the
Company or to any payee designated by an Authorized Officer of the Company, as
set forth in such requisition.
Section 405. Reliance on Requisitions. All requisitions received by
the Trustee, as required in this Article as conditions of payment from the
Construction Fund, may be conclusively relied upon by the Trustee, and shall
be retained by the Trustee, subject at all reasonable times to examination by
the Company, the Issuer and the agents and representatives thereof.
Section 406. Completion of the Project.
(a) Upon the receipt by the Trustee of a certificate of an
Authorized Officer of the Company to the effect that the Project has
been completed, any balance remaining in the Construction Fund (other
than amounts retained by the Trustee to pay costs not then due and
payable or for which the liability for payment is in dispute) shall be
(i) applied to the redemption of Bonds at the earliest date permitted by
this Agreement or (ii) applied to such other purposes as shall, in the
opinion of Bond Counsel, not be inconsistent with the provisions of the
Act as it shall then be in effect and not cause the interest on any of
the Bonds to become subject to federal income taxes then in effect,
which opinion shall be in writing and filed by the Company with the
Authority and the Trustee prior to the application of any such amount.
From time to time as the proper disposition of the amounts retained in
the Construction Fund shall be determined, to the extent that such
amounts are not to be paid out by the Trustee pursuant to Section 404
hereof, upon notification by the Company, the Trustee shall deposit such
amounts in the Debt Service Fund to be applied as aforesaid. Until such
time as the proceeds remaining in the Construction Fund are applied as
set forth above, such proceeds shall not be invested at a yield which
exceeds the yield on the Bonds, except to the extent approved in an
opinion of Bond Counsel.
(b) In the event that the Company exercises an option under this
Agreement to effect the redemption of all the Bonds then outstanding,
the Trustee shall, upon the written direction of the Company, deposit in
36<PAGE>
the Debt Service Fund, on the date the prepayment is made, any balance
remaining in the Construction Fund.
(c) If the principal of all outstanding Bonds shall have become
due and payable in accordance with Section 901 of this Agreement, the
Trustee shall forthwith deposit in the Debt Service Fund any balance
remaining in the Construction Fund.
(d) If any acceleration shall be rescinded in accordance with
Section 902 hereof, the Trustee shall transfer from the Debt Service
Fund to the Construction Fund an amount, not to exceed the balance then
to the credit of the Debt Service Fund, equal to the amount previously
transferred pursuant to clause (c) of this Section 406 from the
Construction Fund to the Debt Service Fund.
Section 407. Transfer of Money from Fund on Repurchase or Redemption of
Bonds. Whenever the Company shall exercise its option or shall be required
under Section 203 of this Agreement to deposit with the Trustee money or
Government or Equivalent Obligations in an amount sufficient to discharge this
Agreement, any amounts remaining in the Construction Fund shall be paid over
to the Debt Service Fund to be held by the Trustee in order to provide for the
proper and timely redemption of the Bonds in accordance with this Agreement,
such payment to the Trustee to be made immediately prior to the deposit by the
Company of such money or Government or Equivalent Obligations.
Section 408. Rebate.
(a) Payment of Rebate to the United States. (i) No later than
sixty (60) days after the close of the fifth Rebate Year following the date of
issue of the Bonds (or any earlier date that may be required) and the close of
each fifth Rebate Year thereafter, the Company shall pay to the United States
on behalf of the Authority the full amount then required to be paid under IRC
section 148(f) and the regulations thereunder (the "Rebate Provision").
Within sixty (60) days after the Bonds of a series have been paid in full,
the Company shall pay to the United States on behalf of the Authority the full
amount then required to be paid under the Rebate Provision. Each such payment
shall be made to the Internal Revenue Service Center, Philadelphia,
Pennsylvania, 19255 or any successor location specified by the Internal Revenue
Service, accompanied by a Form 8038-T (or other similar information reporting
form) prepared by the Institution.
(ii) No later than fifteen (15) days prior to each date on
which a payment could become due under Paragraph (a)(i) (a "Rebate Payment
Date"), the Company shall deliver to the Authority and the Trustee a
certificate either summarizing the determination that no amount is required to
be paid or specifying the amount then required to be paid pursuant to
Paragraph (a)(i). If the certificate specifies an amount to be paid, (A) such
certificate shall be accompanied by a completed Form 8038-T, which is to be
signed by an officer of the Authority, and shall include a certification
stating that the Form 8038-T is accurate and complete, and (B) no later than
ten (10) days after the Rebate Payment Date the Company shall furnish to the
Authority and the Trustee a certificate stating that such amount has been
timely paid.
37<PAGE>
(b) Records. The Company, the Trustee and the Authority shall
keep such records as will enable them to fulfill their responsibilities under
this section and the Rebate Provision.
(c) Interpretation of this Section. The purpose of this Section
408 is to satisfy the requirements of the Rebate Provision. Accordingly, this
section shall be construed so as to meet such requirements. The Company
covenants that all action taken under this section shall be taken in a manner
that complies with the Rebate Provision and that it shall neither take any
action nor omit to take any action that would cause the Bonds to be arbitrage
bonds by reason of the failure to comply with the Rebate Provision. To the
extent any payment of rebatable arbitrage or penalty in lieu of rebate is not
timely made to the United States, the Company shall pay to the United States
on behalf of the Authority any correction amount, interest, penalty, or other
amount necessary to prevent any series of Bonds from becoming arbitrage bonds
within the meaning of IRC Section 148. The Company covenants that to the
extent necessary it shall obtain the advice and assistance of experts to aid
it in complying with the Rebate Provision.
Section 409. Maintenance and Modifications of Project by Company.
Subject to the provisions of Section 410, the Company agrees that so long as
any Bonds are outstanding it will at its own expense maintain, repair and
operate the Project. The Company may make modifications to completed
components of the Project.
Section 410. Removal of Portions of the Project.
(a) The Company shall not be under any obligation to renew, repair or replace
any inadequate, obsolete, worn-out, unsuitable, undesirable or unnecessary
portion of the Project. In any instance where the Company determines that any
portion of the Project has become inadequate, obsolete, worn-out, unsuitable,
undesirable or unnecessary, the Company may remove such portion from the
Project and sell, trade in, exchange or otherwise dispose of such removed
portion of the Project without any responsibility or accountability to the
Authority, the Trustee or the holders of the Bonds.
(b) The removal of any portion of the Project pursuant to the
provisions of this Section shall not entitle the Company to any abatement or
diminution of the amounts required to be paid with respect to the Bonds.
Section 411. Assignment, Leasing and Sale by the Company. This
Agreement may be assigned, and the Project may be leased or sold as a whole or
in part, by the Company without the necessity of obtaining the consent of
either the Authority or the Trustee, subject, however, except as provided in
Section 503, to each of the following conditions:
(a) no assignment, lease or sale shall relieve the Company from liability
for any of its obligations hereunder, and, in the event of any such
assignment, lease or sale, the Company shall continue to remain primarily
liable for the payments required to be made pursuant to this Agreement and for
the performance and observance of the other agreements on its part herein
contained;
38<PAGE>
(b) the assignee, lessee or buyer shall assume the obligations
of the Company hereunder to the extent of the interest assigned, leased or
sold, and may assume the Company's obligations under Article III;
(c) the Company shall, not later than 10 days prior to the
delivery thereof, furnish or cause to be furnished to the Authority and to the
Trustee a true and complete copy of the form of each such proposed assignment,
lease or conveyance, as the case may be; and
(d) the Company shall, not later than the effective date of such
sale, assignment or lease, furnish or cause to be furnished to the Authority
and the Trustee a written opinion of Bond Counsel that such sale, assignment
or lease will not cause the interest on the Bonds to become includable in
gross income for federal income tax purposes.
ARTICLE V: THE COMPANY.
Section 501. Representations by the Company. The Company makes the
following representations as of the date of delivery of this Agreement:
(a) The Company is a corporation organized and existing under
the laws of the State of Florida and has power to enter into this Agreement;
(b) By proper corporate action, the officers of the Company
executing and attesting this Agreement have been duly authorized to execute
and deliver this Agreement;
(c) Neither the execution or delivery of this Agreement or the
consummation of the transactions contemplated herein (including, without
limitation, execution and delivery of the First Mortgage Bonds, if any, nor
the fulfillment of or compliance with the terms hereof) will conflict with or
result in a breach of any of the terms or provisions of, or constitute a
default under, the Company's Restated Articles of Incorporation, its bylaws or
any indenture, mortgage, deed of trust or other agreement or instrument to
which the Company is now a party or by which it is bound;
(d) The facilities comprising the Project constitute a "project"
within the meaning of Section 159.27(5), Florida Statutes.
(e) The Company has caused and will cause the acquisition,
construction and installation of the Project at the Unit, pursuant to the
terms and conditions expressed herein, all for the purpose of promoting
effective and efficient solid waste disposal throughout the State;
(f) Not less than 95% of the proceeds of the Bonds and any
investment earnings thereon will be used to pay costs of "solid waste disposal
facilities" within the meaning of Section 142(a)(6) of the IRC; and
(g) All necessary authorizations, approval, consents and other
orders of any governmental authority or agency for the execution and delivery
by the Company of this Agreement have been obtained and are in full force and
effect.
39<PAGE>
Section 502. Access to the Project. The Authority and its duly
authorized agents shall have such rights of access to the Project and the Unit
as may be reasonably necessary to inspect the Project.
Section 503. Company To Maintain Its Corporate Existence; Conditions
Under Which Exceptions Permitted. The Company agrees that, so long as any
Bonds are Outstanding, it will maintain its corporate existence, will not
dissolve or otherwise dispose of all or substantially all of its assets and
will not consolidate with or merge into another corporation or permit one or
more other corporations to consolidate with or merge into it; provided that
the Company may, without violating its agreement contained in this section,
consolidate with or merge into another corporation, or permit one or more
other corporations to consolidate with or merge into it, or sell or otherwise
transfer to another corporation all or substantially all of its assets as an
entirety and thereafter dissolve, provided the surviving, resulting or
transferee corporation, as the case may be (if other than the Company), is a
corporation organized and existing under the laws of one of the states of the
United States and assumes in writing all of the obligations of the Company
herein and, if not a Florida corporation, is qualified to do business in the
State.
Section 504. Indemnification Covenants.
(a) The Company hereby agrees to indemnify the Authority, the
Paying Agent, the Registrar, the Tender Agent, the Remarketing Agent and the
Trustee against claims arising out of the construction or operation of the
Project and to pay or bond and discharge and indemnify and hold harmless the
Authority from and against (i) any lien or charge upon payments by the Company
to or for the account of the Authority hereunder and (ii) any taxes,
assessments, impositions and other charges of any federal, state or municipal
government or political body in respect of the Project. If any such claim is
asserted, or any such lien or charge upon payments, or charges are sought to
be imposed, the Authority, the Paying Agent, the Tender Agent, the Remarketing
Agent or the Trustee, as the case may be, shall give prompt notice to the
Company, and the Company shall pay the same or bond and assume the defense
thereof (and if bonded, with a bonding company and in an amount reasonably
satisfactory to the Authority), with full power to contest, litigate,
compromise or settle the same in its sole discretion.
(b) The Company shall at all times protect and hold the
Authority, its members, officers and employees, its agents and attorneys, the
Trustee, the Paying Agent, the Registrar, the Tender Agent and the Remarketing
Agent harmless against any claim or liability arising from this Agreement, the
Bond Resolution, the issuance of the Bonds and all transactions pertaining
thereto, including but not limited to any loss or damage to property or any
injury to or death of any person that may be occasioned by any cause
whatsoever pertaining to the Project or to the use thereof, in excess of any
insurance proceeds available to the Authority in connection therewith, such
indemnification to include reasonable expenses and attorney's fees incurred by
the Authority, its members, officers and employees, and its agents and
attorneys, the Trustee, the Paying Agent, the Registrar, the Tender Agent and
the Remarketing Agent in connection therewith. Nothing contained herein shall
require the Company to indemnify the Authority for any claim or liability
resulting from the willfully wrongful acts or gross negligence of the
Authority, its members, officers, employees, agents or attorneys or of the
40<PAGE>
officers, employees, agents or attorneys for the Trustee, the Paying Agent,
the Registrar, the Tender Agent or the Remarketing Agent.
Section 505. Consent to Assignment of Contract Rights by the Authority.
The Company hereby consents to the pledge and assignment by the Authority to
the Trustee of (i) all of its rights under this Agreement (except its rights
under Sections 311(b)(i) and 911 to payment of certain costs and expenses and
under Section 504 to indemnification) to the Trustee for the benefit of the
holders from time to time of the Bonds as security for payment of the
principal of and premium, if any, and interest on the Bonds, (ii) its
subordinated security interest in the Project and (iii) any interest it may
have in the First Mortgage Bonds, if any, as additional security for the
payment of the principal of and premium, if any, and interest on the Bonds.
The Company hereby agrees that by virtue of such pledge and assignment the
Trustee may enjoy and enforce all such rights of the Authority hereunder.
Section 506. Obligations of Company Hereunder Unconditional.
(a) Until such time as the principal of and premium, if any, and
interest on the Bonds shall have been fully paid or deemed to have been paid
as provided pursuant to Section 205 of this Agreement, the Company's
obligations under this Agreement shall be absolute and unconditional, and the
Company (i) will not suspend or discontinue payment of any amounts required to
be paid by it hereunder, (ii) will perform and observe all of its other
agreements contained in this Agreement, and (iii) except as permitted by this
Agreement, will not terminate this Agreement for any cause, including, without
limiting the generality of the foregoing, the occurrence of any act or
circumstance that may constitute failure of consideration, destruction of or
damage to the Project, commercial frustration of purpose, any change in the
tax or other laws of the United States of America or of the State or any
political subdivision of either of them, any failure of the Authority or the
Trustee to perform or observe any agreement, whether express or implied, or
any duty, liability or obligation arising out of or connected with this
Agreement, or arising out of any indebtedness or liability at any time owing
to the Company by the Authority or the Trustee.
(b) Nothing contained in this section will be construed to
release the Authority from the performance of any of the agreements on its
part herein contained; and in the event the Authority should fail to perform
any such agreement on its part, the Company may institute such action against
the Authority as the Company may deem necessary to compel performance of the
Authority hereunder so long as such action shall not violate the agreements on
the part of the Company contained in Subsection 504(a) or diminish the amounts
required to be paid by the Company under this Agreement. The Company may
also, at its own cost and expense and in its own name or in the name of the
Authority, prosecute or defend any action or proceeding or take any other
action involving third persons which the Company deems reasonably necessary in
order to secure or protect its right of possession, occupancy and use
hereunder, and in such event the Authority hereby agrees to cooperate fully
with the Company and, at the Company's expense, to take all action necessary
to effect the substitution of the Company for the Authority in any action or
proceeding if the Company shall so request.
Section 507. Tax Status of Bonds. The Company will perform its
obligations and agreements contained in the Federal Tax Statement as if they
41<PAGE>
were set forth herein. Any covenants, agreements or representations made by
the Company in the Federal Tax Statement shall be performed and treated as if
set forth herein. The Authority will, at the expense of the Company,
cooperate with the Bondowners and the Company to the extent deemed necessary
or permitted by law in the opinion of Bond Counsel in order to preserve the
exclusion of interest on the Bonds from the gross income of the owners thereof
for federal income tax purposes.
Section 508. Continuing Disclosure. The Company and the Trustee hereby
covenant and agree that each will comply with and carry out all of the
provisions of the Continuing Disclosure Agreement applicable to it and this
Section 508 of this Agreement. The Authority shall have no liability to the
owners of the Bonds or any other person with respect to such disclosure
matters. Notwithstanding any other provision of this Agreement, failure of
the Company or the Trustee to comply with the Continuing Disclosure Agreement
shall not be considered an Event of the Default; however, the Trustee may
(and, at the request of the owners of at least 25% aggregate principal amount
of Outstanding Bonds, shall) or any owner (including a beneficial owner) of
Bonds may seek specific performance of the Company's or the Trustee's
obligations to comply with the Continuing Disclosure Agreement or this Section
508 and not for money damages in any amount.
ARTICLE VI: THE AUTHORITY.
Section 601. Representations by the Authority. The Authority makes the
following representations as of the date of delivery of this Agreement:
(a) The Authority covenants that it is duly authorized under the
laws of the State, including particularly and without limitation the Act, to
issue the Bonds authorized hereby and to execute this Agreement, to assign the
payments and amounts hereby assigned in the manner and to the extent herein
set forth and to undertake the transactions contemplated by this Agreement and
to carry out its obligations hereunder, and that all action on its part for
the issuance of the Bonds and the execution and delivery of this Agreement has
been duly and effectively taken; and
(b) By proper action of the Authority, the officers of the
Authority executing and attesting this Agreement have been duly authorized to
execute and deliver this Agreement.
Section 602. No Warranty of Condition or Suitability by the Authority.
THE AUTHORITY MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE
CONDITION OF THE PROJECT OR ITS SUITABILITY FOR THE COMPANY'S PURPOSES OR
NEEDS.
Section 603. Payment of Principal, Premium and Interest. The Authority
covenants that it will promptly pay the principal of, premium, if any, and
interest on every Bond issued under this Agreement but only from the Revenues
and any accrued interest on the Bonds deposited in the Debt Service Fund as
provided herein at the place, on the dates, from the funds and in the manner
provided herein and in said Bonds according to the true intent and meaning
thereof.
42<PAGE>
Section 604. Authority To Use Best Efforts To Require Company To Make
Payments. The Authority shall use its best efforts, acting through the
Trustee, to require the Company to pay all of the payments and other costs and
charges payable by the Company under this Agreement.
Section 605. Take Further Action. The Authority covenants that it
shall from time to time execute and deliver such further instruments and take
such further action as may be reasonable and as may be required to carry out
the purposes of this Agreement; provided, however that no such instruments or
actions shall pledge the credit of the Authority.
Section 606. No Disposition of Revenues. The Authority agrees that,
except for its pledge and assignment to the Trustee hereunder, the Authority
will not pledge, assign, mortgage, encumber, convey or otherwise transfer any
of its interest or rights to the Revenues or otherwise under this Agreement;
provided, however, that if the laws of the State at the time shall so permit,
nothing contained in this section shall prevent the consolidation of the
Authority with, or merger of the Authority into, any public corporation the
property and income of which are not subject to taxation; and provided,
further, that upon any such consolidation, merger or transfer, the due and
punctual payment of the principal of, premium, if any, and interest on the
Bonds according to their tenor, and the due and punctual performance and
observance of all the agreements and conditions of this Agreement to be kept
and performed by the Authority, shall be expressly assumed in writing by the
entity resulting from such consolidation or surviving such merger.
Section 607. No Extensions. In order to prevent any accumulation of
claims for interest after maturity, the Authority will not directly or
indirectly extend or assent to the extension of the time of payment of claims
of interest on any of the Bonds and will not directly or indirectly be a party
to or approve any such arrangement by purchasing or funding such claims for
interest or in any other manner. In case any such claim for interest shall be
extended or funded in violation hereof, such claim for interest shall not be
entitled, in case of any default hereunder, to the benefit or security of this
Agreement except subject to the prior payment in full of the principal of and
premium, if any, on all Bonds issued and outstanding hereunder, and all claims
for interest which shall not have been so extended or funded.
Section 608. Covenant To Perform Further Acts. The Authority covenants
that it will, at the expense of the Company, do, execute, acknowledge and
deliver, or cause to be done, executed, acknowledged and delivered, such
supplements and amendments to this Agreement and such further acts,
instruments and transfers as the Trustee may reasonably require in order to
fully preserve, protect and perfect the rights and security of the Bondowners
and the rights of the Trustee under this Agreement. The Authority further
covenants to file such information reports as may be required by federal or
State law which reports shall be prepared by the Company and submitted to the
Authority for execution.
Section 609. Faithful Performance. The Authority covenants that it
will faithfully perform at all times any and all covenants, undertakings,
stipulations and provisions required to be performed by it and contained in
this Agreement, in any and every Bond executed and delivered hereunder and in
all of its proceedings pertaining hereto.
43<PAGE>
ARTICLE VII: THE TRUSTEE AND PAYING AGENTS;
REMARKETING AGENT; TENDER AGENT; REGISTRAR.
Section 701. Conditions of Trust. The Trustee (which term shall be
deemed to include for purposes of this Section 701 the Paying Agent, Registrar
and Tender Agent, unless the context otherwise requires) hereby accepts the
trusts imposed upon it by this Agreement, and agrees to perform said trusts,
but only upon and subject to the following express terms and conditions:
(a) The Trustee may execute any of the obligations or powers
hereof and perform any of its duties either directly or by or through
attorneys, agents, receivers or employees and the Trustee shall not be
responsible for any misconduct or negligence on the part of any attorney,
agent, receiver or employee appointed with due care by it hereunder.
(b) The Trustee may consult with counsel concerning all matters
of trust hereof and duties hereunder, and the written advice of such counsel
or any opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon.
(c) The Trustee shall not be responsible for, nor have any
liability with respect to, any recital herein or in the Bonds (except in
respect of the certificate of the Trustee endorsed on the Bonds), the validity
of this Agreement or of any supplements hereto or instruments of further
assurance, the maintenance, validity or sufficiency of the security for the
Bonds issued hereunder or intended to be secured hereby, or any lien or
property to be created hereby, but the Trustee may require of the Authority or
the Company full information and advice as to the performance of the
covenants, conditions and agreements aforesaid.
(d) The Trustee shall not be accountable for, or have any
liability with respect to, the use of any Bonds authenticated or delivered
hereunder after such Bonds shall have been delivered in accordance with
instructions of the Authority. The Trustee may become the owner of Bonds
secured hereby with the same rights which it would have if it were not the
Trustee.
(e) The Trustee shall be fully protected in acting upon any
notice, request, consent, certificate, order, affidavit, letter, telegram or
other paper or document believed in good faith to be genuine and correct and
to have been signed or sent by the proper person or persons. Any action taken
by the Trustee pursuant to this Agreement upon the request or authority or
consent of any person who at the time of making such request or giving such
authority or consent is the owner of any Bond shall be conclusive and binding
upon all future owners of the same Bond or portions thereof and upon Bonds
issued in exchange therefor or for portions thereof or in place thereof.
(f) As to the existence or nonexistence of any fact or as to the
sufficiency or validity of any instrument, paper or proceeding, the Trustee
shall be entitled to rely upon a certificate of the Authority signed by (i)
the Chairman or the Secretary of the Authority, or (ii) any other duly
authorized person (such authority to be conclusively evidenced by an
appropriate Certified Resolution of the Authority) or any certificate signed
by an Authorized Officer of the Company as sufficient evidence of the facts
44<PAGE>
therein contained, and prior to the occurrence of a default of which the
Trustee has been notified as provided in subsection (h) of this section, or of
which by said subsection it is deemed to have notice, the Trustee shall also
be at liberty to accept a similar certificate to the effect that any
particular dealing, transaction or action is necessary or expedient, but may
at its discretion secure such further evidence deemed necessary or advisable,
but shall in no case be bound to secure the same. The Trustee may accept a
certificate of the Secretary of the Authority under its seal to the effect
that a resolution has been duly adopted, and is in full force and effect.
(g) The permissive right of the Trustee to do things enumerated
in this Agreement shall not be construed as a duty, and the Trustee shall not
be answerable for other than its gross negligence or willful misconduct. In
the exercise of such of the rights and powers vested in it by this Agreement,
the Trustee shall use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(h) The Trustee shall not be required to take notice or be
deemed to have notice of any default hereunder except (i) failure by the
Authority to cause to be made any of the payments to the Trustee required to
be made by Article III hereof and (ii) default of which the Trustee has actual
knowledge, unless the Trustee shall be specifically notified in writing of
such default by the Authority or by the holders of at least 25% in aggregate
principal amount of Bonds then Outstanding; and all notices or other
instruments required by this Agreement to be delivered at the designated
corporate trust office of the Trustee in Jacksonville, Florida must, in order
to be effective, be delivered at the principal office of the Trustee, and in
the absence of such notice so delivered the Trustee may conclusively assume
there is no default except as aforesaid. For the purposes hereof, the Trustee
shall not be deemed to have actual knowledge of any default or Event of
Default unless a trust officer, assistant trust officer or other person
charged with the administration of the obligations of the Trustee hereunder
shall during the course of his duties have actual knowledge thereof.
(i) The Trustee shall not be personally liable for any debts
contracted or for damages to persons or to personal property injured or
damaged or for salaries or nonfulfillment of contracts during any period in
which it may be in the possession of or managing the real and tangible
personal property as in this Agreement provided.
(j) The Trustee shall not be required to give any bond or surety
in respect of the execution of the said trusts and powers or otherwise in
respect of the premises.
(k) No provision of this Agreement shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers.
(l) All money received by the Trustee or any paying agent shall,
until used or applied or invested as herein provided, be held in trust for the
purposes for which it was received but need not be segregated from other funds
except to the extent required by this Agreement or by law.
45<PAGE>
(m) The Trustee shall not be bound to make an investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties, but the Trustee, in
its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine during
normal business hours and upon reasonable notice the books, records and
premises of the Authority, personally or by agent or by attorney.
Section 702. Reimbursement of Administrative Expenses.
(a) The Trustee, the Tender Agent, the Registrar, any paying
agent and the Remarketing Agent shall be entitled to payment and/or
reimbursement for Administrative Expenses, including reasonable fees for their
services rendered hereunder and all advances, counsel fees and other expenses
reasonably and necessarily made or incurred by them in connection with such
services under this Agreement. The Trustee and any paying agent shall be
entitled to payment and reimbursement for their reasonable fees and charges as
paying agents for the Bonds as hereinabove provided. Upon the occurrence of
an Event of Default, but only upon an Event of Default, the Trustee and any
paying agent shall have a first lien with right of payment prior to payment on
account of interest or principal of any Bond for the foregoing advances, fees,
costs and expenses incurred by them, respectively, or any indemnification due,
on moneys held by the Trustee hereunder, other than moneys held for the
payment of Bonds which are deemed to have been purchased or paid (including
payment upon acceleration of maturity) under the terms of this Agreement.
(b) All fees, charges and other compensation to which the
Trustee, the Tender Agent, the Registrar, any paying agent and the Remarketing
Agent may be entitled under the provisions of this Agreement are required to
be paid by the Company, and, accordingly, the Authority shall not be liable in
any respect to indemnify such entities for fees, charges and other
compensation to which they may be entitled and, by acceptance of the trusts
hereunder, each entity shall be deemed to have agreed to the foregoing.
Section 703. Trustee To Give Notice to Bondowners in Event of Default.
If a default or Event of Default occurs of which the Trustee is by reason of
subsection (h) of Section 701 required to take notice or if notice of default
be given as provided in said subsection (h), and such Event of Default shall
have continued for two (2) days after the Trustee acquired actual notice
thereof (unless such default shall have been cured or waived), then the
Trustee shall give notice thereof by mailing written notice thereof to all
registered holders of Bonds (as the names and addresses of such holders appear
upon the books for registration and transfer of Bonds as kept by the
Registrar), the Paying Agent, the Tender Agent and the Remarketing Agent.
Section 704. Trustee's Right To Intervene; First Mortgage Bonds.
(a) In any judicial proceedings to which the Authority is a
party and which in the opinion of the Trustee and its counsel has a
substantial bearing on the interests of the Bondowners, the Trustee may
intervene on behalf of Bondowners and shall do so if requested in writing by
the holders of at least 25% of the aggregate principal amount of Bonds then
46<PAGE>
outstanding. The rights and obligations of the Trustee under this section are
subject to the approval of a court of competent jurisdiction.
(b) Except as required to effect an assignment to a successor
Trustee or as required in Section 207 hereof, the Trustee shall not sell,
assign or transfer any First Mortgage Bond, if any, and the Trustee is
authorized to enter into an agreement with the Company to such effect,
including a consent to the issuance of stop transfer instructions to the First
Mortgage Trustee.
(c) If First Mortgage Bonds shall have been delivered in
connection with the Bonds, the Trustee, as a holder of such First Mortgage
Bonds, shall attend any meeting of first mortgage bondholders under the First
Mortgage as to which it receives due notice. Either at such meeting, or
otherwise where consent of holders of First Mortgage Bonds of the Company is
sought without a meeting, the Trustee shall vote pursuant to the direction of
the Bondowners as provided in Section 904.
Notwithstanding the foregoing, the Trustee shall not vote as such holder
in favor of, or give its consent to, any action which, in the Trustee's
opinion, would materially adversely affect the interests of the Bondowners,
except upon notification by the Trustee to the Bondowners of such proposal and
consent thereto of the holders of at least two-thirds (2/3) in aggregate
principal amount of the Bonds then outstanding or, if such proposal would so
affect the rights of some but less than all the outstanding Bonds, the consent
thereto of the holders of at least two-thirds (2/3) in aggregate principal
amount of all Bonds so affected voting as a class.
Section 705. Successor Trustee Upon Merger, Etc. Any corporation or
association into which the Trustee may be converted or merged, or with which
it may be consolidated, or to which it may sell or transfer its corporate
trust business and assets as a whole or substantially as a whole, or any
corporation or association resulting from any such conversion, sale, merger,
consolidation or transfer to which it is a party, ipso facto, shall be and
become successor Trustee hereunder and vested with all the trusts, powers,
discretions, immunities, privileges and all other matters as was its
predecessor, without the execution or filing of any instrument or any further
acts, deed or conveyance on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 706. Resignation of Trustee. A Trustee and any successor
Trustee may resign by giving 60 days' written notice by first class mail to
the Authority, the Company, the Remarketing Agent, the Paying Agent, the
Tender Agent and to each Registered Bondowner then outstanding as shown on the
Bond Register, prior to the date specified in such notice when such
resignation shall take effect. Such resignation shall take effect only upon
the appointment of a successor or temporary Trustee by the Bondowners or by
the Authority as hereinafter provided. Such notice to the Authority, the
Company, the Remarketing Agent and the Paying Agent may be served personally
or sent by registered mail or telegram.
Section 707. Removal of Trustee. The Trustee may be removed at any
time by an instrument or concurrent instruments in writing delivered to the
Trustee, the Authority, the Company, the Remarketing Agent, the Tender Agent
47<PAGE>
and the Paying Agent and signed by the owners of a majority in aggregate
principal amount of Bonds then outstanding.
Section 708. Appointments of Successor Trustee. In case the Trustee
hereunder shall resign or be removed, or be dissolved, or shall be in the
course of dissolution or liquidation, or otherwise become incapable of acting
hereunder, or in the case it shall be taken under control of any public
officer or officers, or of a receiver appointed by a court, a successor may be
appointed by the owners of a majority in aggregate principal amount of Bonds
then outstanding, by an instrument or concurrent instruments in writing signed
by such owners, or by their attorneys in fact, duly authorized; provided,
however, that in case of such vacancy the Company shall forthwith appoint a
temporary successor Trustee to fill such vacancy until a successor Trustee
shall be appointed by the Bondowners in the manner above provided, and any
such temporary successor Trustee as appointed by the Company shall immediately
and without further act be superseded by the successor Trustee so appointed by
such Bondowners. If no appointment of a successor is made within sixty (60)
days after the giving of written notice in accordance with Section 706 or
after the occurrence of any other event requiring or authorizing such
appointment, the outgoing Trustee or any Bondowner may apply to any court of
competent jurisdiction for the appointment of such a successor, and such court
may thereupon, after such notice, if any, as such court may deem proper,
appoint such successor. Every such successor Trustee and temporary successor
Trustee appointed pursuant to the provisions of this section shall be a
corporation organized and doing business under the laws of the United States
of America or of any state, authorized under such laws to exercise corporate
trust powers having a reported capital and surplus of not less than
$25,000,000, subject to supervision or examination by federal or state
authority, if there be such an institution willing, qualified and able to
accept the trust upon reasonable or customary terms.
Section 709. Acceptance by Successor Trustee. Every successor Trustee
appointed hereunder shall execute, acknowledge and deliver to its predecessor
and also to the Authority, the Company, the Remarketing Agent, the Tender
Agent and the Paying Agent an instrument in writing accepting such appointment
hereunder, and thereupon such successor, without any further act, deed or
conveyance, shall become fully vested with all the estates, properties,
rights, powers, trusts, duties and obligations of its predecessors; but such
predecessor Trustee shall nevertheless, on the written request of the Company,
or of its successor, execute and deliver an instrument transferring to such
successor Trustee all the estate, properties, rights, powers and trusts,
duties and obligations of such predecessor hereunder, and every predecessor
Trustee shall deliver all securities and money held by it as Trustee hereunder
to its successor. Should any instrument in writing from the Company be
required by a successor Trustee for more fully and certainly vesting in such
successor the estate, rights, powers and duties hereby vested or intended to
be vested in the predecessor, any and all such instruments in writing shall,
on request, be executed, acknowledged and delivered by the Company.
Section 710. Reliance Upon Instruments. The resolutions, opinions,
certificates and other instruments provided for in this Agreement may be
accepted by the Trustee as conclusive evidence of the facts and conclusions
stated therein and shall be full protection and authority to the Trustee for
the withdrawal of cash hereunder, and the taking or omitting to take of any
other action under this Agreement.
48<PAGE>
Section 711. Former Trustee No Longer Custodian or Paying Agent. Any
Trustee which has resigned or been removed shall cease to be custodian of the
funds and, if it has been so appointed, Paying Agent or Co-Paying Agent, and
the successor Trustee shall become such custodian, and a successor Paying
Agent shall be appointed under Section 715.
Section 712. Directions From Company; Company May Perform.
(a) Whenever after a reasonable request by the Company the
Authority shall fail, refuse or neglect to give any direction to the Trustee
or to require the Trustee to take any other action which the Authority is
required to have the Trustee take pursuant to the provisions of this
Agreement, the Company instead of the Authority may give any such direction to
the Trustee or require the Trustee to take any such action, and the Trustee,
upon receipt of proof of delivery of the request to the Authority and unless
otherwise instructed by the Authority, is hereby irrevocably empowered and
directed to accept such direction from the Company as sufficient for all
purposes of this Agreement. The Company shall have the right to cause the
Trustee to comply with any of the Trustee's obligations under this Agreement
to the same extent that the Authority is empowered so to do.
(b) The Authority and the Trustee acknowledge that certain
actions or failures to act by the Authority under this Agreement may create or
result in a default hereunder. The Authority hereby agrees that the Company
may perform any and all acts or take such action as may be necessary for and
on behalf of the Authority to prevent or correct said default, and the Trustee
agrees that it shall take or accept such performance by the Company as
performance by the Authority in such event.
Section 713. Trading in Bonds by Trustee, Tender Agent, Paying Agent,
Registrar or Remarketing Agent. The Trustee, the Tender Agent, any paying
agent, the Registrar or the Remarketing Agent, in its individual capacity, may
in good faith buy, sell, own, hold and deal in any of the Bonds issued
hereunder, and may join in any action which any Bondowners may be entitled to
take with like effect as if it did not act in any capacity hereunder. The
Trustee, the Tender Agent, the Authenticating Agent, any paying agent, the
Registrar or the Remarketing Agent, in its individual capacity, either as
principal or agent, may also engage in or be interested in any financial or
other transaction with the Authority or the Company, and may act as
depositary, trustee, or agent for any committee or body of Bondowners secured
hereby or other obligation of the Authority as freely as if it did not act in
any capacity hereunder.
Section 714. Appointment and Duties of Paying Agent.
(a) The Company shall appoint the Paying Agent for the Bonds and
may at any time or from time to time appoint one or more Co-Paying Agents for
the Bonds, subject to the conditions set forth in Section 715. The Paying
Agent and each Co-Paying Agent shall designate its Principal Office and
signify its acceptance of the duties and obligations imposed upon it hereunder
by a written instrument of acceptance delivered to the Company, the Authority,
the Trustee and the Remarketing Agent under which such Paying Agent or Co-
Paying Agent will agree, particularly:
49<PAGE>
(i) to hold all sums held by it for the payment of the
principal of and premium, if any, or interest on Bonds in trust for the
benefit of the Bondowners until such sums shall be paid to such Bondowners or
otherwise disposed of as herein provided;
(ii) to notify the Trustee promptly in the event the
Company has failed to make a timely payment to the Debt Service Fund for the
payment of interest, premium, if any, or principal due on any of the Bonds;
(iii) to keep such books and records as shall be consistent
with prudent industry practice, to make such books and records available for
inspection by the Authority, the Trustee and the Company at all reasonable
times, and, in the case of a Co-Paying Agent, to promptly furnish copies of
such books and records to the Paying Agent; and
(iv) in the case of a Co-Paying agent, upon the request of
the Paying Agent, to forthwith deliver to the Paying Agent all sums so held in
trust by such Co-Paying Agent.
(b) The Authority shall, at the expense of the Company,
cooperate with the Trustee and the Company to cause the necessary arrangements
to be made and to be thereafter continued whereby funds will be made available
for the payment when due of the Bonds as presented at the Principal Offices of
the Paying Agent and the Co-Paying Agents.
(c) The Paying Agent and Tender Agent shall always be the same
corporation.
Section 715. Qualification of Paying Agent.
(a) The Paying Agent and any Co-Paying Agent shall be a
corporation duly organized under the laws of the United States of America or
any state or territory thereof, having a combined capital stock, surplus and
undivided profits of at least $30,000,000 and authorized by law to perform all
the duties imposed upon it by this Agreement. As long as the Bonds are rated
by Moody's, any successor Paying Agent or Co-Paying Agent shall be a bank or
trust company or other person whose debt obligations shall be rated Baa3/P3 or
higher by Moody's or be otherwise acceptable to Moody's. The Paying Agent and
any Co-Paying Agent may at any time resign and be discharged of the duties and
obligations created by this Agreement by giving at least sixty (60) days'
notice to the Authority, the Company, the Remarketing Agent and the Trustee.
The Paying Agent and Co-Paying Agent may be removed at any time, at the
direction of the Company, by an instrument signed by an Authorized Officer of
the Company, filed with the Paying Agent or such Co-Paying Agent, as the case
may be, and with the Authority, the Trustee and the Remarketing Agent.
(b) In the event of the resignation or removal of the Paying
Agent or any Co-Paying Agent, the Paying Agent or such Co-Paying Agent, as the
case may be, shall pay over, assign and deliver any moneys held by it in such
capacity to its successor or, if there be no successor, to the Trustee.
(c) In the event that the Company shall fail to appoint a Paying
Agent hereunder, or in the event that the Paying Agent shall resign or be
removed, or be dissolved, or if the property or affairs of the Paying Agent
shall be taken under the control of any state or federal court or
50<PAGE>
administrative body because of bankruptcy or insolvency, or for any other
reason, and the Company shall not have appointed its successor as Paying
Agent, the Trustee shall ipso facto be deemed to be the Paying Agent for all
purposes of this Agreement until the appointment by the Company of the Paying
Agent or successor Paying Agent, as the case may be.
Section 716. Appointment and Duties of Tender Agent.
(a) Prior to the first remarketing of the Bonds pursuant to this
Agreement the Company shall appoint the Tender Agent for the Bonds, subject to
the conditions set forth in Section 717. The Tender Agent shall be the same
corporation as the Paying Agent. The Tender Agent shall designate its
Principal Office and signify its acceptance of the duties and obligations
imposed upon it hereunder by a written instrument of acceptance delivered to
the Authority, the Trustee, the Remarketing Agent and the Company under which
the Tender Agent will agree, particularly:
(i) to deliver to the Company and the Remarketing Agent a
copy of each notice delivered to it in accordance with Section 302;
(ii) to hold all Bonds delivered to it for purchase
hereunder by the Tender Agent as agent and bailee of, and in escrow for the
benefit of, the respective Bondowners which shall have so delivered such Bonds
until moneys representing the purchase price of such Bonds shall have been
delivered to or for the account of or to the order of such Bondowners;
(iii) to hold all moneys, other than moneys delivered to it
hereunder by the Company for the purchase of Bonds, delivered to it hereunder
for the purchase of Bonds as agent and bailee of, and in escrow for the
benefit of the person or entity which shall have so delivered such moneys
until Bonds purchased with such moneys shall have been delivered to or for the
account of such person or entity;
(iv) to hold all moneys delivered to it hereunder by the
Company for the purchase of Bonds as agent and bailee of, and in escrow for
the benefit of, the Bondowners who shall deliver Bonds to it for purchase
until the Bonds purchased with such moneys shall have been delivered to or for
the account of the Company; provided, however, that if the Bonds shall at any
time become due and payable and written notice thereof be furnished by the
Paying Agent to the Tender Agent, the Tender Agent shall deliver such moneys
other than amounts held for the benefit of Bondowners whose Bonds have been
deemed purchased to the Trustee or the Paying Agent, as the case may be, for
deposit into the Debt Service Fund; and
(v) to keep such books and records as shall be consistent
with prudent industry practice and to make such books and records available
for inspection by the Authority, the Trustee, the Remarketing Agent and the
Company.
(b) The Company shall cooperate with the Trustee, the Registrar,
the Tender Agent, the Remarketing Agent and the Authority to cause the
necessary arrangements to be made and to be thereafter continued whereby funds
from the sources specified herein will be made available for the purchase of
Bonds presented at the Principal Office of the Tender Agent, and otherwise to
enable the Tender Agent to carry out its duties hereunder.
51<PAGE>
Section 717. Qualification of Tender Agent.
(a) The Tender Agent shall be a corporation duly organized under
the laws of the United States of America or any state or territory thereof,
having a combined capital stock, surplus and undivided profits of at least
$30,000,000 and authorized by law to perform all the duties imposed upon it by
this Agreement. As long as the Bonds are rated by Moody's any successor
Tender Agent shall be a bank or trust company or other person whose debt
obligations shall be rated Baa3/P3 or higher by Moody's or be otherwise
acceptable to Moody's. The Tender Agent may at any time resign and be
discharged of the duties and obligations created by this Agreement by giving
at least sixty (60) days' notice to the Authority, the Trustee, the
Remarketing Agent, and the Company, provided that such resignation shall not
take effect until the appointment of a successor by the Company. The Tender
Agent may be removed at any time by the Company, by an instrument, signed by
an Authorized Officer of the Company, filed with the Tender Agent, the
Authority, the Trustee and the Remarketing Agreement.
(b) In the event of the resignation or removal of the Tender
Agent, the Tender Agent shall deliver any Bonds and moneys held by it in such
capacity to its successor. Upon any such resignation, the Company shall
promptly appoint a successor Tender Agent.
(c) In the event that the Company shall fail to appoint a Tender
Agent hereunder, or in the event that the Tender Agent shall resign or be
removed, or be dissolved, or if the property or affairs of the Tender Agent
shall be taken under the control of any state or federal court or
administrative body because of bankruptcy or insolvency, or for any other
reason, and the Company shall not have appointed a successor as Tender Agent,
the Trustee shall ipso facto be deemed to be the Tender Agent for all purposes
of this Agreement until the appointment by the Company of the Tender Agent or
successor Tender Agent, as the case may be.
Section 718. Appointment and Duties of Remarketing Agent.
(a) Prior to the first remarketing of the Bonds pursuant to this
Agreement the Company shall appoint the Remarketing Agent for the Bonds,
subject to the conditions set forth in Section 719. The Remarketing Agent
shall designate its Principal Office and signify its acceptance of the duties
and obligations imposed upon it hereunder by a written instrument of
acceptance delivered to the Authority, the Trustee, the Paying Agent, the
Tender Agent and the Company under which the Remarketing Agent will agree,
particularly:
(i) to hold all Bonds delivered to it for purchase
pursuant to Section 302(a) as agent and bailee of, and in escrow for the
benefit of the person or entity which shall have so delivered such Bonds until
moneys representing the purchase price of such Bonds shall have been delivered
to or for the account of or to the order of such person or entity;
(ii) to hold all moneys, other than moneys delivered to it
by the Company for the purchase of Bonds, delivered to it hereunder for the
purchase of Bonds as agent and bailee of, and in escrow for the benefit of,
the person or entity which shall have so delivered such moneys until the Bonds
52<PAGE>
purchased with such moneys shall have been delivered to or for the account of
such person or entity;
(iii) to hold all moneys delivered to it hereunder by the
Company for the purchase of Bonds as agent and bailee of, and in escrow for
the benefit of, the Bondowners who shall deliver Bonds to it for purchase
until the Bonds purchased with such moneys shall have been delivered to or for
the account of the Company; provided, however, that if the Bonds shall at any
time become due and payable, the Remarketing Agent shall cause such moneys to
be deposited into the Bond Payment Fund; and
(iv) to keep such books and records as shall be consistent
with prudent industry practice and to make such books and records available
for inspection by the Authority, the Trustee, the Tender Agent and the Company
at all reasonable times.
(b) The Authority, at the expense of the Company, and the
Company shall cooperate with the Trustee, the Registrar, the Paying Agent, and
the Remarketing Agent to cause the necessary arrangements to be made and to be
thereafter continued whereby Bonds, executed by the Authority and
authenticated by the Paying Agent, shall be made available to the Remarketing
Agent to the extent necessary for delivery pursuant to Section 314, and to
otherwise enable the Remarketing Agent to carry out its duties hereunder.
Section 719. Qualifications of Remarketing Agent.
(a) The Remarketing Agent shall be a member of the National
Association of Securities Dealers, Inc., having a capitalization of at least
$30,000,000 and authorized by law to perform all the duties imposed upon it by
this Agreement. The Remarketing Agent may at any time resign and be
discharged of the duties and obligations created by this Agreement by giving
at least sixty (60) days' notice to the Authority, the Trustee, the Paying
Agent, the Tender Agent and the Company. The Remarketing Agent may be removed
at any time by the Company, by an instrument, signed by an Authorized Officer
of the Company, filed with the Remarketing Agent, the Authority, the Trustee,
the Tender Agent and the Paying Agent.
(b) In the event of the resignation or removal of the
Remarketing Agent, the Remarketing Agent shall pay over, assign and deliver
any moneys and Bonds held by it in such capacity to its successor or, if there
be no successor, to the Paying Agent.
(c) In the event that the Company shall fail to appoint a
Remarketing Agent hereunder, or in the event that the Remarketing Agent shall
resign or be removed, or be dissolved, or if the property or affairs of the
Remarketing Agent shall be taken under the control of any state or federal
court or administrative body because of bankruptcy or insolvency, or for any
other reason, and the Company shall not have appointed its successor as
Remarketing Agent, the Paying Agent, notwithstanding the provisions of
Subsection 719(a), shall ipso facto be deemed to be the Remarketing Agent for
all purposes of this Agreement until the appointment by the Company of the
Remarketing Agent or successor Remarketing Agent, as the case may be;
provided, however, that the Paying Agent, in its capacity as Remarketing
Agent, shall not be required to remarket Bonds pursuant to Section 314 or
determine the interest rate on the Bonds pursuant to Section 301.
53<PAGE>
Section 720. Appointment and Duties of Registrar.
(a) The Company shall appoint the Registrar for the Bonds,
subject to the conditions set forth in Section 721. The Registrar shall
designate its Principal Office and signify its acceptance of the duties
imposed upon it hereunder by a written instrument of acceptance delivered to
the Company, the Authority, the Trustee and the Remarketing Agent under which
such Registrar will agree, particularly, to keep such books and records as
shall be consistent with prudent industry practice and to make such books and
records available for inspection by the Authority, the Trustee, the Paying
Agent, the Remarketing Agent and the Company at all reasonable times.
(b) The Authority, at the expense of the Company, and the
Company shall cooperate with the Trustee and the Paying Agent to cause the
necessary arrangements to be made and to be thereafter continued whereby
Bonds, executed by the Authority and authenticated by the Paying Agent, shall
be made available for exchange, registration and registration of transfer at
the Principal Office of the Registrar. The Authority, at the expense of the
Company, and the Company shall cooperate with the Trustee, the Paying Agent,
the Registrar and the Remarketing Agent to cause the necessary arrangements to
be made and thereafter continued whereby the Paying Agent, any Co-Paying Agent
and the Remarketing Agent shall be furnished such records and other
information at such times, as shall be required to enable the Paying Agent,
such Co-Paying Agent and the Remarketing Agent to perform the duties and
obligations imposed upon them hereunder.
Section 721. Qualifications for Registrar.
(a) The Registrar shall be a corporation duly organized under
the laws of the United States of America or any state or territory thereof,
having a combined capital stock, surplus and undivided profits of at least
$30,000,000 and authorized by law to perform all the duties imposed upon it by
this Agreement. The Registrar may at any time resign and be discharged of the
duties and obligations created by this Agreement by giving at least sixty (60)
days' notice to the Authority, the Trustee and the Company. The Registrar may
be removed at any time by the Company, by an instrument signed by an
Authorized Officer of the Company, filed with the Authority, the Registrar,
the Paying Agent, the Remarketing Agent and the Trustee.
(b) In the event of the resignation or removal of the Registrar,
the Registrar shall deliver any bonds held by it in such capacity to its
successor or, if there be no successor, to the Trustee.
(c) In the event that the Company shall fail to appoint a
Registrar hereunder, or in the event that the Registrar shall resign or be
removed, or be dissolved, or if the property or affairs of the Registrar shall
be taken under the control of any state or federal court or administrative
body because of bankruptcy or insolvency, or for any other reason, and the
Company shall not have appointed its successor as Registrar, the Trustee shall
ipso facto be deemed to be the Registrar for all purposes of this Agreement
until the appointment by the Company of the Registrar or successor Registrar,
as the case may be.
Section 722. Entities Serving in More Than One Capacity. Anything in
this Agreement to the contrary notwithstanding, the same entity may serve
54<PAGE>
hereunder as the Trustee, the Paying Agent or a Co-Paying Agent, the
Registrar, the Tender Agent and the Remarketing Agent and in any other
combination of such capacities, to the extent permitted by law.
ARTICLE VIII: SECURITY FOR AND INVESTMENT OF MONEY.
Section 801. All Money Held In Trust. All money from time to time
received by the Trustee or the Paying Agent and held any fund created under
this Agreement, or otherwise, shall be held in trust by the Trustee and the
Paying Agent, as the case may be, for the benefit of the holders from time to
time of the Bonds entitled to be paid therefrom, subject to the provisions of
Section 303.
Section 802. Permitted Investments.
(a) Money on deposit to the credit of the Construction Fund or
the Debt Service Fund may be retained uninvested and on deposit in fully
secured demand deposit accounts as trust funds, but upon written direction (or
telephonic direction promptly confirmed in writing) of an Authorized Officer
of the Company, or a designee thereof, or if the Company is in default under
this Agreement, an Officer's Certificate, from time to time so directing, such
money shall be invested in Permitted Investments, maturing or marketable prior
to the maturities thereof, at such time or times as to enable disbursements to
be made from the Construction Fund or the Debt Service Fund.
(b) For the purpose of determining the amount of money in each
Fund, the securities therein shall be valued at their cost or market,
whichever is lower. The interest, including realized discount, if any, on
securities purchased, received on all such securities (after deduction for
accrued interest and premium paid from such Fund at the time of purchase)
shall be deposited to the Fund of which such securities are a part. Neither
the Trustee nor the Paying Agent shall be liable or responsible for any loss
resulting from any such investment as herein authorized. If at any time it
shall become necessary that some or all of the securities purchased with the
money in such Fund be redeemed or sold in order to raise money necessary to
comply with the provisions of this Agreement, the Trustee or the Paying Agent,
as the case may be, shall, without further authorization than is hereby
contained, effect such redemption or sale, employing, in the case of a sale,
any commercially reasonable method of effecting the same.
Section 803. Balance After Bonds Have Been Paid. Any balance in any of
the Funds created under this Agreement or otherwise held by the Trustee or the
Paying Agent after all the Bonds issued hereunder and secured hereby have been
paid in full, or provision for payment in full thereof have been made, and all
amounts due to the Trustee and the Paying Agent, the Remarketing Agent, the
Tender Agent and the Authority have been paid, shall be paid over to the
Company upon such indemnification, if any, as the Authority, the Paying Agent,
the Remarketing Agent, the Tender Agent or the Trustee may reasonably require.
Should the holders of any Bonds fail or neglect to present their Bonds for
payment within one year from the date such Bonds become due and payable,
whether by redemption or at maturity, the Trustee or the Paying Agent, as the
case may be, shall, at the end of such period, remit to the Company in trust
for the holders of the Bonds the money then held for such Bonds; and the
55<PAGE>
holders of such Bonds shall thereafter have recourse only to the Company for
payment therefor.
ARTICLE IX: DEFAULT AND REMEDIES.
Section 901. Events of Default. An "Event of Default" in this
Agreement means any one of the events set forth below and "default" means any
Event of Default without regard to any lapse of time or notice.
(a) Debt Service on Bonds; Required Purchase. Any principal of,
premium, if any, or interest on any Bond shall not be paid when due, whether
at maturity, by acceleration, upon redemption or otherwise or any purchase
price for Bonds shall not be paid, as provided in Sections 301, 303, 311 or
313.
(b) First Mortgage Bonds. First Mortgage Bonds shall have been
delivered in connection with the Bonds and a "default" as defined in Section
12.01 of the First Mortgage shall have occurred and be continuing.
(c) Other Obligations. The Company or the Authority shall fail
to observe and perform any covenant, condition, agreement or provisions (other
than as specified in clause (a) of this Section 901) contained in the Bonds or
in this Agreement on the part of the Company or the Authority to be observed
or performed, which failure shall continue for a period of ninety (90) days
after written notice, specifying such failure and requesting that it be
remedied, shall have been given to the Company and the Authority by the
Trustee, which may give such notice in its discretion and shall give such
notice at the written request of Bondowners of not less than 25% in principal
amount of the Bonds then outstanding, unless the Trustee and Bondowners of a
principal amount of Bonds not less than the principal amount of the Bonds the
Bondowners of which requested such notice, as the case may be, shall agree in
writing to an extension of such period prior to its expiration; provided
however, that the Trustee and the Bondowners of such principal amount of
Bonds, as the case may be, shall be deemed to have agreed to an extension of
such period if corrective action is initiated by the Authority or the Company
on behalf of the Authority within such period and is being diligently pursued.
(d) Appointment of Receiver. A trustee, receiver, custodian or
similar official or agent shall be appointed for the Company or for any
substantial part of its property and such trustee or receiver shall not be
discharged within sixty (60) days.
(e) Voluntary Bankruptcy. The Company shall commence a
voluntary case under the federal bankruptcy laws, or shall make an assignment
for the benefit of creditors, or shall apply for, consent to or acquiesce in
the appointment of, or taking possession by, a trustee, receiver, custodian or
similar official or agent for itself or any substantial part of its property.
(f) Involuntary Bankruptcy. The Company shall have an order or
decree for relief in an involuntary case under the federal bankruptcy laws
entered against it, or a petition seeking reorganization, readjustment,
arrangement, composition, or other similar relief as to it under the federal
bankruptcy laws or any similar law for the relief of debtors shall be brought
56<PAGE>
against it and shall be consented to by it or shall remain undismissed for
sixty (60) days.
Upon the occurrence and continuance of any Event of Default described in
clauses (a), (b), (c) or (d) of the preceding paragraph and further upon the
condition that if any First Mortgage Bonds shall have been delivered, and all
First Mortgage Bonds outstanding under the First Mortgage shall have become
immediately due and payable in accordance with the terms of the First
Mortgage, the Trustee may, and at the written request of Bondowners of not
less than 25% in principal amount of Bonds then outstanding shall, by written
notice to the Authority and to the Company declare the Bonds to be immediately
due and payable, whereupon, and upon the occurrence of an Event of Default as
specified in clauses (e) and (f) of the preceding paragraph without any
further notice or action by the Trustee or the Authority, the Bonds shall,
without further action, become and be immediately due and payable, anything in
this Agreement or the Bonds to the contrary notwithstanding, and the Trustee
shall give notice of acceleration to the Authority, the Paying Agent, the
Tender Agent and the Remarketing Agent, and shall give notice thereof by mail
to the Bondowners.
The provisions of the preceding paragraph, however, are subject to the
condition that if, after the principal of the Bonds shall have been so
declared to be due and payable, and before any judgment or decree for the
payment of moneys due shall have been obtained or entered as hereinafter
provided, the Company or the Authority shall cause to be deposited with the
Trustee a sum sufficient to pay all matured installments of interest upon all
Bonds and the principal of any and all Bonds which shall have become due
otherwise than by reason of such declaration (with interest upon such
principal at the rate per annum specified herein) and such amounts as shall be
sufficient to cover reasonable compensation and reimbursement of expenses
payable to the Trustee and the Paying Agent, and all Events of Default
hereunder other than nonpayment of the principal of Bonds which shall have
become due by said declaration shall have been remedied, then, in every such
case, such Event of Default shall be deemed waived and such declaration and
its consequences rescinded and annulled, and the Trustee shall promptly give
written notice of such waiver, rescission or annulment to the Authority, the
Company, the Paying Agent, the Tender Agent and the Remarketing Agent, and
shall give notice thereof to the Bondowners; but no such waiver, rescission
and annulment shall extend to or affect any subsequent Event of Default or
impair any right or remedy consequent thereon; provided however that if any
First Mortgage Bonds shall have been delivered in connection with the Bonds,
any waiver of a "default" under the First Mortgage and a rescission and
annulment of its consequences shall constitute a waiver of the corresponding
Event of Default under this Agreement and a rescission and annulment of the
consequences thereof, and the Trustee shall promptly give written notice of
such waiver, rescission and annulment to the Authority and the Company, and
notice to the Bondowners in the same manner as a notice of redemption under
Section 303; but no such waiver, rescission and annulment shall extend to or
affect any subsequent default or Event of Default or impair any right or
remedy consequent thereon.
Section 902. Trustee May Institute Suits. Upon the happening of any
Event of Default, the Trustee shall have the power to, but unless requested in
writing by the holders of 25% in aggregate principal amount of the Bonds then
outstanding and furnished with satisfactory security and indemnity shall be
57<PAGE>
under no obligation to, institute and maintain such suits and proceedings as
it may be advised by Counsel shall be necessary or expedient to prevent any
impairment of the security under this Agreement and such suits and proceedings
as the Trustee may be advised by Counsel shall be necessary or expedient to
preserve or protect its interests and the interests of the Bondowners.
Section 903. Remedies on Events of Default.
(a) Upon the occurrence of an Event of Default and the giving of
satisfactory indemnification under Section 701, the Trustee may proceed to
pursue any available remedy to enforce the payment of the principal of,
premium, if any, and interest on the Bonds then outstanding, including,
without limitation, mandamus and as the holder of First Mortgage Bonds, if
any.
(b) Upon the happening and continuance of any Event of Default,
then and in every case the Trustee may proceed, and upon the written request
of the holders of not less than 25% in aggregate principal amount of the Bonds
then outstanding and the giving of satisfactory indemnification under Section
701 shall proceed, to protect and enforce its rights, and by suits, actions or
special proceedings in equity or at law, or by proceedings in the office of
any board or officer having jurisdiction, whether for the specific performance
of any covenant or agreement contained in this Agreement or in aid of the
execution of any power granted herein or for the enforcement of any legal or
equitable right or remedy as the Trustee, being advised by Counsel, shall deem
most effectual to protect and enforce such rights or to perform any of its
duties under this Agreement.
(c) If an Event of Default shall have occurred, and if requested
to do so by the holders of not less than 25% in aggregate principal amount of
the Bonds then outstanding and satisfactorily indemnified, the Trustee shall
be obligated to exercise such one or more of the rights and powers conferred
by this section and by Section 902 and 905 as the Trustee, being advised by
Counsel, shall deem most expedient in the interest of the Bondowners.
(d) No remedy by the terms of this Agreement conferred upon or
reserved to the Trustee (or to the Bondowners) is intended to be exclusive of
any other remedy, but each and every remedy shall be cumulative and shall be
in addition to any other remedy given to the Trustee or to the Bondowners
hereunder or now or hereafter existing by law.
(e) No delay or omission to exercise any right or power accruing
upon any default or Event of Default shall impair any such right or power or
shall be construed to be a waiver of any such default or Event of Default or
acquiescence therein; and every such right and power may be exercised from
time to time and as often as may be deemed expedient.
(f) No waiver of any default or Event of Default hereunder,
whether by the Trustee or by the Bondowners, shall extend to or shall affect
any subsequent default or Event of Default or shall impair any rights or
remedies consequent thereon.
Section 904. Bondowners To Direct Trustee. Anything in this Agreement
to the contrary notwithstanding, the holders of a majority in aggregate
principal amount of Bonds then outstanding shall have the right, at any time,
58<PAGE>
by an instrument or instruments in writing executed and delivered to the
Trustee, to direct the method and place of conducting all proceedings to be
taken in connection with the enforcement of the terms and conditions of this
Agreement or for the appointment of a receiver or any other proceedings
hereunder; provided, however, that such direction shall not be otherwise than
in accordance with the provisions of law or of this Agreement and shall not,
in the opinion of the Trustee, unduly prejudice the rights of Bondowners who
are not in such majority. The Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the holders of a majority in aggregate principal amount of the
Bonds.
Section 905. Receiver for the Revenues of the Authority From the
Project. Upon the occurrence of an Event of Default, and upon the filing of a
suit or other commencement of judicial proceedings to enforce the rights of
the Trustee and of the Bondowners, the Trustee shall be entitled, as a matter
of right, to the appointment of a receiver or receivers of the Revenues of the
Authority from the Project, pending such proceedings, with such powers as the
court making such appointment shall confer, to the extent permitted by law.
Section 906. Application of Moneys. All money received by the Trustee
pursuant to any right given or action taken under the provisions of this
Article shall be applied first to the payment of the costs and expenses of the
proceedings resulting in the collection of such money and of the
Administrative Expenses, liabilities and advances incurred or made by the
Trustee, the Paying Agent, the Registrar or the Authority hereunder except as
a result of its gross negligence or willful misconduct. The balance of such
money, after providing for the foregoing, shall be deposited by the Trustee in
the Debt Service Fund and all money in the Debt Service Fund shall be applied
as follows:
(a) Unless the principal of all the Bonds shall have become or
shall have been declared due and payable, all such money shall be applied:
FIRST: To the payment to the persons entitled thereto of all
installments of interest then due on the Bonds, in the order of maturity
of the installments of such interest and, if the amount available shall
not be sufficient to pay in full any particular installment, then to the
payment ratably, according to the amounts due on such installment, to
the persons entitled thereto, without any discrimination or privilege;
and
SECOND: To the payment to the persons entitled thereto of the
unpaid principal of and premium, if any, on any of the Bonds which shall
have become due (other than Bonds called for redemption for the payment
of which money is held pursuant to the provisions of this Agreement), in
the order of their due dates, with interest on such Bonds at the rate
provided in Section 910 from the respective dates upon which they become
due, and if the amount available shall not be sufficient to pay in full
Bonds due on any particular date, together with such interest, then to
the payment, ratably, according to the amount of principal of, and
premium, if any, due on such date, to the persons entitled thereto
without any discrimination or privilege.
59<PAGE>
(b) If the principal of all the Bonds shall have become due or
shall have been declared due and payable, all such money shall be applied to
the payment of the principal, premium, if any, and interest then due and
unpaid upon the Bonds, without preference or priority of principal over
interest or of interest over principal, or of any installment of interest over
any other installment of interest, or of any Bond over any other Bond,
ratably, according to the amounts due respectively for principal, premium, if
any, and interest to the persons entitled thereto without discrimination or
privilege.
(c) If the principal of all the Bonds shall have been declared
due and payable, and if such declaration shall thereafter have been rescinded
and annulled under the provisions of Section 910, then subject to the
provisions of paragraph (b) of this Section in the event that the principal of
all the Bonds shall later become due or be declared due and payable, the money
shall be applied in accordance with the provisions of paragraph (a) of this
Section.
(d) Whenever money is to be applied pursuant to the provisions
of this section, such moneys shall be applied at such times, and from time to
time, as the Trustee shall determine, having due regard to the amount of such
money available for application and the likelihood of additional money
becoming available for such application in the future. Whenever the Trustee
shall apply such funds, it shall fix the date (which shall be an interest
payment date unless it shall deem another date more suitable) upon which such
application is to be made, and upon such date interest on the amounts of
principal to be paid on such date shall cease to accrue. The Trustee shall
give such notice as it may deem appropriate of the deposit with it of any such
money and of the fixing of any such date, and shall not be required to make
payment to the holder of any Bond until such Bond shall be presented to the
Trustee for appropriate endorsement or for cancellation if fully paid.
(e) Whenever all the Bonds and interest thereon have been paid
under the provisions of this Section 906 and all expenses and charges of the
Trustee and the Authority have been paid, any balance remaining in the Debt
Service Fund shall be paid as provided in Section 803.
Section 907. Trustee as Representative of the Bondowners. All rights
of action (including the right to file proofs of claim under this Agreement or
under any of the Bonds) may be enforced by the Trustee without the possession
of any of the Bonds or the production thereof in any trial or other
proceedings relating thereto, and any such suit or proceedings instituted by
the Trustee shall be brought in its name as Trustee without the necessity of
joining as plaintiffs or defendants any Bondowners. Any recovery of judgment
shall be for the equal and ratable benefit of the Bondowners.
Section 908. Enforcement by Bondowners.
(a) No Bondowners shall have any right to institute any suit,
action or proceeding for the enforcement of any covenant or provisions of this
Agreement or for the appointment of a receiver or any other remedy thereunder,
unless (i) a default has occurred of which the Trustee has been notified as
provided in subsection (h) of Section 701, or of which by said subsection it
is deemed to have notice; (ii) such default shall have become an Event of
Default; (iii) the holders of not less than 25% in aggregate principal amount
60<PAGE>
of Bonds then outstanding shall have made written request to the Trustee and
shall have offered reasonable opportunity either to proceed to exercise the
powers hereinbefore granted or to institute such action, suit or proceeding in
the Trustee's name and shall have offered to the Trustee security or indemnity
as provided in Section 701; and (iv) the Trustee shall thereafter fail or
refuse to exercise the powers hereinbefore granted or to institute such
action, suit or proceeding in its own name. Such notification, request and
offer of security or indemnity are hereby declared in every case at the option
of the Trustee to be conditions precedent to the execution of the powers and
trusts of this Agreement, and to any action or cause of action for the
enforcement of this Agreement, or for the appointment of a receiver or for any
other remedy hereunder, it being understood and intended that no one or more
holders of the Bonds shall have any right in any manner whatsoever to enforce
any right hereunder except in the manner herein provided, and that all
proceedings shall be instituted and maintained in the manner herein provided
and for the equal and ratable benefit of the holders of all Bonds then
outstanding.
(b) Nothing in this Agreement contained shall, however, affect
or impair any right to enforcement otherwise conferred on any Bondowner by law
or the right of any Bondowner to enforce the payment of the principal of,
premium, if any, and interest on any Bond at and after the maturity thereof,
or the obligation of the Authority to pay the principal of, premium, if any,
and interest on each of the Bonds issued hereunder to the respective holders
thereof at the time, place, and the source and in the manner in said Bonds and
this Agreement expressed.
Section 909. Rights To Continue. In case the Trustee shall have
proceeded to enforce any right under this Agreement by the appointment of a
receiver or otherwise, and such proceedings shall have been discontinued or
abandoned for any reason, or shall have been determined adversely, then and in
every such case the Authority, the Trustee and the Bondowners shall be
restored to their former positions and rights hereunder, and all rights,
remedies and powers of the Trustee shall continue as if no such proceedings
had been taken.
Section 910. Waivers of Default. To the extent not precluded by law
the Trustee may, in its discretion, waive any default or Event of Default
hereunder and its consequences and rescind any declaration of maturity of
principal, and shall do so upon the written request of the holders of not less
than a majority in aggregate principal amount of all the Bonds then
outstanding; provided, however, that there shall not be waived (a) any Event
of Default in the payment of the principal, if any, of any Outstanding Bonds
at the date of maturity specified therein or the date fixed for redemption
thereof, (b) any default or Event of Default in the payment when due of
interest on any such Bonds, or (c) any Event of Default in the payment of the
purchase price of the Bonds at the date fixed for the purchase thereof unless
prior to such waiver or rescission, all arrears of interest, and all arrears
of payment of principal or purchase price then due, as the case may be,
together with interest (to the extent permitted by law), at the rate per annum
borne by any of the Bonds, on overdue principal, purchase price and interest,
and all Administrative Expenses of the Trustee, the Paying Agent, and the
Remarketing Agent in connection with such default shall have been paid or
provided for, and in case of any such waiver or rescission, then and in every
such case the Authority, the Trustee and the Bondowners shall be restored to
61<PAGE>
their former positions and rights hereunder, respectively, but no such waiver
or rescission shall extend to any subsequent or other default, or impair any
right consequent thereon.
Section 911. Agreement To Pay Attorneys' Fees and Expenses. In the
event the Company should default under any of the provisions of this Agreement
or the First Mortgage if any First Mortgage Bonds shall have been delivered to
the Trustee and the Authority should employ attorneys or incur other expenses
for the collection of any amounts due from the Company hereunder or the
enforcement of performance or observance of any obligation or agreement of the
Company herein contained, the Company agrees that it will on demand therefor
pay to the Authority the reasonable fees of such attorneys and such other
reasonable expenses so incurred by the Authority.
Section 912. Remedies in Article IX in Addition to Remedies in the
First Mortgage. The remedies conferred in this Article shall be in addition
to any remedies available to the Trustee as holder of the First Mortgage
Bonds, if any, under the First Mortgage.
ARTICLE X: THE BONDOWNERS.
Section 1001. Action by Bondowners.
(a) Any request, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Bondowners may be contained in and evidenced by one or more writings of
substantially the same tenor signed by the requisite number of Bondowners or
their attorneys duly appointed in writing. Proof of the execution of any such
instrument, or of an instrument appointing any such attorney, shall be
sufficient for any purpose of this Agreement (except as otherwise herein
expressly provided) if made as provided in this section, but the Authority or
the Trustee may nevertheless in its discretion require further or other proof
in cases where it deems the same desirable.
(b) The fact and date of the execution by any Bondowner or his
or her attorney of such instrument may be proved by the certificate, which
need not be acknowledged or verified, of an officer of a bank or trust company
satisfactory to the Authority or to the Trustee or of any notary public or
other officer authorized to take acknowledgements of deeds to be recorded in
the state in which he purports to act, that the person signing such request or
other instrument acknowledged to him or her the execution thereof, or by an
affidavit of a witness of such execution, duly sworn to before such notary
public or other officer. The authority of the person or persons executing any
such instrument on behalf of a corporate Bondowner may be established without
further proof if such instrument is signed by a person purporting to be the
president or a vice president of such corporation with a corporate seal
affixed and attested by a person purporting to be its clerk or secretary or an
assistant clerk or secretary.
Section 1002. Ownership of Bonds. The ownership of Bonds and the
amount, numbers and other identification, and date of holding the same shall
be proved by the registry books for the Bonds maintained by the Paying Agent.
62<PAGE>
ARTICLE XI: SUPPLEMENTAL AGREEMENTS.
Section 1101. Supplemental Agreements Without Consent or Notice to
Bondowners. The Authority, the Company and the Trustee may without the
consent of, or notice to, any of the Bondowners, enter into an agreement or
agreements supplemental to this Agreement for any one or more of the following
purposes:
(a) To add to the covenants and agreements of the Authority or
the Company contained in this Agreement other covenants and agreements
thereafter to be observed, and to surrender any right or power herein reserved
to or conferred upon the Authority or the Company.
(b) To modify any of the provisions of this Agreement or release
the Authority from any of the obligations, conditions, or restrictions herein
contained; provided that no such modification or release shall be or become
operative or effective which shall in any manner impair any of the rights of
the Bondowners or the Trustee; and provided further, that the Trustee may in
its sole discretion decline to enter into any such supplemental indenture
which in its opinion may not afford adequate protection to the Trustee when
the same shall become operative.
(c) To cure any ambiguity or to cure, correct, or supplement any
defect or inconsistent provision contained in this Agreement or in any
supplemental agreement in a manner which, in the opinion of bond counsel of
nationally recognized standing, is not adverse to the interest of the
Bondowners.
(d) To make such provision in regard to matters or questions
arising under this Agreement as may be necessary or desirable and not
inconsistent with this Agreement and not, in the opinion of bond counsel of
nationally recognized standing, adverse to the interests of the Bondowners.
(e) To comply with the requirements of the Trust Indenture Act
of 1939, as from time to time amended.
(f) To change the method of determining any interest rate or
Interest Rate Period in a manner not to the prejudice of the Trustee or the
Bondowners.
(g) To change the conversion notice periods and related purchase
procedures in a manner not to the prejudice of the Trustee or the owners of
the Bonds.
(h) To make any change which is required by Moody's, Duff &
Phelps or S&P in order to obtain or maintain a rating of the Bonds.
(i) To make any other change which, in the opinion of bond
counsel of nationally recognized standing, does not materially adversely
affect the rights of the Authority or any Bondowner.
63<PAGE>
Section 1102. Supplemental Agreements With Consent of Majority of
Bondowners.
(a) Exclusive of supplemental agreements covered by Section 1101
and subject to the terms and provisions contained in this Section 1102, and
not otherwise, the holders of not less than a majority in aggregate principal
amount of the Bonds then outstanding shall have the right, from time to time,
anything contained in this Agreement to the contrary notwithstanding, to
consent to and approve the execution by the Company, the Authority and the
Trustee of such other agreement or agreements supplemental hereto as shall be
deemed necessary and desirable by the Company for the purpose of modifying,
altering, amending, adding to or rescinding, in any particular, any of the
terms or provisions contained in this Agreement or in any supplemental
agreement; provided, however that nothing in this Agreement contained shall
permit, or be construed as permitting without the consent of the holders of
all the Bonds then outstanding affected thereby (i) an extension of the
maturity of the principal of or premium, if any, or the interest on or
redemption date of any Bond issued hereunder, or a change in the terms of the
purchase of Bonds delivered pursuant to Section 302, (ii) a reduction in the
principal or premium thereon, or a change in the method of determining the
rate of interest thereon, (iii) a privilege or priority of any Bond or Bonds
over any other Bond or Bonds, (iv) a reduction in the aggregate principal
amount of the Bonds required for consent to such modification, amendment or
supplemental agreement, or (v) impairment of the exclusion from federal income
taxation of interest on any of the outstanding Bonds.
(b) If at any time the Authority or the Company shall request
the Trustee to enter into such supplemental agreement for any of the purposes
of this Section 1102, the Trustee shall, upon being satisfactorily indemnified
with respect to expense, cause notice of the proposed execution of such
supplemental agreement to be given in the manner set forth in Section 303 and
shall give notice to the Remarketing Agent of the proposed execution of such
supplemental agreement. Such notice shall briefly set forth the nature of the
proposed supplemental agreement and shall state that copies thereof are on
file at the designated office of the Trustee for inspection by all Bondowners.
If, within sixty (60) days or such longer period as shall be prescribed by the
Company following the giving of such notice, the holders of not less than a
majority in aggregate principal amount of the Bonds outstanding shall have
consented to and approved the execution thereof as herein provided, no holder
of any Bond shall have any right to object to any of the terms and provisions
contained therein, or the operation thereof, or in any manner to question the
propriety of the adoption thereof, or to enjoin or restrain the Trustee, the
Company or the Authority from taking any action pursuant to the provision
thereof. Upon the execution of any such supplemental agreement as in this
Section 1102 permitted and provided, this Agreement shall be and be deemed to
be modified and amended in accordance therewith.
Section 1103. Consents by Trustee, Tender Agent, Etc. Anything herein
to the contrary notwithstanding, a supplemental agreement under this Article
XI which affects any rights or duties of the Trustee, the Tender Agent, the
Paying Agent or Co-Paying Agent, the Registrar or the Remarketing Agent shall
not become effective unless and until the Trustee, Tender Agent, Paying Agent
or Co-Paying Agent, Registrar or Remarketing agent, as the case may be, shall
have consented in writing to the execution of such supplemental agreement.
64<PAGE>
Section 1104. Notice of Amendments to Rating Agencies. Notice of any
amendment to this Agreement shall be sent by the Trustee to Moody's, if the
Bonds are then rated by Moody's, to S&P, if the Bonds are then rated by S&P,
and to any other rating agency if the Bonds are, at the request of the
Company, rated by such rating agency, at their respective addresses furnished
by such rating agency to the Trustee.
ARTICLE XII: MISCELLANEOUS.
Section 1201. Notices.
(a) All notices, certificates, requests, complaints, demands, consents and
other communications hereunder shall be deemed sufficiently given or filed for
all purposes of this Agreement if and when sent by registered mail, return
receipt requested: to the Authority, if addressed to the Polk County
Industrial Development Authority, P.O. Box 9005, Drawer AT01, 330 West Church
Street, Bartow, Florida 33831-9005; Attention: Chairman; to the Company, if
addressed to Tampa Electric Company, Post Office Box 111, Tampa, Florida
33601, Attention: Corporate Secretary; to the Trustee, if addressed to The
Bank of New York, Towermarc Plaza, 10161 Centurion Parkway, Jacksonville,
Florida 32256, Attention: Corporate Trust Department; to the Paying Agent and
Tender Agent, if addressed to The Bank of New York, 101 Barclay Street, 7th
Floor, New York, New York 10286, Attention: Fiscal Agencies Department; or, as
to all of the foregoing, to such other address as the addressee shall have
indicated by prior written notice to the one giving notice. All notices to a
Bondowner shall be in writing and shall be deemed sufficiently given if sent
by mail, postage prepaid, to the Bondowner at the address shown on the
registration books for the Bonds maintained by the Paying Agent. A Bondowner
may direct the Paying Agent to change its address as shown on the registration
books by written notice to the Paying Agent.
(b) Notice hereunder may be waived prospectively or
retrospectively by the person entitled to the notice, but no waiver shall
affect any notice requirement as to other persons.
(c) All documents received by the Trustee under the provisions
of this Agreement, or photographic copies thereof, shall be retained in its
possession until this Agreement shall be released under the provision of this
Agreement, subject at all reasonable times to the inspection of the Authority,
the Company, any Bondowner and any agent or representative thereof.
Section 1202. Successors and Assigns. The rights and obligations of
the parties to this Agreement shall inure to their respective successors and
assigns.
Section 1203. Agreement Not for the Benefit of Other Parties. Except
as otherwise expressly provided herein, this Agreement is not intended for
the benefit of and shall not be construed to create rights in parties other
than the Company, the Authority, the Trustee and the Bondowners.
Section 1204. No Recourse Against Authority. No recourse under or upon
any obligations, covenants or agreement of this Agreement, or of any Bond, or
in any way based thereon or otherwise in respect thereof, shall be had against
any past, present or future member or officer, as such, of the Authority or
any successor body politic, either directly or through the Authority, whether
65<PAGE>
by virtue of any constitution, statute or rule of law, or by the enforcement
of any assessment or penalty or otherwise, all such liability being hereby
expressly waived and released as a conclusion of and as consideration for, the
execution of this Agreement and the issue of the Bonds.
Section 1205. Payments Due, Conversion Dates or Notices on Nonbusiness
Days.
(a) If the date for any payment on the Bonds at a place of
payment shall be other than a Business Day, then payment shall be made on the
next succeeding Business Day, and no interest shall accrue for the intervening
period other than as specifically provided for herein. If any Conversion Date
is other than a Business Day, then actions, other than the giving of notices,
required to be taken under Article III on any such date with respect to the
tender of Bonds, the placement of Bonds and the purchase of Bonds shall not be
taken on that date but shall be taken on the next succeeding Business Day with
the same force and effect as if made on such Conversion Date, and, in the case
of any purchase and placement of Bonds that takes place on that next
succeeding Business Day, interest on those Bonds shall accrue for the benefit
of the new Bondowner from the Conversion Date.
(b) In the event any date required for the giving of any notice
under this Agreement (including without limitation any notice of Bondowner
election and surrender of Bonds) is not a Business Day, such notice shall be
given on the next preceding Business Day.
Section 1206. Severability. In the event that any provision of this
Agreement shall be held to be invalid in any circumstance, such invalidity
shall not affect any other provisions or circumstances.
Section 1207. Counterparts. This Agreement may be executed and
delivered in any number of counterparts, each of which shall be deemed to be
an original, but such counterparts together shall constitute one and the same
instrument.
Section 1208. Captions. The captions and table of contents of this
Agreement are for convenience only and shall not affect the construction
hereof.
Section 1209. Florida Law to Govern. This Agreement and each Bond
shall be deemed to be a contract made under the laws of the State and for all
purposes shall be construed in accordance with the laws of the State.
Section 1210. Time. All references to time of day in this Agreement
are references to New York, New York time.
66<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed under seal all as of the date first above written.
POLK COUNTY INDUSTRIAL
(Official Seal) DEVELOPMENT AUTHORITY
Attest:
By:_______________________________
Title: Chairman
____________________________
Assistant Secretary
(Corporate Seal) TAMPA ELECTRIC COMPANY
Attest:
By:________________________________
Title:
___________________________
Secretary
(Corporate Seal) THE BANK OF NEW YORK, as Trustee
Attest:
By:________________________________
Title: Authorized Agent
___________________________
67<PAGE>
STATE OF FLORIDA )
) ss.:
COUNTY OF POLK )
The foregoing instrument was acknowledged before me this ____ day
of December, 1996, by George W. Harris, Jr., personally known to me, the
Chairman of the Polk County Industrial Development Authority, the public body
corporate and politic and public instrumentality described in and which
executed the above instrument.
_______________________________
Notary Public
[NOTARIAL SEAL] My commission expires:
STATE OF FLORIDA )
) ss.:
COUNTY OF POLK )
The foregoing instrument was acknowledged before me this ____ day
of December, 1996, by Joseph B. Tedder, personally known to me, the Assistant
Secretary of the Polk County Industrial Development Authority, the public body
corporate and politic and public instrumentality described in and which
executed the above instrument.
_______________________________
Notary Public
[NOTARIAL SEAL] My commission expires:
STATE OF FLORIDA )
) ss.:
COUNTY OF HILLSBOROUGH )
The foregoing instrument was acknowledged before me this ____ day
of December, 1996, by William L. Griffin, personally known to me, the Vice
President-Controller and Assistant Secretary of Tampa Electric Company, on
behalf of said corporation.
_______________________________
Notary Public
[NOTARIAL SEAL] My commission expires:
STATE OF FLORIDA )
) ss.:
COUNTY OF HILLSBOROUGH )
The foregoing instrument was acknowledged before me this ____ day
of December, 1996, by Roger H. Kessel, personally known to me, the Secretary
of Tampa Electric Company, on behalf of such corporation.
68<PAGE>
_______________________________
Notary Public
[NOTARIAL SEAL] My commission expires:
STATE OF FLORIDA )
) ss.:
COUNTY OF ____________ )
The foregoing instrument was acknowledged before me this ____ day
of December, 1996, by Sharon L. Atkinson, personally known to me, an
Authorized Agent of The Bank of New York, the New York corporation described
in and which executed the above instrument.
_______________________________
Notary Public
[NOTARIAL SEAL] My commission expires:
STATE OF FLORIDA )
) ss.:
COUNTY OF ____________ )
The foregoing instrument was acknowledged before me this ____ day
of December, 1996, by _____________________, personally known to me, a
__________________ of The Bank of New York, the New York corporation described
in and which executed the above instrument.
_______________________________
Notary Public
[NOTARIAL SEAL] My commission expires:
69<PAGE>
EXHIBIT A
PROJECT DESCRIPTION
The Project collects, processes, stores and disposes of waste slag and
coal handling solid wastes associated with the Company's integrated coal
gasification combined cycle power plant located in southwest Polk County. The
facilities include the following:
Coal Gasifier Slag Disposal Facility
The Coal Gasifier Slag Disposal Facility collects, processes, stores and
disposes of waste slag. The facility includes the slag pond, slag crusher,
lockhopper, drag conveyor, pumps, dewatering area, slag storage area,
filtration pumps, evaporation system, grey and black water systems, cooling
systems and related mechanical, electrical and associated structures.
Coal Handling Solid Wastes Disposal Facility
The Coal Handling Solid Waste Disposal Facility collects, stores and
disposes of coal handling solid wastes. The primary components of the Coal
Handling Solid Waste Disposal Facility include a magnetic separator, metal
detector, coal slurry waste collectors and related mechanical, electrical and
associated structures.
Industrial Wastewater Treatment Solid Waste Facility
The Industrial Wastewater Treatment Solid Waste Facility processes,
stores and disposes of solid wastes removed from the industrial waste water
treatment facility. The Industrial Wastewater Treatment System treats all
potentially contaminated wastewater systems. The primary components of the
Industrial Wastewater Treatment Solid Waste Facility include the clarifier
basin and rake mechanism, sludge recycle pumps, sludge transfer pumps, sludge
thickening tank, filter press feed pumps, filter press, filter cake bins,
filtrate tank, filtrate pump and related mechanical, electrical and associated
structures.
70<PAGE>
TECO ENERGY GROUP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
1996 Amendment and Restatement
SECTION 1. PURPOSE AND EFFECTIVE DATE
The purpose of this plan is to provide key executives of the Company and
its subsidiaries with additional retirement income by supplementing the
retirement benefits provided under the retirement plan. The effective date of
this plan as herein amended and restated is October 16, 1996.
SECTION 2. DEFINITIONS
This section contains definitions of terms used in the plan. Where the
context so requires, the masculine includes the feminine, the singular
includes the plural, and the plural includes the singular.
2.1 Annual earnings will have the same meaning as in the retirement
plan, except that the same will be determined without regard to (a) any dollar
limitation on such annual earnings that may be imposed under the retirement
plan or (b) any reduction in taxable income as a result of voluntary salary
reduction deferrals under the TECO Energy Group Retirement Savings Excess
Benefit Plan.
2.2 Average annual earnings of a participant as of his retirement date
means the average of his annual earnings during whichever of the following
periods yields the highest average: (a) the 36 consecutive months of active
employment preceding the retirement date (or all months of employment if less
than 36), or (b) any three consecutive calendar years out of the five calendar
years preceding the retirement date. Bonuses are included as compensation for
the period in which paid, provided that if more than three regular annual
bonuses are paid in any 36 consecutive month period, only the largest three
bonuses will be counted.
2.3 Board shall mean the Board of Directors of the Company.
2.4 Change in control of the company shall mean a change in control of
a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), whether or not the Company is in
fact required to comply therewith; provided, that, without limitation, such a
change in control shall be deemed to have occurred if:
(a) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
a corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock of
the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the Company's then
outstanding securities;
(b) during any period of 24 consecutive months (not including
any period prior to the effective date of this plan), individuals who at the
beginning of such period constitute the board and any new director (other than
a director designated by a person who has entered into an agreement with the
Company to effect a transaction described in paragraphs (a), (c) or (d) of
this Subsection 2.4) whose election by the board or nomination for election by
the stockholders of the company was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof;
or
(c) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (i) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) at least 50% of the combined voting securities of the
Company or such surviving entity outstanding immediately after such merger or
consolidation or (ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no "person"
(as hereinabove defined) acquires 30% or more of the combined voting power of
the Company's then outstanding securities; or
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
2.5 Committee means the retirement plan committee as constituted under
the retirement plan.
2.6 Company means TECO Energy, Inc. and any successor to all or a
major portion of its assets or business which assumes the obligations of the
Company under this plan.
2.7 Disability income plan means the TECO Energy Group Disability
Income Plan, as amended from time to time.
2.8 Early retirement age is exactly ten years before the age specified
in the table in Section 2.10.
2.9 Employer will have the same meaning as in the retirement plan.
2.10 Normal retirement age for purposes of this plan is exactly three
years before the age specified in the following table:
Calendar year
of birth Specified age
before 1938 65 exactly
1938 65 and 2 months
1939 65 and 4 months
1940 65 and 6 months
1941 65 and 8 months
1942 65 and 10 months
1943 through 1954 66 exactly
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
after 1959 67 exactly
2.11 Participant means each employee of an employer who has satisfied
the eligibility requirements set forth in Section 3 hereof.
2.12 Plan means the TECO Energy Group Supplemental Executive
Retirement Plan, as set forth in this plan instrument, and as it may be amended
from time to time.
2.13 Retirement means a participant's termination of employment from an
employer on or after (a) he has reached his normal retirement age, (b) he has
reached his early retirement age and completed five years of service, or (c) a
change in control of the Company has occurred.
2.14 Retirement plan means the TECO Energy Group Retirement Plan, as
amended from time to time.
2.15 Service will have the same meaning as "plan service" in the
retirement plan.
2.16 Social Security benefit of a participant as of his retirement date
(the "computation date") means the primary insurance amount to which he is or
would be entitled, payable under Title II of the Social Security Act as in
effect on such date, based on the assumptions: (a) that no changes in the
benefit levels payable or the wage base under Title II occur after the
computation date; (b) if the computation date falls on or after the date when
he reaches his early retirement age and before the date when he reaches his
normal retirement age, that his annual earnings during the calendar year in
which the computation date falls and any subsequent calendar year before the
year in which his normal retirement age falls is zero; (c) if the computation
date falls before the date when he reaches his early retirement age, that his
annual earnings during the calendar year in which the computation date falls
and during each subsequent calendar year before the calendar year in which his
normal retirement age falls is equal to his rate of annual earnings on the
computation date; (d) that payment of his primary insurance amount begins for
the month after he reaches normal retirement age, or his retirement date if
later, without reduction or delay because of future gainful employment or
delay in applying for benefits; and (e) that the participant's earnings for
calendar years before the calendar year in which the computation date falls
will be determined using his actual earnings history if available, and
otherwise by applying a six percent retrospective salary scale to the
employee's rate of annual earnings in effect on the computation date. The
social security benefit of a participant who retires after the age specified
in the table in Section 2.10 will include any delayed retirement credit.
2.17 Survivor income plan means the TECO Energy Group Survivor Income
Plan, as amended from time to time.
SECTION 3. PARTICIPATION
Any active employee of an employer who is elected as an officer by such
employer's board of directors is covered by this plan and is eligible to
receive benefits hereunder if he falls in one of the following categories,
provided that he is not covered by another supplemental executive retirement
plan or arrangement of the Company or any employer:
(a) he is in salary grade level five or above, and his participation
hereunder is requested by the Vice President - Human Resources and approved by
the Chief Executive Officer of the Company; or
(b) he is in a salary grade level below five, and his participation
hereunder is requested by the Vice President - Human Resources and approved by
the Chief Executive Officer of the Company and the Compensation Committee of
the Board.
SECTION 4. RETIREMENT BENEFITS
4.1 Retirement at or after normal retirement age. Subject to the
reductions described in Section 7.1 below, each eligible officer who retires
on or after attaining normal retirement age will receive a supplemental
monthly pension equal to one-twelfth of the following: three percent of his
average annual earnings multiplied by his years of service up to a maximum of
20 years. A participant's retirement benefit hereunder will be calculated
using his years of service and average annual earnings as of the actual date
of his retirement.
4.2 Retirement after early retirement age but before normal retirement
age. A participant who retires on or after attaining early retirement age but
before attaining normal retirement age and who has completed five years of
service will receive a supplemental monthly pension equal to one-twelfth of
the amount determined using the formula in Section 4.1 above, multiplied by an
early retirement factor determined under the following table:
Years by which the Early
start of payments precedes retirement
normal retirement age* factor
7 .65
6 .70
5 .75
4 .80
3 .85
2 .90
1 .95
*Interpolate for completed months.
Notwithstanding the foregoing, in the event of a change in control of
the Company a participant who subsequently retires on or after attaining early
retirement age but before normal retirement age will receive the benefits
provided under this Section 4.2 whether or not he has completed five years of
service.
4.3 Effect of change in control prior to attainment of early
retirement age. In the event of a change in control of the Company prior to
the attainment of early retirement age by any participant, such participant
will receive upon his retirement thereafter a supplemental monthly pension
equal to one-twelfth of the amount determined using the formula in Section 4.1
above, multiplied by an early retirement factor determined under the following
table:
<PAGE>
Years by which the Early
start of payments precedes retirement
normal retirement age* factor
30 .10
29 .11
28 .12
27 .13
26 .14
25 .15
24 .16
23 .17
22 .18
21 .20
20 .21
19 .23
18 .25
17 .27
16 .30
15 .32
14 .35
13 .38
12 .41
11 .45
10 .49
9 .54
8 .59
*Interpolate for completed months.
4.4 Form of Payment.
(a) Normal form of retirement benefits. The normal form of
retirement benefit payable to a participant under the plan is a life annuity.
Benefits payable in the normal form will begin on the first day of the month
coinciding with or next following the date of a participant's retirement.
(b) Optional lump sum benefit. In lieu of the normal form of
benefit, a participant may elect to receive payment of his benefit in the form
of a commuted single sum payment that is the actuarial equivalent of the
normal form of benefit (including the value of the post-retirement surviving
spouse benefit under Section 5.2(c)). Actuarial equivalence will be based on
the actuarial assumptions specified from time to time in the retirement plan
for lump sum payments. A participant's election to receive a lump sum payment
will be effective only with respect to a retirement occurring at least 12
months after the date the participant submits the election, provided that
elections submitted on or before May 1, 1997 will be immediately effective.
4.5 Enhanced benefits for certain retirees. Certain retirees have
been provided enhanced retirement benefits as set forth in Schedule A hereto.
SECTION 5. SURVIVING SPOUSE BENEFIT
5.1 Eligibility. The surviving spouse of a deceased participant will
receive the surviving spouse benefit if:
(a) the participant dies (i) during employment with an employer
on or after he has completed at least five years of service and his combined
age and years of service total 50 or more, or (ii) after retirement; and
(b) the spouse and the deceased participant were married to each
other for at least the 12 months preceding the participant's date of death
and, in the case of a participant who dies after retirement, were married to
each other on the participant's date of retirement.
5.2 Amount of surviving spouse benefit. Subject to the reductions
described in Section 7.2 below, the benefit provided under the plan to the
surviving spouse of a participant will be determined as follows.
(a) Pre-retirement before normal retirement age. If a
participant dies during employment with an employer and before his normal
retirement age, his surviving spouse will receive a monthly survivor income
payment equal to 50% percent of the participant's monthly projected retirement
benefit. A participant's monthly projected retirement benefit is the monthly
benefit he would have received at normal retirement age under Section 4.1
calculated using the number of years of service he would have had if he had
continued in employment with an employer until normal retirement age and his
average annual earnings determined as of his date of death.
(b) Pre-retirement on or after normal retirement age. If the
participant dies during employment with an employer on or after his normal
retirement age, his surviving spouse will receive a monthly survivor income
payment equal to 50 percent of his monthly retirement benefit earned under
Section 4.1 using his number of years of service and his average annual
earnings as of his date of death.
(c) Post-retirement. If a participant dies on or after his date
of retirement, his surviving spouse will receive a monthly survivor income
payment equal to 50 percent of the monthly benefit payment he was receiving at
his death (or would have received if he had survived until the first payment
date).
5.3 Form and time of surviving spouse benefit. Surviving spouse
benefits under this Section 5 will be payable only in the form of a life
annuity to the surviving spouse. Benefit payments will begin on the first day
of the month on or after the date of the participant's death.
5.4 Death benefit where lump sum paid. If a participant received a
lump sum payment of his benefit under Section 4.4(b), no surviving spouse
benefit or other death benefit will be payable under the plan to any person.
SECTION 6. DISABILITY
6.1 Service during disability. A participant who suffers a total
disability, as defined in the disability income plan, will continue to be
credited with service as if he were actively employed by an employer during
his period of total disability. If such a participant does not return to
active service with an employer, his benefit under Section 4 will be
calculated using his average annual earnings as of his disability date, his
total service including service credited under the preceding sentence, and his
primary social security benefit calculated as of the date of his disability.
6.2 Period of disability. A participant's date of disability is his
last day of work for his employer before becoming unable to continue working
because of his total disability. A period of total disability of a
participant will begin on his disability date and will end on the earlier of
the last day of the month in which his final disability income payment is due
under the disability income plan or on the date he retires hereunder and
starts receiving benefit payments.
6.3 Death while disabled. If a participant dies while disabled, his
surviving spouse will, if eligible, receive the pre-retirement surviving
spouse benefit determined under Section 5.2(a) or (b).
6.4 No duplication of benefits. A participant may not receive
benefits under this plan at any time when he is receiving disability income
benefits under the disability income plan.
SECTION 7. OFFSET FOR OTHER PAYMENTS
7.1 Retirement benefit offsets. The retirement benefit of a
participant will be reduced (but not below zero) by the following payments,
with such reductions starting when such benefits are assumed to begin: (a)
100% percent of the social security benefit of the participant assuming such
benefit begins on the later of his normal retirement age or his actual
retirement, and (b) the amount of his benefit payments under the retirement
plan (converted to a life annuity if such payments are in an optional form),
assuming such payments begin on the later of his early retirement age or his
actual retirement.
7.2 Death benefit offsets. The benefit of a surviving spouse will be
reduced (but not below zero) by the following payments: (a) payments under the
survivor income plan, and (b) payments under the retirement plan.
SECTION 8. BENEFITS NOT CURRENTLY FUNDED
8.1 No funding. Nothing in this plan will be construed to create a
trust or to obligate the Company or any other employer to segregate a fund,
purchase an insurance contract, or in any other way currently to fund the
future payment of any benefits hereunder, nor will anything herein be
construed to give any participant or any other person rights to any specific
assets of the Company or of any other employer or entity.
8.2 Grantor trust. Notwithstanding Section 8.1, the Company has
established a grantor trust of which it is treated as the owner under Section
671 of the Internal Revenue Code.
SECTION 9. ADMINISTRATION
The plan will be administered by the committee, which will have full
power and authority to construe, interpret and administer the plan. Decisions
of the committee will be final and binding on all persons. The committee may,
in its discretion, adopt, amend, and rescind rules and regulations relating to
the administration of the plan.
SECTION 10. RIGHTS NON-ASSIGNABLE
No participant, surviving spouse, or any other person will have any
right to assign or otherwise to alienate the right to receive payments under
the plan, in whole or in part.
SECTION 11. EXCESS BENEFIT PLAN
This plan will supersede any obligation to pay to participants excess
plan benefits under the excess benefit plan contained in the retirement plan,
as such plan may be amended from time to time; no excess plan benefits will be
payable under such excess benefit plan to participants.
SECTION 12. AMENDMENT OR TERMINATION
The Company reserves the right at any time by action of the board to
terminate the plan or to amend its provisions in any way. In addition, if the
retirement plan is terminated, this plan will automatically terminate also as
of the same effective date. Notwithstanding the foregoing, no termination or
amendment of the plan may reduce the benefits payable under the plan to any
person with respect to a participant whose employment with his employer was
terminated before such termination or amendment and no termination or
amendment may reduce the benefits to be paid with respect to a participant on
the date of such termination or amendment below the amount which such
participant would have received if his employment had terminated on the date
before such termination or amendment.
EXECUTED as of October 16, 1996.
TECO ENERGY, INC.
By:________________________________
Roger A. Dunn
Vice President - Human Resources<PAGE>
SCHEDULE A
Enhanced Retirement Benefits
A.1. David N. Campbell and G. Pierce Wood. The retirement benefits of David
N. Campbell and G. Pierce Wood are to be calculated as though each had
continued in employment until age 62 with annual earnings equal to the rate of
earnings in effect on his date of termination of employment.
A.2. 1994-95 Early Retirement Window.
(a) The retirement benefits of each of the following participants are
to be calculated by using the factors set forth below:
Name Increase in Age Increase in Service
William T. Snyder 3 years, 8 months n/a
Robert T. Tomczak 3 years 3 years
Fred W. Maggard 4 years 4 years
R.D. Cornwell 4 years 4 years
(b) Average annual earnings for each of Philip G. Flood and John G.
Graham is to be calculated using the three consecutive calendar years out of
the five calendar years preceding the date of retirement which yield the
highest average.
A.3. Larry D. Noland. The retirement benefit of Larry D. Noland is to be
calculated as though he were age 62 1/2 on his retirement date, resulting in
an increase in the benefit otherwise payable under the plan of $1,062.93 per
month.
Exhibit 10.4
TECO ENERGY GROUP
SUPPLEMENTAL RETIREMENT BENEFITS
TRUST AGREEMENT
1997 Amendment and Restatement
The TECO Energy Group Supplemental Retirement Benefits Trust Agreement
by and between TECO Energy, Inc. (the "Company") and NationsBank, N.A. (South)
(successor to Barnett Banks Trust Company, the "Trustee"), as previously
amended, is hereby amended and restated in its entirety effective as of
January 15, 1997.
WHEREAS, the Company maintains the plans listed on Exhibit A (such plans
being hereinafter collectively referred to as the "plans" and individually as
a "plan") under which certain eligible officers of the Company and its
subsidiaries and their spouses may become eligible for supplemental retirement
income and excess plan benefits ("supplemental benefits"); and
WHEREAS, the Company desires to amend and restate the trust agreement;
NOW THEREFORE, in consideration of the mutual agreements contained
herein, the Company and the Trustee hereby agree to amend and restate the
trust agreement as follows:
SECTION 1. TRUST FUND
1.1. Subject to the claims of its creditors as set forth in Section 4,
the Company has heretofore deposited certain sums of cash or other property
with the Trustee pursuant to the trust agreement. Such cash or other property
shall continue to be held, administered and disposed of by the Trustee as
provided in this trust agreement.
1.2. The trust will be irrevocable. However, if at any time before a
"change in control of the Company" (as defined below), the Company obtains an
opinion of counsel, acceptable to the Company and the Trustee, that the plans
would be deemed "funded" for purposes of Title I of the Employee Retirement
Income Security Act of 1974, as amended, by reason of the trust, or that
amounts held in the trust or contributed thereto, or earnings thereon, would
be includible in the income of trust beneficiaries before distribution to them
from the trust, the trust will become revocable. Any revocation will be
accomplished by written notice thereof from the Company to the Trustee. Upon
receipt of such a notice of revocation, the Trustee will deliver the assets of
the trust to the Company.
1.3. The trust is intended to be a grantor trust of which the Company
is treated as the owner under Section 671 of the Internal Revenue Code of
1986, as it may be amended from time to time, and the trust will be construed
accordingly.
1.4. The principal of the trust and any earnings hereon, unless
returned to the Company under Section 1.2 or Section 6 or used to defray the
expenses of the trust, will be used exclusively for the benefit of trust
beneficiaries or, to the extent provided under Section 4, for the benefit of
general creditors of the Company. No trust beneficiary will have any
preferred claim on, or any beneficial ownership interest in, any assets of the
- 169 -<PAGE>
Exhibit 10.4
trust before such assets are paid to the trust beneficiaries as supplemental
benefits under Section 3, and all rights created under the plans and this
t r u s t agreement will be unsecured contractual rights of the trust
beneficiaries against the Company.
1.5. The Trustee shall keep such records and maintain such books and
accounts as shall at all times be sufficient to indicate, for accounting
purposes, the proportionate part of the trust that is held on behalf of the
officers listed on Exhibit B. For this purpose only, the Trustee shall
maintain separate bookkeeping accounts for each such officer and shall credit
thereto all contributions made by the Company to fund benefits payable to such
officer or his beneficiary, and earnings thereon, and shall charge thereto all
payments made to or for the account of such officer or his beneficiary.
Notwithstanding the foregoing, the Trustee may hold the trust as a single fund
and may invest and reinvest the commingled assets and receive the income and
proceeds thereof, all without regard to the source of any part of the
commingled assets.
SECTION 2. FUNDING OF TRUST FUND
2.1. The Company may at any time and from time to time make deposits of
cash or other property with the Trustee to augment the principal of the trust,
and the Trustee will hold, administer and dispose of such deposits as provided
in this trust agreement.
2.2. If at the time of a "potential change in control of the Company"
(as defined below), this trust (a) has not been terminated or revoked and (b)
is not "fully funded" (as defined below), the Company will promptly deposit in
the trust cash sufficient to cause the trust to be fully funded as of the date
of the deposit. In the event of a potential change in control of the Company,
the Company will recalculate the fully funded amount as of the last day of the
calendar year in which such potential change in control occurs and as of the
last day of every calendar year following the potential change in control. If
the amount so calculated exceeds the fair market value of the assets then held
in trust, the Company will promptly (and in no event later than 30 days after
such recalculation date) deposit in the trust cash equal to such excess. If
the fully funded amount so calculated is less than the fair market value of
the assets held in trust, the Trustee, upon receipt of a written request from
the Company, will distribute to the Company such difference in cash.
2.3. For purposes of this Section 2, the trust will be deemed "fully
funded" as of any date if, as of such date, the fair market value of the
assets held in the trust is not less than the aggregate present value as of
such date of (a) all benefits then in pay status under the plans (including
benefits not yet begun for eligible officers who have retired, died or
otherwise terminated employment under circumstances entitling them to benefits
under any of the plans) plus (b) all benefits that would become payable under
the plans if on such date a change in control of the Company was deemed to
have occurred and all participants under each of the plans were deemed to have
retired for purposes of such plans. In applying the preceding sentence,
present value will be determined by using the interest and mortality
assumptions used in determining lump sum present values under the TECO Energy
Group Retirement Plan, as it may be amended from time to time.
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Exhibit 10.4
2.4. For purposes of this trust agreement, a "change in control of the
Company" shall mean a change in control of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") whether or not the Company is in fact required to comply
therewith; provided, that, without limitation, such change in control shall be
deemed to have occurred if:
(a) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
a corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock of
the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the Company's then
outstanding securities;
(b) during any period of 24 consecutive months (not including
any period prior to the effective date of this agreement), individuals who at
the beginning of such period constitute the board of directors of the Company
(the "board") and any new director (other than a director designated by a
person who has entered into an agreement with the Company to effect a
transaction described in paragraphs (a), (c) or (d) of this Section 2.4) whose
election by the board or nomination for election by the stockholders of the
Company was approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of the period
or whose election or nomination for election was previously so approved, cease
for any reason to constitute a majority thereof;
(c) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (i) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) at least 50% of the combined voting securities of the
Company or such surviving entity outstanding immediately after such merger or
consolidation or (ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no "person"
(as hereinabove defined) acquires 30% or more of the combined voting power of
the Company's then outstanding securities; or
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
2.5. For purposes of this trust agreement, a "potential change in
control of the Company" shall be deemed to have occurred if:
(a) the Company enters into an agreement, the consummation of
which would result in the occurrence of a change in control of the Company;
- 171 -<PAGE>
Exhibit 10.4
(b) any person (including the Company), publicly announces an
intention to take or consider taking actions which if consummated would
constitute a change in control of the Company;
(c) any person (as hereinabove defined), other than the Company,
any trustee or other fiduciary holding securities under an employee benefit
plan of the Company or a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company (a) is or becomes the beneficial owner, (b)
discloses directly or indirectly to the Company or publicly a plan or
intention to become the beneficial owner, or (c) makes a filing under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, with respect
to securities to become the beneficial owner, directly or indirectly, of
securities representing 9.9% or more of the combined voting power of the
outstanding voting securities of the Company; or
(d) the board adopts a resolution to the effect that, for
purposes of this trust agreement, a potential change in control of the Company
has occurred.
2.6. Upon the termination of employment with the Company of an officer
listed on Exhibit B for any reason, the Company will promptly deposit in the
trust cash equal to the present value of all benefits to which such officer or
his beneficiary is entitled. Such deposit will be credited to the account
established on behalf of such officer under Section 1.5. The Company will
recalculate such present value as of the last day of the calendar year in
which such termination of employment occurs and as of the last day of every
calendar year following the termination of employment. If the amount so
calculated exceeds the fair market value of the assets then credited to such
officer's individual account by at least one percent, the Company will
promptly (and in no event later than 30 days after such recalculation date)
deposit in the trust for crediting to the account cash equal to such excess.
In applying the preceding sentences, present value will be determined by using
the interest and mortality assumptions used in determining lump sum present
values under the TECO Energy Group Retirement Plan, as it may be amended from
time to time.
2.7 The Trustee will, and any participant or beneficiary may, take any
actions necessary to enforce the deposit of funds as required under this
Section 2, including bringing suit or instituting other legal proceedings
against the Company. Any such person taking action to enforce the payment of
contributions will be entitled to reimbursement from the trust or, if such
assets are insufficient, from the Company for any costs or expenses, including
reasonable attorneys fees, of the enforcement action. In taking any such
action, the Trustee may rely on such evidence as it deems appropriate of the
event or events giving rise to the Company's obligation to contribute. In the
case of contributions required under Section 2.2, such evidence may include a
public announcement of the event constituting a "potential change in control
of the Company". In the case of contributions required under Section 2.6,
such evidence may include a participant's affidavit that employment with the
Company has terminated supported by a copy of a resignation letter, severance
agreement or other appropriate documentation of termination.
SECTION 3. PAYMENTS TO TRUST BENEFICIARIES
- 172 -<PAGE>
Exhibit 10.4
3.1. Subject to the availability of the assets in the trust and
provided the Company is not then "insolvent" (as hereinafter defined), the
Trustee will make payments of supplemental benefits to trust beneficiaries as
they fall due in accordance with the plans. If the assets of the trust are
not sufficient to make all payments of supplemental benefits to trust
beneficiaries, the Company will make the balance of such payments as they fall
due.
3.2. If the Company at any time amends the provisions of a plan, the
Company will deliver a copy of the instrument amending such plan to the
Trustee.
3.3. If at any time following a change in control of the Company, it is
determined by the Trustee that amounts held in the trust or contributed
thereto, or earnings thereon, would be includable in the income of trust
beneficiaries before distribution to them from the trust, the Trustee shall
distribute such amounts as are includable in the income of trust beneficiaries
to such beneficiaries. With respect to any amounts contributed under Section
2.6 and the earnings thereon, if at any time before a change in control the
Company obtains an opinion of counsel, acceptable to the Company and the
Trustee, that the related plans would be deemed "funded" for purposes of Title
I of the Employee Retirement Security Act of 1974, as amended, by reason of
the trust, or that amounts held in the trust or contributed thereto, or
earnings thereon, would be includible in the income of trust beneficiaries
before distribution to them from the trust, the Trustee shall distribute such
amounts to such beneficiaries.
3.4. Subject to Section 4, all amounts credited to the account
established on behalf of an officer under Section 1.5, and all earnings
thereon, will be used solely to make payments of supplemental benefits to such
officer or his beneficiary and will not be available for payment of benefits
to any other trust beneficiary. If the amounts credited to the account are
for any reason insufficient to make payments to such officer and his
beneficiary, such payments may be made from any assets in the trust other than
assets credited to the accounts established on behalf of other officers under
Section 1.5. If such other assets of the trust are not sufficient to make
such payments, the Company will make the balance of such payments as they fall
due. Upon payment of all supplemental benefits to such officer and his
beneficiary, any amounts that remain credited to the account established on
behalf of such officer will become general assets of the trust available for
payment of supplemental benefits to any trust beneficiaries.
SECTION 4. PAYMENTS TO TRUST BENEFICIARIES WHEN THE COMPANY IS INSOLVENT
4.1. The Company will be deemed to be "insolvent" for purposes of this
trust agreement upon the occurrence of any of the following:
(a) the Company makes an assignment for the benefit of
creditors, files a petition in bankruptcy, petitions or applies to any
tribunal for the appointment of a custodian, receiver, liquidator,
sequestrator, or any trustee for it or a substantial part of its assets, or
commences any case under any bankruptcy, reorganization, arrangement,
readjustment of a debt, dissolution, or liquidation law or statute of any
jurisdiction (federal or state), whether now or hereafter in effect; or if any
- 173 -<PAGE>
Exhibit 10.4
such petition or application is filed, or any such case is commenced against
it, in which an order for relief is entered or which remains undismissed and
unstayed for 90 days; or the Company by any act or omission indicates its
consent to, approval of or acquiescence in any such petition, application or
case or order for relief or to the appointment of a custodian, receiver or any
trustee for it or any substantial part of its assets, or suffers any such
custodianship, receivership, or trusteeship to continue undischarged;
(b) the Company generally does not pay its debts as such debts
become due or ceases to pay its debts in the ordinary course of business; or
(c) the sum of the Company's debts is determined to be greater
than all its property at a fair valuation; or
(d) the present saleable value of the Company's assets is
determined to be less than the amount that would be required to pay the
probable liability on its existing debts as they become absolute and matured.
4.2. At all times during the continuance of the trust, the principal
and income of the trust will be subject to claims of general creditors of the
Company, but only to the extent hereinafter set forth.
If at any time the Trustee has actual knowledge that the Company
is insolvent, the Trustee will deliver any undistributed principal and income
in the trust to satisfy such claims as a court of competent jurisdiction may
direct. The board and the chief financial officer of the Company shall inform
the Trustee of the Company's insolvency as soon as practicable after either of
them knows of the Company's insolvency. If the Company or a person claiming
to be a creditor of the Company alleges in writing to the Trustee that the
Company has become insolvent, the Trustee will independently determine, within
30 days after receipt of such writing, whether the Company is insolvent.
Pending such determination, the Trustee will discontinue payments of
supplemental benefits to trust beneficiaries. The Trustee will resume
payments of supplemental benefits to trust beneficiaries in accordance with
Section 3 of this trust agreement only after the Trustee has determined that
the Company is not insolvent (or is no longer insolvent, if the Trustee
initially determined the Company to be insolvent). The Trustee will have no
duty to inquire whether the Company is insolvent unless the Trustee has actual
knowledge of facts indicating that the Company may be insolvent or has
received an allegation of insolvency as provided in this Section 4.2. The
Trustee may in all events rely on such evidence concerning the Company's
solvency which in the opinion of the Trustee provides a reasonable basis for
making a determination concerning the Company's solvency.
Nothing in this trust agreement will in any way diminish or
augment any rights of trust beneficiaries to pursue their rights as general
creditors of the Company with respect to their supplemental benefits or
otherwise.
4.3. If the Trustee discontinues payments of supplemental benefits from
the trust under Section 4.2 and subsequently resumes such payments, the first
payment following such discontinuance will include the aggregate amount of all
payments which would have been made to trust beneficiaries (together with
interest at a rate equal to the prime rate as published in the Wall Street
- 174 -<PAGE>
Exhibit 10.4
Journal from time to time, compounded annually on the amount delayed) in
accordance with the plans during the period of such discontinuance, less the
aggregate amount of any payments made to trust beneficiaries by the Company in
lieu of the payments provided for hereunder during any such period of
discontinuance.
SECTION 5. INVESTMENT OF PRINCIPAL AND INCOME
Before a change in control of the Company, the Trustee will invest the
principal of the trust and any earnings thereon in accordance with such
investment objectives, policies and restrictions as the Company may from time
to time communicate to the Trustee, or, if the Company has appointed an
investment manager to manage or direct the investment of some or all of the
assets of the trust, in accordance with the directions of such investment
manager. The Trustee is authorized to invest the assets of the trust in a
common, collective or pooled trust fund maintained by the Trustee. The
Trustee will have no duty to inquire into or review the investment objectives,
policies, or restrictions, or the investments made pursuant to the directions
of an investment manager. However, assets held in trust will not be invested
in securities or obligations issued by the Company or any affiliate of the
Company. Following a change in control of the Company, the Trustee will
invest the assets of the trust as it determines in its sole discretion, in any
form of tangible or intangible property, real or personal, or in the
securities or obligations of any form of enterprise wherever it may be located
(other than in securities or obligations of the Company or an affiliate of the
Company).
SECTION 6. DISPOSITION OF PRINCIPAL AND INCOME
At all times during the continuance of the trust, all principal amounts
contributed to the trust and all interest thereon, net of expenses, will,
unless paid as distributions to trust beneficiaries under Section 3.1 or to
creditors of the Company under Section 4.2, be accumulated and reinvested for
the purposes provided herein. Except as provided in Section 1.2 or
Section 2.2, the Company will have no right or power to direct the Trustee to
return to the Company or to direct to others any of the trust assets before
all payments of supplemental benefits payable under the trust have been made
to trust beneficiaries. Upon payment of all such supplemental benefits, the
Trustee will return to the Company all amounts, if any, then remaining in the
trust.
SECTION 7. ACCOUNTING BY THE TRUSTEE
The Trustee will keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions of the trust, including
such specific records as will be agreed upon in writing between the Company
and the Trustee. All such accounts, books and records will be open to
inspection and audit at all reasonable times by the Company. Within 60 days
following the close of each calendar year and within 60 days after the removal
or resignation of the Trustee, the Trustee will deliver to the Company a
written account of its administration of the trust during such year or during
the period from the close of the last preceding year to the date of such
removal or resignation, setting forth all investments, receipts, disbursements
and other transactions of the trust, including a description of all securities
- 175 -<PAGE>
Exhibit 10.4
and investments purchased and sold with the cost or net proceeds of such
p u rchases or sales (accrued interest paid or receivable being shown
separately), and showing all cash, securities and other property held in the
trust at the end of such year or as of the date of such removal or
resignation, as the case may be.
ECTION 8. RESPONSIBILITY OF THE TRUSTEE
8.1. The Trustee will act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims; provided, however, that the
Trustee will incur no liability to any one for any action reasonably taken in
accordance with a written direction, request, or approval given by the Company
or by an investment manager appointed by the Company that is contemplated by
and complies with the terms of this trust agreement, including distributions
made in accordance with a plan and to that extent will be relieved of the
prudent person rule for investments.
8.2. The Trustee may consult with legal counsel (who may also be
counsel for the Trustee generally or counsel to the Company) with respect to
any of its duties or obligations hereunder, including any determination as to
whether a change in control of the Company has occurred or as to whether the
Company is insolvent, and will not be held responsible for acting or
refraining from acting in accordance with the advice of any such counsel
selected with reasonable care.
8.3. The Trustee may hire such agents, legal counsel, accountants,
actuaries, investment managers and financial consultants as may be reasonably
necessary to administer the trust.
8.4. The Trustee will have, without exclusion, all powers conferred on
trustees by applicable law unless expressly provided otherwise herein;
provided, however, that if an insurance policy or annuity contract is held as
an asset of the trust, the Trustee will have no power to name a beneficiary of
the policy or contract other than the trust or, except in accordance with
Section 6 hereof, to assign the policy or contract (as distinct from
conversion of the policy or contract to a different form) other than to a
successor to the Trustee or to loan to any person the proceeds of any
borrowing against such policy or contract.
SECTION 9. COMPENSATION AND EXPENSES OF THE TRUSTEE
The Trustee will be entitled to receive such reasonable compensation for
its services as the Company and the Trustee agree upon in writing. The
Trustee will also be entitled to receive its reasonable expenses incurred with
respect to the administration of the trust, including expenditures reasonably
incurred by the Trustee pursuant to Sections 8.2 and 8.3 of this trust
agreement and any taxes required to be paid by the Trustee in respect of the
trust. All such compensation and expenses will be paid by the Company, but if
not paid by the Company will be a charge against and may be paid from the
assets of the trust.
SECTION 10. REPLACEMENT OF THE TRUSTEE
- 176 -<PAGE>
Exhibit 10.4
The Trustee may be removed at any time by the Company, or may resign, in
either case by at least 30 days' advance notice in writing (unless the parties
waive such notice or agree to a shorter notice period). In the case of the
removal or the resignation of the Trustee before a change in control of the
Company, the Company will appoint a new corporate Trustee, independent and not
subject to the control of either the Company, any affiliate thereof or any
trust beneficiary. Following a change in control of the Company, the Trustee
cannot be removed by the Company. If the Trustee resigns following a change
in control of the Company, it will either appoint a successor Trustee (which
will be a corporate Trustee, independent and not subject to the control of
either the Company, any affiliate thereof or any trust beneficiary) or obtain
appointment of such a Trustee by court order.
SECTION 11. AMENDMENT OR TERMINATION
11.1. This trust agreement may be amended at any time and to any extent
by a written instrument executed by the Trustee and the Company; provided,
however, that following a change in control of the Company this trust
agreement may not be amended or terminated, and following a potential change
in control of the Company and prior to the occurrence of a change in control
of the Company the trust agreement may not be amended in any manner adverse to
any trust beneficiaries unless (a) at least one year has expired since the
most recent event or transaction constituting a potential change in control of
the Company and (b) in respect of a potential change in control which
previously occurred, no facts or circumstances continue to exist which, if
initially occurring at the time any termination or amendment of this trust
agreement is to occur, would constitute a potential change in control of the
Company; and provided further, that while the trust is irrevocable, no such
amendment will make the trust revocable or permit assets of the trust, before
the payment of all supplemental benefits, to be returned to the Company or
paid out of the trust to any other person (except to trust beneficiaries
pursuant to the plans or to creditors of the Company under Section 4); and
provided further that this trust agreement may not be amended or terminated in
any manner adverse to any of the officers listed on Exhibit B or their
beneficiaries without the written consent of such officer of beneficiary, as
the case may be.
11.2. The trust will not terminate until the date on which the last
trust beneficiary ceases to be entitled to supplemental benefits payable under
the trust, unless sooner revoked in accordance with Section 1.2; provided,
however, that the trust shall terminate no later than 21 years following the
death of all individuals who were participants in any plan on the date hereof
(and their respective beneficiaries as of such date).
11.3. Upon termination of the trust as provided in Section 11.2 or upon
revocation of the trust under Section 1.2, any assets remaining in the trust
will be returned to the Company.
SECTION 12. SEVERABILITY AND ALIENATION
12.1. Any provision of this trust agreement prohibited by law will be
ineffective to the extent of any such prohibition without invalidating the
remaining provisions hereof.
- 177 -<PAGE>
Exhibit 10.4
12.2. To the extent permitted by law, benefits to trust beneficiaries
under this trust agreement may not be anticipated, assigned (either at law or
in equity), alienated or subject to attachment, garnishment, levy, execution
or other legal or equitable process, and no benefit actually paid to a trust
beneficiary by the Trustee will be subject to any claim for repayment by the
Company or the Trustee.
SECTION 13. GOVERNING LAW
This trust agreement will be governed by and construed in accordance
with the laws of the State of Florida, without giving effect to the conflicts
of law principles thereof.
SECTION 14. ENTIRE AGREEMENT
This trust agreement constitutes the entire agreement between the
parties hereto and supersedes all prior agreements, understandings and
arrangements, oral or written, between the parties hereto and respect to the
subject matter hereof.
IN WITNESS WHEREOF, the Company and the Trustee have executed this
amended and restated trust agreement as of January 15, 1997.
TECO ENERGY, INC.
By:
Roger A. Dunn
Vice President - Human Resources
NATIONSBANK, N.A. (SOUTH),
as Trustee
By:
Name:
Title:
- 178 -<PAGE>
Exhibit 10.4
EXHIBIT A
TECO Energy Group Supplemental Executive Retirement Plan
Excess benefit plan contained in the TECO Energy Group Retirement Plan
TECO Energy Group Retirement Savings Excess Benefit Plan
TECO Energy, Inc. Supplemental Executive Retirement Plan for Girard F.
Anderson
TECO Energy, Inc. Supplemental Executive Retirement Plan for H.L. Culbreath
TECO Energy, Inc. Supplemental Executive Retirement Plan for Roger A. Dunn
TECO Energy, Inc. Supplemental Executive Retirement Plan for Royston K.
Eustace
TECO Energy, Inc. Supplemental Executive Retirement Plan for T.L. Guzzle
TECO Energy, Inc. Supplemental Executive Retirement Plan for Roger H. Kessel
TECO Energy, Inc. Supplemental Executive Retirement Plan for Richard E. Ludwig
TECO Energy, Inc. Supplemental Executive Retirement Plan for Alan D. Oak
TECO Energy, Inc. Supplemental Executive Retirement Plan for Keith S. Surgenor
TECO Energy, Inc. Supplemental Executive Retirement Plan for James K. Taggart
- 179 -<PAGE>
Exhibit 10.4
EXHIBIT B
Girard F. Anderson
Roger A. Dunn
Royston K. Eustace
Timothy L. Guzzle
Roger H. Kessel
Richard E. Ludwig
Alan D. Oak
Keith S. Surgenor
James K. Taggart
- 180 -<PAGE>
Exhibit 10.9
TECO ENERGY GROUP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FOR TIMOTHY L. GUZZLE
SECTION 1. PURPOSE AND EFFECTIVE DATE
The purpose of this plan is to provide Timothy L. Guzzle, Chairman of
the Board and Chief Executive Officer of TECO Energy, with additional
retirement income by supplementing the retirement benefits provided under the
retirement plan. The plan was originally effective as of February 22, 1988.
The effective date of this amendment and restatement is October 16, 1996.
SECTION 2. DEFINITIONS
This section contains definitions of terms used in the plan. Where the
context so requires, the singular includes the plural, and the plural includes
the singular.
2.1 Annual earnings will have the same meaning as in the retirement
plan, except that the same will be determined without regard to (a) any dollar
limitation on such annual earnings that may be imposed under the retirement
plan or (b) any reduction in taxable income as a result of voluntary salary
reduction deferrals under the TECO Energy Group Retirement Savings Excess
Benefit Plan.
2.2 Average annual earnings of Mr. Guzzle as of any date of reference
means the average of his annual earnings during whichever of the following
periods yields the highest average: (a) the 36 consecutive months of active
employment preceding the date of reference (or all months of employment if
less than 36), or (b) any three consecutive calendar years out of the five
calendar years preceding the date of reference. Bonuses are included as
compensation for the period in which paid, provided that if more than three
regular annual bonuses are paid in any 36 consecutive month period, only the
largest three bonuses will be counted.
2.3 Board means the Board of Directors of TECO Energy.
2.4 Committee means the retirement plan committee as constituted under
the retirement plan.
2.5 TECO Energy means TECO Energy, Inc. and any successor to all or a
major portion of its assets or business which assumes the obligations of TECO
Energy, Inc. under this plan.
2.6 Disability income plan means the TECO Energy Group Disability
Income Plan, as amended from time to time.
- 183 -<PAGE>
Exhibit 10.9
2.7 Plan means the TECO Energy Group Supplemental Executive Retirement
Plan for T.L. Guzzle, as set forth in this plan instrument, and as it may be
amended from time to time.
2.8 Retirement means termination of Mr. Guzzle's employment with TECO
Energy by Mr. Guzzle or TECO Energy for any reason.
2.9 Retirement plan means the TECO Energy Group Retirement Plan, as
amended from time to time.
2.10 Service will have the same meaning as "plan service" in the
retirement plan.
2.11 Social security benefit of Mr. Guzzle as of any date of reference
(the "computation date") means the primary insurance amount to which he is or
would be entitled, payable under Title II of the Social Security Act as in
effect on such date, based on the assumptions: (a) that no changes in the
benefit levels payable or the wage base under Title II occur after the
computation date; (b) that, if the computation date falls before his 62nd
birthday, his annual earnings during the calendar year in which the
computation date falls and during any subsequent calendar year before the
calendar year in which his 62nd birthday falls is zero; (c) that payment of
his primary insurance amount begins for the month after he reaches age 62, or
his date of retirement if later, without reduction or delay because of future
gainful employment or delay in applying for benefits; and (d) that his
earnings for calendar years before the calendar year in which the computation
date falls will be determined using his actual earnings history if available,
and otherwise by applying a six percent retrospective salary scale to his rate
of annual earnings in effect on the computation date. The social security
benefit of Mr. Guzzle if he retires after his 65th birthday will include any
delayed retirement credit.
2.12 Survivor income plan means the TECO Energy Group Survivor Income
Plan, as amended from time to time.
SECTION 3. RETIREMENT BENEFITS
3.1 Retirement at or after age 62. Subject to the reductions in
Section 6.1 below, if Mr. Guzzle retires on or after attaining age 62, he will
receive a supplemental monthly retirement benefit equal to one-twelfth of 60
percent of his average annual earnings (60 percent is equal to six percent
multiplied by a maximum of 10 years of service). Mr. Guzzle's retirement
benefit hereunder will be calculated using his average annual earnings as of
his actual date of retirement.
3.2 Retirement before age 62. Subject to the reductions in Section
6.1 below, if Mr. Guzzle retires before attaining age 62, he will receive a
supplemental monthly retirement benefit equal to one-twelfth of (a) six
percent of his average annual earnings multiplied by his years of service (or
portions thereof) determined as of his date of retirement, multiplied by (b)
an early retirement factor determined under the following table:
- 184 -<PAGE>
Exhibit 10.9
Years by which the
start of payments Early retirement
precedes age 62* factor
6 .70
5 .75
4 .80
3 .85
2 .90
1 .95
* Interpolate for completed months
3.3 Termination by TECO Energy without Cause or by Mr. Guzzle for Good
Reason. If Mr. Guzzle's employment is terminated by TECO Energy other than
for Cause or disability or by the participant for Good Reason, retirement
benefits payable under Section 3.2 will be computed as though Mr. Guzzle had
continued to be employed at the same rate of annual earnings by TECO Energy
(after the date of termination) for 24 months or, if less, the number of
months from the date of termination until age 62. "Cause" and "Good Reason"
are defined in the employment agreement between TECO Energy and the
participant dated July 20, 1993, as it may be amended from time to time.
3.4 Form of Payment.
(a) Normal form of retirement benefits. The normal form of
retirement benefit payable to Mr. Guzzle under the plan is a life annuity.
Benefits payable in the normal form will begin on the first day of the month
coinciding with or next following the date of Mr. Guzzle s retirement.
(b) Optional lump sum benefit. In lieu of the normal form of
benefit, Mr. Guzzle may elect to receive payment of his benefit in the form of
a commuted single sum payment that is the actuarial equivalent of the normal
form of benefit (including the value of the post-retirement surviving spouse
benefit under Section 4.2(c)). If Mr. Guzzle elects to receive a lump sum
payment, such payment will be made on the first day of the month coinciding
with or next following the date Mr. Guzzle's employment terminates. Actuarial
equivalence will be based on the actuarial assumptions specified from time to
time in the retirement plan for lump sum payments. Mr. Guzzle's election to
receive a lump sum payment will be effective only with respect to a retirement
occurring at least 12 months after the date Mr. Guzzle submits the election,
provided that elections submitted on or before December 31, 1996 will be
immediately effective.
SECTION 4. SURVIVING SPOUSE BENEFIT
4.1 Eligibility. Mr. Guzzle's surviving spouse will receive the
surviving spouse benefit if Mr. Guzzle and his spouse were married to each
other for at least the 12 months preceding Mr. Guzzle's date of death and, in
the case of Mr. Guzzle's death after retirement, Mr. Guzzle and his spouse
were married to each other on Mr. Guzzle's date of retirement.
- 185 -<PAGE>
Exhibit 10.9
4.2 Amount of surviving spouse benefit. Subject to the reductions
described in Section 6.2 below, the benefit provided under the plan to Mr.
Guzzle's surviving spouse will be determined as follows:
(a) Pre-retirement before age 62. If Mr. Guzzle dies during
employment with TECO Energy and before his 62nd birthday, his surviving spouse
will receive a monthly survivor income payment equal to 50 percent of his
monthly projected retirement benefit. Mr. Guzzle's monthly projected
retirement benefit is the monthly benefit he would have received if he had
retired at age 62 under Section 3.1 calculated using his average annual
earnings determined as of his date of death.
(b) Pre-retirement on or after age 62. If Mr. Guzzle dies
during employment with TECO Energy on or after his 62nd birthday, his
surviving spouse will receive a monthly survivor income payment equal to 50
percent of his monthly retirement benefit earned under Section 3.1 using his
average annual earnings as of his date of death.
(c) Post-retirement. If Mr. Guzzle dies on or after the date of
his retirement, his surviving spouse will receive a monthly survivor income
payment equal to 50 percent of the monthly benefit payment he was receiving at
his death (or would have received if he had survived until the first payment
date).
4.3 Form and time of surviving spouse benefit. Surviving spouse
benefits under this Section 4 will be payable only in the form of a life
annuity to the surviving spouse. Benefit payments will begin on the first day
of the month coinciding with or next following the date of Mr. Guzzle's death.
4.4 Death benefit where lump sum paid. If Mr. Guzzle received a lump
sum payment of his benefit under Section 3.4(b), no surviving spouse benefit
or other death benefit will be payable under the plan to any person.
SECTION 5. DISABILITY
5.1 If Mr. Guzzle suffers a total disability (as defined in the
disability income plan) before age 62, he will continue to be credited with
service as if he were actively employed by TECO Energy during his period of
total disability. Mr. Guzzle may not receive benefits under this plan at any
time when he is receiving disability income payments under the disability
income plan. Benefits under this plan will begin when payments cease under
the disability income plan.
5.2 Mr. Guzzle's disability date is his last day of work for TECO
Energy before becoming unable to continue working because of his total
disability. A period of total disability of Mr. Guzzle will begin on his
disability date and will end on the earlier of the last day of the month in
which his final disability income payment is due under the disability income
plan or on the date he retires hereunder and starts receiving benefit
payments.
- 186 -<PAGE>
Exhibit 10.9
5.3 If Mr. Guzzle does not return to active service with TECO Energy
after suffering a total disability, his retirement benefits under Section 3
will be calculated using his average annual earnings as of his disability
date, his total service including service credited under Section 5.1 above,
and his primary social security benefit as of his date of disability.
5.4 If Mr. Guzzle dies while disabled, his surviving spouse will, if
eligible, receive the pre-retirement surviving spouse benefit determined under
Section 4.2(a) or (b).
SECTION 6. OFFSET FOR OTHER PAYMENTS
6.1 Mr. Guzzle's retirement benefit will be reduced (but not below
zero) by the following payments, with such reductions starting when such
payments are assumed to begin: (a) 100 percent of the social security benefit
of Mr. Guzzle assuming such benefit begins on the later of the date he reaches
age 62 or his actual retirement, and (b) the amount of his benefit payments
under the retirement plan (converted to a life annuity if such payments are in
an optional form), assuming such payments begin on his actual retirement date.
6.2 The benefit of Mr. Guzzle's surviving spouse will be reduced (but
not below zero) by the following payments: (a) payments under the survivor
income plan, and (b) payments under the retirement plan.
SECTION 7. BENEFITS NOT CURRENTLY FUNDED
7.1 Nothing in this plan will be construed to create a trust or to
obligate TECO Energy or any other employer to segregate a fund, purchase an
insurance contract, or in any other way currently to fund the future payment
of any benefits hereunder, nor will anything herein be construed to give Mr.
Guzzle or any other person rights to any specific assets of TECO Energy or of
any other employer or entity.
7.2 Notwithstanding Section 7.1, TECO Energy has established a grantor
trust of which it is treated as the owner under Section 671 of the Internal
Revenue Code to provide for the payment of benefits hereunder.
SECTION 8. ADMINISTRATION
The plan will be administered by the committee, which will have full
power and authority to construe, interpret and administer the plan. Decisions
of the committee will be final and binding on all persons. The committee may,
in its discretion, adopt, amend and rescind rules and regulations relating to
the administration of the plan.
SECTION 9. RIGHTS NON-ASSIGNABLE
- 187 -<PAGE>
Exhibit 10.9
Neither Mr. Guzzle, his surviving spouse, nor any other person will have
any right to assign or otherwise to alienate the right to receive payments
under the plan, in whole or in part.
SECTION 10. OTHER BENEFIT PLANS
This plan will supersede any obligation to pay benefits to Mr. Guzzle
under the excess benefit plan contained in the retirement plan or the TECO
Energy Group Supplemental Executive Retirement Plan, as they may be amended
from time to time. No benefits will be payable to Mr. Guzzle under such
excess benefit plan or the TECO Energy Group Supplemental Executive Retirement
Plan.
SECTION 11. AMENDMENT
TECO Energy reserves the right at any time by action of the board to
amend the plan in any way. However, no amendment of the plan may reduce the
benefits to be paid to Mr. Guzzle or his surviving spouse below those that
would have been paid if the plan had continued without change to the date of
Mr. Guzzle's retirement or termination of employment for any reason.
Executed as of October 16, 1996.
TECO ENERGY, INC.
By:
Roger A. Dunn
V i ce President - Human Resources
TIMOTHY L. GUZZLE
- 188 -<PAGE>
Exhibit 10.10
TECO ENERGY GROUP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FOR ROGER H. KESSEL
SECTION 1. PURPOSE AND EFFECTIVE DATE
The purpose of this plan is to provide Roger H. Kessel, Senior Vice
President - General Counsel and Secretary of TECO Energy, with additional
retirement income by supplementing the retirement benefits provided under the
retirement plan. The plan was originally effective as of December 1, 1989.
The effective date of this amendment and restatement is January 15, 1997.
SECTION 2. DEFINITIONS
This section contains definitions of terms used in the plan. Where the
context so requires, the singular includes the plural, and the plural includes
the singular.
2.1 Annual earnings will have the same meaning as in the retirement
plan, except that the same will be determined without regard to (a) any dollar
limitation on such annual earnings that may be imposed under the retirement
plan or (b) any reduction in taxable income as a result of voluntary salary
reduction deferrals under the TECO Energy Group Retirement Savings Excess
Benefit Plan.
2.2 Average annual earnings of Mr. Kessel as of any date of reference
means the average of his annual earnings during whichever of the following
periods yields the highest average: (a) the 36 consecutive months of active
employment preceding the date of reference (or all months of employment if
less than 36), or (b) any three consecutive calendar years out of the five
calendar years preceding the date of reference. Bonuses are included as
compensation for the period in which paid, provided that if more than three
regular annual bonuses are paid in any 36 consecutive month period, only the
largest three bonuses will be counted.
2.3 Board means the Board of Directors of TECO Energy.
2.4 Committee means the retirement plan committee as constituted under
the retirement plan.
2.5 TECO Energy means TECO Energy, Inc. and any successor to all or a
major portion of its assets or business which assumes the obligations of TECO
Energy, Inc. under this plan.
2.6 Disability income plan means the TECO Energy Group Disability
Income Plan, as amended from time to time.
- 190 -<PAGE>
Exhibit 10.10
2.7 Plan means the TECO Energy Group Supplemental Executive Retirement
Plan for Roger H. Kessel, as set forth in this plan instrument, and as it may
be amended from time to time.
2.8 Retirement means termination of Mr. Kessel's employment with TECO
Energy by Mr. Kessel or TECO Energy for any reason on or after he attains age
55.
2.9 Retirement plan means the TECO Energy Group Retirement Plan, as
amended from time to time.
2.10 Service will have the same meaning as "plan service" in the
retirement plan.
2.11 Social security benefit of Mr. Kessel as of any date of reference
(the "computation date") means the primary insurance amount to which he is or
would be entitled, payable under Title II of the Social Security Act as in
effect on such date, based on the assumptions: (a) that no changes in the
benefit levels payable or the wage base under Title II occur after the
computation date; (b) that, if the computation date falls before his 62nd
birthday, his annual earnings during the calendar year in which the
computation date falls and during any subsequent calendar year before the
calendar year in which his 62nd birthday falls is zero; (c) that payment of
his primary insurance amount begins for the month after he reaches age 62, or
his date of retirement if later, without reduction or delay because of future
gainful employment or delay in applying for benefits; and (d) that his
earnings for calendar years before the calendar year in which the computation
date falls will be determined using his actual earnings history if available,
and otherwise by applying a six percent retrospective salary scale to his rate
of annual earnings in effect on the computation date. The social security
benefit of Mr. Kessel if he retires after his 65th birthday will include any
delayed retirement credit.
2.12 Survivor income plan means the TECO Energy Group Survivor Income
Plan, as amended from time to time.
- 191 -<PAGE>
Exhibit 10.10
ECTION 3. RETIREMENT BENEFITS
3.1 Retirement at or after age 62. Subject to the reductions in
Section 6.1 below, if Mr. Kessel retires on or after attaining age 62, he will
receive a supplemental monthly retirement benefit equal to one-twelfth of five
percent of his average annual earnings multiplied by his years of service (or
portions thereof) up to a maximum benefit of 60% of his final average earnings
(60% is equal to five percent multiplied by a maximum of 12 years of service).
Mr. Kessel's retirement benefit hereunder will be calculated using his years
of service (or portions thereof) and average annual earnings as of his actual
date of retirement.
3.2 Retirement before age 62. Subject to the reductions in Section
6.1 below, if Mr. Kessel retires before attaining age 62, he will receive a
supplemental monthly retirement benefit equal to one-twelfth of (a) the amount
determined using the formula in Section 3.1 above, multiplied by (b) an early
retirement factor determined under the following table:
Years by which the
start of payments Early retirement
precedes age 62* factor
7 .65
6 .70
5 .75
4 .80
3 .85
2 .90
1 .95
* Interpolate for completed months
3.3 Form of Payment.
(a) Normal form of retirement benefits. The normal form of
retirement benefit payable to Mr. Kessel under the plan is a life annuity.
Benefits payable in the normal form will begin on the first day of the month
coinciding with or next following the date of Mr. Kessel s retirement.
(b) Optional lump sum benefit. In lieu of the normal form of
benefit, Mr. Kessel may elect to receive payment of his benefit in the form of
a commuted single sum payment that is the actuarial equivalent of the normal
form of benefit (including the value of the post-retirement surviving spouse
benefit under Section 4.2(c)). If Mr. Kessel elects to receive a lump sum
payment, such payment will be made on the first day of the month coinciding
with or next following the date Mr. Kessel s employment terminates. Actuarial
equivalence will be based on the actuarial assumptions specified from time to
time in the retirement plan for lump sum payments. Mr. Kessel s election to
receive a lump sum payment will be effective only with respect to a retirement
occurring at least 12 months after the date Mr. Kessel submits the election,
provided that elections submitted on or before December 31, 1996 will be
immediately effective.
- 192 -<PAGE>
Exhibit 10.10
SECTION 4. SURVIVING SPOUSE BENEFIT
4.1 Eligibility. Mr. Kessel's surviving spouse will receive the
surviving spouse benefit if Mr. Kessel and his spouse were married to each
other for at least the 12 months preceding Mr. Kessel's death and, in the case
of Mr. Kessel s death after retirement, Mr. Kessel and his spouse were married
to each other on Mr. Kessel's date of retirement.
4.2 Amount of surviving spouse benefit. Subject to the reductions
described in Section 6.2 below, the benefit provided under the plan to Mr.
Kessel's surviving spouse will be determined as follows:
(a) Pre-retirement before age 62. If Mr. Kessel dies during
employment with TECO Energy and before his 62nd birthday, his surviving spouse
will receive a monthly survivor income payment equal to 50 percent of his
monthly projected retirement benefit. Mr. Kessel's monthly projected
retirement benefit is the monthly benefit he would have received if he had
retired at age 62 under Section 3.1 calculated using his average annual
earnings determined as of his date of death.
(b) Pre-retirement on or after age 62. If Mr. Kessel dies
during employment with TECO Energy on or after his 62nd birthday, his
surviving spouse will receive a monthly survivor income payment equal to 50
percent of his monthly retirement benefit earned under Section 3.1 using his
years of service (or portions thereof) and his average annual earnings as of
his date of death.
(c) Post-retirement. If Mr. Kessel dies on or after the date of
his retirement, his surviving spouse will receive a monthly survivor income
payment equal to 50 percent of the monthly benefit payment he was receiving at
his death (or would have received if he had survived until the first payment
date).
4.3 Form and time of surviving spouse benefit. Surviving spouse
benefits under this Section 4 will be payable only in the form of a life
annuity to the surviving spouse. Benefit payments will begin on the first day
of the month coinciding with or next following the date of Mr. Kessel's death.
4.4 Death benefit where lump sum paid. If Mr. Kessel received a lump
sum payment of his benefit under Section 3.3(b), no surviving spouse benefit
or other death benefit will be payable under the plan to any person.
SECTION 5. DISABILITY
5.1 If Mr. Kessel suffers a total disability (as defined in the
disability income plan) before age 62, he will continue to be credited with
service as if he were actively employed by TECO Energy during his period of
total disability. Mr. Kessel may not receive benefits under this plan at any
time when he is receiving disability income payments under the disability
income plan. Benefits under this plan will begin when payments cease under
the disability income plan.
- 193 -<PAGE>
Exhibit 10.10
5.2 Mr. Kessel's disability date is his last day of work for TECO
Energy before becoming unable to continue working because of his total
disability. A period of total disability of Mr. Kessel will begin on his
disability date and will end on the earlier of the last day of the month in
which his final disability income payment is due under the disability income
plan or on the date he retires hereunder and starts receiving benefit
payments.
5.3 If Mr. Kessel does not return to active service with TECO Energy
after suffering a total disability, his retirement benefits under Section 3
will be calculated using his average annual earnings as of his disability
date, his total service including service credited under Section 5.1 above,
and his primary social security benefit as of his date of disability.
5.4 If Mr. Kessel dies while disabled, his surviving spouse will, if
eligible, receive the pre-retirement surviving spouse benefit determined under
Section 4.2(a) or (b).
SECTION 6. OFFSET FOR OTHER PAYMENTS
6.1 Mr. Kessel's retirement benefit will be reduced (but not below
zero) by the following payments, with such reductions starting when such
payments are assumed to begin: (a) 100 percent of the social security benefit
of Mr. Kessel assuming such benefit begins on the later of the date he reaches
age 62 or his actual retirement, and (b) the amount of his benefit payments
under the retirement plan (converted to a life annuity if such payments are in
an optional form), assuming such payments begin on the later of the date he
reaches age 55 or his actual retirement.
6.2 The benefit of Mr. Kessel's surviving spouse will be reduced (but
not below zero) by the following payments: (a) payments under the survivor
income plan, and (b) payments under the retirement plan.
SECTION 7. BENEFITS NOT CURRENTLY FUNDED
7.1 Nothing in this plan will be construed to create a trust or to
obligate TECO Energy or any other employer to segregate a fund, purchase an
insurance contract, or in any other way currently to fund the future payment
of any benefits hereunder, nor will anything herein be construed to give Mr.
Kessel or any other person rights to any specific assets of TECO Energy or of
any other employer or entity.
7.2 Notwithstanding Section 7.1, TECO Energy has established a grantor
trust of which it is treated as the owner under Section 671 of the Internal
Revenue Code to provide for the payment of benefits hereunder.
SECTION 8. ADMINISTRATION
The plan will be administered by the committee, which will have full
power and authority to construe, interpret and administer the plan. Decisions
- 194 -<PAGE>
Exhibit 10.10
of the committee will be final and binding on all persons. The committee may,
in its discretion, adopt, amend and rescind rules and regulations relating to
the administration of the plan.
SECTION 9. RIGHTS NON-ASSIGNABLE
Neither Mr. Kessel, his surviving spouse, nor any other person will have
any right to assign or otherwise to alienate the right to receive payments
under the plan, in whole or in part.
SECTION 10. OTHER BENEFIT PLANS
This plan will supersede any obligation to pay benefits to Mr. Kessel
under the excess benefit plan contained in the retirement plan or the TECO
Energy Group Supplemental Executive Retirement Plan, as they may be amended
from time to time. No benefits will be payable to Mr. Kessel under such
excess benefit plan or the TECO Energy Group Supplemental Executive Retirement
Plan.
SECTION 11. AMENDMENT
TECO Energy reserves the right at any time by action of the board to
amend the plan in any way. However, no amendment of the plan may reduce the
benefits to be paid to Mr. Kessel or his surviving spouse below those that
would have been paid if the plan had continued without change to the date of
Mr. Kessel's retirement or termination of employment for any reason.
Executed as of January 15, 1997.
TECO ENERGY, INC.
By:
Roger A. Dunn
V i ce President - Human Resources
ROGER H. KESSEL
- 195 -<PAGE>
Exhibit 10.12
TECO ENERGY GROUP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FOR ALAN D. OAK
SECTION 1. PURPOSE AND EFFECTIVE DATE
The purpose of this plan is to provide Alan D. Oak, Senior Vice
President - Finance and Chief Financial Officer of TECO Energy, with
additional retirement income by supplementing the retirement benefits provided
under the retirement plan. The plan was originally effective as of July 21,
1992. The effective date of this amendment and restatement is October 16,
1996.
SECTION 2. DEFINITIONS
This section contains definitions of terms used in the plan. Where the
context so requires, the singular includes the plural, and the plural includes
the singular.
2.1 Annual earnings will have the same meaning as in the retirement
plan, except that the same will be determined without regard to (a) any dollar
limitation on such annual earnings that may be imposed under the retirement
plan or (b) any reduction in taxable income as a result of voluntary salary
reduction deferrals under the TECO Energy Group Retirement Savings Excess
Benefit Plan.
2.2 Average annual earnings of Mr. Oak as of any date of reference
means the average of his annual earnings during whichever of the following
periods yields the highest average: (a) the 36 consecutive months of active
employment preceding the date of reference (or all months of employment if
less than 36), or (b) any three consecutive calendar years out of the five
calendar years preceding the date of reference. Bonuses are included as
compensation for the period in which paid, provided that if more than three
regular annual bonuses are paid in any 36 consecutive month period, only the
largest three bonuses will be counted.
2.3 Board means the Board of Directors of TECO Energy.
2.4 Committee means the retirement plan committee as constituted under
the retirement plan.
2.5 TECO Energy means TECO Energy, Inc. and any successor to all or a
major portion of its assets or business which assumes the obligations of TECO
Energy, Inc. under this plan.
2.6 Disability income plan means the TECO Energy Group Disability
Income Plan, as amended from time to time.
- 197 -<PAGE>
Exhibit 10.12
2.7 Plan means the TECO Energy Group Supplemental Executive Retirement
Plan for Alan D. Oak, as set forth in this plan instrument, and as it may be
amended from time to time.
2.8 Retirement means termination of Mr. Oak's employment with TECO
Energy by Mr. Oak or TECO Energy for any reason on or after he attains age 56.
2.9 Retirement plan means the TECO Energy Group Retirement Plan, as
amended from time to time.
2.10 Service will have the same meaning as "plan service" in the
retirement plan.
2.11 Social security benefit of Mr. Oak as of any date of reference
(the "computation date") means the primary insurance amount to which he is or
would be entitled, payable under Title II of the Social Security Act as in
effect on such date, based on the assumptions: (a) that no changes in the
benefit levels payable or the wage base under Title II occur after the
computation date; (b) that, if the computation date falls before his 63rd
birthday, his annual earnings during the calendar year in which the
computation date falls and during any subsequent calendar year before the
calendar year in which his 63rd birthday falls is zero; (c) that payment of
his primary insurance amount begins for the month after he reaches age 63, or
his date of retirement if later, without reduction or delay because of future
gainful employment or delay in applying for benefits; and (d) that his
earnings for calendar years before the calendar year in which the computation
date falls will be determined using his actual earnings history if available,
and otherwise by applying a six percent retrospective salary scale to his rate
of annual earnings in effect on the computation date. The social security
benefit of Mr. Oak if he retires after his 66th birthday will include any
delayed retirement credit.
2.12 Survivor income plan means the TECO Energy Group Survivor Income
Plan, as amended from time to time.
SECTION 3. RETIREMENT BENEFITS
3.1 Retirement at or after age 63. Subject to the reductions in
Section 6.1 below, if Mr. Oak retires on or after attaining age 63, he will
receive a supplemental monthly retirement benefit equal to one-twelfth of 60
percent of his average annual earnings (60 percent is equal to three percent
multiplied by a maximum of 20 years of service). Mr. Oak's retirement benefit
hereunder will be calculated using his average annual earnings as of his
actual date of retirement.
3.2 Retirement before age 63. Subject to the reductions in Section
6.1 below, if Mr. Oak retires before attaining age 63, he will receive a
supplemental monthly retirement benefit equal to one-twelfth of (a) three
percent of his average annual earnings multiplied by his years of service (or
portions thereof) up to a maximum of 20 years determined as of his date of
retirement, multiplied by (b) an early retirement factor determined under the
following table:
- 198 -<PAGE>
Exhibit 10.12
Years by which the
start of payments Early retirement
precedes age 63* factor
7 .65
6 .70
5 .75
4 .80
3 .85
2 .90
1 .95
* Interpolate for completed months
3.3 Termination before age 56. If Mr. Oak's employment terminates for
any reason before age 56, he will receive a supplemental monthly pension equal
to one-twelfth of the amount determined under the formula in Section 3.2
above, calculated using his years of service (or portions thereof) and average
annual earnings as of his date of termination.
3.4 Form of Payment.
(a) Normal form of retirement benefits. The normal form of retirement
benefit payable to Mr. Oak under the plan is a life annuity. Benefits payable
in the normal form will begin on the first day of the month coinciding with or
next following the date of Mr. Oak s retirement. If Mr. Oak s employment
terminates before his age of retirement set forth in Section 2.8, benefits
will begin on the first day of the month coinciding with or next following the
date he attains that age.
(b) Optional lump sum benefit. In lieu of the normal form of benefit,
Mr. Oak may elect to receive payment of his benefit in the form of a commuted
single sum payment that is the actuarial equivalent of the normal form of
benefit (including the value of the post-retirement surviving spouse benefit
under Section 4.2(c)). If Mr. Oak elects to receive a lump sum payment, such
payment will be made on the first day of the month coinciding with or next
following the date Mr. Oak s employment terminates. Actuarial equivalence
will be based on the actuarial assumptions specified from time to time in the
retirement plan for lump sum payments. Mr. Oak s election to receive a lump
sum payment will be effective only with respect to a retirement occurring at
least 12 months after the date Mr. Oak submits the election, provided that
elections submitted on or before December 31, 1996 will be immediately
effective.
SECTION 4. SURVIVING SPOUSE BENEFIT
4.1 Eligibility. Mr. Oak's surviving spouse will receive the
surviving spouse benefit if Mr. Oak and his spouse were married to each other
for at least the 12 months preceding Mr. Oak's death and, in the case of Mr.
Oak's death after retirement, Mr. Oak and his spouse were married to each
other on Mr. Oak's date of retirement.
- 199 -<PAGE>
Exhibit 10.12
4.2 Amount of surviving spouse benefit. Subject to the reductions
described in Section 6.2 below, the benefit provided under the plan to Mr.
Oak's surviving spouse will be determined as follows:
(a) Pre-retirement before age 63. If Mr. Oak dies during
employment with TECO Energy and before his 63rd birthday, his surviving spouse
will receive a monthly survivor income payment equal to 50 percent of his
monthly projected retirement benefit. Mr. Oak's monthly projected retirement
benefit is the monthly benefit he would have received if he had retired at age
63 under Section 3.1 calculated using his average annual earnings determined
as of his date of death.
(b) Pre-retirement on or after age 63. If Mr. Oak dies during
employment with TECO Energy on or after his 63rd birthday, his surviving
spouse will receive a monthly survivor income payment equal to 50 percent of
his monthly retirement benefit earned under Section 3.1 using his average
annual earnings as of his date of death.
(c) Post-retirement. If Mr. Oak dies on or after the date of
his retirement, his surviving spouse will receive a monthly survivor income
payment equal to 50 percent of the monthly benefit payment he was receiving at
his death (or would have received if he had survived until the first payment
date).
4.3 Form and time of surviving spouse benefit. Surviving spouse
benefits under this Section 4 will be payable only in the form of a life
annuity to the surviving spouse. Benefit payments will begin on the first day
of the month coinciding with or next following the date of Mr. Oak's death.
4.4 Death benefit where lump sum paid. If Mr. Oak received a lump sum
payment of his benefit under Section 3.4(b), no surviving spouse benefit or
other death benefit will be payable under the plan to any person.
SECTION 5. DISABILITY
5.1 If Mr. Oak suffers a total disability (as defined in the
disability income plan) before age 63, he will continue to be credited with
service as if he were actively employed by TECO Energy during his period of
total disability. Mr. Oak may not receive benefits under this plan at any
time when he is receiving disability income payments under the disability
income plan. Benefits under this plan will begin when payments cease under
the disability income plan.
5.2 Mr. Oak's disability date is his last day of work for TECO Energy
before becoming unable to continue working because of his total disability. A
period of total disability of Mr. Oak will begin on his disability date and
will end on the earlier of the last day of the month in which his final
disability income payment is due under the disability income plan or on the
date he retires hereunder and starts receiving benefit payments.
5.3 If Mr. Oak does not return to active service with TECO Energy
after suffering a total disability, his retirement benefits under Section 3
- 200 -<PAGE>
Exhibit 10.12
will be calculated using his average annual earnings as of his disability
date, his total service including service credited under Section 5.1 above,
and his primary social security benefit as of his date of disability.
5.4 If Mr. Oak dies while disabled, his surviving spouse will, if
eligible, receive the pre-retirement surviving spouse benefit determined under
Section 4.2(a) or (b).
SECTION 6. OFFSET FOR OTHER PAYMENTS
6.1 Mr. Oak's retirement benefit will be reduced (but not below zero)
by the following payments, with such reductions starting when such payments
are assumed to begin: (a) 100 percent of the social security benefit of Mr.
Oak assuming such benefit begins on the later of the date he reaches age 63 or
his actual retirement, and (b) the amount of his benefit payments under the
retirement plan (converted to a life annuity if such payments are in an
optional form), assuming such payments begin on the later of the date he
reaches age 56 or his actual retirement.
6.2 The benefit of Mr. Oak's surviving spouse will be reduced (but not
below zero) by the following payments: (a) payments under the survivor income
plan, and (b) payments under the retirement plan.
SECTION 7. BENEFITS NOT CURRENTLY FUNDED
7.1 Nothing in this plan will be construed to create a trust or to
obligate TECO Energy or any other employer to segregate a fund, purchase an
insurance contract, or in any other way currently to fund the future payment
of any benefits hereunder, nor will anything herein be construed to give Mr.
Oak or any other person rights to any specific assets of TECO Energy or of any
other employer or entity.
7.2 Notwithstanding Section 7.1, TECO Energy has established a grantor
trust of which it is treated as the owner under Section 671 of the Internal
Revenue Code to provide for the payment of benefits hereunder.
SECTION 8. ADMINISTRATION
The plan will be administered by the committee, which will have full
power and authority to construe, interpret and administer the plan. Decisions
of the committee will be final and binding on all persons. The committee may,
in its discretion, adopt, amend and rescind rules and regulations relating to
the administration of the plan.
SECTION 9. RIGHTS NON-ASSIGNABLE
Neither Mr. Oak, his surviving spouse, nor any other person will have
any right to assign or otherwise to alienate the right to receive payments
under the plan, in whole or in part.
- 201 -<PAGE>
Exhibit 10.12
SECTION 10. OTHER BENEFIT PLANS
This plan will supersede any obligation to pay benefits to Mr. Oak under
the excess benefit plan contained in the retirement plan or the TECO Energy
Group Supplemental Executive Retirement Plan, as they may be amended from time
to time. No benefits will be payable to Mr. Oak under such excess benefit
plan or the TECO Energy Group Supplemental Executive Retirement Plan.
SECTION 11. AMENDMENT
TECO Energy reserves the right at any time by action of the board to
amend the plan in any way. However, no amendment of the plan may reduce the
benefits to be paid to Mr. Oak or his surviving spouse below those that would
have been paid if the plan had continued without change to the date of Mr.
Oak's retirement or termination of employment for any reason.
Executed as of October 16, 1996.
TECO ENERGY, INC.
By:
____________________________________
Roger A. Dunn
V i ce President - Human Resources
ALAN D. OAK
___________________________________
- 202 -<PAGE>
Exhibit 10.13
TECO ENERGY GROUP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FOR KEITH S. SURGENOR
SECTION 1. PURPOSE AND EFFECTIVE DATE
The purpose of this plan is to provide Keith S. Surgenor, President of
Tampa Electric Company, with additional retirement income by supplementing the
retirement benefits provided under the retirement plan. The plan was
originally effective as of July 21, 1992. The effective date of this
amendment and restatement is October 16, 1996.
SECTION 2. DEFINITIONS
This section contains definitions of terms used in the plan. Where the
context so requires, the singular includes the plural, and the plural includes
the singular.
2.1 Annual earnings will have the same meaning as in the retirement
plan, except that the same will be determined without regard to (a) any dollar
limitation on such annual earnings that may be imposed under the retirement
plan or (b) any reduction in taxable income as a result of voluntary salary
reduction deferrals under the TECO Energy Group Retirement Savings Excess
Benefit Plan.
2.2 Average annual earnings of Mr. Surgenor as of any date of
reference means the average of his annual earnings during whichever of the
following periods yields the highest average: (a) the 36 consecutive months of
active employment preceding the date of reference (or all months of employment
if less than 36), or (b) any three consecutive calendar years out of the five
calendar years preceding the date of reference. Bonuses are included as
compensation for the period in which paid, provided that if more than three
regular annual bonuses are paid in any 36 consecutive month period, only the
largest three bonuses will be counted.
2.3 Board means the Board of Directors of TECO Energy.
2.4 Committee means the retirement plan committee as constituted under
the retirement plan.
2.5 TECO Energy means TECO Energy, Inc. and any successor to all or a
major portion of its assets or business which assumes the obligations of TECO
Energy, Inc. under this plan.
2.6 Disability income plan means the TECO Energy Group Disability
Income Plan, as amended from time to time.
- 204 -<PAGE>
Exhibit 10.13
2.7 Plan means the TECO Energy Group Supplemental Executive Retirement
Plan for Keith S. Surgenor, as set forth in this plan instrument, and as it
may be amended from time to time.
2.8 Retirement means termination of Mr. Surgenor's employment with
TECO Energy by Mr. Surgenor or TECO Energy for any reason on or after he
attains age 56.
2.9 Retirement plan means the TECO Energy Group Retirement Plan, as
amended from time to time.
2.10 Service will have the same meaning as "plan service" in the
retirement plan.
2.11 Social security benefit of Mr. Surgenor as of any date of
reference (the "computation date") means the primary insurance amount to which
he is or would be entitled, payable under Title II of the Social Security Act
as in effect on such date, based on the assumptions: (a) that no changes in
the benefit levels payable or the wage base under Title II occur after the
computation date; (b) that, if the computation date falls before his 63rd
birthday, his annual earnings during the calendar year in which the
computation date falls and during any subsequent calendar year before the
calendar year in which his 63rd birthday falls is zero; (c) that payment of
his primary insurance amount begins for the month after he reaches age 63, or
his date of retirement if later, without reduction or delay because of future
gainful employment or delay in applying for benefits; and (d) that his
earnings for calendar years before the calendar year in which the computation
date falls will be determined using his actual earnings history if available,
and otherwise by applying a six percent retrospective salary scale to his rate
of annual earnings in effect on the computation date. The social security
benefit of Mr. Surgenor if he retires after his 66th birthday will include any
delayed retirement credit.
2.12 Survivor income plan means the TECO Energy Group Survivor Income
Plan, as amended from time to time.
SECTION 3. RETIREMENT BENEFITS
3.1 Retirement at or after age 63. Subject to the reductions in
Section 6.1 below, if Mr. Surgenor retires on or after attaining age 63, he
will receive a supplemental monthly retirement benefit equal to one-twelfth of
60 percent of his average annual earnings (60 percent is equal to three
percent multiplied by a maximum of 20 years of service). Mr. Surgenor's
retirement benefit hereunder will be calculated using his average annual
earnings as of his actual date of retirement.
3.2 Retirement before age 63. Subject to the reductions in Section
6.1 below, if Mr. Surgenor retires before attaining age 63, he will receive a
supplemental monthly retirement benefit equal to one-twelfth of (a) three
percent of his average annual earnings multiplied by his years of service (or
portions thereof) up to a maximum of 20 years determined as of his date of
- 205 -<PAGE>
Exhibit 10.13
retirement, multiplied by (b) an early retirement factor determined under the
following table:
Years by which the
start of payments Early retirement
precedes age 63* factor
7 .65
6 .70
5 .75
4 .80
3 .85
2 .90
1 .95
* Interpolate for completed months
3.3 Termination before age 56. If Mr. Surgenor's employment
terminates for any reason before age 56, he will receive a supplemental
monthly pension equal to one-twelfth of the amount determined under the
formula in Section 3.2 above, calculated using his years of service (or
portions thereof) and average annual earnings as of his date of termination.
3.4 Form of Payment.
(a) Normal form of retirement benefits. The normal form of
retirement benefit payable to Mr. Surgenor under the plan is a life annuity.
Benefits payable in the normal form will begin on the first day of the month
coinciding with or next following the date of Mr. Surgenor s retirement. If
Mr. Surgenor s employment terminates before his age of retirement set forth in
Section 2.8, benefits will begin on the first day of the month coinciding with
or next following the date he attains that age.
(b) Optional lump sum benefit. In lieu of the normal form of
benefit, Mr. Surgenor may elect to receive payment of his benefit in the form
of a commuted single sum payment that is the actuarial equivalent of the
normal form of benefit (including the value of the post-retirement surviving
spouse benefit under Section 4.2(c)). If Mr. Surgenor elects to receive a
lump sum payment, such payment will be made on the first day of the month
coinciding with or next following the date Mr. Surgenor s employment
terminates. Actuarial equivalence will be based on the actuarial assumptions
specified from time to time in the retirement plan for lump sum payments. Mr.
Surgenor s election to receive a lump sum payment will be effective only with
respect to a retirement occurring at least 12 months after the date Mr.
Surgenor submits the election, provided that elections submitted on or before
December 31, 1996 will be immediately effective.
- 206 -<PAGE>
Exhibit 10.13
SECTION 4. SURVIVING SPOUSE BENEFIT
4.1 Eligibility. Mr. Surgenor's surviving spouse will receive the
surviving spouse benefit if Mr. Surgenor and his spouse were married to each
other for at least the 12 months preceding Mr. Surgenor's death and, in the
case of Mr. Surgenor's death after retirement, Mr. Surgenor and his spouse
were married to each other on Mr. Surgenor's date of retirement.
4.2 Amount of surviving spouse benefit. Subject to the reductions
described in Section 6.2 below, the benefit provided under the plan to Mr.
Surgenor's surviving spouse will be determined as follows:
(a) Pre-retirement before age 63. If Mr. Surgenor dies during
employment with TECO Energy and before his 63rd birthday, his surviving spouse
will receive a monthly survivor income payment equal to 50 percent of his
monthly projected retirement benefit. Mr. Surgenor's monthly projected
retirement benefit is the monthly benefit he would have received if he had
retired at age 63 under Section 3.1 calculated using his average annual
earnings determined as of his date of death.
(b) Pre-retirement on or after age 63. If Mr. Surgenor dies
during employment with TECO Energy on or after his 63rd birthday, his
surviving spouse will receive a monthly survivor income payment equal to 50
percent of his monthly retirement benefit earned under Section 3.1 using his
average annual earnings as of his date of death.
(c) Post-retirement. If Mr. Surgenor dies on or after the date
of his retirement, his surviving spouse will receive a monthly survivor income
payment equal to 50 percent of the monthly benefit payment he was receiving at
his death (or would have received if he had survived until the first payment
date).
4.3 Form and time of surviving spouse benefit. Surviving spouse
benefits under this Section 4 will be payable only in the form of a life
annuity to the surviving spouse. Benefit payments will begin on the first day
of the month coinciding with or next following the date of Mr. Surgenor's
death.
4.4 Death benefit where lump sum paid. If Mr. Surgenor received a
lump sum payment of his benefit under Section 3.4(b), no surviving spouse
benefit or other death benefit will be payable under the plan to any person.
SECTION 5. DISABILITY
5.1 If Mr. Surgenor suffers a total disability (as defined in the
disability income plan) before age 63, he will continue to be credited with
service as if he were actively employed by TECO Energy during his period of
total disability. Mr. Surgenor may not receive benefits under this plan at
any time when he is receiving disability income payments under the disability
income plan. Benefits under this plan will begin when payments cease under
the disability income plan.
- 207 -<PAGE>
Exhibit 10.13
5.2 Mr. Surgenor's disability date is his last day of work for TECO
Energy before becoming unable to continue working because of his total
disability. A period of total disability of Mr. Surgenor will begin on his
disability date and will end on the earlier of the last day of the month in
which his final disability income payment is due under the disability income
plan or on the date he retires hereunder and starts receiving benefit
payments.
5.3 If Mr. Surgenor does not return to active service with TECO Energy
after suffering a total disability, his retirement benefits under Section 3
will be calculated using his average annual earnings as of his disability
date, his total service including service credited under Section 5.1 above,
and his primary social security benefit as of his date of disability.
5.4 If Mr. Surgenor dies while disabled, his surviving spouse will, if
eligible, receive the pre-retirement surviving spouse benefit determined under
Section 4.2(a) or (b).
SECTION 6. OFFSET FOR OTHER PAYMENTS
6.1 Mr. Surgenor's retirement benefit will be reduced (but not below
zero) by the following payments, with such reductions starting when such
payments are assumed to begin: (a) 100 percent of the social security benefit
of Mr. Surgenor assuming such benefit begins on the later of the date he
reaches age 63 or his actual retirement, and (b) the amount of his benefit
payments under the retirement plan (converted to a life annuity if such
payments are in an optional form), assuming such payments begin on the later
of the date he reaches age 56 or his actual retirement.
6.2 The benefit of Mr. Surgenor's surviving spouse will be reduced
(but not below zero) by the following payments: (a) payments under the
survivor income plan, and (b) payments under the retirement plan.
SECTION 7. BENEFITS NOT CURRENTLY FUNDED
7.1 Nothing in this plan will be construed to create a trust or to
obligate TECO Energy or any other employer to segregate a fund, purchase an
insurance contract, or in any other way currently to fund the future payment
of any benefits hereunder, nor will anything herein be construed to give Mr.
Surgenor or any other person rights to any specific assets of TECO Energy or
of any other employer or entity.
7.2 Notwithstanding Section 7.1, TECO Energy has established a grantor
trust of which it is treated as the owner under Section 671 of the Internal
Revenue Code to provide for the payment of benefits hereunder.
- 208 -<PAGE>
Exhibit 10.13
SECTION 8. ADMINISTRATION
The plan will be administered by the committee, which will have full
power and authority to construe, interpret and administer the plan. Decisions
of the committee will be final and binding on all persons. The committee may,
in its discretion, adopt, amend and rescind rules and regulations relating to
the administration of the plan.
SECTION 9. RIGHTS NON-ASSIGNABLE
Neither Mr. Surgenor, his surviving spouse, nor any other person will
have any right to assign or otherwise to alienate the right to receive
payments under the plan, in whole or in part.
SECTION 10. OTHER BENEFIT PLANS
This plan will supersede any obligation to pay benefits to Mr. Surgenor
under the excess benefit plan contained in the retirement plan or the TECO
Energy Group Supplemental Executive Retirement Plan, as they may be amended
from time to time. No benefits will be payable to Mr. Surgenor under such
excess benefit plan or the TECO Energy Group Supplemental Executive Retirement
Plan.
SECTION 11. AMENDMENT
TECO Energy reserves the right at any time by action of the board to
amend the plan in any way. However, no amendment of the plan may reduce the
benefits to be paid to Mr. Surgenor or his surviving spouse below those that
would have been paid if the plan had continued without change to the date of
Mr. Surgenor's retirement or termination of employment for any reason.
Executed as of October 16, 1996.
TECO ENERGY, INC.
By:
____________________________________
Roger A. Dunn
Vice President - Human Resources
KEITH S. SURGENOR
_____________________________________
- 209 -<PAGE>
Exhibit 10.15
TECO ENERGY GROUP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FOR GIRARD F. ANDERSON
SECTION 1. PURPOSE AND EFFECTIVE DATE
The purpose of this plan is to provide Girard F. Anderson, President and
Chief Operating Officer of TECO Energy, with additional retirement income by
supplementing the retirement benefits provided under the retirement plan. The
plan was originally effective as of July 20, 1993. The effective date of this
amendment and restatement is October 16, 1996.
SECTION 2. DEFINITIONS
This section contains definitions of terms used in the plan. Where the
context so requires, the singular includes the plural, and the plural includes
the singular.
2.1 Annual earnings will have the same meaning as in the retirement
plan, except that the same will be determined without regard to (a) any dollar
limitation on such annual earnings that may be imposed under the retirement
plan or (b) any reduction in taxable income as a result of voluntary salary
reduction deferrals under the TECO Energy Group Retirement Savings Excess
Benefit Plan.
2.2 Average annual earnings of Mr. Anderson as of any date of
reference means the average of his annual earnings during whichever of the
following periods yields the highest average: (a) the 36 consecutive months of
active employment preceding the date of reference (or all months of employment
if less than 36), or (b) any three consecutive calendar years out of the five
calendar years preceding the date of reference. Bonuses are included as
compensation for the period in which paid, provided that if more than three
regular annual bonuses are paid in any 36 consecutive month period, only the
largest three bonuses will be counted.
2.3 Board means the Board of Directors of TECO Energy.
2.4 Committee means the retirement plan committee as constituted under
the retirement plan.
2.5 TECO Energy means TECO Energy, Inc. and any successor to all or a
major portion of its assets or business which assumes the obligations of TECO
Energy, Inc. under this plan.
2.6 Disability income plan means the TECO Energy Group Disability
Income Plan, as amended from time to time.
- 211 -<PAGE>
Exhibit 10.15
2.7 Plan means the TECO Energy Group Supplemental Executive Retirement
Plan for Girard F. Anderson, as set forth in this plan instrument, and as it
may be amended from time to time.
2.8 Retirement means termination of Mr. Anderson's employment with
TECO Energy by Mr. Anderson or TECO Energy for any reason.
2.9 Retirement plan means the TECO Energy Group Retirement Plan, as
amended from time to time.
2.10 Service will have the same meaning as "plan service" in the
retirement plan.
2.11 Social security benefit of Mr. Anderson as of any date of
reference (the "computation date") means the primary insurance amount to which
he is or would be entitled, payable under Title II of the Social Security Act
as in effect on such date, based on the assumptions: (a) that no changes in
the benefit levels payable or the wage base under Title II occur after the
computation date; (b) that, if the computation date falls before his 62nd
birthday, his annual earnings during the calendar year in which the
computation date falls and during any subsequent calendar year before the
calendar year in which his 62nd birthday falls is zero; (c) that payment of
his primary insurance amount begins for the month after he reaches age 62, or
his date of retirement if later, without reduction or delay because of future
gainful employment or delay in applying for benefits; and (d) that his
earnings for calendar years before the calendar year in which the computation
date falls will be determined using his actual earnings history if available,
and otherwise by applying a six percent retrospective salary scale to his rate
of annual earnings in effect on the computation date. The social security
benefit of Mr. Anderson if he retires after his 65th birthday will include any
delayed retirement credit.
2.12 Survivor income plan means the TECO Energy Group Survivor Income
Plan, as amended from time to time.
SECTION 3. RETIREMENT BENEFITS
3.1 Retirement at or after age 62. Subject to the reductions in
Section 6.1 below, if Mr. Anderson retires on or after attaining age 62, he
will receive a supplemental monthly retirement benefit equal to one-twelfth of
60 percent of his average annual earnings (60 percent is equal to three
percent multiplied by a maximum of 20 years of service). Mr. Anderson's
retirement benefit hereunder will be calculated using his average annual
earnings as of his actual date of retirement.
3.2 Retirement before age 62. Subject to the reductions in Section
6.1 below, if Mr. Anderson retires before attaining age 62, he will receive a
supplemental monthly retirement benefit equal to one-twelfth of 60 percent of
his average annual earnings reduced by 5/12ths of one percent for each month
by which the start of payments precedes age 62.
3.3 Form of Payment.
- 212 -<PAGE>
Exhibit 10.15
(a) Normal form of retirement benefits. The normal form of
retirement benefit payable to Mr. Anderson under the plan is a life annuity.
Benefits payable in the normal form will begin on the first day of the month
coinciding with or next following the date of Mr. Anderson s retirement.
(b) Optional lump sum benefit. In lieu of the normal form of
benefit, Mr. Anderson may elect to receive payment of his benefit in the form
of a commuted single sum payment that is the actuarial equivalent of the
normal form of benefit (including the value of the post-retirement surviving
spouse benefit under Section 4.2(c)). If Mr. Anderson elects to receive a
lump sum payment, such payment will be made on the first day of the month
coinciding with or next following the date Mr. Anderson s employment
terminates. Actuarial equivalence will be based on the actuarial assumptions
specified from time to time in the retirement plan for lump sum payments. Mr.
Anderson s election to receive a lump sum payment will be effective only with
respect to a retirement occurring at least 12 months after the date Mr.
Anderson submits the election, provided that elections submitted on or before
December 31, 1996 will be immediately effective.
SECTION 4. SURVIVING SPOUSE BENEFIT
4.1 Eligibility. Mr. Anderson's surviving spouse will receive the
surviving spouse benefit if Mr. Anderson and his spouse were married to each
other for at least the 12 months preceding Mr. Anderson's date of death and,
in the case of Mr. Anderson's death after retirement, Mr. Anderson and his
spouse were married to each other on Mr. Anderson's date of retirement.
4.2 Amount of surviving spouse benefit. Subject to the reductions
described in Section 6.2 below, the benefit provided under the plan to Mr.
Anderson's surviving spouse will be determined as follows:
(a) Pre-retirement before age 62. If Mr. Anderson dies during
employment with TECO Energy and before his 62nd birthday, his surviving spouse
will receive a monthly survivor income payment equal to 50 percent of his
monthly projected retirement benefit. Mr. Anderson's monthly projected
retirement benefit is the monthly benefit he would have received if he had
retired at age 62 under Section 3.1 calculated using his average annual
earnings determined as of his date of death.
(b) Pre-retirement on or after age 62. If Mr. Anderson dies
during employment with TECO Energy on or after his 62nd birthday, his
surviving spouse will receive a monthly survivor income payment equal to 50
percent of his monthly retirement benefit earned under Section 3.1 using his
average annual earnings as of his date of death.
(c) Post-retirement. If Mr. Anderson dies on or after the date
of his retirement, his surviving spouse will receive a monthly survivor income
payment equal to 50 percent of the monthly benefit payment he was receiving at
his death (or would have received if he had survived until the first payment
date).
- 213 -<PAGE>
Exhibit 10.15
4.3 Form and time of surviving spouse benefit. Surviving spouse
benefits under this Section 4 will be payable only in the form of a life
annuity to the surviving spouse. Benefit payments will begin on the first day
of the month coinciding with or next following the date of Mr. Anderson's
death.
4.4 Death benefit where lump sum paid. If Mr. Anderson received a
lump sum payment of his benefit under Section 3.3(b), no surviving spouse
benefit or other death benefit will be payable under the plan to any person.
SECTION 5. DISABILITY
5.1 If Mr. Anderson suffers a total disability (as defined in the
disability income plan) before age 62, he will continue to be credited with
service as if he were actively employed by TECO Energy during his period of
total disability. Mr. Anderson may not receive benefits under this plan at
any time when he is receiving disability income payments under the disability
income plan. Benefits under this plan will begin when payments cease under
the disability income plan.
5.2 Mr. Anderson's disability date is his last day of work for TECO
Energy before becoming unable to continue working because of his total
disability. A period of total disability of Mr. Anderson will begin on his
disability date and will end on the earlier of the last day of the month in
which his final disability income payment is due under the disability income
plan or on the date he retires hereunder and starts receiving benefit
payments.
5.3 If Mr. Anderson does not return to active service with TECO Energy
after suffering a total disability, his retirement benefits under Section 3
will be calculated using his average annual earnings as of his disability
date, his total service including service credited under Section 5.1 above,
and his primary social security benefit as of his date of disability.
5.4 If Mr. Anderson dies while disabled, his surviving spouse will, if
eligible, receive the pre-retirement surviving spouse benefit determined under
Section 4.2(a) or (b).
SECTION 6. OFFSET FOR OTHER PAYMENTS
6.1 Mr. Anderson's retirement benefit will be reduced (but not below
zero) by the following payments, with such reductions starting when such
payments are assumed to begin: (a) 100 percent of the social security benefit
of Mr. Anderson assuming such benefit begins on the later of the date he
reaches age 62 or his actual retirement, and (b) the amount of his benefit
payments under the retirement plan (converted to a life annuity if such
payments are in an optional form), assuming such payments begin on his actual
retirement date.
- 214 -<PAGE>
Exhibit 10.15
6.2 The benefit of Mr. Anderson's surviving spouse will be reduced
(but not below zero) by the following payments: (a) payments under the
survivor income plan, and (b) payments under the retirement plan.
SECTION 7. BENEFITS NOT CURRENTLY FUNDED
7.1 Nothing in this plan will be construed to create a trust or to
obligate TECO Energy or any other employer to segregate a fund, purchase an
insurance contract, or in any other way currently to fund the future payment
of any benefits hereunder, nor will anything herein be construed to give Mr.
Anderson or any other person rights to any specific assets of TECO Energy or
of any other employer or entity.
7.2 Notwithstanding Section 7.1, TECO Energy has established a grantor
trust of which it is treated as the owner under Section 671 of the Internal
Revenue Code to provide for the payment of benefits hereunder.
SECTION 8. ADMINISTRATION
The plan will be administered by the committee, which will have full
power and authority to construe, interpret and administer the plan. Decisions
of the committee will be final and binding on all persons. The committee may,
in its discretion, adopt, amend and rescind rules and regulations relating to
the administration of the plan.
SECTION 9. RIGHTS NON-ASSIGNABLE
Neither Mr. Anderson, his surviving spouse, nor any other person will
have any right to assign or otherwise to alienate the right to receive
payments under the plan, in whole or in part.
SECTION 10. OTHER BENEFIT PLANS
This plan will supersede any obligation to pay benefits to Mr. Anderson
under the excess benefit plan contained in the retirement plan or the TECO
Energy Group Supplemental Executive Retirement Plan, as they may be amended
from time to time. No benefits will be payable to Mr. Anderson under such
excess benefit plan or the TECO Energy Group Supplemental Executive Retirement
Plan.
SECTION 11. AMENDMENT
TECO Energy reserves the right at any time by action of the board to
amend the plan in any way. However, no amendment of the plan may reduce the
benefits to be paid to Mr. Anderson or his surviving spouse below those that
would have been paid if the plan had continued without change to the date of
Mr. Anderson's retirement or termination of employment for any reason.
- 215 -<PAGE>
Exhibit 10.15
Executed as of October 16, 1996.
TECO ENERGY, INC.
By:
____________________________________
Roger A. Dunn
Vice President - Human Resources
GIRARD F. ANDERSON
- 216 -<PAGE>
Exhibit 10.20
TECO ENERGY GROUP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FOR ROGER A. DUNN
SECTION 1. PURPOSE AND EFFECTIVE DATE
The purpose of this plan is to provide Roger A. Dunn, Vice President -
Human Resources of TECO Energy, with additional retirement income by
supplementing the retirement benefits provided under the retirement plan. The
plan was originally effective as of July 17, 1995. The effective date of this
amendment and restatement is January 15, 1997.
SECTION 2. DEFINITIONS
This section contains definitions of terms used in the plan. Where the
context so requires, the singular includes the plural, and the plural includes
the singular.
2.1 Annual earnings will have the same meaning as in the retirement
plan, except that the same will be determined without regard to (a) any dollar
limitation on such annual earnings that may be imposed under the retirement
plan or (b) any reduction in taxable income as a result of voluntary salary
reduction deferrals under the TECO Energy Group Retirement Savings Excess
Benefit Plan.
2.2 Average annual earnings of Mr. Dunn as of any date of reference
means the average of his annual earnings during whichever of the following
periods yields the highest average: (a) the 36 consecutive months of active
employment preceding the date of reference (or all months of employment if
less than 36), or (b) any three consecutive calendar years out of the five
calendar years preceding the date of reference. Bonuses are included as
compensation for the period in which paid, provided that if more than three
regular annual bonuses are paid in any 36 consecutive month period, only the
largest three bonuses will be counted.
2.3 Board means the Board of Directors of TECO Energy.
2.4 Committee means the retirement plan committee as constituted under
the retirement plan.
2.5 TECO Energy means TECO Energy, Inc. and any successor to all or a
major portion of its assets or business which assumes the obligations of TECO
Energy, Inc. under this plan.
2.6 Disability income plan means the TECO Energy Group Disability
Income Plan, as amended from time to time.
- 217 -<PAGE>
Exhibit 10.20
2.7 Plan means the TECO Energy Group Supplemental Executive Retirement
Plan for Roger A. Dunn, as set forth in this plan instrument, and as it may be
amended from time to time.
2.8 Retirement means termination of Mr. Dunn's employment with TECO
Energy by Mr. Dunn or TECO Energy for any reason on or after he attains age 55
years and 10 months.
2.9 Retirement plan means the TECO Energy Group Retirement Plan, as
amended from time to time.
2.10 Service will have the same meaning as "plan service" in the
retirement plan.
2.11 Social security benefit of Mr. Dunn as of any date of reference
(the "computation date") means the primary insurance amount to which he is or
would be entitled, payable under Title II of the Social Security Act as in
effect on such date, based on the assumptions: (a) that no changes in the
benefit levels payable or the wage base under Title II occur after the
computation date; (b) that, if the computation date falls before his the date
he reaches age 62 years and 10 months, his annual earnings during the calendar
year in which the computation date falls and during any subsequent calendar
year before the calendar year in which he reaches such age is zero; (c) that
payment of his primary insurance amount begins for the month after he reaches
age 62 years and 10 months, or his date of retirement if later, without
reduction or delay because of future gainful employment or delay in applying
for benefits; and (d) that his earnings for calendar years before the calendar
year in which the computation date falls will be determined using his actual
earnings history if available, and otherwise by applying a six percent
retrospective salary scale to his rate of annual earnings in effect on the
computation date. The social security benefit of Mr. Dunn if he retires after
age 65 years and 10 months will include any delayed retirement credit.
2.12 Survivor income plan means the TECO Energy Group Survivor Income
Plan, as amended from time to time.
SECTION 3. RETIREMENT BENEFITS
3.1 Retirement at or after age 62 years and 10 months. Subject to the
reductions in Section 6.1 below, if Mr. Dunn retires on or after attaining age
62 years and 10 months, he will receive a supplemental monthly retirement
benefit equal to one-twelfth of four percent of his average annual earnings
multiplied by his years of service (or portions thereof) up to a maximum
benefit of 40% of his final average earnings (40% is equal to four percent
multiplied by a maximum of 10 years of service) . Mr. Dunn's retirement
benefit hereunder will be calculated using his years of service (or portions
thereof) and average annual earnings as of his actual date of retirement.
3.2 Retirement before age 62 years and 10 months. Subject to the
reductions in Section 6.1 below, if Mr. Dunn retires before attaining age 62
years and 10 months, he will receive a supplemental monthly retirement benefit
equal to one-twelfth of (a) the amount determined using the formula in Section
- 218 -<PAGE>
Exhibit 10.20
3.1 above, multiplied by (b) an early retirement factor determined under the
following table:
Years by which the
start of payments
precedes age 62 Early retirement
years and 10 months* factor
7 .65
6 .70
5 .75
4 .80
3 .85
2 .90
1 .95
* Interpolate for completed months
3.3 Termination before age 55 years and 10 months. If Mr. Dunn's
employment terminates for any reason before age 55 years and 10 months, he
will receive a supplemental monthly pension equal to one-twelfth of the amount
determined under the formula in Section 3.2 above, calculated using his years
of service (or portions thereof) and average annual earnings as of his date of
termination.
3.4 Form of Payment.
(a) Normal form of retirement benefits. The normal form of
retirement benefit payable to Mr. Dunn under the plan is a life annuity.
Benefits payable in the normal form will begin on the first day of the month
coinciding with or next following the date of Mr. Dunn s retirement. If Mr.
Dunn s employment terminates before his age of retirement set forth in Section
2.8, benefits will begin on the first day of the month coinciding with or next
following the date he attains that age.
(b) Optional lump sum benefit. In lieu of the normal form of
benefit, Mr. Dunn may elect to receive payment of his benefit in the form of a
commuted single sum payment that is the actuarial equivalent of the normal
form of benefit (including the value of the post-retirement surviving spouse
benefit under Section 4.2(c)). If Mr. Dunn elects to receive a lump sum
payment, such payment will be made on the first day of the month coinciding
with or next following the date Mr. Dunn s employment terminates. Actuarial
equivalence will be based on the actuarial assumptions specified from time to
time in the retirement plan for lump sum payments. Mr. Dunn s election to
receive a lump sum payment will be effective only with respect to a retirement
occurring at least 12 months after the date Mr. Dunn submits the election,
provided that elections submitted on or before December 31, 1996 will be
immediately effective.
SECTION 4. SURVIVING SPOUSE BENEFIT
- 219 -<PAGE>
Exhibit 10.20
4.1 Eligibility. Mr. Dunn's surviving spouse will receive the
surviving spouse benefit if Mr. Dunn and his spouse were married to each other
for at least the 12 months preceding Mr. Dunn's death and, in the case of Mr.
Dunn's death after retirement, Mr. Dunn and his spouse were married to each
other on Mr. Dunn's date of retirement.
4.2 Amount of surviving spouse benefit. Subject to the reductions
described in Section 6.2 below, the benefit provided under the plan to Mr.
Dunn's surviving spouse will be determined as follows:
(a) Pre-retirement before age 62 years and 10 months. If Mr.
Dunn dies during employment with TECO Energy and before he reaches age 62
years and 10 months, his surviving spouse will receive a monthly survivor
income payment equal to 50 percent of his monthly projected retirement
benefit. Mr. Dunn's monthly projected retirement benefit is the monthly
benefit he would have received if he had retired at age 62 years and 10 months
under Section 3.1 calculated using his average annual earnings determined as
of his date of death.
(b) Pre-retirement on or after age 62 years and 10 months. If
Mr. Dunn dies during employment with TECO Energy on or after age 62 years and
10 months, his surviving spouse will receive a monthly survivor income payment
equal to 50 percent of his monthly retirement benefit earned under Section 3.1
using his years of service (or portions thereof) and his average annual
earnings as of his date of death.
(c) Post-retirement. If Mr. Dunn dies on or after the date of
his retirement, his surviving spouse will receive a monthly survivor income
payment equal to 50 percent of the monthly benefit payment he was receiving at
his death (or would have received if he had survived until the first payment
date).
4.3 Form and time of surviving spouse benefit. Surviving spouse
benefits under this Section 4 will be payable only in the form of a life
annuity to the surviving spouse. Benefit payments will begin on the first day
of the month coinciding with or next following the date of Mr. Dunn's death.
4.4 Death benefit where lump sum paid. If Mr. Dunn received a lump
sum payment of his benefit under Section 3.4(b), no surviving spouse benefit
or other death benefit will be payable under the plan to any person.
SECTION 5. DISABILITY
5.1 If Mr. Dunn suffers a total disability (as defined in the
disability income plan) before age 62 years and 10 months, he will continue to
be credited with service as if he were actively employed by TECO Energy during
his period of total disability. Mr. Dunn may not receive benefits under this
plan at any time when he is receiving disability income payments under the
disability income plan. Benefits under this plan will begin when payments
cease under the disability income plan.
- 220 -<PAGE>
Exhibit 10.20
5.2 Mr. Dunn's disability date is his last day of work for TECO Energy
before becoming unable to continue working because of his total disability. A
period of total disability of Mr. Dunn will begin on his disability date and
will end on the earlier of the last day of the month in which his final
disability income payment is due under the disability income plan or on the
date he retires hereunder and starts receiving benefit payments.
5.3 If Mr. Dunn does not return to active service with TECO Energy
after suffering a total disability, his retirement benefits under Section 3
will be calculated using his average annual earnings as of his disability
date, his total service including service credited under Section 5.1 above,
and his primary social security benefit as of his date of disability.
5.4 If Mr. Dunn dies while disabled, his surviving spouse will, if
eligible, receive the pre-retirement surviving spouse benefit determined under
Section 4.2(a) or (b).
SECTION 6. OFFSET FOR OTHER PAYMENTS
6.1 Mr. Dunn's retirement benefit will be reduced (but not below zero)
by the following payments, with such reductions starting when such payments
are assumed to begin: (a) 100 percent of the social security benefit of Mr.
Dunn assuming such benefit begins on the later of the date he reaches age 62
years and 10 months or his actual retirement, and (b) the amount of his
benefit payments under the retirement plan (converted to a life annuity if
such payments are in an optional form), assuming such payments begin on the
later of the date he reaches age 55 years and 10 months or his actual
retirement.
6.2 The benefit of Mr. Dunn's surviving spouse will be reduced (but
not below zero) by the following payments: (a) payments under the survivor
income plan, and (b) payments under the retirement plan.
SECTION 7. BENEFITS NOT CURRENTLY FUNDED
7.1 Nothing in this plan will be construed to create a trust or to
obligate TECO Energy or any other employer to segregate a fund, purchase an
insurance contract, or in any other way currently to fund the future payment
of any benefits hereunder, nor will anything herein be construed to give Mr.
Dunn or any other person rights to any specific assets of TECO Energy or of
any other employer or entity.
7.2 Notwithstanding Section 7.1, TECO Energy has established a grantor
trust of which it is treated as the owner under Section 671 of the Internal
Revenue Code to provide for the payment of benefits hereunder.
SECTION 8. ADMINISTRATION
The plan will be administered by the committee, which will have full
power and authority to construe, interpret and administer the plan. Decisions
- 221 -<PAGE>
Exhibit 10.20
of the committee will be final and binding on all persons. The committee may,
in its discretion, adopt, amend and rescind rules and regulations relating to
the administration of the plan.
SECTION 9. RIGHTS NON-ASSIGNABLE
Neither Mr. Dunn, his surviving spouse, nor any other person will have
any right to assign or otherwise to alienate the right to receive payments
under the plan, in whole or in part.
SECTION 10. OTHER BENEFIT PLANS
This plan will supersede any obligation to pay benefits to Mr. Dunn
under the excess benefit plan contained in the retirement plan or the TECO
Energy Group Supplemental Executive Retirement Plan, as they may be amended
from time to time. No benefits will be payable to Mr. Dunn under such excess
benefit plan or the TECO Energy Group Supplemental Executive Retirement Plan.
SECTION 11. AMENDMENT
TECO Energy reserves the right at any time by action of the board to
amend the plan in any way. However, no amendment of the plan may reduce the
benefits to be paid to Mr. Dunn or his surviving spouse below those that would
have been paid if the plan had continued without change to the date of Mr.
Dunn's retirement or termination of employment for any reason.
Executed as of January 15, 1997.
TECO ENERGY, INC.
By:
____________________________________
Girard F. Anderson
President
ROGER A. DUNN
___________________________________
- 222 -<PAGE>
EXHIBIT 12
TAMPA ELECTRIC COMPANY
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the company's ratio of earnings to fixed
charges for the periods indicated.
Year ended Dec. 31, 1996 1995 1994 1993 1992
4.64 4.50x 4.11x(1) 3.98x(2) 4.16x
For the purposes of calculating this ratio, earnings consist of income before
income taxes and fixed charges. Fixed charges consist of interest on
indebtedness, amortization of debt premium, the interest component of rentals,
deferred interest costs and preferred stock dividend requirements.
__________________
(1) Includes the effect of the restructuring charge of $21.3 million pretax as
discussed in Note F on page 36. The effect of this charge was to reduce the
ratio of earnings to fixed charges. Had this non-recurring charge been
excluded from the calculation, the ratio of earnings to fixed charges would
have been 4.52x for the period ended Dec. 31, 1994.
(2)Includes the effect of the non-recurring $10-million pretax charge
associated with a coal pricing settlement. The effect of this charge was to
reduce the ratio of earnings to fixed charges. Had this non-recurring charge
been excluded from the calculation, the ratio of earnings to fixed charges
would have been 4.17x for the period ended Dec. 31, 1993.
224<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Tampa Electric Company on Form S-3 (File No. 33-61636) of our report dated
Jan. 15, 1997 on our audits of the financial statements of Tampa Electric
Company as of Dec. 31, 1996 and 1995 and for the years ended Dec. 31, 1996,
1995, and 1994, which report is included in this Annual Report on Form 10-K.
COOPERS & LYBRAND L.L.P.
Certified Public Accountants
Tampa, Florida
March 26, 1997
225<PAGE>
Exhibit 24.1
TAMPA ELECTRIC COMPANY
POWER OF ATTORNEY
WHEREAS, the Board of Directors of Tampa Electric Company, a Florida
corporation, at a meeting held on January 15, 1997, authorized the officers
and Directors of the Company to execute an Annual Report on Form 10-K and
authorized the officers of the Company to file said Annual Report with the
Securities and Exchange Commission under the Securities Exchange Act of 1934,
as amended.
NOW, THEREFORE, each of the undersigned in his capacity as a Director or
officer or both, as the case may be, of said Company, does hereby appoint R.
H. Kessel, W. L. Griffin and D. R. Pokross, Jr., and each of them, severally,
his true and lawful attorneys or attorney to execute in his name, place and
stead, in his capacity as Director or officer or both, as the case may be, of
said Company, said Annual Report and any and all amendments thereto and all
instruments necessary or incidental in connection therewith, and to file the
same with the Securities and Exchange Commission. Each of said attorneys has
the power to act hereunder with or without the other of said attorneys and
shall have full power of substitution and resubstitution. Each of said
attorneys shall have full power and authority to do and perform in the name
and on behalf of each of the undersigned, in any and all capacities, every act
whatsoever requisite or necessary to be done in the premises, as fully and to
all intents and purposes as each of the undersigned might or could do in
person, and each of the undersigned hereby ratifies and approves the acts of
said attorneys and each of them.
IN TESTIMONY WHEREOF, the undersigned have executed this instrument on
the dates set forth below.
/s/ T. L. Guzzle January 15, 1997
T. L. Guzzle, Chairman of the Board,
Director and Chief Executive Officer
(Principal Executive Officer)
/s/ A. D. Oak January 15, 1997
A.D. Oak, Vice President,
Treasurer and Chief Financial Officer
(Principal Financial Officer)
/s/ W. L. Griffin January 15, 1997
W. L. Griffin, Vice President-Controller
(Principal Accounting Officer)
226<PAGE>
Exhibit 24.1
/s/ G. F. Anderson January 15, 1997
G. F. Anderson, Director
/s/ C. D. Ausley January 15, 1997
C. D. Ausley, Director
/s/ S. L. Baldwin January 15, 1997
S. L. Baldwin, Director
/s/ H. L. Culbreath January 15, 1997
H. L. Culbreath, Director
/s/ J. L. Ferman, Jr. January 15, 1997
J. L. Ferman, Jr., Director
/s/ E. L. Flom January 15, 1997
E. L. Flom, Director
/s/ H. R. Guild, Jr January 15, 1997
H. R. Guild, Jr., Director
/s/ D. R. Hendrix January 15, 1997
D. R. Hendrix, Director
/s/ R. L. Ryan January 15, 1997
R. L. Ryan, Director
/s/ W. P. Sovey January 15, 1997
W. P. Sovey, Director
/s/ J. T. Touchton January 15, 1997
J. T. Touchton, Director
/s/ J. A. Urquhart January 15, 1997
J. A. Urquhart, Director
/s/ J. O. Welch, Jr. January 15, 1997
J. O. Welch, Jr., Director
227<PAGE>
Exhibit 24.2
Transcript from Records of Board of Directors
January 15, 1997
*****************************************************************
R E S OLVED, that the preparation and filing with the
Securities and Exchange Commission of an Annual Report on Form 10-
K pursuant to the Securities Exchange Act of 1934, as amended,
including any required exhibits and amendments thereto and
c o ntaining the information required by such form and any
additional information as the officers of the Company, with the
advice of counsel, deem necessary, advisable or appropriate (the
Annual Report ), are hereby authorized and approved; that the
Chairman of the Board, President, any Vice President and the
Treasurer of the Company be, and each of them acting singly hereby
is, authorized for and in the name and on behalf of the Company to
execute the Annual Report and cause it to be filed with the
Securities and Exchange Commission; that the officers referred to
above be, and each of them hereby is, authorized to execute the
Annual Report through or by W. L. Griffin, D. R. Pokross, Jr. or
R. H. Kessel, or any of them, as duly authorized attorneys
pursuant to a Power of Attorney in such form as shall be approved
by the Company's general counsel.
*****************************************************************
I, R. H. KESSEL, hereby certify that I am Secretary of TAMPA ELECTRIC
COMPANY (the "Company"), a Florida corporation, and there is above set forth a
true, correct and complete copy of a certain resolution duly adopted by the
Board of Directors of said Company at a Regular Meeting of said Board convened
and held on January 15, 1997 at which meeting a quorum for the transaction of
business was present and acting throughout.
I further certify that said resolution has not been altered, amended or
rescinded and that the same is now in full force and effect.
WITNESS my hand and the seal of the Company this 12th day of March,
1997.
/s/ R. H. Kessel
Secretary
TAMPA ELECTRIC COMPANY
(CORPORATE SEAL)
228<PAGE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE TAMPA
ELECTRIC COMPANY BALANCE SHEETS, STATEMENTS OF INCOME AND STATEMENTS OF CASH
FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000096271
<NAME> Tampa Electric Company
<MULTIPLIER> 1000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> DEC-31-1996
<PERIOD-TYPE> YEAR
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,278,300
<OTHER-PROPERTY-AND-INVEST> 6,000
<TOTAL-CURRENT-ASSETS> 230,600
<TOTAL-DEFERRED-CHARGES> 208,300
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,723,200
<COMMON> 119,700
<CAPITAL-SURPLUS-PAID-IN> 815,700
<RETAINED-EARNINGS> 191,700
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,127,100
0
20,000
<LONG-TERM-DEBT-NET> 661,100
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 98,600
<LONG-TERM-DEBT-CURRENT-PORT> 1,000
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 815,400
<TOT-CAPITALIZATION-AND-LIAB> 2,723,200
<GROSS-OPERATING-REVENUE> 1,112,900
<INCOME-TAX-EXPENSE> 71,300
<OTHER-OPERATING-EXPENSES> 869,000
<TOTAL-OPERATING-EXPENSES> 940,300
<OPERATING-INCOME-LOSS> 172,600
<OTHER-INCOME-NET> 16,300
<INCOME-BEFORE-INTEREST-EXPEN> 188,900
<TOTAL-INTEREST-EXPENSE> 47,300
<NET-INCOME> 141,600
1,800
<EARNINGS-AVAILABLE-FOR-COMM> 139,800
<COMMON-STOCK-DIVIDENDS> 134,900
<TOTAL-INTEREST-ON-BONDS> 39,300
<CASH-FLOW-OPERATIONS> 259,500
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
/TEXT
<PAGE>
</DOCUMENT>
</SEC-DOCUMENT>
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