Registration No. 333-333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-3
REGISTRATION STATEMENT
UNDERUnder
THE SECURITIES ACT OF 1933
Appalachian Power Company
(Exact name of registrant as specified in its charter)
Virginia 54-0124790
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
40 Franklin Road, S.W.
Roanoke, Virginia 24011
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 540-985-2300(540)985-2300
ARMANDO A. PENA, Treasurer
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza
Columbus, Ohio 43215
614-223-2850(614) 223-2850
(Name, address and telephone number, including
area code, of agent for service)
It is respectfully requested that the Commission send copies
of all notices, orders and communications to:
Simpson Thacher & Bartlett Dewey Ballantine LLP
425 Lexington Avenue 1301 Avenue of the Americas
New York, NY 10017-3909 New York, NY 10019-6092
Attention: James M. Cotter Attention: E. N. Ellis,N.Ellis, IV
___________________
Approximate date of commencement of proposed sale to the
public: At such time or timesAs soon as practicable after the effective date of the
Registra-
tion Statement as the registrant shall determine.Registration Statement.
___________________
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box. [ ]
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, please check the following box. [ ][x]
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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Title of
Each Class Proposed Proposed
Each Class ofOf Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Unit* Price* Fee
Senior- ---------------------------------------------------------------------
Unsecured
Notes $100,000,000$250,000,000 100% $100,000,000 $29,500$250,000,000 $69,500
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*Estimated solely for purpose of calculating the registration fee.
The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until the registration statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE
ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY
SALE OF THESE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.--------------------------------------------------------
The information in this prospectus is not complete and may
be changed. We may not sell these securities until the
registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell
these securities and is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MARCH 31, 1998JULY 30, 1999
PROSPECTUS
$100,000,000
APPALACHIAN POWER COMPANY
____% Senior Notes, Series B, Due 203840 Franklin Road, S.W.
Roanoke, Virginia 24011
540-985-2300
$250,000,000
UNSECURED NOTES
TERMS OF SALE
The Senior Notes, Series B, Due 2038, will mature on June
30, 2038 (the "New Senior Notes"). Interest on the New Senior
Notes at the rate of _____% per annum is payable quarterly, in
arrears, on each March 31, June 30, September 30 and December 31
(each an "Interest Payment Date"), commencing June 30, 1998. The
New Senior Notes will be redeemable at 100% of the principal
amount redeemed plus accrued interestfollowing terms may apply to the redemption datenotes that we may sell
at
the option of the Company in whole or in part on or after April
__, 2003. The New Senior Notes will be available for purchase in
denominations of $25 and any integral multiple thereof. See
"Description of the New Senior Notes" herein.
The New Senior Notes will be direct, unsecured and
unsubordinated obligations of the Company ranking pari passu with
all other unsecured and unsubordinated obligations of the
Company. The New Senior Notes will be effectively subordinated
to all secured debt of the Company, including its first mortgage
bonds, aggregating approximately $1,102,000,000 outstanding at
December 31, 1997. The Indenture contains no restrictions on the
amount of additional indebtedness that may be incurred by the
Company.
The New Senior Notes initially will be represented by one or more global Notes (eachtimes. A pricing supplement will include the final
terms for each note. If we decide to list upon issuance any note
or notes on a "Global Note") registeredsecurities exchange, a pricing supplement will
identify the exchange and state when we expect trading could
begin.
- Mature 9 months to 50 years
- Fixed or floating interest rate
- Remarketing features
- Certificate or book-entry form
- Subject to redemption
- Not convertible, amortized or subject to a sinking fund
- Interest paid on fixed rate notes quarterly or
semi-annually
- Interest paid on floating rate notes monthly, quarterly,
semi-annually, or annually
- Issued in the namemultiples of a nominee ofminimum denomination
The Depository Trust Company, as Depository, or
another depository (such a Note, so represented, being called a
"Book-Entry Note"). Beneficial interests in Global Notes
representing Book-Entry Notes will be shown on, and transfers
thereof will be effected only through, records maintainednotes have not been approved by the Depository's participants. Book-Entry Notes will not be issuable
as certificated notes except under circumstances described
herein. See "Description of the New Senior Notes -- Book-Entry
Notes" herein.
Application will be made toSEC or any state
securities commission, nor have the New Senior Notes listed
on the New York Stock Exchange ("NYSE").
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Price to Underwriting Proceeds to
Public(1) Discount(2)(4) Company(3)(4)
Per New
Senior Note . 100.00% ____% __.___%
Total . . . . $100,000,000 $_,___,___ $___,___,___
(1) Plus accrued interest, if any, from the date of original
issuance.
(2) The Company has agreed to indemnify the Underwriters against
certain liabilities, including certain liabilities under the
Securities Act of 1933, as amended. See "Underwriting"
herein.
(3) Before deducting expenses payable by the Company, estimated
at $200,500.
(4) The Underwriting Discount will be __% of the principal
amount of the New Senior Notes sold to certain institutions.
Therefore,these organizations determined
that this prospectus is accurate or complete. Any represen-tation
to the extent any such sales are made to such
institutions, the actual total Underwriting Discount will be
less than, and the actual total Proceeds to the Company will
be greater than, the amounts shown in the table above.
The New Senior Notes are offered severally by the
Underwriters, as specified herein, subject to receipt and
acceptance by them and subject to their right to reject any order
in whole or in part. Itcontrary is expected that delivery of the New
Senior Notes will be made only in book-entry form through the
facilities of The Depository Trust Company on or about April __,
1998 against payment therefor in immediately available funds.
Salomon Smith Barney
Merrill Lynch & Co.
Morgan Stanley Dean Witter
PaineWebber Incorporated
Prudential Securities Incorporateda criminal offense.
The date of this Prospectusprospectus is __________ __, 1998.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE
PRICE OF THE NEW SENIOR NOTES OFFERED HEREBY, INCLUDING BY
ENTERING STABILIZING BIDS, PURCHASING NEW SENIOR NOTES TO COVER
SYNDICATE SHORT POSITIONS AND IMPOSING PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING" HEREIN.
No dealer, salesperson or other person has been authorized
to give any information or to make any representation not
contained in this Prospectus in connection____________, 1999.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a registration statement we filed
with the offer madeSEC. We also file annual, quarterly and special reports
and other information with the SEC. You may read and copy any
document we file at the SEC's Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the Public Reference
Room. You may also examine our SEC filings through the SEC's web
site at http://www.sec.gov.
The SEC allows us to "incorporate by this Prospectus, and, if given or made, suchreference" the
information or
representation must notwe file with them, which means that we can disclose
important information to you by referring you to those
documents. The information incorporated by reference is
considered to be relied upon as having been authorized
by the Company or any underwriter, agent or dealer. This
Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, by any underwriter, agent or
dealer in any jurisdiction in which it is unlawful for such
underwriter, agent or dealer to make such an offer or
solicitation. Neither the deliverypart of this Prospectus norprospectus, and later information
that we file with the SEC will automatically update and supersede
this information. We incorporate by reference the documents
listed below and any salefuture filings made thereunder shall,with the SEC under
any circumstances, create any
implication that there has been no change in the affairs of the
Company since the date hereofSections 13(a), 13(c), 14, or thereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements15(d) of the Securities Exchange
Act of 1934 (the "1934 Act") and in
accordance therewith files reports and other information withuntil we sell all the Securities and Exchange Commission (the "SEC"). Such reports and
other infor-mation may be inspected and copied at the public
reference facilities maintained by the SEC at 450 Fifth Street,
N.W., Washington, D.C., 20549; Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois, 60661; and 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such
material can be obtained from the Public Reference Section of the
SEC, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The SEC maintains a Web site at http://www.sec.gov
containing reports, proxy statements and information statements
and other information regarding registrants that file electroni-
cally with the SEC, including the Company. Certain of the
Company's securities are listed on the New York Stock Exchange
and on the Philadelphia Stock Exchange, where reports and other
information concerning the Company may also be inspected.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the SEC
are incorporated in this Prospectus by reference:
-- The Company'snotes.
Annual Report on Form 10-K for the year ended December 31, 1997.
All documents subsequently filed by1998;
and
Quarterly Report on Form 10-Q for the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date
of this Prospectus and prior to the termination of the offering
made by this Prospectus shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other
subsequently filed document which is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to
whomquarter ended March 31,
1999.
You may request a copy of this Prospectus has been delivered, onthese filings, at no cost, by writing
or telephoning us at the written
or oral request of any such person, a copy of any or all of the
documents described above which have been incorporated by
reference in this Prospectus, other than exhibits to such
documents. Written requests for copies of such documents should
be addressed tofollowing address:
Mr. G. C. Dean
American Electric Power Service Corporation
1 Riverside Plaza
Columbus, Ohio 43215
(telephone
number: 614-223-1000). The614-223-1000
You should rely only on the information relating to the Company
containedincorporated by
reference or provided in this Prospectus doesprospectus or any supplement. We
have not purportauthorized anyone else to be comprehensive
andprovide you with different
information. We are not making an offer of these notes in any
state where the offer is not permitted. You should be read together withnot assume
that the information contained in this prospectus or any supplement is
accurate as of any date other than the documents incorporated by reference.
TABLE OF CONTENTS
Page
Available Information . . . . . . . . . . . . . . . . . . . . . 2
Documents Incorporated by Reference . . . . . . . . . . . . . . 2
Tabledate on the front of Contents . . . . . . . . . . . . . . . . . . . . . . . 3
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 4
Ratio of Earnings to Fixed Charges . . . . . . . . . . . . . . 4
Description of New Senior Notes . . . . . . . . . . . . . . . . 4
Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . 14
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . 15those
documents.
THE COMPANY
The Company is engaged in the generation,We generate, sell, purchase, transmissiontransmit and distribution ofdistribute
electric power topower. We serve approximately 877,000888,000 customers in
southwestern Virginia and southern West Virginia,Virginia. We also sell
and in supplying electrictransmit power at wholesale to other electric utility companies,utilities,
municipalities, electric cooperatives and non-utility entities
engaged in the wholesale power market. ItsOur principal executive
offices are located at 40 Franklin Road, S.W., Roanoke, Virginia
24011 (telephone number:number 540-985-2300). The Company isWe are a subsidiary of
American Electric Power Company, Inc. ("AEP"), a public utility holding
company, and iswe are a part of the American Electric Power
integrated utility system (the "AEP System").system. The executive offices of AEPAmerican
Electric Power Company, Inc. are located at 1 Riverside Plaza,
Columbus, Ohio 43215 (telephone number:number 614-223-1000).
USE OF PROCEEDS
The Company proposesPROSPECTUS SUPPLEMENTS
We provide information to useyou about the net proceeds fromnotes in three
separate documents that progressively provide more detail: (a)
this prospectus provides general information some of which may
not apply to your notes, (b) the saleaccompanying prospectus
supplement provides more specific terms of your notes, and (c)
the New Senior Notespricing supplement provides the final terms of your notes.
It is important for you to redeem or repurchase certain of its
outstanding debt and/or preferred stock, to fund its construction
program, to repay short-term indebtedness incurredconsider the information contained in
connection
with such repurchases, redemptions or funding its construction
programthis prospectus, the prospectus supplement and for other corporate purposes. Proceeds may be
temporarily investedthe pricing
supplement in short-term instruments pending their
application to the foregoing purposes. The Company's First
Mortgage Bonds, 8.43% Series due 2022 ($37,471,000 principal
amount outstanding) may be redeemed at their regular redemption
price of 106.33% or at par with cash deposited with the Trustee
under the Company's Mortgage (as defined below) pursuant to
certain provisions thereof.
The Company has estimated that its consolidated construction
costs (inclusive of allowance for funds used during construction)
for 1998 will be approximately $206,000,000. At March 30, 1998,
the Company had approximately $122,000,000 of short-term
indebtedness outstanding.making your investment decision.
RATIO OF EARNINGS TO FIXED CHARGES
Below is set forth the ratioThe Ratio of earningsEarnings to fixed chargesFixed Charges for each of the
twelve month periods ended December 31, 1993
through 1997:
12-Monthindicated is as follows:
Twelve Months
Period Ended Ratio
December 31, 1993 2.69
December 31, 1994 2.37
December 31, 1995 2.54
December 31, 1996 2.78
December 31, 1997 2.44
December 31, 1998 2.07
March 31, 1999 2.15
For current information on the Ratio of Earnings to Fixed
Charges, please see our most recent Form 10-K and 10-Q. See
Where You Can Find More Information.
USE OF PROCEEDS
The net proceeds from the sale of the notes will be used for
general corporate purposes relating to our utility business.
These purposes include redeeming or repurchasing outstanding debt
or preferred stock and replenishing working capital. If we do
not use the net proceeds immediately, we temporarily invest them
in short-term, interest-bearing obligations. We estimate that
our construction costs in 1999 will approximate $254,600,000. At
March 31,1999, our outstanding short-term debt was $57,275,000.
DESCRIPTION OF NEW SENIORTHE NOTES
The New Senior NotesGeneral
We will be issued as a series of
Securitiesissue the notes under anthe Indenture dated as of January 1,
1998 (as previously supplemented and amended) between us and the
Company andTrustee, The Bank of New York, as Trustee (the
"Trustee"), as heretofore supplemented and amended and as to be
further supplemented and amended (the "Indenture"). The
following summary does not purport to be complete and is subject
in all respects to the provisions of, and is qualified in its
entirety by reference to, the Indenture. Whenever particular
provisions or defined terms in the Indenture are referred to
herein, such provisions or defined terms are incorporated by
reference herein. Section and Article references used herein are
references toYork. This prospectus briefly outlines
some provisions of the Indenture unless otherwise noted.
All Notes (including the New Senior Notes) to be issued
underIndenture. If you would like more
information on these provisions, you should review the Indenture
are herein sometimes referredand any supplemental indentures or company orders that we have
filed or will file with the SEC. See Where You Can Find More
Information on how to as "Notes".
Copieslocate these documents. You may also
review these documents at the Trustee's offices at 101 Barclay
Street, New York, New York.
The Indenture does not limit the amount of the Indenture, including the form of Company Order
pursuant to which each series of Notesnotes that may be
issued, are filed
as exhibits to the Registration Statement.
General
The New Senior Notes will be issued in fully registered form
only, without coupons. The New Senior Notes will be issued
initially as one or more Book-Entry Notes. Except as set forth
herein under "Book-Entry Notes", the New Senior Notes will not be
issuable as certificated notes. The authorized denominations of
Global Notes will be $25 and any integral multiple thereof.
The New Senior Notes will be unsecured obligations of the
Company and will rank pari passu with all other unsecured debt of
the Company, except debt that by its terms is subordinated to the
unsecured debt of the Company.issued. The Indenture provides that New
Senior Notes may be issued thereunder without limitation aspermits us to aggregate principal amount and may be issued thereunder from time
to timeissue notes in one or more
series or tranches upon the approval of our board of directors
and as described in one or more Tranches thereof,company orders or supplemental
indentures. Each series of notes may differ as authorized by a Board Resolutionto their terms.
The notes are unsecured and as set forth in a Company
Order or one or more supplemental indentures creating such
series. (Section 2.01).will rank equally with all our
unsecured unsubordinated debt. Substantially all of theour fixed
properties and franchises of
the Company are subject to the lien of itsour first
mortgage bonds
(the "Bonds") issued under and secured by a Mortgage and Deed of
Trust, dated as of December 1, 1940 as(as previously supplemented
and amended by supplemental indentures,amended) between the Companyus and Bankers Trust Company, as trustee (the "Mortgage").trustee.
For current information on our debt outstanding see our most
recent Form 10-K and 10-Q. See Where You Can Find More
Information.
The New Senior Notes are not convertible into any other
security of the Company. The covenants contained in the
Indenture do not limit the amount of other debt, secured or
unsecured, which may be issued by the Company. In addition, the
Indenture does not contain any provisions that afford holders of
New Senior Notes protection in the event of a highly leveraged
transaction involving the Company.
Principal Amount, Maturity and Interest
The New Senior Notesnotes will be limiteddenominated in aggregateU.S. dollars and we will
pay principal amount to $100,000,000.
The New Senior Notesand interest in U.S. dollars. Unless an applicable
pricing or prospectus supplement states otherwise, the notes will
mature and become due and payable,
together with any accrued and unpaid interest thereon, on June
30, 2038 and will bear interest at the rate per annum shown in
the title thereof from the date on which the New Senior Notes are
originally issued until the principal amount thereof becomes due
and payable. The New Senior Notes are not be subject to any conversion, amortization, or sinking fund provision.
Interest on each New Senior Notefund.
We expect that the notes will be payable quarterly"book-entry," represented by a
permanent global note registered in arrears on each March 31, June 30, September 30 and December
31 and at redemption, if any,the name of The Depository
Trust Company, or maturity. The initial Interest
Payment Date is June 30, 1998. Each paymentits nominee. We reserve the right, however, to
issue note certificates registered in the name of interest in
respect of an Interest Payment Date shall include interest
accrued through the day before such Interest Payment Date.
Interest on New Senior Notes will be computednoteholders.
In the discussion that follows, whenever we talk about
paying principal on the basis of a
360-day year of twelve 30-day months.
Payments ofnotes, we mean at maturity or redemption.
Also, in discussing the time for notices and how the different
interest onrates are calculated, all times are New York City time
and all references to New York mean the New Senior Notes (other than
interest payable at redemption, if any, or maturity) will be
made, except as provided below, in immediately available funds to
the owners of such New Senior Notes (which, in the case of Global
Notes representing Book-Entry Notes, will be a nominee of the
Depository, as hereinafter defined) as of the Regular Record Date
(as defined below) for each Interest Payment Date.
The principal of the New Senior Notes and any premium and
interest thereon payable at redemption, if any, or maturity will
be paid in immediately available funds upon surrender thereof at
the office of The BankCity of New York, at 101 Barclay Street in New
York, New York. Should any New Senior Note be issued other than
as a Global Note, interest (other than interest payable at
redemption or maturity)unless
otherwise noted.
The following terms may at the option of the Company, be
paidapply to the person entitled thereto by check mailed to any such
person. See "Book-Entry Notes" herein.
If, with respect to any New Senior Note, any Interest
Payment Date, redemption date or the maturity is not a Business
Day (as defined below), payment of amounts due on such New Senior
Note on such date may be made on the next succeeding Business
Day, and, if such payment is made or duly provided for on such
Business Day, no interest shall accrue on such amounts for the
period from and after such Interest Payment Date, redemption date
or maturity, as the case may be, to such Business Day, except
that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding
Business Day, with the same force and effect as if made on such
date.
The "Regular Record Date" with respect to a New Senior Note
will be one Business Day prior to the relevant Interest Payment
Date, except if the New Senior Notes are no longer represented by
a Global Note, the "Regular Record Date" shall be the close of
business on the March 15, June 15, September 15 or December 15,
as the case may be, next preceding an Interest Payment Date or if
such March 15, June 15, September 15 or December 15 is not a
Business Day, the next preceding Business Day.
"Business Day" with respect to any New Senior Note means any
day that (a) in the Place of Payment (as defined in the
Indenture) (or in any of the Places of Payment, if more than one)
in which amounts are payableeach note as specified in
the formapplicable pricing or prospectus supplement and the note.
Redemptions
If we issue redeemable notes, we may redeem such notes at
our option unless an applicable pricing or prospectus supplement
states otherwise. The pricing or prospectus supplement will
state the terms of such
Note and (b) in the city in which the Trustee administers its
corporate trust business, is not a day on which banking
institutions are authorized or required by law or regulation to
close.
Certain Trading Characteristics of the New Senior Notes
The New Senior Notes are expected to trade at a price that
takes into account the value, if any, of accrued but unpaid
interest; thus, purchasers will not pay and sellers will not
receive accrued and unpaid interest with respect to the New
Senior Notes that is not included in the trading price thereof.
Any portion of the trading price of a New Senior Note received
that is attributable to accrued interest will be treated as
ordinary interest income for federal income tax purposes and will
not be treated as part of the amount realized for purposes of
determining gain or loss on the disposition of the New Senior
Note.
The trading price of the New Senior Notes is likely to be
sensitive to the level of interest rates generally. If interest
rates rise in general, the trading price of the New Senior Notesredemption. We may decline to reflect the additional yield requirements of the
purchasers. Conversely, a decline in interest rates may increase
the trading price of the New Senior Notes, although any increase
will be moderated by the Company's ability to call the New Senior
Notes at any time on or after April __, 2003 at a Redemption
Price equal to 100% of the principal amount to be redeemed plus
accrued but unpaid interest.
Optional Redemption
The New Senior Notes will be redeemable at the option of the
Company,redeem notes in whole or in
part at any time on or after April __,
2003, uponby delivering written notice to the noteholders no more than
60, and not less than 30, nor more than 60 days' notice,days prior to redemption. If we do not
redeem all the notes of a series at 100% of the principal amount redeemed together with accrued and
unpaid interest to the redemption date.
Form, Exchange, Registration and Transfer
New Senior Notes in definitive form will be issued only as
registered Notes without coupons in denominations of $25 and in
integral multiples thereof authorized by the Company. New Senior
Notes may be presented for registration of transfer (with the
form of transfer endorsed thereon duly executed) or exchange, at
the office of the Security Registrar, without service charge and
upon payment of any taxes and other governmental charges as
described in the Indenture. Such transfer or exchange will be
effected upon the Company or the Security Registrar being
satisfied with the documents of title and identity of the person
making the request. The Company has appointedone time, the Trustee as
Security Registrarselects
the notes to be redeemed in a manner it determines to be fair.
Remarketed Notes
If we issue notes with respectremarketing features, an applicable
pricing or prospectus supplement will describe the terms for the
notes including: interest rate, remarketing provisions, our right
to New Senior Notes. The Company
may changeredeem notes, the place for registrationholders' right to tender notes, and any
other provisions.
Book-Entry Notes - Registration, Transfer, and Payment of
transferInterest and exchange of
the New Senior Notes and may designate one or more additional
places for such registration and exchange. (Sections 2.05 and
4.02).
The Company shall not be required to (i) issue, register the
transfer of or exchange any New Senior Note during a period
beginning at the opening of business 15 days before the day of
the mailingPrincipal
Book-entry notes of a notice of redemption of less than all the
outstanding New Senior Notes and ending at the close of business
on the day of such mailing or (ii) register the transfer of or
exchange any New Senior Notes or portions thereof called for
redemption in whole or in part. (Section 2.05).
Payment and Paying Agents
Payment of principal of and premium, if any, on any New
Senior Note will be made only against surrender to the Paying
Agent of such New Senior Note. Principal of and any premium and
interest on New Senior Note will be payable at the office of such
Paying Agent or Paying Agents as the Company may designate from
time to time, except that at the option of the Company payment of
any interest may be made by check mailed to the address of the
person entitled thereto as such address shall appear in the
Security Register with respect to such New Senior Note.
The Trustee initially will act as Paying Agent with respect
to New Senior Notes. The Company may at any time designate
additional Paying Agents or rescind the designation of any Paying
Agents or approve a change in the office through which any Paying
Agent acts. (Sections 4.02 and 4.03).
All moneys paid by the Company to a Paying Agent for the
payment of the principal of and premium, if any, or interest, if
any, on any New Senior Notes that remain unclaimed at the end of
two years after such principal, premium, if any, or interest
shall have become due and payable, subject to applicable law,
will be repaid to the Company and the holder of such New Senior
Note will thereafter look only to the Company for payment
thereof. (Section 11.04).
Book-Entry Notes
Except under the circumstances described below, the New
Senior Notesseries will be issued in whole or in part in the form of one or more Global Notesa
global note that the Trustee will be depositeddeposit with or on
behalf of, The Depository
Trust Company, New York, New York ("DTC"), or such other depository as may be subsequently
designated (the "Depository"), and registered in the name of a
nominee of the Depository.
Book-Entry Notes represented by a Global Note. This means that we
will not be
exchangeable for certificatedissue note certificates to each holder. One or more
global notes and, except under the
circumstances described below, will not otherwise be issuable as
certificated notes.
So long as the Depository, or its nominee, is the registered
owner of a Global Note, such Depository or such nominee, as the
case may be, will be consideredissued to DTC who will keep a computerized
record of its participants (for example, your broker) whose
clients have purchased the sole ownernotes. The participant will then keep
a record of its clients who purchased the individual
Book-Entry Notes represented by such Global Notenotes. Unless it is
exchanged in whole or in part for all purposes
under the Indenture. Paymentsa note certificate, a global
note may not be transferred; except that DTC, its nominees, and
their successors may transfer a global note as a whole to one
another.
Beneficial interests in global notes will be shown on, and
transfers of principal of and premium, if
any, and any interest on individual Book-Entry Notes represented
by a Global Noteglobal notes will be made to the Depository oronly through, records
maintained by DTC and its nominee,
as the case may be, as the owner of such Global Note. Except as
set forth below, owners of beneficial interests in a Global Note
will not be entitled to have any of the individual Book-Entry
Notes represented by such Global Note registered in their names,
will not receive or be entitled to receive physical delivery of
any such Book-Entry Note and will not be considered the owners
thereof under the Indenture, including, without limitation, for
purposes of consenting to any amendment thereof or supplement
thereto.
If the Depository is at any time unwilling or unable to
continue as depository and a successor depository is not
appointed, the Company will issue individual certificated notes
in exchange for the Global Note representing the corresponding
Book-Entry Notes. In addition, the Company may at any time and
in its sole discretion determine not to have any New Senior Notes
represented by the Global Note and, in such event, will issue
individual certificated notes in exchange for the Global Note
representing the corresponding Book-Entry Notes. In any such
instance, an owner of a Book-Entry Note represented by a Global
Note will be entitled to physical delivery of individual
certificated notes equal in principal amount to such Book-Entry
Note and to have such certificated notes registered in his or her
name. Individual certificated notes so issued will be issued as
registered New Senior Notes in denominations, unless otherwise
specified by the Company, of $25 and integral multiples thereof.participants.
DTC has confirmed to the Company and the Underwritersprovided us the following information:
1. DTC will act as securities depository for the Global
Notes. The New Senior Notes will be issued as fully-registered
securities registered in the name of Cede & Co. (DTC's
partnership nominee). One fully-registered Global Note will be
issued for the series of New Senior Notes, in the aggregate
principal amount of such series, and will be deposited with DTC.
2. DTC is a
limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the
New York Banking Law, a member of the United States Federal
Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code and a "clearing agency"
registered pursuant tounder the provisions of Section 17A of the 1934
Act.Securities
Exchange Act of 1934. DTC holds securities that its participants
("Direct Participants") deposit with DTC. DTC also facilitatesrecords the
settlement among Direct Participants of securities transactions,
such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby eliminatingrecords for Direct Participant's accounts. This
eliminates the need for physical movement of securitiesto exchange note certificates. Direct
Participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations.
DTC is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of
Securities Dealers, Inc. Access to the DTC system is also
available to othersOther organizations such as securities brokers and dealers,
banks and trust companies that clearwork through or maintain a
custodial relationship with a Direct Participant
either directly
or indirectly ("Indirect Participants").also use DTC's book-entry system. The Rules applicablerules that apply to DTC
and its Participantsparticipants are on file with the Securities and
Exchange Commission.
3. PurchasesSEC.
A number of New Senior Notes under the DTC system must
be made by or throughits Direct Participants which will receive a
credit forand the New Senior Notes onYork Stock
Exchange, Inc., The American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. own DTC.
We will wire principal and interest payments to DTC's
records. The ownership
interestnominee. We and the Trustee will treat DTC's nominee as the
owner of each actual purchaser of each New Senior Note
("Beneficial Owner") is in turnthe global notes for all purposes. Accordingly, we, the
Trustee and any paying agent will have no direct responsibility
or liability to be recordedpay amounts due on the Direct and
Indirect Participants' records. Beneficial Owners will not
receive written confirmation from DTCglobal notes to owners of
their purchase, but
Beneficial Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect
Participant through which the Beneficial Owner entered into the
transaction. Transfers of ownershipbeneficial interests in the New Senior
Notes are to be accomplished by entries made on the booksglobal notes.
It is DTC's current practice, upon receipt of Participants acting on behalfany payment of
Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership
interests in New Senior Notes, except in the event that use of
the book-entry system for the New Senior Notes is discontinued.
4. To facilitate subsequent transfers, all New Senior
Notes deposited by Participants with DTC are registered in the
name of DTC's partnership nominee, Cede & Co. The deposit of New
Senior Notes with DTC and their registration in the name of Cede
& Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the New Senior
Notes; DTC's records reflect only the identity of the Direct
Participants to whose accounts such New Senior Notes are
credited, which mayprincipal or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC
to Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect
Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
6. Redemption notices shall be sent to Cede & Co. If less
than all of the New Senior Notes are being redeemed, DTC's
practice is to determine by lot the amount of the interest, of
each Direct Participant in such issue to be redeemed.
7. Neither DTC nor Cede & Co. will consent or vote with
respect to the New Senior Notes. Under its usual procedures, DTC
mails an Omnibus Proxy to the Company as soon as possible after
the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose
accounts the New Senior Notes are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
8. Principal and interest payments on the New Senior Notes
will be made to DTC. DTC's practice is to credit Direct Participants' accounts on
the payment date on which interest is payable
in accordance withaccording to their respective holdings of
beneficial interests in the global notes as shown on DTC's
records unless DTC has reasonrecords. In addition, it is DTC's current practice to believe that itassign any
consenting or voting rights to Direct Participants whose accounts
are credited with notes on a record date. The customary
practices between the participants and owners of beneficial
interests will not receive
payment on such date. Paymentsgovern payments by Participantsparticipants to Beneficial
Owners will be governedowners of
beneficial interests in the global notes and voting by
standing instructions and customary
practices,participants, as is the case with securitiesnotes held for the accountsaccount of
customers in bearer form or registered in "street name", andname." However, payments will be
the responsibility of such Participantthe participants and not of DTC, the
UnderwritersTrustee or us.
DTC management is aware that some computer applications,
systems and the like for processing data ("Systems") that are
dependent upon calendar dates, including dates before, on and
after January 1, 2000, may encounter "Year 2000 problems". DTC
has informed its Direct Participants and other members of the
financial community (the "Industry") that it has developed and is
implementing a program so that its Systems, as the same relate to
the timely payment of distributions (including principal and
income payments) to securityholders, book-entry deliveries and
settlement of trades within DTC ("DTC Services"), continue to
function appropriately. This program includes a technical
assessment and a remediation plan, each of which is complete.
Additionally, DTC's plan includes a testing phase, which is
expected to be completed within appropriate time frames.
However, DTC's ability to perform properly its services is
also dependent upon other parties, including but not limited to
issuers and their agents, as well as third party vendors from
whom DTC licenses software and hardware, and third party vendors
on whom DTC relies for information or the Company, subjectprovision of services,
including telecommunication and electrical utility service
providers, among others. DTC has informed the Industry that it
is contacting (and will continue to any statutory or
regulatory requirementscontact) third party vendors
from whom DTC acquires services to: (i) impress upon them the
importance of such services being Year 2000 compliant; and (ii)
determine the extent of their efforts for Year 2000 remediation
(and, as may beappropriate, testing) of their services. In addition,
DTC is in effect from time to time.
Paymentthe process of principal and interestdeveloping such contingency plans as it
deems appropriate.
According to DTC, is the responsibility of
the Company or the Trustee, disbursement of such payments to
Direct Participants shall be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners shall be
the responsibility of Direct and Indirect Participants.
9. DTC may discontinue providing its services as
securities depositoryforegoing information with respect to
the New Senior Notes at any
time by giving reasonable noticeDTC has been provided to the CompanyIndustry for informational purposes
only and is not intended to serve as a representation, warranty
or contract modification of any kind.
Notes represented by a global note will be exchangeable for
note certificates with the same terms in authorized denominations
only if:
DTC notifies us that it is unwilling or unable to continue as
depositary or if DTC ceases to be a clearing agency registered
under applicable law and a successor depositary is not
appointed by us within 90 days; or
we determine not to require all of the notes of a series to be
represented by a global note and notify the Trustee of our
decision.
Note Certificates-Registration, Transfer, and Payment of Interest
and Principal
If we issue note certificates, they will be registered in
the name of the noteholder. The notes may be transferred or
exchanged, pursuant to administrative procedures in the
indenture, without the payment of any service charge (other than
any tax or other governmental charge) by contacting the paying
agent. Payments on note certificates will be made by check.
Interest Rate
The interest rate on the notes will either be fixed or
floating. The interest paid will include interest accrued to,
but excluding, the date of maturity or redemption. Interest is
generally payable to the person in whose name the note is
registered at the close of business on the record date before
each interest payment date. Interest payable at maturity or
redemption, however, will be payable to the person to whom
principal is payable.
If we issue a note after a record date but on or prior to
the related interest payment date, we will pay the first interest
payment on the interest payment date after the next record date.
We will pay interest payments by check or wire transfer, at our
option.
Fixed Rate Notes
A pricing or prospectus supplement will designate the record
dates, payment dates and the Trustee.
Under such circumstances, in the eventfixed rate of interest payable on a
note. We will pay interest quarterly or semi-annually, and upon
maturity or redemption. Unless an applicable pricing or
prospectus supplement states otherwise, if any payment date falls
on a day that a successor
securities depository is not obtained, certificated notes are
required to be printeda business day, we will pay interest on the
next business day and delivered.
10. The Company may decide to discontinue use of the system
of book-entry transfers through DTC (or a successor securities
depository). In that event, certificated notesno additional interest will be printed
and delivered.
The information in this section concerning DTC and DTC's
book-entry system has been obtained from sources that the Company
believes topaid.
Interest payments will be reliable, but the Company takes no responsibility
for the accuracy thereof.
None of the Company, the Trustee or any agent for payment on
or registration of transfer or exchange of any Global Note will
have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial
interests in such Global Note or for maintaining, supervising or
reviewing any records relating to such beneficial interests.
Modification of the Indenture
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a
majority in principal amount of Notes of each series that are
affected by the modification, to modify the Indenture or any
supplemental indenture affecting that series or the rights of the
holders of that series of Notes; provided, that no such
modification may, without the consent of the holder of each
outstanding Note affected thereby, (i) extend the fixed maturity
of any Notes of any series, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any premium payable upon the
redemption thereof, or reduce the amount of interest accrued to, but
excluding, each payment date. Interest will be computed using a
360-day year of twelve 30-day months.
Floating Rate Notes
Each floating rate note will have an interest rate formula.
The applicable pricing supplement will state the initial interest
rate or interest rate formula on each note effective until the
first interest reset date. The applicable pricing or prospectus
supplement will state the method and dates on which the interest
rate will be determined, reset and paid.
Events of Default
"Event of Default" means any of the following:
failure to pay for three Business Days the principal of
a
Discount Security (as defined in the Indenture) that would be due
and payable upon a declaration(or premium, if any, on) any note of acceleration of the maturity
thereof pursuant to the Indenture, (ii) reduce the percentage of
Notes, the holders of which are required to consent to any such
supplemental indenture, or (iii) reduce the percentage of Notes,
the holders of which are required to waive any default and its
consequences. (Section 9.02).
In addition, the Company and the Trustee may execute,
without the consent of any holder of Notes, any supplemental
indenture for certain other usual purposes including the creation
of any new series of Notes. (Sections 2.01, 9.01 and 10.01).
Events of Default
The Indenture provides that any one or more of the following
described events, which has occurred and is continuing,
constitutes an "Event of Default" with respect to each series of
Notes:
(a) failure for 30 days to pay interest on Notes of
thata series when due and
payable;
or
(b) failure for 3 Business Days to pay principal or
premium, iffor 30 days any interest on Notesany note of thatany
series when due and payable whether at maturity, upon redemption, pursuantpayable;
failure to
any sinking fund obligation, by declaration or otherwise; or
(c) failure by the Company to observe or perform any other covenant (other than those specifically relating to
another series) containedrequirements in such notes,
or in the Indenture in regard to such notes, for 90 days
after written notice tonotice;
certain events of bankruptcy or insolvency; or
any other event of default specified in a series of notes.
An Event of Default for a particular series of notes does
not necessarily mean that an Event of Default has occurred for
any other series of notes issued under the Company fromIndenture. If an
Event of Default occurs and continues, the Trustee or the holders
of at least 33% inof the principal amount of the outstanding Notes of that series; or
(d) certain events involving bankruptcy, insolvency or
reorganizationnotes of the
Company; or
(e) any other eventseries affected may require us to repay the entire principal of
default provided for in athe notes of such series of Notes. (Section 6.01)immediately ("Repayment Acceleration").
The Trustee orIn most instances, the holders of not less than 33%at least a majority in
aggregate
outstanding principal amount of any particularthe notes of the affected series
of Notes
may declare the principal due and payable immediately uponrescind a previously triggered Repayment Acceleration.
However, if we cause an Event of Default because we have failed
to pay (unaccelerated) principal, premium, if any, or interest,
Repayment Acceleration may be rescinded only if we have first
cured our default by depositing with respectthe Trustee enough money to
such series, butpay all (unaccelerated) past due amounts and penalties, if any.
The Trustee must within 90 days after a default occurs,
notify the holders of a majority in aggregate outstanding principal amountthe notes of suchthe series may annulof default unless
such declaration and waive the default with
respect to such series if the default has been cured and a sum
sufficientor waived. We are required to pay all matured installments of interest and
principal otherwise than by acceleration and any premium has been
depositedfile
an annual certificate with the Trustee. (Sections 6.01 and 6.06).
The holdersTrustee, signed by an officer,
concerning any default by us under any provisions of a majority in aggregate outstanding principal
amount of any series of Notes have the
right to direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee for that series. (Section 6.06).Indenture.
Subject to the provisions of the Indenture relating to theits
duties in case of default, the Trustee in case an Event of Default shall occur and be
continuing, the Trustee will be under no
obligation to exercise any of its rights or powers under the
Indenture at the request, order or direction of any of the holders of the Notes,
unless such holders shall have offeredoffer the Trustee reasonable indemnity.
Subject to the Trustee indemnity satisfactory to it.
(Section 7.02).
Theprovisions for indemnification, the holders of a
majority in aggregate outstanding principal amount of the notes of any series may
direct the time, method and place of conducting any proceedings
for any remedy available to, or exercising any trust or power
conferred on, the Trustee with respect to such notes.
Modification of Indenture
Under the Indenture, our rights and obligations and the
rights of the holders of any notes may be changed. Any change
affecting the rights of the holders of any series of Notes affected thereby may, on behalfnotes
requires the consent of the holders of not less than a majority
in aggregate principal amount of the outstanding notes of all
Notesseries affected by the change, voting as one class. However, we
cannot change the terms of suchpayment of principal or interest, or a
reduction in the percentage required for changes or a waiver of
default, unless the holder consents. We may issue additional
series waiveof notes and take other action that does not affect the
rights of holders of any past default,
except a default inseries by executing supplemental
indentures without the consent of any noteholders.
Consolidation, Merger or Sale
We may merge or consolidate with any corporation or sell
substantially all of our assets as an entirety as long as the
successor or purchaser expressly assumes the payment of
principal, premium, if any, or
interest when due otherwise than by acceleration (unless such
default has been cured and a sum sufficient to pay all matured
installments of interest and principal otherwise than by
acceleration and any premium has been deposited with the Trustee)
or a call for redemption of Notes of such series. (Section
6.06). The Company is required to file annually with the Trustee
a certificate as to whether or not the Company is in compliance
with all the conditions and covenants under the Indenture.
(Section 5.03(d)).
Consolidation, Merger and Sale
The Indenture does not contain any covenant that restricts
the Company's ability to merge or consolidate with or into any
other corporation, sell or convey all or substantially all of its
assets to any person, firm or corporation or otherwise engage in
restructuring transactions, provided that the successor
corporation assumes due and punctual payment of principal or premium, if any, and interest on the Notes. (Section 10.01).notes.
Legal Defeasance
and Covenant Defeasance
NotesWe will be discharged from our obligations on the notes of
any series may be defeased in accordance with their
terms and, unless the supplemental indenture or Company Order
establishing the terms of such series otherwise provides, as set
forth below. The Company at any time may terminate asif:
we deposit with the Trustee sufficient cash or government
securities to a
series all of its obligations (except for certain obligations,
including obligations with respectpay the principal, interest, any premium and
any other sums due to the defeasance truststated maturity date or a
redemption date of the note of the series, and
we deliver to the Trustee an opinion of counsel stating that
the federal income tax obligations of noteholders of that
series will not change as a result of our performing the
action described above.
If this happens, the noteholders of the series will not be
entitled to register the benefits of the Indenture except for registration
of transfer orand exchange of a Note, to
replace destroyed,notes and replacement of lost, stolen
or stolen Notes and to maintain agencies
in respect of the Notes) with respect to the Notes of such series
and the Indenture ("legal defeasance"). The Company at any time
also may terminate as to a series itsmutilated notes.
Covenant Defeasance
We will be discharged from our obligations with respect to
the Notes of that series under any
restrictive covenant which may
be applicable to the notes of a particular
series if we perform both actions described above. See Legal
Defeasance. If this happens, any later breach of that
particular series ("covenant defeasance").
The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance
option. If the Company exercises its legal defeasance option,
the particular series may not be accelerated because of an Event
of Default. If the Company exercises its covenant defeasance
option, a series may not be accelerated by reference to any
restrictive covenant which may be applicable to that particular
series.
To exercise either of its defeasance options as to a series,
the Company must deposit with the Trustee or any paying agent, in
trust: moneys or Eligible Obligations, or a combination thereof,
in an amount sufficient to pay when due the principal of and
premium, if any, and interest, if any, due and to become due on
the Notes of such series that are Outstanding (as defined in the
Indenture). Such defeasance or discharge may occur only if,
among other things, the Company has delivered to the Trustee an
Opinion of Counsel to the effect that the holders of such Notes
will not recognize gain, loss or income for federal income tax
purposes as a result of the satisfaction and discharge of the
Indenture with respect to such series and that such holders will
realize gain, loss or income on such Notes, including payments of
interest thereon, in the same amounts and in the same manner and
at the same time as would have been the case if such satisfaction
and discharge had not occurred. (Section 11.01).
In the event the Company exercises its option to effect a
covenant defeasance with respect to the Notes of any series and
the Notes of that series are thereafter declared due and payable
because of the occurrence of any Event of Default other thanRepayment
Acceleration. If we cause an Event of Default caused by failing to comply with the covenants
which are defeased, the amount ofapart from
breaching that restrictive covenant, there may not be sufficient
money and Eligible Obligationsor government obligations on deposit with the Trustee may not be sufficient to
pay all amounts due on the Notesnotes of that series at the time of the acceleration
resulting from such Event of Default. However, the Companyseries. In that
instance, we would remain liable for such payments. (Section 11.01).amounts.
Governing Law
The Indenture and New Senior Notesnotes of all series will be governed by and
construed in accordance with,
the laws of the State of New York.
(Section 13.05).
Concerning the Trustee
AEP System companies, including the Company, utilizeWe and our affiliates use or may
utilizewill use some of the banking
services offered by The Bank of New
Yorkthe Trustee in the normal course of business.
PLAN OF DISTRIBUTION
We may sell the notes (a) through agents; (b) through
underwriters or dealers; or (c) directly to one or more
purchasers.
By Agents
Notes may be sold on a continuing basis through agents
designated by us. The agents will agree to use their reasonable
efforts to solicit purchases for the period of their appointment.
Unless the pricing supplement states otherwise, the notes
will be sold to the public at 100% of their principal amount.
Agents will receive commissions from .125% to .750% of the
principal amount per note depending on the maturity of the note
they sell.
The Agents will not be obligated to make a market in the
notes. We cannot predict the amount of trading or liquidity of
the notes.
By Underwriters
If underwriters are used in the sale, the underwriters will
acquire the notes for their own account. The underwriters may
resell the notes in one or more transactions, including
negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. The obligations
of the underwriters to purchase the notes will be subject to
certain conditions. The underwriters will be obligated to
purchase all the notes of the series offered if any of the notes
are purchased. Any initial public offering price and any
discounts or concessions allowed or re-allowed or paid to dealers
may be changed from time to time.
Direct Sales
We may also sell notes directly. In this case, no
underwriters or agents would be involved.
General Information
Underwriters, dealers, and agents that participate in the
distribution of the notes may be underwriters as defined in the
Securities Act of 1933 (the "Act"), and any discounts or
commissions received by them from us and any profit on the resale
of the notes by them may be treated as underwriting discounts and
commissions under the Act.
We may have agreements with the underwriters, dealers and
agents to indemnify them against certain civil liabilities,
including liabilities under the Act.
Underwriters, dealers and agents may engage in transactions
with, or perform services for, us or our affiliates in the
ordinary course of their businesses.
Among such
services are the making of short-term loans, generally at rates
related to the prime commercial interest rate.
LEGAL OPINIONS
Opinions with respect toOur counsel, Simpson Thacher & Bartlett, New York, NY, and
one of our lawyers will each issue an opinion about the legality
of the New Senior
Notes will be rendered by Simpson Thacher & Bartlett, 425
Lexington Avenue, New York, New York and 1 Riverside Plaza,
Columbus, Ohio, counselnotes for the Company, and byus. Dewey Ballantine LLP, 1301 Avenue of the Americas, New York, New York, counselNY will
issue an opinion for the Underwriters. Additional legal opinions in connection with
the offering of the New Senior Notes may be given by Thomas G.
Berkemeyeragents or David C. House, counsel for the Company. Mr.
Berkemeyer is Assistant General Counsel, and Mr. House is an
Attorney, in the Legal Department of American Electric Power
Service Corporation, a wholly owned subsidiary of AEP.underwriters. From time to
time, Dewey Ballantine LLP acts as counsel to our affiliates of
the Company in connection with certainfor
some matters.
EXPERTS
The financial statements and related financial statement
schedule incorporated in this prospectus by reference from the
Company's Annual Report on Form 10-K have been audited by
Deloitte & Touche LLP,llp, independent auditors, as stated in their
reports, which are incorporated herein by reference, and have
been so incorporated in reliance upon the reports of such firm
given upon their authority as experts in accounting and auditing.
UNDERWRITING
Subject toTable of Contents
WHERE YOU CAN FIND MORE
INFORMATION .............. 2
THE COMPANY................... 2
PROSPECTUS SUPPLEMENTS........ 2
RATIO OF EARNINGS TO
FIXED CHARGES ............. 3
USE OF PROCEEDS .............. 3
DESCRIPTION OF THE NOTES ..... 3
General .................. 3
Redemptions ............... 4
Remarketed Notes .......... 4
Book-Entry Notes - Registration,
Transfer, and Payment of
Interest and Principal ... 4
Note Certificates - Registration,
Transfer, and Payment of
Interest and Principal ... 6
Interest Rate ............. 6
Fixed Rate Notes ......... 6
Floating Rate Notes ...... 7
Events of Default ......... 7
Modification of Indenture.. 8
Consolidation, Merger or
Sale ...................... 8
Legal Defeasance ........... 8
Covenant Defeasance ........ 8
Governing Law .............. 8
Concerning the terms and conditions of the Underwriting
Agreement, the Company has agreed to sell to each of theTrustee ..... 8
PLAN OF DISTRIBUTION .......... 9
By Agents .................. 9
By Underwriters named below ("Underwriters"), and each of the
Underwriters has severally agreed to purchase from the Company
the respective principal amount of New Senior............ 9
Direct Sales ............... 9
General Information ........ 9
LEGAL OPINIONS ................ 9
EXPERTS ....................... 10
$250,000,000 Unsecured Notes
set forth
opposite its name below:
Principal Amount
Underwriters of New Senior Notes
Smith Barney Inc. . . . . . . . . . . . . . . $
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . $
Morgan Stanley & Co. Incorporated . . . . . . $
PaineWebber Incorporated . . . . . . . . . . . $
Prudential Securities Incorporated . . . . . . $
TOTAL . . . . . . . . . . . . . . . . . . . $100,000,000
In the Underwriting Agreement, the Underwriters have agreed,
subject to the terms and conditions set forth therein, to
purchase all of the New Senior Notes offered hereby if any of the
New Senior Notes are purchased.PROSPECTUS
The Underwriters propose to offer the New Senior Notes in
part directly to the public at the initial public offering price
set forth on the cover pagedate of this
Prospectus and in part to
certain securities dealers at such price less a concession not in
excess of $______ per New Senior Note. The Underwriters may
allow, and such dealers may reallow, a concession not in excess
of $______ per New Senior Note to certain brokers and dealers.
After the New Senior Notes are released for sale to the public,
the offering price and other selling terms may from time to time
be varied by the Underwriters.
The Company has agreed, during the period of 30 days from
the date of the Underwriting Agreement, not to sell, offer to
sell, grant any option for the sale of, or otherwise dispose of
any New Senior Notes, any security convertible into or
exchangeable into or exercisable for New Senior Notes or any debt
securities substantially similar to the New Senior Notes (except
for the New Senior Notes issued pursuant to the Underwriting
Agreement), without the prior written consent of the
Underwriters.
The New Senior Notes are a new issue of securities with no
established trading market. While the Company intends to list
the New Senior Notes on the NYSE, there can be no assurance that
an active market for the New Senior Notes will develop or be
sustained in the future on the NYSE. Listing will depend upon
satisfaction of the NYSE's listing requirements with respect to
the New Senior Notes. The Underwriters have advised the Company
that they intend to make a market in the New Senior Notes prior
to the commencement of trading on the NYSE. The Underwriters
will have no obligation to make a market in the New Senior Notes,
however, and may cease market making activities, if commenced, at
any time.
The Company has agreed to indemnify the Underwriters against
certain liabilities, including certain liabilities under the
Securities Act of 1933.
In connection with this offering and in compliance with
applicable law and industry practice, the Underwriters may
overallot or effect transactions which stabilize, maintain or
otherwise affect the market price of the New Senior Notes at
levels above those which might otherwise prevail in the open
market, including by entering stabilizing bids, purchasing New
Senior Notes to cover syndicate short positions and imposing
penalty bids. A stabilizing bid means the placing of any bid, or
the effecting of any purchase, for the purpose of pegging, fixing
or maintaining the price of a security. Covering a syndicate
short position means placing a bid or effecting a purchase of a
security on behalf of the underwriting syndicate to reduce the
short position created in connection with the offering. Imposing
a penalty bid means purchasing a security in the open market to
reduce the underwriting syndicate's short position or to
stabilize the price of the security and in connection therewith
reclaiming the amount of the selling concession from the
underwriters and selling group members who sold such securities
as part of the offering.
In general, purchases of a security for the purpose of
stabilization or to reduce a syndicate short position could cause
the price of the security to be higher than it might be in the
absence of such purchases. The imposition of a penalty bid might
also have an effect on the price of a security to the extent that
it were to discourage resales of the security.
Neither the Company nor any of the Underwriters makes any
representation or prediction as to the direction or magnitude of
any effect that the transactions described above may have on the
price of the New Senior Notes. In addition, neither the Company
nor any of the Underwriters makes any representation that the
Underwriters will engage in such transactions or that such
transactions once commenced, will not be discontinued without
notice.
The Underwriters, and certain affiliates thereof, engage in
transactions with, and from time to time have performed services
for, the Company and its affiliates in the ordinary course of
business.is _______, 1999
PART II.II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.*
Estimation based upon the issuance of all of the
New
Senior Notesunsecured notes in one issuance:two issuances:
Securities and Exchange Commission Filing Fees Fees...........$ 29,50069,500
Printing Registration Statement, Prospectus, etc.etc......... 30,000
Independent Auditors' fees 15,000fees............................... 30,000
Charges of Trustee (including counsel fees) 10,000.............. 15,000
Legal fees 65,000fees............................................... 160,000
Rating Agency fees 31,000fees....................................... 80,000
Miscellaneous expenses $ 20,000
Total $200,500expenses................................... 25,000
Total............................................... $409,500
* Estimated,....Estimated, except for filing fees.
Item 15. Indemnification15....Indemnification of Directors and Officers.
The Bylaws of the Company provide that the Company shall
indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal, including all
appeals, because such person is or was a director, officer or
employee of the Company or is or was serving at the request of
the Company as a director, officer, partner, trustee, employee or
agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against any
obligations to pay judgments, settlements, penalties, fines
(including any excise tax)tax assessed with respect to an employee
benefit plan) or reasonable expenses (including attorneys' fees)
incurred by such person in connection with such action, suit or
proceeding if (a) such person conducted him or herself in good
faith,faith; (b) such person believed, in the case of conduct in such
person's official capacity with the Company (as defined), that
his or her conduct was in the best interests of the Company, and,
in all other cases, that his or her conduct was at least not
opposed to its best interests,interests; (c) with respect to any criminal
action or proceeding, such person had no reasonable cause to
believe his or her conduct was unlawfulunlawful; and (d) such person was
not grossly negligent or guilty of willful misconduct. Such
indemni-ficationindemnification in connection with a proceeding by or in the
right of the Company is limited to reasonable expenses incurred
in connection with the proceeding. Any such indemnification
(unless ordered by a court) shall be made by the Company only as
authorized in the specific case upon a determination that
indemnification of the director is proper in the circumstances
because such person has met the applicable standard of conduct.
Section......Section 13.1-698 of the Code of Virginia provides that
unless limited by the articles of incorporation, a corporation
shall indemnify a director who entirely prevails in the defense
of any proceeding to which such person was a party because such
person is or was a director of the corporation against reasonable
expenses incurred in connection with such proceeding. Section
13.1-699 provides that a corporation may pay for or reimburse
reasonable expenses incurred by a director who is a party to such
a proceeding in advance of final disposition of such proceeding
if (a) the director furnishes a written statement of his or her
good faith belief that the standard of conduct described in
Section 13.1-697 has been met; (b) the director furnishes the
corporation a written undertaking by or on behalf of the director
to repay the advance if it is ultimately determined that such
person did not meet the standard of conduct; and (c) a
determination is made that the facts then known to those making
the determination would not preclude indemnification. Section
13.1-700.1 provides procedures which allow directors to apply to
a court for an order directing advances or indemnification.
Section......Section 13.1-702 provides that unless limited by the
articles of incorporation, (a) officers are entitled to mandatory
indemni-ficationindemnification under Section 13.1-698 and to apply for court
ordered indemnification under Section 13.1-700.1 to the same
extent as a director, and (b) that a corporation may indemnify
and advance expenses to an officer, employee or agent to the same
extent as to a director. Section 13.1-704 provides that any
corporation shall have the power to make any further indemnity to
any director, officer, employee or agent that may be authorized
by the articles of incorporation or any bylaw made by the
stockholders or any resolution adopted, before or after the
event, by the stockholders, except an indemnity against willful
misconduct or a knowing violation of criminal law.
The......The above is a general summary of certain provisions of the
Company's Bylaws and the Code of Virginia and is subject in all
respects to the specific and detailed provisions of the Company's
Bylaws and the Code of Virginia.
Reference......Reference is made to the Selling Agency Agreement and the
Underwriting Agreement filed as Exhibits 1(a) and 1(b) hereto,
respectively, which provide for indemnification of the Company,
certain of its directors and officers, and persons who control
the Company, under certain circumstances.
The......The Company maintains insurance policies insuring its
directors and officers against certain obligations that may be
incurred by them.
Item 16. Exhibits.
Reference16....Exhibits.
......Reference is made to the information contained in the
Exhibit Index filed as part of this Registration Statement.
Item 17. Undertakings.
The17....Undertakings.
......The undersigned registrant hereby undertakes:
......(1)..To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of unsecured notes offered
(if the total dollar value of unsecured notes offered would
not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) of the Securities Act of
1933 if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
Provided, however, that (i) and (ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) That, for purposes of determining any liability under
the Securities Act of 1933, each filing of the registrant's
annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference
in this registration statement shall be deemed to be a new
registration statement relating to the New Senior
Notes,unsecured notes offered,
and the offering thereof at that time shall be deemed to be the
initial bona fide offering thereof.
(2)(5) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the laws of the Commonwealth of Virginia, the registrant's
bylaws, or otherwise, the registrant has been advised that in the
opinion of the SEC such indemnification is against public policy
as expressed in said Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the New
Senior Notes,unsecured notes, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
said Act and will be governed by the final adjudication of such
issue.
(3)(6) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of
this registration statement as of the time it was declared
effective.
(4)(7) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable cause to believe
that it meets all of the requirements for filing on Form S-3 and
has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City
of Columbus and State of Ohio, on the 31st30th day of March, 1998.July, 1999.
.......... APPALACHIAN POWER COMPANY
.......... E. Linn Draper, Jr.*
.......... Chairman of the Board and
.......... Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
(i) Principal Executive
Officer Chairman of the Board
and Chief Executive
E. Linn Draper, Jr.* Officer March 31, 1998July 30, 1999
(ii) Principal Financial
Officer:
G. P. Maloney* Vice President, March 31, 1998Treasurer
/s/ A. A. Pena_________ and Chief Financial
A. A. Pena Officer July 30, 1999
(iii) Principal Accounting
Officer:
P. J. DeMaria*/s/ L. V. Assante_______ Controller March 31, 1998and Chief
L. V. Assante Accounting Officer July 30, 1999
(iv) A Majority of the
Directors:
P. J. DeMaria*
E. Linn Draper, Jr.*
H. W. Fayne*
Wm. J. Lhota*
G. P. Maloney*
James J. Markowsky*
A. A. Pena
J. H. Vipperman* March 31, 1998
*By_/July 30, 1999
*By/s/ A. A. Pena_____Pena______
(A. A. Pena, Attorney-in-Fact)
EXHIBIT INDEX
Certain of the following exhibits, designated with an
asterisk (*), are filed herewith. The exhibits not so designated
have heretofore been filed with the Commission and, pursuant to
17 C.F.R. Sections 201.24 and 230.411, are incorporated herein by
reference to the documents indicated following the descriptions
of such exhibits.
Exhibit No. Description
* 1 -1(a) Copy of proposed form of Selling Agency
Agreement for the unsecured notes.
* 1(b) Copy of proposed form of Underwriting
Agreement for the New Senior Notes.unsecured notes.
4(a) - Copy of Indenture, dated as of January 1,
1998, between the Company and The Bank of New
York, as Trustee [Registration Statement No.
333-45927, Exhibits 4(a) and 4(b); Registration
Statement No. 333-49071, Exhibit 4(b)].
* 4(b) - Copy of Company Order and Officers'
Certificate, dated March 3,April 22, 1998, forestablishing
certain terms of the 7.20%7.30% Senior Notes, Series A,B,
Due 2038.
* 4(c) -Copy of Company Order and Officers'
Certificate, dated May 20, 1999, establishing
certain terms of the 6.60% Senior Notes, Series C,
Due 2009.
* 4(d) Copy of proposed form of Company Order for
the New
Senior Notes.unsecured notes.
* 5 - Opinion of Simpson Thacher & Bartlett with respect
to the New Senior Notes.unsecured notes.
12 - Statement re Computations of Ratios [Annual[Quarterly
Report on Form 10-K10-Q of the Company for the period
ended DecemberMarch 31, 1997,1999, File No. 1-3457, Exhibit 12].
*23(a) - Consent of Deloitte & Touche LLP.
23(b) - Consent of Simpson Thacher & Bartlett
(included in Exhibit 5 filed herewith).
*24 - Powers of Attorney and resolutions of the Board of
Directors of the Company.
*25 - Form T-1 re eligibility of The Bank of New York to
act as Trustee under the Indenture.