As Filed with the Securities and Exchange Commission on February 11, 1998.December 21, 1999
File No. 333-___________333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________----------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
_______________________
DOMINION RESOURCES, INC. VIRGINIA 54-1229715
(Exact name of (State or other (I.R.S. Employer
registrant as specified jurisdiction of Identification No.)
in its charter) VIRGINIA 54-1229715incorporation or
organization)
DOMINION RESOURCES DELAWARE APPLIED FOR
CAPITAL TRUST II (State or other jurisdiction of (I.R.S. Employer
incorporation or organization)(Exact name of jurisdiction of Identification No.)
901 E. BYRDregistrant as specified incorporation or
in its Trust Agreement) organization)
DOMINION RESOURCES DELAWARE APPLIED FOR
CAPITAL TRUST III (State or other (I.R.S. Employer
(Exact name of jurisdiction of Identification No.)
registrant as specified incorporation or
in its Trust Agreement) organization)
120 TREDEGAR STREET
RICHMOND, VIRGINIA 23219
(804) 775-5700819-2000
(Address including zip code, and telephone number, including area code, of
registrant'sregistrants' principal executive offices)
PATRICIA A. WILKERSON, VICE PRESIDENT AND CORPORATE SECRETARY
W. H. RIGGS, JR., ASSISTANT CORPORATE SECRETARY
DOMINION RESOURCES, INC.
901 E. BYRD120 TREDEGAR STREET, RICHMOND, VIRGINIA 23219
(804) 775-5700819-2000
(Name, address, including zip code, and telephone number, including area code,
of agent offor service)
With a Copy to:
JAMES F. STUTTS ROBERT L. BURRUS, JR.
DOMINION RESOURCES, INC. McGUIRE, WOODS, BATTLE & BOOTHE LLP
120 TREDEGAR STREET ONE JAMES CENTER
RICHMOND, VIRGINIA 23219 RICHMOND, VIRGINIA 23219-4030
Approximate date of commencement of proposed sale to the public: From time to
time after effectiveness
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(b)
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. [_]
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CALCULATION OF REGISTRATION FEE (*)
Proposed
Amount Proposed Maximum Amount of
Title of Each Class of to be Maximum Aggregate Registration
Securities to be Registered Registered Offering Offering Fee
Price Per Price
Share
Common Stock, without par 10,000,000 $40.34375 $403,437,500 $119,014.06
value . . . . . . . . . . shares
(*)(1)
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Proposed
Title of each Class of Maximum Offering Proposed Maximum Amount of
Securities to be Amount To be Price Per Share Aggregate Registration
Registered Registered (2) Offering Price Fee
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Senior Debt Securities
Junior Subordinated
Debentures
Trust Preferred
Securities and Related
Guarantee(3)
Common Stock (without
par value)(4)
Preferred Stock
Stock Purchase Contracts
Stock Purchase Units(5)
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TOTAL $4,500,000,000 $4,500,000,000 $1,188,000
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(1) Estimated in accordance with Rule 457 solely for the purpose of
calculating the registration fee and basedfee. Such amount in U.S. dollars or the
equivalent thereof in other currencies, as shall result in an aggregate
offering price for all securities of $4,500,000,000.
(2) Omitted pursuant to General Instruction II.D. of Form S-3.
(3) No separate consideration will be received for the guarantee by Dominion
Resources, Inc.
(4) Includes an indeterminate number of shares of Common Stock to be issued by
Dominion Resources, Inc. upon the averagesettlement of the highStock Purchase Contracts.
(5) Each Stock Purchase Unit of Dominion Resources, Inc. consists of (a) a
Stock Purchase Contract, under which the holder, upon settlement, will
purchase an indeterminate number of shares of Common Stock of Dominion
Resources, Inc. and low prices reported on(b) either a beneficial interest in Senior Debt
Securities, Trust Preferred Securities, Preferred Stock or debt
obligations of third parties, including U.S. Treasury securities,
purchased with the New Yorkproceeds from the sale of the Stock Exchange composite tape byPurchase Units.
Each beneficial interest will be pledged to secure the obligation of such
holder to purchase such shares of Common Stock. No separate consideration
will be received for the Stock Purchase Contracts or the related
beneficial interests .
The Wall Street Journal for February 6, 1998.
The registrantregistrants hereby amendsamend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrantregistrants
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 SEC, acting pursuant to said Section
8(a), may determine.
PROSPECTUSSUBJECT TO COMPLETION
DATED DECEMBER 21, 1999
Prospectus
[LOGO OF DOMINION RESOURCES]
DOMINION RESOURCES, INC.
10,000,000 Shares of120 Tredegar Street
Richmond, Virginia 23219
(804) 819-2000
$4,500,000,000
Senior Debt Securities
Junior Subordinated Debentures
Trust Preferred Securities and Related Guarantee
Common Stock
(Without Par Value)
DOMINION DIRECT LOGO
A DirectPreferred Stock
Stock Purchase Plan for
Dominion Resources CommonContracts
Stock Dominion Direct Investment
- Purchase stock without a broker s fee.
- Increase your ownership by reinvesting dividendsUnits
Neither the Securities and making optional
monthly investments.
- Transfer shares at no charge.
- Own shares without holding certificates.
- Sell shares with minimal fees.
The common stock offered in this prospectus has not been approved by the SEC
orExchange Commission nor any state securities
commission nor havehas approved or disapproved of these organizations determined
thatsecurities or passed upon the
adequacy or accuracy of this prospectus is accurate or complete.Prospectus. Any representation to the contrary is
a criminal offense.
Dated February ___, 1998This prospectus is dated December , 1999.
WhereABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a shelf registration process.
Under this shelf process, we may, from time to time, sell any combination of
the securities described in this prospectus in one or more offerings up to a
total dollar amount of $4,500,000,000. This prospectus provides you with a
general description of the securities we may offer. Each time we sell
securities, we will provide a prospectus supplement that will contain specific
information about the terms of that offering. Material United States federal
income tax considerations applicable to the offered securities will also be
discussed in the applicable prospectus supplement. The prospectus supplement
may also add, update or change information contained in this prospectus. You
Can Find More Informationshould read both this prospectus and any prospectus supplement together with
additional information described under the heading WHERE YOU CAN FIND MORE
INFORMATION.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC sSEC's web site at http://www.sec.gov. You may also read and
copy any document we file at the SEC sSEC's public reference rooms in Washington,
D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-03301-800-
SEC-0330 for further information on the public reference rooms. You may also
read and copy these documents at the offices of the New York Stock Exchange, 20
Broad Street, New York, New York 10005.
The SEC allows us to incorporate by reference the information we 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
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until we sell all of thesethe securities.
- Annual.Annual Report on Form 10-K for the year ended December 31, 1996;
- Quarterly1998;
.Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997,1999, June 30,
19971999 and September 30, 1997;
- Current Reports1999;
.Current Report on Form 8-K filed January 23, 1997, Form 8-K/A, filed
March 20, 1997,29, 1999; and
Form 8-K, filed December 11, 1997 and January 15,
1998; and
- The.The description of the Company sour common stock contained in Form 8-B (Item 4) dated April
29, 1983.
You may request a copy of these filings at no cost, by writing telephoning
or e-mailingtelephoning
us at the following address:
Corporate Secretary
Dominion Resources, Inc.
901 East Byrd120 Tredegar Street
Richmond, Virginia 23219-4072
1-804-775-5700
Shareholder_Administration@domres.com23219
(804) 819-2000
You should rely only on the information incorporated by reference or provided
in this prospectus or any prospectus supplement. We have not authorized anyone
else to provide you with different information. We are not making an offer of
these securities in any state where the offer is not permitted. You should not
assume that the information in this prospectus or any prospectus supplement is
accurate as of any date other than the date on the front of those documents.
12
A SummaryTHE COMPANY
Dominion Resources, Inc. is a diversified utility holding company
headquartered in Richmond, Virginia. Our principal operating subsidiaries are
Virginia Electric and Power Company, a regulated public utility, engaged in the
generation, transmission, distribution and sale of Important Plan Features
Any investor who wisheselectric energy, Dominion
Energy, Inc., an independent power and natural gas subsidiary, and Dominion
Capital, Inc., a financial services subsidiary. We also own an 80% interest in
and operate a 365 megawatt natural gas fired generating facility in the United
Kingdom.
In May 1999, we entered into a merger agreement with Consolidated Natural Gas
Company (CNG), one of the nation's largest producers, transporters,
distributors and retail marketers of natural gas. The merger is scheduled to
make an initial purchaseclose on January 28, 2000. As a result of the merger with CNG, we will become a
registered public utility holding company under the provisions of the Public
Utility Holding Company Act of 1935 (1935 Act). Because of limits the 1935 Act
will impose on our non-utility activities, it will be necessary for us to
divest ourselves of Dominion Capital, Inc. after the merger.
THE TRUSTS
Each of Dominion Resources stock can do soCapital Trust II and Dominion Resources Capital
Trust III is a statutory business trust newly formed under Delaware law by completingus,
as sponsor for the Trust, and Chase Manhattan Bank Delaware, who will serve as
trustee in the State of Delaware for the purpose of complying with the
provisions of the Delaware Business Trust Act. The trust agreement for each of
the Trusts will be amended and restated substantially in the form filed as an
Enrollment Form and sending a check or
money orderexhibit to the Administrator.
Investments:
- New shareholders must makeregistration statement, effective when securities of the Trusts
are initially issued. The amended trust agreement will be qualified as an
initial investmentindenture under the Trust Indenture Act of at least $250;1939.
Each Trust exists for the exclusive purposes of
.issuing two classes of trust securities, trust preferred securities and trust
common securities, which together represent undivided beneficial interests in
the assets of each Trust;
.investing the gross proceeds of the trust securities in our Junior
Subordinated Debentures;
.making distributions; and
.engaging in only those other activities necessary, advisable or you may electincidental to
make monthly installments of $40 or more a
month for 12 consecutive months, by either mail or automatic bank
withdrawal.
- Current shareholders may make periodic investments of $40 or more
at any time.
-the purposes listed above.
The maximum quarterly investment is $100,000.
Dividends on all or some of your shares can be reinvested in Dominion
Resources Common Stock.
You will receive a confirmation statement for each transaction. Each
statement includes a form that you may use to make additional investments,
sell shares or issue certificates.
If you already own shares of Dominion Resources and have certificates, you
can deposit them in Dominion Direct Investment for safekeeping.
You pay no fees or brokerage commissions when you buy shares and only
minimal brokerage commission fees when you sell shares.
Please read this booklet carefully. If you are a Dominion Resources
shareholder now - or if you decide to become a shareholder - please keep
this booklet with your permanent investment records, since it contains
important information about Dominion Direct Investment.
Dominion Resources Shareholder AdministrationJunior Subordinated Debentures will be the Administratorsole assets of Dominion Direct Investment. Its mailing address, e-mail addresseach Trust, and
phone
numbers are:our payments under the Junior Subordinated Debentures and the Agreement as to
Expenses and Liabilities will be the sole revenue of each Trust.
No separate financial statements of any Trust are included in this
prospectus. We consider that these financial statements would not be material
to holders of the Trust preferred securities because no Trust has any
independent operations and the purposes of each Trust are as described above.
We do not expect that any of the Trusts will be filing annual, quarterly or
special reports with the SEC.
The principal place of business of each of the Trusts will be c/o Dominion
Resources, Inc.
P. O. Box 26532, 120 Tredegar Street, Richmond, Virginia 23261-6532
Shareholder_Administration@domres.com
1-800-552-4034
1-804-775-2500
2VA 23219.
USE OF PROCEEDS
The net proceeds from the sale of the offered securities will be used for
financing our merger with CNG, refinancing of our
3
Who Can Joindebt incurred in connection with that merger, and for other general corporate
purposes.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of the periods indicated is
as follows:
Twelve Twelve Months ended Dec. 31,
Months ended -----------------------------
Sep. 30, 1999(/2/) 1994 1995 1996 1997(/1/) 1998
- ------------------ ---- ---- ---- --------- ----
2.07 2.77 2.55 2.71 1.97 2.36
These computations include us and our subsidiaries, and certain other
companies in which we hold an equity interest. For these ratios, earnings is
determined by adding total fixed charges (excluding interest capitalized),
income taxes, minority common stockholders equity in net income and
amortization of interest capitalized to income from continuing operations
after eliminating equity in undistributed earnings and adding back losses of
companies in which at least 20% but less than 50% equity is owned. For this
purpose, total fixed charges consists of (1) interest on all indebtedness and
amortization of debt discount and expense, (2) interest capitalized and (3) an
interest factor attributable to rentals.
- Current shareholders--------
(1) Net income for the twelve months ended December 31, 1997 includes the one-
time charge of Dominion Resources.
- New investors residing$156.6 million for the windfall profits tax levied by the
U.K. government. Excluding this charge from the calculation above results
in a ratio of earnings to fixed charges for the twelve months ended
December 31, 1997 of 2.22x.
(2) Net income for the twelve months ended September 30, 1999 includes the
one-time charge of $254.8 million for the write-off of regulatory assets.
Excluding this charge from the calculation above results in a ratio of
earnings to fixed charges for the twelve months ended September 30, 1999
of 2.55x.
DESCRIPTION OF DEBT SECURITIES
The term Debt Securities includes the Senior Debt Securities and the Junior
Subordinated Debentures. We will issue the Senior Debt Securities in one or
more series under a Senior Indenture between us and The Chase Manhattan Bank
as Trustee. We will issue the Junior Subordinated Debentures in one or more
series under our Junior Subordinated Indenture dated as of December 1, 1997
between us and The Chase Manhattan Bank as Trustee, as supplemented from time
to time. The Indenture related to the Junior Subordinated Debentures is called
the Subordinated Indenture in this prospectus, and together, the Senior
Indenture and the Subordinated Indenture are called Indentures. We have
summarized selected provisions of the Indentures below. The form of the Senior
Indenture and the Subordinated Indenture have been filed as exhibits to the
registration statement and you should read the Indentures for provisions that
may be important to you. In the summary below, we have included references to
section numbers of the Indentures so that you can easily locate these
provisions. Capitalized terms used in the U.S. who would likesummary have the meanings specified
in the Indentures.
General
The Senior Debt Securities will be our direct, unsecured obligations and
will rank equally with all of our other senior and unsubordinated debt. The
Junior Subordinated Debentures will be our unsecured obligations and are
junior in
4
right of payment to become
shareholders.
- Foreign citizens are eligible to participateour Senior Indebtedness, as long as their
participation would not violate any laws in their home countries.
How To Enroll
- If youdescribed under the caption
ADDITIONAL TERMS OF JUNIOR SUBORDINATED DEBENTURES--SUBORDINATION.
Because we are a Dominion Resources shareholderholding company that conducts all of record already, fill outour operations through
our subsidiaries, our ability to meet our obligations under the Enrollment FormDebt Securities
is dependent on the earnings and return itcash flows of those subsidiaries and the
ability of those subsidiaries to pay dividends or to advance or repay funds to
us. Holders of Debt Securities will generally have a junior position to claims
of creditors of our subsidiaries, including trade creditors, debtholders,
secured creditors, taxing authorities, guarantee holders and any preferred
stockholders. Virginia Power has 6,890,140 issued and outstanding shares of
preferred stock. In addition to trade debt, all of our operating subsidiaries
have ongoing corporate debt programs used to finance their business activities.
As ofSeptember 30, 1999, our subsidiaries had approximately $6.9 billion of
outstanding debt.
Neither of the Indentures limits the amount of Debt Securites that we may
issue under it. We may issue Debt Securities from time to time under the
Indentures in one or more series by entering into supplemental indentures or by
our Board of Directors or a duly authorized committee authorizing the issuance.
A form of supplemental indenture to each of the Indentures is an exhibit to the
Administrator along with your
investment of $40 or more.
- If youregistration statement.
The Indentures do not own Dominion Resources stock,protect the holders of Debt Securities if we engage in
a highly leveraged transaction.
Provisions of a Particular Series
The Debt Securities of a series need not be issued at the same time, bear
interest at the same rate or if you wish to establish
a separate account (for example, a joint account with your spouse, or as
a custodianmature on the same date. The prospectus supplement
for a minor), fill outparticular series of Debt Securities will specify the Enrollment Formterms of that
series, including, if applicable, some or all of the following:
.the title and return ittype of the Debt Securities;
.the total principal amount of the Debt Securities;
.the portion of the principal payable upon acceleration of maturity, if other
than the entire principal;
.the date or dates on which principal is payable or the method for determining
the date or dates, and any right that we have to change the date on which
principal is payable;
.the interest rate or rates, if any, or the method for determining the rate or
rates, and the date or dates from which interest will accrue;
.any interest payment dates and the regular record date for the interest
payable on each interest payment date, if any;
.any payments due if the maturity of the Debt Securities is accelerated;
.any optional redemption terms, or, with respect to the Administrator. Enclose a checkSenior Debt Securities,
any repayment terms;
.any provisions that would obligate us to repurchase or money order,otherwise redeem the
Debt Securities, or, with respect to the Senior Debt Securities, any sinking
fund provisions;
.the currency in which payments will be made if other than U.S. dollars, and
the manner of determining the equivalent of those amounts in U.S. dollars,dollars;
5
.if payments may be made, at our election or at the holder's election, in a
currency other than that in which the Debt Securities are stated to be
payable, then the currency in which those payments may be made, the terms and
conditions of the election and the manner of determining those amounts;
.any index or formula used for determining principal, interest, or premium, if
any;
.the percentage of the principal amount at which the Debt Securities will be
issued, if other than 100% of the principal amount;
.whether to be issued in fully registered certificated form or book-entry form,
represented by certificates deposited with, or on behalf of, a minimum investment of $250 or commit to make installment payments of
$40 or more for 12 consecutive months.
- If you own shares of Dominion Resources but they are heldsecurities
depositary and registered in the name of the depositary's nominee (Book-Entry
Debt Securities);
.denominations, if other than $1,000 each or multiples of $1,000;
.any changes to events of defaults or covenants; and
.any other terms of the Debt Securities. (Sections 201 & 301 of the Senior
Indenture & Sections 2.1 & 2.3 of the Subordinated Indenture.)
The prospectus supplement will also indicate any special tax implications of
the Debt Securities and any provisions granting special rights to holders when
a bankspecified event occurs.
Conversion or broker (that is,Redemption
No Debt Security will be subject to conversion, amortization, or redemption,
unless otherwise provided in street name ), complete and sendthe applicable prospectus supplement. Any
provisions relating to the Administrator,conversion or redemption of Debt Securities will be
set forth in the Enrollment Form alongapplicable prospectus supplement, including whether conversion
is mandatory or at our option. If no redemption date or redemption price is
indicated with respect to a Debt Security, we may not redeem the Debt Security
prior to Stated Maturity. Debt Securities subject to redemption by us will be
subject to the following terms:
.redeemable on and after the applicable redemption dates;
.redemption dates and redemption prices fixed at the time of sale and set forth
on the Debt Security; and
.redeemable in whole or in part (provided that any remaining principal amount
of the Debt Security will be equal to an authorized denomination) at our
option at the applicable redemption price, together with interest, payable to
the date of redemption, on notice given not more than 60 nor less than 20
days prior to the date of redemption. (Section 1104 of the Senior Indenture &
Section 3.2 of the Subordinated Indenture.)
We will not be required to:
.issue, register the transfer of, or exchange any Debt Securities of a series
during the period beginning 15 days before the date the notice is mailed
identifying the Debt Securities of that series that have been selected for
redemption; or
.register the transfer of, or exchange any Debt Security of that series
selected for redemption except the unredeemed portion of a Debt Security
being partially redeemed. (Section 305 of the Senior Indenture & Section 2.5
of the Subordinated Indenture.)
6
Payment and Transfer; Paying Agent
The paying agent will pay the principal of any Debt Securities only if those
Debt Securities are surrendered to it. Unless we state otherwise in the
applicable prospectus supplement, the paying agent will pay principal, interest
and premium, if any, on Debt Securities, subject to such surrender, where
applicable, at its office or, at our option:
.by wire transfer to an account at a banking institution in the United States
that is designated in writing to the Trustee prior to the deadline set forth
in the applicable prospectus supplement by the person entitled to that
payment (which in the case of Book-Entry Debt Securities is the securities
depositary or its nominee); or
.by check mailed to the address of the person entitled to that interest as that
address appears in the security register for $250those Debt Securities. (Sections
307 & 1001 of the Senior Indenture & Section 4.1 of the Subordinated
Indenture.)
Neither we nor the Trustee will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in a Book-Entry Debt Security, or for maintaining,
supervising or reviewing any records relating to the beneficial ownership
interests. We expect that the securities depositary, upon receipt of any
payment of principal, interest or premium, if any, in a Book-Entry Debt
Security, will credit immediately the accounts of the related participants with
payment in amounts proportionate to their respective holdings in principal
amount of beneficial interest in the Book-Entry Debt Security as shown on the
records of the securities depositary. We also expect that payments by
participants to owners of beneficial interests in a Book-Entry Debt Security
will be governed by standing customer instructions and customary practices, as
is now the case with securities held for the accounts of customers in bearer
form or registered in "street name" and will be the responsibility of the
participants.
Unless we state otherwise in the applicable prospectus supplement, the
Trustee will act as paying agent for the Debt Securities, and the principal
corporate trust office of the Trustee will be the office through which the
paying agent acts. We may, however, change or add paying agents or approve a
change in the office through which a paying agent acts. (Section 1002 of the
Senior Indenture & Section 4.4 of the Subordinated Indenture.)
Any money that we have paid to a paying agent for principal or interest on
any Debt Securities which remains unclaimed at the end of two years after that
principal or interest has become due will be repaid to us at our request. After
repayment to the Company, holders should look only to us for those payments.
(Section 1003 of the Senior Indenture & Section 12.4 of the Subordinated
Indenture.)
Fully registered securities may be transferred or exchanged at the corporate
trust office of the Trustee or at any other office or agency we maintain for
those purposes, without the payment of any service charge except for any tax or
governmental charge. (Section 1002 of the Senior Indenture & Section 2.5 of the
Subordinated Indenture.)
Global Securities
We may issue some or all of the Debt Securities as Book-Entry Debt
Securities. Book-Entry Debt Securities will be represented by one or more fully
registered
7
global certificates. Book-Entry Debt Securities of like tenor and terms up to
$200,000,000 aggregate principal amount may be represented by a single global
certificate. Each global certificate will be deposited and registered with the
securities depositary or commitits nominee or a custodian for the securities
depositary. Unless it is exchanged in whole or in part for Debt Securities in
definitive form, a global certificate may generally be transferred only as a
whole unless it is being transferred to $40certain nominees of the depositary.
(Section 305 of the Senior Indenture & Section 2.5 of the Subordinated
Indenture.)
Unless otherwise stated in any prospectus supplement, The Depository Trust
Company will act as the securities depositary. Beneficial interests in global
certificates will be shown on, and transfers of global certificates will be
effected only through, records maintained by the securities depositary and its
participants. If there are any additional or morediffering terms of the depositary
arrangement with respect to the Book-Entry Debt Securities, we will describe
them in the applicable prospectus supplement.
Holders of beneficial interests in Book-Entry Debt Securities represented by
a monthglobal certificate are referred to as beneficial owners. Beneficial owners
will be limited to institutions having accounts with the securities depositary
or its nominee, which are called participants in this discussion, and to
persons that hold beneficial interests through participants. When a global
certificate representing Book-Entry Debt Securities is issued, the securities
depositary will credit on its book-entry, registration and transfer system the
principal amounts of Book-Entry Debt Securities the global certificate
represents to the accounts of its participants. Ownership of beneficial
interests in a global certificate will be shown only on, and the transfer of
those ownership interests will be effected only through, records maintained by:
.the securities depositary, with respect to participants' interests; and
.any participant, with respect to interests the participant holds on behalf of
other persons.
As long as the securities depositary or its nominee is the registered holder
of a global certificate representing Book-Entry Debt Securities, that person
will be considered the sole owner and holder of the global certificate and the
Book-Entry Debt Securities it represents for 12 consecutive months.
- If your sharesall purposes. Except in limited
circumstances, beneficial owners:
.may not have the global certificate or any Book-Entry Debt Securities it
represents registered in their names;
.may not receive or be entitled to receive physical delivery of certificated
Book-Entry Debt Securities in exchange for the global certificate; and
.will not be considered the owners or holders of the global certificate or any
Book-Entry Debt Securities it represents for any purposes under the Debt
Securities or the Indentures. (Section 2.2 of the Subordinated Indenture.)
We will make all payments of principal, interest and premium, if any, on a
Book-Entry Debt Security to the securities depositary or its nominee as the
holder of the global certificate. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of securities in
definitive form. These laws
8
may impair the ability to transfer beneficial interests in a global
certificate.
Payments participants make to beneficial owners holding interests through
those participants will be the responsibility of those participants. The
securities depositary may from time to time adopt various policies and
procedures governing payments, transfers, exchanges and other matters relating
to beneficial interests in a global certificate. None of the following will
have any responsibility or liability for any aspect of the securities
depositary's or any participant's records relating to beneficial interests in
a global certificate representing Book-Entry Debt Securities, for payments
made on account of those beneficial interests or for maintaining, supervising
or reviewing any records relating to those beneficial interests:
.the Company;
.the Trustee;
.the Trust (only with respect to the Junior Subordinated Debentures if the
Junior Subordinated Debentures are held in street name you cannot reinvest dividends
on those shares. However, you may transfer your Dominion Resources
street name sharesissued to a Dominion Direct Investment accountTrust); or
.any agent of any of the above.
Covenants
Under the Indentures we will:
.pay the principal, interest and premium, if any, on the Debt Securities when
due;
.maintain a place of payment;
.deliver an officer's certificate to the Trustee at the end of each fiscal
year confirming our compliance with our obligations under each of the
Indentures; and
.deposit sufficient funds with any paying agent on or before the due date for
any principal, interest or premium, if any. (Sections 1001, 1002, 1003 &
1006 of the Senior Indenture & Sections 4.1, 4.2 4.4 & 4.6 of the
Subordinated Indenture.)
Consolidation, Merger or Sale
The Indentures provide that we may consolidate or merge with or into, or
sell all or substantially all of our properties and assets to, another
corporation or other entity, provided that any successor assumes our
obligations under the Indentures and the Debt Securities issued under the
Indentures. We must also deliver an opinion of counsel to the Trustee
affirming our compliance with all conditions in the applicable Indenture
relating to the transaction. When the conditions are satisfied, the successor
will succeed to and be substituted for us under the Senior Indenture, and we
will be relieved of our obligations under the Senior Indenture and the Debt
Securities issued under them. (Sections 801 & 802 of the Senior Indenture &
Sections 11.1, 11.2 & 11.3 of the Subordinated Indenture.)
Events of Default
Event of Default when used in each of the Indentures, will mean any of the
following:
.failure to pay the principal or any premium on any Debt Security when due;
.with respect to the Senior Debt Securities, failure to deposit any sinking
fund payment when due that continues for 60 days;
.failure to pay any interest on any Debt Securities of that series, when due,
that continues for 60 days (or for 30 days in the case of any Junior
Subordinated
9
Debentures); provided that, if applicable, for this purpose, the date on
which interest is due is the date on which we are required to make payment
following any deferral of interest payments by instructing your agentit under the terms of Junior
Subordinated Debentures that permit such deferrals;
.failure to perform any other covenant in the Indentures (other than a covenant
expressly included solely for the benefit of other series) that continues for
90 days after the Trustee or the holders of at least 33% of the outstanding
Debt Securities (25% in the case of the Junior Subordinated Debentures) of
that series give us written notice of the default;
.certain events in bankruptcy, insolvency or reorganization of the Company; or
.any other Event of Default included in the Indentures or any supplemental
indenture. (Section 501 of the Senior Indenture & Section 6.1 of the
Subordinated Indenture.)
In the case of a general covenant default described above, the Trustee may
extend the grace period. In addition, if holders of a particular series have
given a notice of default, then holders of at least the same percentage of Debt
Securities of that series, together with the Trustee, may also extend the grace
period. The grace period will be automatically extended if we have initiated
and are diligently pursuing corrective action.
An Event of Default for a particular series of Debt Securities does not
necessarily constitute an Event of Default for any other series of Debt
Securities issued under the Indentures. Additional events of default may be
established for a particular series and, if established, will be described in
the applicable prospectus supplement.
If an Event of Default for any series of Debt Securities occurs and
continues, the Trustee or the holders of at least 33% (25%, in the case of the
Junior Subordinated Debentures) in aggregate principal amount of the Debt
Securities of the series may declare the entire principal of all the Debt
Securities of that series to be due and payable immediately. If this happens,
subject to certain conditions, the holders of a majority of the aggregate
principal amount of the Debt Securities of that series can void the trust
agreement. (Section 502 of the Senior Indenture & Section 6.1 of the
Subordinated Indenture.)
The Trustee may withhold notice to the holders of Debt Securities of any
default (except in the payment of principal or interest) if it considers the
withholding of notice to be in the best interests of the holders. Other than
its duties in case of a default, a Trustee is not obligated to exercise any of
its rights or powers under the Indentures at the request, order or direction of
any holders, unless the holders offer the Trustee reasonable indemnity. If they
provide this reasonable indemnification, the holders of a majority in principal
amount of any series of Debt Securities may direct the time, method and place
of conducting any proceeding or any remedy available to the Trustee, or
exercising any power conferred upon the Trustee, for any series of Debt
Securities. (Sections 512, 601 & 602 of the Senior Indenture & Sections 6.6,
7.1 & 7.2 of the Subordinated Indenture.)
The holder of any Debt Security will have an absolute and unconditional right
to receive payment of the principal, any premium and, within certain
limitations, any interest on that Debt Security on its maturity date or
redemption date and to
10
enforce those payments. (Section 508 of the Senior Indenture & Section 14.2 of
the Subordinated Indenture.)
Satisfaction; Discharge
We may discharge all our obligations (except those described below) to
holders of the Debt Securities issued under the Indentures, which Debt
Securities have not already been delivered to the Trustee for cancellation and
which either have become due and payable or are by their terms due and payable
within one year, or are to be called for redemption within one year, by
depositing with the Trustee an amount certified to be sufficient to pay when
due the principal, interest and premium, if any, on all outstanding Debt
Securities. However, certain of our obligations under the Indentures will
survive, including with respect to the following:
.remaining rights to register the transfer, conversion, substitution or
exchange of Debt Securities of the applicable series;
.rights of holders to receive payments of principal of, and any interest on,
the Debt Securities of the applicable series, and other rights, duties and
obligations of the holders of Debt Securities with respect to any amounts
deposited with the Trustee; and
.the rights, obligations and immunities of the Trustee under the Indentures.
(Section 401 of Senior Indenture & Section 12.1 of Subordinated Indenture.)
Modification of Indentures; Waiver
Under the Indentures our rights and obligations and the rights of the holders
may be modified with the consent of the holders of a majority in aggregate
principal amount of the outstanding Debt Securities of each series affected by
the modification. No modification of the principal or interest payment terms,
and no modification reducing the percentage required for modifications, is
effective against any holder without its consent. (Section 902 of the Senior
Indenture & Section 10.2 of the Subordinated Indenture.) In addition, we may
supplement the Indentures to create new series of Debt Securities and for
certain other purposes, without the consent of any holders of Debt Securities.
(Section 901 of the Senior Indenture & Section 10.1 of the Subordinated
Indenture.)
The holders of a majority of the outstanding Debt Securities of all series
under the applicable Indenture with respect to which a default has occurred and
is continuing may waive a default for all those series, except a default in the
payment of principal or interest, or any premium, on any Debt Securities or a
default with respect to a covenant or provision which cannot be amended or
modified without the consent of the holder of each outstanding Debt Security of
the series affected. (Section 513 of the Senior Indenture & Section 6.6 of the
Subordinated Indenture.)
In addition, under certain circumstances, the holders of a majority of the
outstanding Junior Subordinated Debentures of any series may waive in advance,
for that series, our compliance with certain restrictive provisions of the
Subordinated Indenture under which those Junior Subordinated Debentures were
issued. (Section 4.7 of the Subordinated Indenture.)
Concerning the Trustee
The Chase Manhattan Bank is the Subordinated Indenture Trustee and the
Trustee under the Senior Indenture. We and certain of our affiliates maintain
deposit accounts and banking relationships with The Chase Manhattan Bank. The
Chase
11
Manhattan Bank also serves as trustee under other indentures pursuant to which
securities of ours and of certain of our affiliates are outstanding. It has
purchased, and is likely to purchase in the future, our securities and
securities of our affiliates.
The Trustee will perform only those duties that are specifically set forth in
the Indentures unless an event of default under an Indenture occurs and is
continuing. The Trustee is under no obligation to exercise any of its powers
under the Indentures at the request of any holder of Debt Securities unless
that holder offers reasonable indemnity to the Trustee against the costs,
expenses and liabilities which it might incur as a result. (Section 601 of the
Senior Indenture & Section 7.1 of the Subordinated Indenture.)
The Trustee administers its corporate trust business at 450 West 33rd Street,
New York, New York 10001 (Attention: Capital Markets Fiduciary Services).
ADDITIONAL TERMS OF SENIOR DEBT SECURITIES
Repayment at the Option of the Holder; Repurchases by the Company
We must repay the Senior Debt Securities at the option of the Holders prior
to the Stated Maturity Date only if specified in the applicable prospectus
supplement. Unless otherwise provided in the prospectus supplement, the Senior
Debt Securities subject to repayment at the option of the Holder will be
subject to repayment:
. on the specified Repayment Dates; and
. at a repayment price equal to 100% of the unpaid principal amount to be
repaid, together with unpaid interest accrued to the Repayment Date. (Section
1302 of the Senior Indenture.)
For any Senior Debt Security to be repaid, the Trustee must receive, at its
office maintained for that purpose in the Borough of Manhattan, New York City
not more than 60 nor less than 30 calendar days prior to the date of repayment:
. in the case of a certificated Senior Debt Security, the certificated Senior
Debt Security and the form in the Senior Debt Security entitled Option of
Holder to Elect Purchase duly completed; or
. in the case of a book-entry Senior Debt Security, instructions to that effect
from the beneficial owner to the securities depositary and forwarded by the
securities depositary. Exercise of the repayment option by the Holder will be
irrevocable. (Section 1303 of the Senior Indenture.)
Only the securities depositary may exercise the repayment option in respect
of beneficial interests in the book-entry Senior Debt Securities. Accordingly,
beneficial owners that desire repayment in respect of all or any portion of
their beneficial interests must instruct the participants through which they
own their interests to direct the securities depositary to exercise the
repayment option on their behalf. All instructions given to participants from
beneficial owners relating to the option to elect repayment will be
irrevocable. In addition, at the time the instructions are given, each
beneficial owner will cause the participant through which it owns its interest
to transfer its interest in the book-entry Senior Debt Securites or the global
certificate representing the related book-entry Senior Debt Securities, on the
securities depositary's records, to the Trustee. See DESCRIPTION OF THE DEBT
SECURITIES--GLOBAL SECURITIES.
12
Defeasance
We will be discharged from our obligations on the Senior Debt Securities of
any series at any time if we deposit with the Trustee sufficient cash or
government securities to pay the principal, interest, any premium and any other
sums due to the stated maturity date or a redemption date of the Senior Debt
Securities of the series. If this happens, the holders of the Senior Debt
Securities of the series will not be entitled to the benefits of the Senior
Indenture except for registration of transfer and exchange of Senior Debt
Securities and replacement of lost, stolen or mutilated Senior Debt Securities.
(Section 402 of the Senior Indenture.)
Under federal income tax law as of the date of this prospectus, a discharge
may be treated as an exchange of the related Senior Debt Securities. Each
holder might be required to recognize gain or loss equal to the difference
between the holder's cost or other tax basis for the Senior Debt Securities and
the value of the holder's interest in the trust. Holders might be required to
include as income a different amount than would be includable without the
discharge. We urge prospective investors to consult their own tax advisers as
to the consequences of a discharge, including the applicability and effect of
tax laws other than the federal income tax law.
ADDITIONAL TERMS OF THE JUNIOR SUBORDINATED DEBENTURES
Additional Covenants Applicable to Junior Subordinated Debentures
Under the Subordinated Indenture, we will:
. maintain 100% ownership of any Trust to which the Junior Subordinated
Debentures have been issued while the Junior Subordinated Debentures remain
outstanding; and
. pay to any Trust to which the Junior Subordinated Debentures have been issued
any taxes, duties, assessments or governmental charges of whatever nature
(other than withholding taxes) imposed by the United States or any other
taxing authority on that Trust, so that the net amounts received and retained
by that Trust (after paying any taxes, duties, assessments or other
governmental charges) will be not less than the Trust would have received had
no such taxes, duties, assessments or other governmental charges been
imposed. (Sections 4.8 & 4.9 of the Subordinated Indenture.)
Option to Extend Interest Payment Period
We can defer interest payments by extending the interest payment period for
the number of consecutive extension periods specified in the applicable
prospectus supplement (each, an Extension Period). Other details regarding the
Extension Period will also be specified in the applicable prospectus
supplement. No Extension Period may extend beyond the maturity of the Junior
Subordinated Debentures. At the end of the Extension Period(s), we will pay all
interest then accrued and unpaid, together with interest compounded quarterly
at the rate for the Junior Subordinated Debentures, to the extent permitted by
applicable law. (Section 2.10 of the Subordinated Indenture.)
13
During any Extension Period, we will not make distributions related to our
capital stock, including dividends, redemptions, repurchases, liquidation
payments, or guarantee payments. Also we will not make any payments, redeem or
repurchase any debt securities of equal or junior rank to the Junior
Subordinated Debentures or make any guarantee payments on any such debt
securities. We may, however, make the following types of distributions:
.dividends paid in common stock;
. dividends in connection with the implementation of a shareholder rights plan;
. payments to a trust holding securities of the same series under a guarantee;
or
. repurchases, redemptions or other acquisitions of shares of our capital stock
in your name.
Methodsconnection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of Investment
- All investments mustemployees, officers, directors or
consultants.
Subordination
Each series of Junior Subordinated Debentures will be subordinate and junior
in right of payment, to the extent set forth in the Subordinated Indenture, to
all Senior Indebtedness as defined below. If:
. we make a payment or distribution of any of our assets to creditors upon our
dissolution, winding-up, liquidation or reorganization, whether in
bankruptcy, insolvency or otherwise;
. a default beyond any grace period has occurred and is continuing with respect
to the payment of principal, interest or any other monetary amounts due and
payable on any Senior Indebtedness; or
. the maturity of any Senior Indebtedness has been accelerated because of a
default on that Senior Indebtedness,
then the holders of Senior Indebtedness generally will have the right to
receive payment, in the case of the first instance, of all amounts due or to
become due upon that Senior Indebtedness, and, in the case of the second and
third instances, of all amounts due on that Senior Indebtedness, or we will
make provision for those payments, before the holders of any Junior
Subordinated Debentures have the right to receive any payments of principal or
interest on their Junior Subordinated Debentures. (Sections 14.1 and 14.9 of
the Subordinated Indenture.)
Senior Indebtedness means, with respect to any series of Junior Subordinated
Debentures, the principal, premium, interest and any other payment in respect
of any of the following:
. all of our indebtedness for borrowed or purchased money that is evidenced by
notes, debentures, bonds or other written instruments;
. our obligations for reimbursement under letters of credit, banker's
acceptances, security purchase facilities or similar facilities issued for
our account;
. any of our other indebtedness or obligations with respect to commodity
contracts, interest rate commodity and currency swap agreements and other
similar agreements or arrangements; and
. all indebtedness of others of the kinds described in the preceding categories
which we have assumed or guaranteed.
Senior Indebtedness will not include our obligations to trade creditors or
indebtedness to our subsidiaries. (Section 1.1 of the Subordinated Indenture.)
14
Senior Indebtedness will be entitled to the benefits of the subordination
provisions in the Subordinated Indenture irrespective of the amendment,
modification or waiver of any term of the Senior Indebtedness. We may not
amend the Subordinated Indenture to change the subordination of any
outstanding Junior Subordinated Debentures without the consent of each holder
of Senior Indebtedness that the amendment would adversely affect. (Sections
10.2 & 14.7 of the Subordinated Indenture.)
The Subordinated Indenture does not limit the amount of Senior Indebtedness
that we may issue.
DESCRIPTION OF THE TRUST PREFERRED SECURITIES
The following is a summary of the principal terms of the Trust Preferred
Securities. The form of amended trust agreement is filed as an exhibit to the
registration statement of which this prospectus forms a part, or is
incorporated by reference. The terms of the Trust Preferred Securities will
include those stated in the amended trust agreement and those made part of the
amended trust agreement by the Trust Indenture Act.
General
Each Trust will exist until terminated as provided in its amended trust
agreement. Except under certain circumstances, we will be entitled to appoint,
remove, or replace trustees, who will conduct the business and affairs of each
Trust. The trustees of each Trust will consist of:
. two employees, officers or affiliates of the Company as Administrative
Trustees;
. a financial institution unaffiliated with us that will act as property
trustee and as indenture trustee for purposes of the Trust
Indenture Act, under the terms set forth in a prospectus supplement (the
Property Trustee); and
. one trustee with its principal place of business or who resides in the State
of Delaware and who will act under the terms set forth in a prospectus
supplement. (Sections 6.1 through 6.5 of the Amended Trust Agreement.)
The amended trust agreement will authorize the Administrative Trustees to
issue, on behalf of the applicable Trust, two classes of trust securities,
Trust Preferred Securities and trust common securities, each of which will
have the terms described in this prospectus and in the applicable prospectus
supplement. We will own all of the trust common securities. The trust common
securities will rank equally in right of payment, and payments will be made on
the trust common securities, proportionately with the trust preferred
securities. However, if an event of default occurs and is continuing under the
amended trust agreement, the rights of the holders of the trust common
securities to payment for distributions and payments upon liquidation,
redemption and otherwise, will be subordinated to the rights of the holders of
the trust preferred securities. We will acquire, directly or indirectly, trust
common securities in a total liquidation amount of approximately 3% of the
total capital of each of the Trusts. (Sections 3.6, 5.1, 5.2 and 7.1 of the
Amended Trust Agreement.)
The proceeds from the sale of the Trust Preferred Securities will be used by
the applicable Trust to purchase our Junior Subordinated Debentures. These
Junior Subordinated Debentures will be held in trust by the Property Trustee
for the benefit
15
of the holders of the trust securities. We will guarantee the payments of
distributions and payments on redemption or liquidation with respect to the
Trust Preferred Securities, but only to the extent the Trust has funds
available to make those payments and has not made the payments. See DESCRIPTION
OF THE GUARANTEES.
The assets of the Trust available for distribution to the holders of Trust
Preferred Securities will be limited to payments from us under the Junior
Subordinated Debentures held by the Trust. If we fail to make a payment on the
Junior Subordinated Debentures, the Trust will not have sufficient funds to
make related payments, including distributions, on its Trust Preferred
Securities.
The Guarantee, when taken together with our obligations under the Junior
Subordinated Debentures, the Subordinated Indenture and the amended trust
agreement, will provide a full and unconditional guarantee of amounts due on
the Trust Preferred Securities issued by the Trust.
The Trust Preferred Securities will have the terms, including distributions,
redemption, voting, liquidation rights and other preferred, deferred or other
special rights or restrictions that will be described in the amended trust
agreement or made part of the amended trust agreement by the Trust Indenture
Act or the Delaware Business Trust Act. The terms of the Trust Preferred
Securities will mirror the terms of the Junior Subordinated Debentures held by
the Trust. In other words, the distribution rate and the distribution payment
dates and other payment dates for the Trust Preferred Securities will
correspond to the interest rate and interest payment dates and other payment
dates on the Junior Subordinated Debentures. Holders of Trust Preferred
Securities have no preemptive or similar rights. (Section 7.1 of the Amended
Trust Agreement.)
Provisions of a Particular Series
Each Trust may issue only one series of Trust Preferred Securities. The
applicable prospectus supplement will set forth the principal terms of the
Trust Preferred Securities that will be offered, including:
. the name of the Trust Preferred Securities;
. the liquidation amount and number of Trust Preferred Securities issued;
. the annual distribution rate(s) or method of determining such rate(s), the
payment date(s) and the record dates used to determine the holders who are to
receive distributions;
. the date from which distributions will be cumulative;
. the optional redemption provisions, if any, including the prices, time
periods and other terms and conditions on which the Trust Preferred
Securities will be purchased or redeemed, in whole or in part;
. the terms and conditions, if any, upon which the Junior Subordinated
Debentures and the related Guarantee may be distributed to holders of those
Trust Preferred Securities;
. any securities exchange on which the Trust Preferred Securities will be
listed;
. whether the Trust Preferred Securities are to be issued in book-entry form
and represented by one or more global certificates, and if so, the depository
for
16
those global certificates and the specific terms of the depositary
arrangements; and
. any other relevant rights, preferences, privileges, limitations or
restrictions of the Trust Preferred Securities. (Article 7 of the Amended
Trust Agreement.)
The interest rate and interest and other payment dates of each series of
Junior Subordinated Debentures issued to a Trust will correspond to the rate at
which distributions will be paid and the distribution and other payment dates
of the Trust Preferred Securities of that Trust.
Extensions
We have the right under the Subordinated Indenture to defer payments of
interest on the Junior Subordinated Debentures by extending the interest
payment period from time to time on the Junior Subordinated Debentures. The
Administrative Trustees will give the holders of the Trust Preferred Securities
notice of any Extension Period upon their receipt of notice from us. If
distributions are deferred, the deferred distributions and accrued interest
will be paid to holders of record of the Trust Preferred Securities as they
appear on the books and records of the Trust on the record date next following
the termination of such deferral period. See DESCRIPTION OF THE JUNIOR
SUBORDINATED DEBENTURES--OPTION TO EXTEND INTEREST PAYMENT PERIOD.
Distributions on the Trust Preferred Securities will be made on the dates
payable to the extent that the Trust has funds available for the payment of
distributions in the Property Account. The Trust's funds available for
distribution to the holders of the trust securities will be limited to payments
received from us on the Junior Subordinated Debentures. We have guaranteed the
payment of distributions out of monies held by the Trust to the extent set
forth under DESCRIPTION OF THE GUARANTEES.
Distributions on the Trust Preferred Securities will be payable to the
holders named on the securities register of the Trust at the close of business
on the relevant record dates, which, as long as the Trust Preferred Securities
remain in book-entry only form, will be one business day prior to the relevant
payment dates. Distributions will be paid through the Property Trustee who will
hold amounts received in respect of the Junior Subordinated Debentures in the
Property Account for the benefit of the holders of the trust securities. In the
event that the Trust Preferred Securities do not continue to remain in book-
entry only form, the relevant record dates will conform to the rules of any
securities exchange on which the Trust Preferred Securities are listed and, if
none, the Administrative Trustees will have the right to select relevant record
dates, which will be more than 14 days but less than 60 days prior to the
relevant payment dates. In the event that any date on which distributions are
to be made on the Trust Preferred Securities is not a business day, then
payment of the distributions payable on that date will be made on the next
succeeding day which is a business day and without any interest or other
payment in respect of that delay, except that, if that business day is in the
next succeeding calendar year, the payment will be made on the immediately
preceding business day, in each case with the same force and effect as if made
on the record date. (Section 7.2 of the Amended Trust Agreement.)
17
Mandatory Redemption of Trust Preferred Securities
The Trust Preferred Securities have no stated maturity date, but will be
redeemed upon the maturity of the Junior Subordinated Debentures or to the
extent the Junior Subordinated Debentures are redeemed prior to maturity. The
Junior Subordinated Debentures will mature on the date specified in the
applicable prospectus supplement and may be redeemed at any time, in whole but
not in part, in certain circumstances upon the occurrence of a Tax Event or an
Investment Company Event as described under SPECIAL EVENT REDEMPTION.
Upon the maturity of the Junior Subordinated Debentures, the proceeds of
their repayment will simultaneously be applied to redeem all the outstanding
trust securities at the Redemption Price. Upon the redemption of the Junior
Subordinated Debentures, either at our option or as a result of a Tax Event or
an Investment Company Event, the proceeds from the redemption will
simultaneously be applied to redeem trust securities having a total liquidation
amount equal to the total principal amount of the Junior Subordinated
Debentures so redeemed at the redemption price; provided, that holders of trust
securities will be given not less than 20 nor more than 60 days' notice of the
redemption. In the event that fewer than all of the outstanding trust
securities are to be redeemed, the trust securities will be redeemed
proportionately. (Section 7.3 of the Amended Trust Agreement.)
Special Event Redemption
Both a Tax Event and an Investment Company Act Event constitute Special
Events for purposes of the redemption provisions described in the preceding
paragraph.
A Tax Event means that the Administrative Trustees have received an opinion
of independent tax counsel experienced in those matters to the effect that, as
a result of:
. any amendment to, change or announced proposed change in, the laws or
regulations of the United States or any of its political subdivisions or
taxing authorities, or
. any official administrative pronouncement, action or judicial decision
interpreting or applying those laws or regulations, which amendment or change
becomes effective or proposed change, pronouncement, action or decision is
announced on or after the date
. the Trust Preferred Securities are issued and sold there is more than an
insubstantial risk that:
. the Trust is or within 90 days would be subject to U.S. dollars.
- Maximumfederal income tax
with respect to income accrued or received on the Junior Subordinated
Debentures,
. interest payable to the Trust on the Junior Subordinated Debentures is not or
within 90 days would not be deductible, in whole or in part, by us for U.S.
federal income tax purposes, or
. the Trust is or within 90 days would be subject to a material amount of other
taxes, duties or other governmental charges.
Investment Company Event means that the Administrative Trustees have received
an opinion of a nationally recognized independent counsel to the effect that,
as a result of an amendment to or change in the Investment Company Act or
regulations
18
thereunder on or after the date the Trust Preferred Securities are issued and
sold, there is more than an insubstantial risk that the Trust is or will be
considered an investment company and be required to be registered under the
Investment Company Act. (Section 1.1 of the Amended Trust Agreement.)
Redemption Procedures
The Trust may not redeem fewer than all the outstanding trust securities
unless all accrued and unpaid distributions have been paid on all trust
securities for all distribution periods terminating on or before the date of
redemption. In the event that fewer than all of the outstanding trust
securities are to be redeemed, the trust securities will be redeemed
proportionately.
If the Trust gives a notice of redemption in respect of the trust securities
(which notice will be irrevocable), then, by 12:00 noon, New York City time, on
the redemption date, and if we have paid to the Property Trustee a sufficient
amount of cash in connection with the related redemption or maturity of the
Junior Subordinated Debentures, the Property Trustee will irrevocably deposit
with the depositary funds sufficient to pay the applicable redemption price and
will give the depositary irrevocable instructions and authority to pay the
redemption price to the holders of the Trust Preferred Securities, and the
paying agent will pay the applicable redemption price to the holders of the
trust common securities by check. If notice of redemption has been given and
funds deposited as required, then, immediately prior to the close of business
on the date of the deposit, distributions will cease to accrue and all rights
of holders of Trust Preferred Securities called for redemption will cease,
except the right of the holders of the Trust Preferred Securities to receive
the redemption price but without interest on the redemption price. In the event
that any date fixed for redemption of Trust Preferred Securities is $100,000 per quarter.
- New shareholders must makenot a
business day, then payment of the redemption price payable on that date will be
made on the next succeeding day that is a business day, without any interest or
other payment in respect of any such delay, except that, if that business day
falls in the next calendar year, payment will be made on the immediately
preceding business day. In the event that payment of the redemption price in
respect of Trust Preferred Securities is improperly withheld or refused and not
paid either by the Trust or by us under the Guarantee, distributions on the
Trust Preferred Securities will continue to accrue at the then applicable rate
from the original redemption date to the date of payment, in which case the
actual payment date will be considered the date fixed for redemption for
purposes of calculating the redemption price.
Subject to the foregoing and applicable law, including, without limitation,
U.S. federal securities laws, we or our subsidiaries may at any time, and from
time to time, purchase outstanding Trust Preferred Securities by tender, in the
open market or by private agreement. (Section 7.4 of the Amended Trust
Agreement.)
Conversion or Exchange Rights
The terms on which the Trust Preferred Securities are convertible into or
exchangeable for common stock or our other securities will be contained in the
applicable prospectus supplement. Those terms will include provisions as to
whether conversion or exchange is mandatory, at the
19
option of the holder or at our option, and may include provisions under which
the number of shares of common stock or our other securities to be received by
the holders of Trust Preferred Securities would be subject to adjustment.
Distribution of the Junior Subordinated Debentures
We will have the right at any time to dissolve the Trust and, after
satisfaction of the liabilities of creditors of the Trust as provided by
applicable law, to cause Junior Subordinated Debentures to be distributed to
the holders of the Trust Preferred Securities in a total stated principal
amount equal to the total stated liquidation amount of the Trust Preferred
Securities then outstanding. Prior to any such dissolution, we will obtain any
required regulatory approvals. The right to dissolve the trust and distribute
the Junior Subordinated Debentures will be conditioned on our receipt of an
initial investmentopinion rendered by an independent tax counsel that the distribution would not
result in the recognition of gain or loss for federal income tax purposes by
the holders. (Section 8.1 of the Amended Trust Agreement.)
Liquidation Distribution Upon Dissolution
The amended trust agreement will state that the Trust will be dissolved:
.upon our bankruptcy;
.upon the filing of a certificate of dissolution or its equivalent with
respect to us;
.upon the filing of a certificate of cancellation with respect to the Trust
after obtaining the consent of at least $250a majority in liquidation amount of
the Trust Preferred Securities, voting together as a single class;
.90 days after the revocation of our charter, but only if the charter is not
reinstated during that 90-day period;
.upon the distribution of the related Junior Subordinated Debentures directly
to the holders of the trust securities;
.upon the redemption of all of the trust securities; or
commit.upon entry of a court order for the dissolution of us or the Trust. (Section
8.1 of the Amended Trust Agreement.)
In the event of a dissolution, after the Trust pays all amounts owed to
make monthly installmentscreditors, the holders of $40the Trust Preferred Securities will be entitled to
receive:
.cash equal to the total liquidation amount of each Trust Preferred Security
specified in an accompanying prospectus supplement, plus accumulated and
unpaid distributions to the date of payment, or
more.Junior Subordinated Debentures in a monthtotal principal amount equal to the total
liquidation amount of the Trust Preferred Securities.
If the Trust cannot pay the full amount due on its trust securities because
insufficient assets are available for 12
consecutive months.
- Additional investmentspayment, then the amounts payable by the
Trust on its trust securities will be paid proportionately. However, if an
event of default under the related amended trust agreement occurs, the total
amounts due on the Trust Preferred Securities will be paid before any
distribution on the trust common securities. Under certain circumstances
involving the dissolution of a Trust, subject to obtaining any required
regulatory approval, Junior Subordinated Debentures
20
will be distributed to the holders of the trust securities in liquidation of
that Trust. (Section 8.2 of the Amended Trust Agreement.)
Trust Enforcement Events
An event of default under the Subordinated Indenture relating to the Junior
Subordinated Debentures will be an event of default under the amended trust
agreement (a Trust Enforcement Event). See DESCRIPTION OF THE JUNIOR
SUBORDINATED DEBENTURES--EVENTS OF DEFAULT.
In addition, the voluntary or involuntary dissolution, winding up or
termination of the Trust is also a Trust Enforcement Event, except in
connection with:
. the distribution of the Junior Subordinated Debentures to holders of the
trust securities of the Trust,
. the redemption of all of the trust securities of the Trust, and
. mergers, consolidations or amalgamations permitted by the amended trust
agreement of the Trust.
Under the amended trust agreement, the holder of the trust common securities
will be deemed to have waived any Trust Enforcement Event with respect to the
trust common securities until all Trust Enforcement Events with respect to the
Trust Preferred Securities have been cured, waived or otherwise eliminated.
Until all Trust Enforcement Events with respect to the Trust Preferred
Securities have been so cured, waived, or otherwise eliminated, the Property
Trustee will be deemed to be acting solely on behalf of the holders of the
Trust Preferred Securities and only the holders of the Trust Preferred
Securities will have the right to direct the Property Trustee with respect to
certain matters under the amended trust agreement and the Subordinated
Indenture. In the event that any Trust Enforcement Event with respect to the
Trust Preferred Securities is waived by the holders of the Trust Preferred
Securities as provided in the amended trust agreement, under the amended trust
agreement the holders of trust common securities have agreed that the waiver
also constitutes a waiver of the Trust Enforcement Event with respect to the
trust common securities for all purposes under the amended trust agreement
without any further act, vote or consent of the holders of trust common
securities. (Section 2.6 of the Amended Trust Agreement.)
We and the Administrative Trustees must file annually with the Property
Trustee a certificate evidencing compliance with all the applicable conditions
and covenants under the amended trust agreement. (Section 2.4 of the Amended
Trust Agreement.)
Upon the occurrence of a Trust Enforcement Event the Property Trustee, as the
sole holder of the Junior Subordinated Debentures, will have the right under
the Subordinated Indenture to declare the principal of, interest and premium,
if any, on the Junior Subordinated Debentures to be immediately due and
payable.
If a Property Trustee fails to enforce its rights under the amended trust
agreement or the Subordinated Indenture to the fullest extent permitted by law
and subject to the terms of the amended trust agreement and the Subordinated
Indenture, any holder of Trust Preferred Securities may sue us, or seek other
remedies, to
21
enforce the Property Trustee's rights under the amended trust agreement or the
Subordinated Indenture without first instituting a legal proceeding against the
Property Trustee or any other person. If a Trust Enforcement Event occurs and
is continuing as a result of our failure to pay principal of or interest or
premium, if any, on the Junior Subordinated Debentures when payable, then a
holder of the Trust Preferred Securities may directly sue us or seek other
remedies, to collect its proportionate share of payments owned. See
RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES, THE GUARANTEE AND THE JUNIOR
SUBORDINATED DEBENTURES HELD BY THE TRUST.
Removal and Replacement of Trustees
Only the holders of trust common securities have the right to remove or
replace the trustees of the Trust, except that while an event of default in
respect of the Junior Subordinated Debentures has occurred or is continuing,
the holders of a majority of the Trust Preferred Securities will have this
right. The resignation or removal of any trustee and the appointment of a
successor trustee will be effective only on the acceptance of appointment by
the successor trustee in accordance with the provisions of the amended trust
agreement. (Section 6.6 of the Amended Trust Agreement.)
Mergers, Consolidations or Amalgamations of the Trust
The Trust may not consolidate, amalgamate, merge with or into, or be replaced
by or convey, transfer or lease its properties and assets substantially as an
entirety to any other corporation or other body (each, a Merger Event), except
as described below. The Trust may, with the consent of a majority of its
Administrative Trustees and without the consent of the holders of its trust
securities, consolidate, amalgamate, merge with or into, or be replaced by
another trust, provided that:
. the successor entity either
. assumes all of the obligations of the Trust relating to its trust
securities, or
. substitutes other securities for the trust securities that are
substantially similar to the trust securities, so long as the successor
securities rank the same as the trust securities for distributions and
payments upon liquidation, redemption and otherwise;
. we acknowledge a trustee of the successor entity who has the same powers and
duties as the Property Trustee of the Trust, as the holder of the Junior
Subordinated Debentures;
. the Trust Preferred Securities are listed, or any successor securities will
be listed, upon notice of issuance, on the same securities exchange or other
organization that the Trust Preferred Securities are then listed;
. the Merger Event does not cause the Trust Preferred Securities or successor
securities to be downgraded by any nationally recognized rating agency;
. the Merger Event does not adversely affect the rights, preferences and
privileges of the holders of the trust securities or successor securities in
any material way, other than with respect to any dilution of the holders'
interest in the new entity;
. the successor entity has a purpose identical to that of the Trust;
22
. prior to the Merger Event, we have received an opinion of counsel from a
nationally recognized law firm stating that
. the Merger Event does not adversely affect the rights of the holders of the
Trust Preferred Securities or any successor securities in any material way,
other than with respect to any dilution of the holders' interest in the new
entity, and
. following the Merger Event, neither the Trust nor the successor entity will
be required to register as an investment company under the Investment
Company Act; and
. we guarantee the obligations of the successor entity under the successor
securities in the same manner as in the Guarantee.
In addition, unless all of the holders of the Trust Preferred Securities and
trust common securities approve otherwise, the Trust will not consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit
any other entity to consolidate, amalgamate, merge with or into, or replace it,
if, in the opinion of a nationally recognized tax counsel experienced in such
matters, the transaction would cause the Trust or the successor entity to be
classified other than as a grantor trust for U.S. federal income tax purposes.
(Section 3.15 of the Amended Trust Agreement.)
Voting Rights; Amendment of Trust Agreement
The holders of Trust Preferred Securities have no voting rights except as
discussed under DESCRIPTION OF TRUST SECURITIES--MERGERS, CONSOLIDATIONS OR
AMALGAMATIONS OF THE TRUST AND DESCRIPTION OF THE GUARANTEES--AMENDMENTS, and
as otherwise required by law and the amended trust agreement.
The amended trust agreement may be amended if approved by a majority of the
Administrative Trustees of the Trust. However, if any proposed amendment
provides for, or the Administrative Trustees otherwise propose to effect,
. any action that would adversely affect the powers, preferences or special
rights of the trust securities, whether by way of amendment to the amended
trust agreement or otherwise, or
. the dissolution, winding-up or termination of the Trust other than under the
terms of its amended trust agreement,
then the holders of the Trust Preferred Securities as a single class will be
entitled to vote on the amendment or proposal. In that case, the amendment or
proposal will only be effective if approved by at least $40a majority in
liquidation amount of the Trust Preferred Securities affected by the amendment
or proposal.
No amendment may be made to an amended trust agreement if that amendment
would:
. cause the Trust to be characterized as other than a grantor trust for U.S.
federal income tax purposes;
. reduce or otherwise adversely affect the powers of the Property Trustee; or
. cause the Trust to be deemed to be an investment company which is required to
23
be registered under the Investment Company Act. (Section 11.1 of the Amended
Trust Agreement.)
The holders of a majority of the total liquidation amount of the Trust
Preferred Securities have the right to:
. direct the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee; or
. direct the exercise of any trust or power conferred upon the Property Trustee
under the amended trust agreement, including the right to direct the Property
Trustee, as the holder of the Junior Subordinated Debentures, to
. exercise the remedies available under the Subordinated Indenture with
respect to the Junior Subordinated Debentures,
. waive any event of default under the Subordinated Indenture that is
waivable, or
. cancel an acceleration of the principal of the Junior Subordinated
Debentures.
In addition, before taking any of the foregoing actions, the Property Trustee
must obtain an opinion of counsel stating that, as a result of that action, the
Trust will continue to be classified as a grantor trust for U.S. federal income
tax purposes. (Section 7.5 of the Amended Trust Agreement.)
As described in the form of amended trust agreement, the Property Trustee may
hold a checkmeeting to have holders of Trust Preferred Securities vote on a change
or money order made payablehave them approve a change by written consent.
If a vote by the holders of Trust Preferred Securities is taken or a consent
is obtained, any Trust Preferred Securities owned by us or any of our
affiliates will, for purposes of the vote or consent, be treated as if they
were not outstanding, which will have the following consequences:
. we and any of our affiliates will not be able to Dominion Resources, Inc.
- Once you enrollvote on or consent to
matters requiring the vote or consent of holders of Trust Preferred
Securities; and
. any Trust Preferred Securities owned by us or any of our affiliates will not
be counted in determining whether the required percentage of votes or
consents has been obtained. Section 7.5 of the Amended Trust Agreement.)
Information Concerning the Property Trustee
For matters relating to compliance with the Trust Indenture Act, the Property
Trustee will have all of the duties and responsibilities of an indenture
trustee under the Trust Indenture Act. The Property Trustee, other than during
the occurrence and continuance of a Trust Enforcement Event, undertakes to
perform only the duties that are specifically described in the plan you can authorizeamended trust
agreement and, upon a Trust Enforcement Event, must use the Administratorsame degree of care
and skill as a prudent person would exercise or use in the conduct of his or
her own affairs. Subject to debit
your savingsthis provision, the Property Trustee is under no
obligation to exercise any of the powers given it by the applicable amended
trust agreement at the request of any holder of Trust Preferred Securities
unless it is offered reasonable security or checking accountindemnity against the costs,
expenses and liabilities that it might incur. However, the holders of the Trust
Preferred
24
Securities will not be required to offer such an indemnity where the holders,
by completingexercising their voting rights, direct the Property Trustee to take any
action following a debit authorization
form.
3Trust Enforcement Event. (Section 3.9 of the Amended Trust
Agreement.)
Information Concerning the Administrative Trustees
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in a way that:
. will not cause it to be deemed to be an investment company required to be
registered under the Investment Company Act;
. will cause it to be classified as a grantor trust for U.S. federal income tax
purposes; and
. will cause the Junior Subordinated Debentures it holds to be treated as our
indebtedness for U.S. federal income tax purposes.
We and the Administrative Trustees are authorized to take any action, so long
as it is consistent with applicable law or the certificate of trust or amended
trust agreement, that we and the Administrative Trustees determine to be
necessary or desirable for those purposes. (Section 3.6 of the Amended Trust
Agreement.)
DESCRIPTION OF THE GUARANTEES
We will execute the Guarantees from time to time for the benefit of the
holders of the Trust Preferred Securities of the respective Trusts.
The Chase Manhattan Bank will act as Guarantee Trustee under each Guarantee.
The Guarantee Trustee will hold each Guarantee for the benefit of the holders
of the Trust Preferred Securities to which it relates.
The following description of the Guarantees is only a summary. The form of
Guarantee is an exhibit to the registration statement.
General
We will irrevocably and unconditionally agree under each Guarantee to pay the
Guarantee Payments that are defined below, to the extent specified in that
Guarantee, to the holders of the Trust Preferred Securities to which the
Guarantee relates, to the extent that the Guarantee Payments are not paid by or
on behalf of the related Trust. We are required to pay the Guarantee Payments
to the extent specified in the relevant Guarantee regardless of any defense,
right of set-off or counterclaim that we may have or may assert against any
person. (Section 5.1 of the Guarantee.)
The following payments and distributions on the Trust Preferred Securities of
a Trust are Guarantee Payments:
. any accrued and unpaid distributions required to be paid on the Trust
Preferred Securities of the Trust, but only to the extent that the Trust has
funds legally and immediately available for those distributions;
. the redemption price for any Trust Preferred Securities that the Trust calls
for redemption, including all accrued and unpaid distributions to the
redemption date, but only to the extent that the Trust
25
How Shares are Purchased
- At Dominion Resources discretion, shares purchased through Dominion
Direct Investmenthas funds legally and immediately available for the payment; and
. upon a dissolution, winding-up or termination of the Trust, other than in
connection with the distribution of Junior Subordinated Debentures to the
holders of Trust Securities of the Trust or the redemption of all the Trust
Preferred Securities of the Trust, the lesser of:
. the sum of the liquidation amount and all accrued and unpaid distributions on
the Trust Preferred Securities of the Trust to the payment date, to the
extent that the Trust has funds legally and immediately available for the
payment; and
. the amount of assets of the Trust remaining available for distribution to
holders of the Trust Preferred Securities of the Trust in liquidation of the
Trust. (Section 1.1 of the Guarantee.)
We may satisfy our obligation to make a Guarantee Payment by making that
payment directly to the holders of the related Trust Preferred Securities or by
causing the Trust to make the payment to those holders. (Section 5.1 of the
Guarantee.)
Each Guarantee will be either newly issueda full and unconditional guarantee, subject to certain
subordination provisions, of the Guarantee Payments with respect to the related
Trust Preferred Securities from the time of issuance of those Trust Preferred
Securities, except that the Guarantee will only apply to the payment of
distributions and other payments on the Trust Preferred Securities when the
Trust has sufficient funds legally and immediately available to make those
distributions or purchasedother payments.
If we do not make the required payments on the Junior Subordinated Debentures
that the Property Trustee holds under a Trust, that Trust will not make the
related payments on its Trust Preferred Securities.
Subordination
Our obligations under each Guarantee will be unsecured obligations of the
Company. Those obligations will rank:
. subordinate and junior in right of payment to all of our other liabilities,
other than obligations or liabilities that rank equal in priority or
subordinate by their terms;
. equal in priority with the Junior Subordinated Debentures that we may issue
and similar guarantees; and
. senior to our common stock. (Section 6.2 of the Guarantee.)
We have $257.7 million in Junior Subordinated Debentures outstanding that
will rank equal in priority with the Guarantees. We have common stock
outstanding that will rank junior to the Guarantees.
Each Guarantee will be a guarantee of payment and not of collection. This
means that the guaranteed party may institute a legal proceeding directly
against us, as guarantor, to enforce its rights under the Guarantee without
first instituting a legal proceeding against any other person or entity.
(Section 5.4 of the Guarantee.)
The terms of the Trust Preferred Securities will provide that each holder of
the Trust Preferred Securities, by accepting those Trust Preferred Securities,
agrees to the subordination provisions and other terms of the related
Guarantee.
26
Amendments
We may amend each Guarantee without the consent of any holder of the Trust
Preferred Securities to which that Guarantee relates if the amendment does not
materially and adversely affect the rights of those holders. We may otherwise
amend each Guarantee with the approval of the holders of at least 50% of the
outstanding Trust Preferred Securities to which that Guarantee relates.
(Section 9.2 of the Guarantee.)
Termination
Each Guarantee will terminate and be of no further effect when:
. the redemption price of the Trust Preferred Securities to which the Guarantee
relates is fully paid;
. we distribute the related Junior Subordinated Debentures to the holders of
those Trust Preferred Securities; or
. the amounts payable upon liquidation of the related Trust are fully paid.
(Section 7.1 of the Guarantee.)
Each Guarantee will remain in effect or will be reinstated if at any time any
holder of the related Trust Preferred Securities must restore payment of any
sums paid to that holder with respect to those Trust Preferred Securities or
under that Guarantee.
Material Covenants
We will covenant that, so long as any Trust Preferred Securities remain
outstanding, if there is an event of default under the Guarantee or the amended
trust agreement:
. we will not make distributions related to our debt securities that rank
equally with or junior to the Junior Subordinated Debentures, including any
payment of interest, principal or premium, or repayments, repurchases or
redemptions; and
. we will not make distributions related to our capital stock, including
dividends, redemptions, repurchases, liquidation payments, or guarantee
payments. We may, however, make the following types of distributions:
. dividends paid in common stock;
. dividends in connection with the implementation of a shareholder rights
plan;
. payments to a trust holding securities of the same series under a
guarantee; and
. repurchases, redemptions or other acquisitions of shares of our capital
stock in connection with any benefit plan or other similar arrangement with
or for the benefit of employees, officers, directors or consultants.
(Section 6.1 of the Guarantee.)
Because we are a holding company that conducts all of our operations through
our subsidiaries, our ability to meet our obligations under the Guarantees is
dependent on the earnings and cash flows of those subsidiaries and the ability
of those subsidiaries to pay dividends or to advance or repay funds to us. The
Trust, as holder of the Guarantee and the Junior Subordinated Debentures will
generally have a junior position to claims of creditors of our subsidiaries,
including trade creditors, debtholders, secured creditors, taxing authorities,
guarantee holders and any preferred stockholders.
27
Events of Default
An event of default will occur under any Guarantee if we fail to perform any
of our payment obligations under that Guarantee. The holders of a majority of
the Trust Preferred Securities of any series may waive any such event of
default and its consequences on behalf of all of the holders of the Trust
Preferred Securities of that series. (Section 2.6 of the Guarantee.) The
Guarantee Trustee is entitled to enforce the Guarantee for the benefit of the
holders of the Trust Preferred Securities of a series if an event of default
occurs under the related Guarantee. (Section 3.1 of the Guarantee.)
The holders of a majority of the Trust Preferred Securities to which a
Guarantee relates have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee
with respect to that Guarantee or to direct the exercise of any trust or power
that the Guarantee Trustee holds under that Guarantee. Any holder of the
related Trust Preferred Securities may institute a legal proceeding directly
against us to enforce that holder's rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee or any other
person or entity. (Section 5.4 of the Guarantee.)
Concerning the Guarantee Trustee
The Chase Manhattan Bank is the Guarantee Trustee. It is also the Property
Trustee, the Subordinated Indenture Trustee and the Senior Indenture Trustee.
We and certain of our affiliates maintain deposit accounts and banking
relationships with The Chase Manhattan Bank. The Chase Manhattan Bank also
serves as trustee under other indentures pursuant to which securities of ours
and certain of our affiliates are outstanding.
The Guarantee Trustee will perform only those duties that are specifically
set forth in each Guarantee unless an event of default under the Guarantee
occurs and is continuing. In case an event of default occurs and is continuing,
the Guarantee Trustee will exercise the same degree of care as a prudent
individual would exercise in the open
market. Thereconduct of his or her own affairs. (Section
3.1 of the Guarantee.) Subject to those provisions, the Guarantee Trustee is
under no obligation to exercise any of its powers under any Guarantee at the
request of any holder of the related Trust Preferred Securities unless that
holder offers reasonable indemnity to the Guarantee Trustee against the costs,
expenses and liabilities which it might incur as a result. (Section 3.2 of the
Guarantee.)
Agreements as to Expenses and Liabilities
We will enter into an Agreement as to Expenses and Liabilities under each
Trust Agreement. Each Agreement as to Expenses and Liabilities will provide
that we will, with certain exceptions, irrevocably and unconditionally
guarantee the full payment of any indebtedness, expenses or liabilities of the
related Trust to each person or entity to whom that Trust becomes indebted or
liable. The exceptions are no feesthe obligations of the Trust to purchase shares.
- Open market purchases are madepay to the holders
of the related trust common or other similar interests in that Trust the
amounts due to the holders under the terms of those trust common securities or
those similar interests.
28
RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES, THE GUARANTEE AND THE JUNIOR
SUBORDINATED DEBENTURES HELD BY THE TRUST
We will guarantee payments of distributions and redemption and liquidation
payments due on the Trust Preferred Securities, to the extent the trust has
funds available for the payments, to the extent described under DESCRIPTION OF
THE GUARANTEES. No single document executed by an independent agent selectedus in connection with the
issuance of the Trust Preferred Securities will provide for our full,
irrevocable and unconditional guarantee of the Trust Preferred Securities. It
is only the combined operation of our obligations under the Guarantee, the
amended trust agreement and the Subordinated Indenture that has the effect of
providing a full, irrevocable and unconditional guarantee of the Trust's
obligations under the Trust Preferred Securities.
As long as we make payments of interest and other payments when due on the
Junior Subordinated Debentures held by the Administrator.
- SharesTrust, those payments will be
purchasedsufficient to cover the payment of distributions and redemption and liquidation
payments due on the 5thTrust Preferred Securities issued by the Trust, primarily
because:
. the total principal amount of the Junior Subordinated Debentures will be
equal to the sum of the total liquidation amount of the trust securities;
. the interest rate and 20thinterest and other payment dates on the Junior
Subordinated Debentures will match the distribution rate and distribution and
other payment dates for the Trust Preferred Securities;
. we will pay for any and all costs, expenses and liabilities of the Trust
except its obligations under its Trust Preferred Securities; and
. each amended trust agreement will provide that the Trust will not engage in
any activity that is not consistent with the limited purposes of the Trust.
If and to the extent that we do not make payments on the Junior Subordinated
Debentures, the Trust will not have funds available to make payments of
distributions or other amounts due on its Trust Preferred Securities. In those
circumstances, you will not be able to rely upon the Guarantee for payment of
these amounts. Instead, you may directly sue us or seek other remedies to
collect your proportionate share of payments owed. If you sue us to collect
payment, then we will assume your rights as a holder of Trust Preferred
Securities under the amended trust agreement to the extent we make a payment to
you in any such legal action.
ACCOUNTING TREATMENT
Each Trust will be treated as a subsidiary of ours for financial reporting
purposes. Accordingly, our consolidated financial statements will include the
accounts of each month orTrust. The Trust Preferred Securities, along with other trust
preferred securities that we guarantee on an equivalent basis, will be
presented as a separate line item in our consolidated balance sheets, and
appropriate disclosures about the next
business day. Checks mustTrust Preferred Securities, the Guarantees
and the Junior Subordinated Debentures will be received two business days priorincluded in the notes to a
purchase.
- Reinvested dividendsthe
consolidated financial statements. We will purchase sharesrecord distributions that each Trust
pays on the 20thTrust Preferred Securities as an expense in our consolidated
statement of the monthincome.
29
DESCRIPTION OF CAPITAL STOCK
As of September 30, 1999, our authorized capital stock was 520,000,000
shares. Those shares consisted of: (a) 20,000,000 shares of preferred stock,
none of which were outstanding; and (b) 500,000,000 shares of common stock, of
which 190,807,645 shares were outstanding as of October 31, 1999. No holder of
shares of common stock or the next business day in which a dividend is paid.
You will not earn interest onpreferred stock has any cash investments. You can get a
refund on any cash investment up to 48 hours prior to the purchasepreemptive rights.
Common Stock
Listing
Our outstanding shares of any shares by writing to the Administrator.
How Sharescommon stock are Priced
The price of share purchases through Dominion Direct Investment will be
either:
- for newly issued shares -- the average of the high and low sales
prices as reportedlisted on the New York Stock
Exchange Composite Tape
and reported in The Wall Street Journal, or
- for open market purchases --under the average cost of all shares
purchased on a particular date.
You cannot instruct the Administrator to purchase shares at a specific
time or at a specific price under Dominion Direct Investment.
Dividends
By completing a dividend authorization you may select one of the following
options:
- Full dividend reinvestment
- Partial dividend reinvestment
- Cash dividends
-- you can receive a check or have your dividends directly
deposited to your bank account by completing a direct deposit
authorization form.
4
Sales
You can sell some or all of the shares you have accumulated in Dominion
Direct Investment or shares you currently hold by mailing the withdrawal
form attached to your statement, along with any certificates, signed
exactly as the name(s) appear on your account. Shares will be sold at
least once a week at the then current market price. Proceeds you receive
will be less the brokerage commission which is expected to be no more than
seven cents per share.
When you make a sale request you must specify the number of shares you want
sold not the dollar amount you would like to receive.
Please note that the Administrator cannot accept instructions to sell on a
specific day, at a specific price or by telephone.
If you prefer to have complete control over the exact timing and sales
prices, you can request a certificate for your shares and sell them through
a broker of your choosing.
Statements
The Administrator will send you a confirmation statement for each
transaction. Each statement includes a form that you may use to makesymbol "D". Any additional investments, sell shares, orcommon stock we issue certificates.
Stock Certificate
To get a stock certificate for any of the shares held in your plan account,
send written instructions to the Administrator. All certificates will be
issued in the account holder s name.
NOTE: FIVE SHARES MUST REMAIN IN YOUR ACCOUNT TO KEEP IT OPEN.
Share Safekeeping
Your stock certificates are valuable and expensive to replace if lost or
stolen. Dominion Direct Investment offers you the convenience of depositing
your certificates for safekeeping.
To deposit your stock certificates into your Dominion Direct Investment
account, send them to the Administrator with a completed and signed letter
of transmittal which can be obtained by calling the Administrator. DO NOT
ENDORSE THE CERTIFICATE.
We recommend that you use Registered Mail, insured for 2% of the market
value of the certificates.
Share Transfers
To transfer some or all of your shares to another name, call the
Administrator to request Transfer Instructions. Signatures must be
Medallion Guaranteed by a financial institution. Once your completed
transfer instructions are received, your request will be processed promptly
by the Administrator. This service is free.
A new Dominion Direct Investment account can only be opened with a transfer
of five shares or more.
5
Changes To Your Account
To stop reinvesting your dividends, or to stop automatic monthly
investments, send the Administrator written instructions signed exactly as
the name(s) appear on your account.
Please be sure to include your social security number and daytime phone
number on all correspondence.
Closing Accounts
To close your Dominion Direct Investment Account, give written notice to
the Administrator or complete and return the withdrawal form attached to
your confirmation statement.
Tax Consequences
All dividends paid to you - whether or not they are reinvested - are
considered taxable income including any brokerage fees we paid for open
market purchases. These fees are not expected to be more than seven cents
per share. The total amount will be reported to you, and to the Internal
Revenue Service, shortly after the end of each year.
Any sale of shares made through the Administrator will also
be reportedlisted on the NYSE.
Dividends
Common shareholders may receive dividends when declared by the Board of
Directors. Dividends may be paid in cash, stock or other form. In certain
cases, common shareholders may not receive dividends until we have satisfied
our obligations to any preferred shareholders. Under certain circumstances, the
IRS as required by law.Subordinated Indenture also restricts our ability to pay cash dividends.
Fully Paid
All outstanding shares of common stock are fully paid and non-assessable. Any
profit or loss you incur shouldadditional common stock we issue will also be reflected when you file your income tax returns.
Dividends on Dominion Direct Investment shares held for non-resident aliens
or non-U.S. entities are generally subject to withholding taxes. Any
dividend reinvestment will be made net of any withholding taxes.
Be sure to keep your statements for income tax purposes. Special tax issues
may apply to some participants. We urge you to consult your own tax
advisor.fully paid and non-assessable.
Voting Rights
Each share of common stock is entitled to one vote in the election of
directors and other matters. Common shareholders are not entitled to preemptive or cumulative
voting rights.
ForOther Rights
We will notify common shareholders of any shareholder meeting youshareholders' meetings according to
applicable law. If we liquidate, dissolve or wind up our business, either
voluntarily or not, common shareholders will receive a proxy that will cover all
the Dominion Resources shares you hold, both in Dominion Direct Investment
andshare equally in the formassets
remaining after we pay our creditors and preferred shareholders.
Transfer Agents and Registrars
We, along with Chase Mellon Shareholder Services, are transfer agent and
registrar. You may contact us at the address listed on page 2 or Chase Mellon
located in Ridgefield, New Jersey.
Preferred Stock
The following description of the terms of the preferred stock certificates. The proxy allows you to indicate how
you want your shares tosets forth
certain general terms and provisions of our authorized preferred stock. If we
offer preferred stock, the specific designations and rights will be voted. Wedescribed
in the prospectus supplement and a description will vote your shares as you indicate.
If you do not vote your Dominion Direct Investment shares,be filed with the Administrator will vote your shares according to the recommendation of
Dominion ResourcesSEC.
Our Board of Directors.
Stock Splits and Other Distributions
If Dominion Resources declares a stock splitDirectors can, without approval of shareholders, issue one or
stock dividend, we will
credit your account withmore series of preferred stock. The Board can also determine the appropriate number of
shares on the payment
date.
If Dominion Resources decides to distribute shares in book-entry form
(rather than certificates), these shares will be added to your Dominion
Direct Investment account. The Administrator will serve as custodian of your shares. You will be entitled to alleach series and the rights, preferences and privileges
outlined in this booklet.
6
Inlimitations of each
series including the event of a stock subscription or other offering ofdividend rights, to
shareholders, yourvoting rights, will be based on your total registered holdings
(the shares held in Dominion Direct Investment plusconversion rights,
redemption rights and any shares held by
you).
Changes to Dominion Direct Investment
We may add to, modify or terminate Dominion Direct Investment and its
administrative procedures at any time. We will send you written noticeliquidation preferences of any significant changes.
Responsibilitieswholly unissued series
of Dominion Resourcespreferred stock, the number of shares constituting each series and the Administrator
Dominion Resources Shareholder Administration will administer Dominion
Direct Investment. The Administrator will respond to inquiries from
participants, maintain records, send statements of accounts, and perform
other duties related to Dominion Direct Investment. In addition, the
Administrator will administer the nominee account of Dominion Resources
shares held for the benefit of Dominion Direct Investment participants and
will appoint an independent agent who will be responsible for purchasing
and selling Dominion Resources shares in the open market. Dominion
Resources believes its serving as Administrator to Dominion Direct
Investment rather than a registered broker-dealer or federally insured bank
poses no material risk to any participating investor.
You should recognize that neither Dominion Resources nor the Administrator
can assure a profit or protect against a loss on Dominion Resources common
stock purchased under Dominion Direct Investment. The continuation of
Dominion Direct Investment by Dominion Resources does not constitute an
assurance with respect to either the value of Dominion Resources common
stock or whether Dominion Resources will continue to pay dividends on
Dominion Resources common stock or at what rate.
In acting under the terms
and conditions of Dominion Direct Investmentissue. In some cases, the issuance of preferred stock could
delay a change in control of the Company and make it harder to remove present
management. Under certain circumstances, preferred stock could also restrict
dividend payments to holders of our common stock.
30
The preferred stock will, when issued, be fully paid and non-assessable.
Unless otherwise specified in the applicable prospectus supplement, the
preferred stock will rank on a parity in all respects with any outstanding
preferred stock we may have and will have priority over our common stock as to
dividends and distributions of assets. Therefore, the rights of any preferred
stock that may subsequently be issued may limit the rights of the holders of
our common stock and preferred stock.
The transfer agent, registrar, and dividend disbursement agent for a series
of preferred stock will be named in a prospectus supplement. The registrar for
shares of preferred stock will send notices to shareholders of any meetings at
which holders of the preferred stock have the right to elect directors or to
vote on any other matter.
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may issue stock purchase contracts, including contracts obligating holders
to purchase from us, and us to sell to the holders, a specified number of
shares of common stock at a future date or dates, which we refer to in this
prospectus as stock purchase contracts. The price per share of common stock and
the number of shares of common stock may be fixed at the time the stock
purchase contracts are issued or may be determined by reference to a specific
formula set forth in the stock purchase contracts. The stock purchase contracts
may be issued separately or as part of units consisting of a stock purchase
contract and beneficial interests in debt securities, trust preferred
securities, preferred stock or debt obligations of third parties, including
U.S. treasury securities, securing the holders' obligations to purchase the
common stock under the stock purchase contracts, which we refer to in this
prospectus as stock purchase units. The stock purchase contracts may require us
to make periodic payments to the holders of the stock purchase units or vice
versa, and these payments may be unsecured or refunded on some basis. The stock
purchase contracts may require holders to secure their obligations under those
contracts in a specified manner.
The applicable prospectus supplement will describe the terms of the stock
purchase contracts or stock purchase units, including, if applicable,
collateral or depositary arrangements, relating to the stock purchase contracts
or stock purchase units.
VIRGINIA STOCK CORPORATION ACT AND THE ARTICLES AND THE BYLAWS
General
We are a Virginia corporation subject to the Virginia Stock Corporation Act
(the Virginia Act). Provisions of the Virginia Act, in addition to provisions
of our Articles of Incorporation and Bylaws, address corporate governance
issues, including the rights of shareholders. Some of these provisions could
hinder management changes while others could have an anti-takeover effect. This
anti-takeover effect may, in some circumstances, reduce the control premium
that might otherwise be reflected in the value of our common stock. If you are
buying this stock as part of a short-term investment strategy, this might be
especially important to you.
31
We have summarized the key provisions below. You should read the actual
provisions of our Articles and Bylaws and the Virginia Act that relate to your
individual investment strategy.
Business Combinations
Our Articles require that any merger, share exchange or sale of substantially
all of the assets of the Company be approved by a plurality of the shares
represented at a meeting where a quorum is present. Abstentions and broker non-
votes have the same effect as a vote against the matter.
Section 13.1-725 of the Virginia Act contains several provisions relating to
transactions with interested shareholders. Interested shareholders are holders
of more than 10% of any class of a corporation's outstanding voting shares.
Transactions between a corporation and an interested shareholder are referred
to as affiliated transactions. The Virginia Act requires that material
affiliated transactions must be approved by at least two-thirds of the
shareholders not including the interested shareholder. Affiliated transactions
requiring this two-thirds approval include mergers, share exchanges, material
dispositions of corporate assets, dissolution or any reclassification of the
corporation with its subsidiaries which increases the percentage of voting
shares owned by an interested shareholder by more than five percent.
For three years following the time that a shareholder becomes an interested
shareholder, a Virginia corporation cannot engage in an affiliated transaction
with the interested shareholder without approval of two-thirds of the
disinterested voting shares, and majority approval of disinterested directors.
A disinterested director is a director who was a director on the date on which
an interested shareholder became an interested shareholder and was recommended
for election or elected by a majority of the disinterested directors then on
the board. After three years, the approval of the disinterested directors is no
longer required.
The provisions of the Virginia Act relating to affiliated transactions do not
apply if a majority of disinterested directors approve the acquisition of
shares making a person an interested shareholder.
The Virginia Act permits corporations to opt out of the affiliated
transactions provisions. We have not opted out.
The Virginia Act also contains provisions regulating certain control share
acquisitions, which are transactions causing the voting strength of any person
acquiring beneficial ownership of shares of a public corporation in Virginia to
meet or exceed certain threshold voting percentages (20%, 33 1/3%, or 50%).
Shares acquired in a control share acquisition have no voting rights unless the
voting rights are granted by a majority vote of all outstanding shares other
than those held by the acquiring person or any officer or employee-director of
the corporation. The acquiring person may require that a special meeting of the
shareholders be held to consider the grant of voting rights to the shares
acquired in the control share acquisition.
Our Bylaws give us the right to redeem the shares purchased by an acquiring
person in a control share acquisition. We can do this if the acquiring person
fails to deliver a statement to us listing information required by the Virginia
Act or if our shareholders vote not to grant voting rights to the acquiring
person.
32
The Virginia Act permits corporations to opt out of the control share
acquisition provisions. We have not opted out.
Directors' Duties
The standards of conduct for directors of Virginia corporations are listed in
Section 13.1-690 of the Virginia Act. Directors must discharge their duties in
accordance with their good faith business judgement of the best interest of the
corporation. Directors may rely on the advice or acts of others, including
officers, employees, attorneys, accountants and board committees if they have a
good faith belief in their competence. Directors' actions are not subject to a
reasonableness or prudent person standard. Virginia's federal and state courts
have focused on the process involved with directors' decision-making and are
generally supportive of directors if they have based their decision on an
informed process. These elements of Virginia law could make it more difficult
to take over a Virginia corporation than corporations in other states.
Board of Directors
Members of our Board of Directors serve one-year terms and are elected
annually.
Shareholder Proposals and Director Nominations
Our shareholders can submit shareholder proposals and nominate candidates for
the Board of Directors if the shareholders follow advance notice procedures
described in this Prospectus, neither Dominion Resources norour Bylaws.
To nominate directors, shareholders must submit a written notice to our
corporate secretary at least 60 days before a scheduled meeting. The notice
must include the name and address of the shareholder and of the nominee, a
description of any arrangements between the shareholder and the nominee,
information about the nominee required by the SEC, the written consent of the
nominee to serve as a director and other information.
Shareholder proposals must be submitted to our corporate secretary at least
90 days before the first anniversary of the date of our last annual meeting.
The notice must include a description of the proposal, the reasons for
presenting the proposal at the annual meeting, the text of any resolutions to
be presented, the shareholder's name and address and number of shares held and
any material interest of the shareholder in the proposal.
Director nominations and shareholder proposals that are late or that do not
include all required information may be rejected. This could prevent
shareholders from bringing certain matters before an annual or special meeting,
including making nominations for directors.
Meetings of Shareholders
Under our Bylaws, meetings of the shareholders may be called only by the
chairman of the board, the president or a majority of the Board of Directors.
This provision could have the effect of delaying until the next annual
shareholders' meeting shareholder actions which are favored by the holders of a
majority of our outstanding voting securities, because such person or entity,
even if it acquired a majority of our outstanding voting securities, would be
able to take action as a shareholder, such as electing new directors or
approving a merger, only at a duly called shareholders' meeting.
33
Amendment of Articles and Bylaws
Generally, our Articles may be amended by a majority of the votes present by
each voting group entitled to vote on a given matter. Some provisions of the
Articles, however, may only be amended or repealed by a vote of at least two-
thirds of the outstanding shares entitled to vote.
Indemnification
We indemnify our officers and directors to the fullest extent permitted under
Virginia law against all liabilities incurred in connection with their service
to us.
Limitation of Liability
Our Articles provide that our directors and officers will not be personally
liable for monetary damages to us for breaches of their fiduciary duty as
directors or officers, unless they violated their duty of loyalty to us or our
shareholders, acted in bad faith, knowingly or intentionally violated the law,
authorized illegal dividends or redemptions or derived an improper personal
benefit from their action as directors or officers. This provision applies only
to claims against directors or officers arising out of their role as directors
or officers and not in any other capacity. Directors and officers remain liable
for violations of the federal securities laws and we retain the right to pursue
legal remedies other than monetary damages, such as an injunction or rescission
for breach of the officer's or director's duty of care.
PLAN OF DISTRIBUTION
We may sell the offered securities (a) through agents; (b) through
underwriters or dealers; or (c) directly to one or more purchasers.
By Agents
Offered securities may be sold through agents that we designate. The agents
agree to use their reasonable best efforts to solicit purchases for the period
of their appointment.
By Underwriters
If underwriters are used in the sale, the offered securities will be acquired
by the underwriters for their own account. The underwriters may resell the
securities 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 securities will be
subject to certain conditions. The underwriters will be obligated to purchase
all the securities of the series offered if any of itsthe securities 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 offered securities directly. In this case, no underwriters
or agents would be involved.
General Information
Underwriters, dealers and agents that participate in the distribution of the
offered securities may be underwriters as defined in the Securities Act of 1933
(the Act), and any discounts or subsidiaries shallcommissions received by them from us and any
profit on the resale of the offered securities by them may be liabletreated as
underwriting discounts and commissions under the Act. Any underwriters or
agents will be identified and their compensation described in a prospectus
supplement.
34
We may have agreements with the underwriters, dealers and agents to indemnify
them against certain civil liabilities, including liabilities under the Act, or
to contribute with respect to payments which the price at which
Dominion Resourcesunderwriters, dealers or
agents may be required to make.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, us or our subsidiaries in the ordinary course of their
businesses.
LEGAL OPINIONS
McGuire, Woods, Battle & Boothe LLP, Richmond Virginia, counsel to the
Company, will issue an opinion about the legality of the offered securities for
us. As of December 20, 1999, partners of McGuire, Woods, Battle & Boothe LLP
own less than one half of one percent of our common stock is purchased for your account or with
respectstock. Certain matters
relating to the formation of the Trusts and the issuance of the Trust Preferred
Securities under Delaware law and the Trust Agreements will be passed upon by
Richards, Layton & Finger, special Delaware counsel to the Trusts and the
Company. Any underwriters will be advised about other issues relating to any
fluctuation in the market value before or after the purchase
of Dominion Resources common stock.
Governing Law
The laws of the Commonwealth of Virginia govern the terms and conditions of
Dominion Direct Investment.
Use of Proceeds
The proceeds from the saleoffering by Dominion Resources of newly issued common
shares offered by Dominion Direct Investment will be added to the general
corporate funds of Dominion Resources and will be used to meet its capital
requirements and the capital requirements of its subsidiaries.
Independent Accountantstheir own legal counsel.
EXPERTS
The financial statements incorporated in this prospectus by reference from
Dominion Resources 1996the Company's Annual Report on Form 10-K for the year ended December 31, 1998
have been audited by Deloitte & Touche LLP.,LLP, independent accountants,auditors, as stated in
their report, which is incorporated herein by reference, and has been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
735
Legal Matters
Mr. James F. Stutts, Esq., Vice President- -------------------------------------------------------------------------------
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Table of Contents
Page
----
About This Prospectus..................................................... 2
Where You Can Find More Information....................................... 2
The Company............................................................... 3
The Trusts................................................................ 3
Use of Proceeds........................................................... 3
Ratio of Earnings to Fixed Charges........................................ 4
Description of Debt Securities............................................ 4
Additional Terms of Senior Debt Securities................................ 12
Additional Terms of Junior Subordinated Debentures........................ 13
Description of the Trust Preferred Securities............................. 15
Description of the Guarantees............................................. 25
Relationship Among the Trust Preferred Securities, the Guarantee and the
Junior Subordinated Debentures Held by the Trust......................... 29
Accounting Treatment...................................................... 29
Description of Capital Stock.............................................. 30
Description of Stock Purchase Contracts and Stock Purchase Units.......... 31
Virginia Stock Corporation Act and the Articles and the Bylaws............ 31
Plan of Distribution...................................................... 34
Legal Opinions............................................................ 35
Experts................................................................... 35
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[LOGO OF DOMINION RESOURCES]
$4,500,000,000
Senior Debt Securities
Junior Subordinated Debentures
Trust Preferred Securities and General Counsel of Dominion
Resources, has passed upon the legality of the securities being offered
pursuant to Dominion Direct Investment.
Limitations of Liability and Indemnification Under the Securities Act
Neither Dominion Resources nor the Administrator will be liable for any
act, or for any failure to act, as long as they have made good faith
efforts to carry out the terms of Dominion Direct Investment as described
in this Prospectus and on the forms that accompany each investment or
activity. The SEC believes that this liability limitation does not cover
violations of federal securities laws.
We indemnify our officers and directors to the fullest extent permitted
under Virginia law against all liabilities incurred in connection with
their service to us. The SEC believes that indemnification of officers and
directors for liabilities arising under the Securities Act of 1933 is
against public policy and unenforceable.
8
DRI LOGORelated Guarantee
Common Stock
Preferred Stock
Stock Purchase Contracts
Stock Purchase Units
----------------
PROSPECTUS
----------------
- Ticker Symbol (NYSE): D-------------------------------------------------------------------------------
- E-mail inquiries: Shareholder_Administration @domres.com
- Dominion Resources, Inc.
P. O. Box 26532
Richmond, Virginia 23261-6532
1-800-552-4034
1-804-775-2500
- Website address: www.domres.com-------------------------------------------------------------------------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Estimated
Securities and Exchange Commission Registration Fee . $119,014
Printing Expenses . . . . . . . . . . . . . . . . . . 40,000
Accounting Fees and Expenses . . . . . . . . . . . . 25,000
New York Stock Exchange Listing Fee . . . . . . . . . 35,000
Legal Fees and Expenses . . . . . . . . . . . . . . . 25,000
Miscellaneous Expenses . . . . . . . . . . . . . . . 1,486
Total . . . . . . . . . . . . . . . . . . . . . . . . $245,500
Estimated
----------
Securities and Exchange Commission Fee (ACTUAL)............... $1,188,000
Transfer Agent and Registrar Fees............................. 196,500
Fees and Expenses of Trustees................................. 408,000
Rating Agency Fees............................................ 375,000
Printing Expenses............................................. 568,000
Accountants' Fees............................................. 550,000
New York Stock Exchange Listing Fee........................... 85,800
Counsel Fees.................................................. 750,000
Miscellaneous................................................. 453,700
----------
Total....................................................... $4,575,000
==========
Item 15. Indemnification of Directors and Officers.
Article VI of Dominion Resources' Articles of Incorporation mandates
indemnification of its directors and officers to the full extent permitted by
the Virginia Stock Corporation Act (the Virginia Act) and any other applicable
law. The Virginia Act permits a corporation to indemnify its directors and
officers against liability incurred in all proceedings, including derivative
proceedings, arising out of their service to the corporation or to other
corporations or enterprises that the officer or director was serving at the
request of the corporation, except in the case of willful misconduct or a
knowing violation of a criminal law. Dominion Resources is required to
indemnify its directors and officers in all such proceedings if they have not
violated this standard.
In addition, Article VI of Dominion Resources' Articles of Incorporation
limits the liability of its directors and officers to the full extent permitted
by the Virginia Act as now and hereafter in effect. The Virginia Act places a
limit on the liability of a director or officer in derivative or shareholder
proceedings equal to the lesser of (i) the amount specified in the
corporation's articles of incorporation or a shareholder-approved bylaw; or
(ii) the greater of (a) $100,000 or (b) twelve months of cash compensation
received by the director or officer. The limit does not apply in the event the
director or officer has engaged in willful misconduct or a knowing violation of
a criminal law or a federal or state securities law. The effect of Dominion
Resources' Articles of Incorporation, together with the Virginia Act, is to
eliminate liability of directors and officers for monetary damages in
derivative or shareholder proceedings so long as the required standard of
conduct is met.
The CompanyDominion Resources has purchased directorsdirectors' and officersofficers' liability insurance
policies. Within the limits of their coverage, the policies insure (1) the
directors and officers of the CompanyDominion Resources against certain losses resulting
from claims against them in their capacities as directors and officers to the
extent that such losses are not indemnified by the CompanyDominion Resources and (2)
the
CompanyDominion Resources to the extent that it indemnifies such directors and
officers for losses as permitted under the laws of Virginia.
R-1Item 16. Exhibits.
Exhibit No. Description of Document
4(i) Articles of Incorporation as in effect on May 4, 1987
(Exhibit 3(i), Form 10-K for the fiscal year ended
December 31, 1993, File No. 1-8489, incorporated by
reference).
4(ii) Bylaws as in effect on September 21, 1994 (Exhibit 3(ii),
Form 10-K for the fiscal year ended December 31, 1994,
File No. 1-8489, incorporated by reference).
5 Opinion of James F. Stutts, Esq., Vice President and
General Counsel of Dominion Resources, Inc.
Exhibit No. Description of Document
----------- -----------------------
1(i) Form of Underwriting Agreement relating to the Senior Debt
Securities (filed herewith).
1(ii) Form of Underwriting Agreement relating to Preferred Stock (filed
herewith).
1(iii) Form of Underwriting Agreement relating to Common Stock (filed
herewith).
1(iv) Form of Underwriting Agreement relating to Trust Preferred
Securities (filed herewith).
1(v) Form of Underwriting Agreement relating to Stock Purchase Units
(filed herewith).
23(i) Consent of James F. Stutts, Esq., Vice President and
General Counsel of Dominion Resources, Inc. (contained in
Exhibit 5)
II-1
Exhibit No. Description of Document
----------- -----------------------
4(i) Articles of Incorporation as in effect on August 9, 1999
(Exhibit 3(i), Form 10-Q for the fiscal quarter ended June 30,
1999, File No. 1-8489, incorporated by reference).
4(ii) Bylaws as in effect on October 15, 1999 (Exhibit 3, Form 10-Q
for the fiscal quarter ended September 30, 1999, File No. 1-
8489, incorporated by reference).
4(iii) Form of Senior Indenture (filed herewith).
4(iv) Junior Subordinated Indenture dated as of December 1, 1997
between Dominion Resources, Inc. and The Chase Manhattan Bank,
as trustee as amended by the First Supplemental Indenture dated
as of December 1, 1997 (Exhibits 4.1 and 4.2, respectively, Form
S-4, File No. 333-50653, incorporated by reference).
4(v) A Preferred Stock and a Common Stock certificate will be filed
with each issuance on Form 8-K.
4(vi) Form of Supplemental Indenture to Senior Indenture (filed
herewith).
4(vii) Form of Second Supplemental Indenture to Junior Subordinated
Indenture (filed herewith).
4(viii) Form of Guarantee Agreement to be delivered by Dominion
Resources, Inc. (filed herewith).
4(ix) Certificate of Trust of Dominion Resources Capital Trust II
(filed herewith).
4(x) Trust Agreement of Dominion Resources Capital Trust II, dated
December 17, 1999 (filed herewith).
4(xi) Certificate of Trust of Dominion Resources Capital Trust III
(filed herewith).
4(xii) Trust Agreement of Dominion Resources Capital Trust III, dated
December 17, 1999 (filed herewith).
4(xiii) Form of Amended and Restated Trust Agreement (filed herewith).
4(xiv) Form of Preferred Security (included as Exhibit A to the Form of
Amended and Restated Trust Agreement to be filed as Exhibit
4(xii)).
4(xv) Form of Purchase Contract Agreement (filed herewith).
4(xvi) Form of Pledge Agreement (filed herewith).
4(xvii) Form of Agreement as to Expenses and Liabilities (filed
herewith).
5(i) Opinion of McGuire, Woods, Battle & Boothe LLP, counsel to the
Issuer with respect to the Offered Securities (filed herewith).
5(ii) Opinion of Richards, Layton & Finger, Delaware counsel to the
Issuer with respect to the Offered Securities (filed herewith).
12 Computation of Ratio of Earnings to Fixed Charges (filed
herewith).
23(i) Consent of McGuire, Woods, Battle & Boothe LLP (contained in
Exhibit 5(i)).
23(ii) Consent of Richards, Layton & Finger (contained in Exhibit
5(ii)).
23(iii) Consent of Deloitte & Touche LLP (filed herewith).
24 Powers of Attorney (included herein).
25(i) Statement of Eligibility of The Chase Manhattan Bank for the
Senior Debt Securities (filed herewith).
25(ii) Statement of Eligibility of The Chase Manhattan Bank for the
Junior Subordinated Debentures (Exhibit 25.1 , Form S-4, File
No. 333-50653, incorporated by reference herein).
25(iii) Statement of Eligibility of The Chase Manhattan Bank for the
Guarantee of Dominion Resources Capital Trust II (filed
herewith).
25(iv) Statement of Eligibility of The Chase Manhattan Bank for the
Dominion Resources Capital Trust II Trust Preferred Securities
(filed herewith).
25(v) Statement of Eligibility of The Chase Manhattan Bank for the
Guarantee of Dominion Resources Capital Trust III (filed
herewith).
25(vi) Statement of Eligibility of The Chase Manhattan Bank for the
Dominion Resources Capital Trust III Trust Preferred Securities
(filed herewith).
23(iii) Consent of Deloitte & Touche (fled herewith).
24 Powers of Attorney (Included herein).
II-2
Item 17. Undertakings.
(a) The undersigned registrantregistrants hereby undertakes:undertake:
(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 securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the SEC pursuant to Rule 424(b), if, in the aggregate, the changes
in volume and price represent no more than 20 percent 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 paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the SEC by the registrantregistrants pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
R-2
(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.
(b)(4) The undersigned registrantregistrants hereby undertakesundertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
theeach such registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c)(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of theeach registrant pursuant to the foregoing
provisions, or otherwise, the registrant hasregistrants have been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by thea registrant of expenses incurred or
paid by a director, officer or controlling person of thesuch registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, theeach registrant agrees that it 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
the Act and will be governed by the final adjudication of such issue.
R-3(6) The undersigned registrants hereby further undertake:
(i) 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
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430A and contained in a form of prospectus filed by such 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.
(ii) 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3, and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, the Commonwealth of Virginia, on February 11, 1998.
DOMINION RESOURCES, INC.
Bythe 21st
day of December 1999.
Dominion Resources, Inc.
/s/THOS. Thos. E. CAPPS
Thos.Capps
By:__________________________________
(Thos. E. Capps Chairman of the
Board of Directors,
President and Chief Executive
OfficerOfficer)
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities indicated
and on February 11, 1998. Each personthe 21st of December 1999. The officers and directors whose signature appearssignatures
appear below hereby authorizesconstitute Patricia A. Wilkerson or W.H. Riggs, Jr., either
agent for service named in the registration
statement,of whom may act, as attorney-in-fact,their true and lawful attorneys-in-fact, with full power to
sign on his/hertheir behalf individually and in each capacity stated below and file
all amendments and post-effective amendments to the registration statement
making such changes in the registration statement as the registrant deems
appropriate, and Dominion Resources hereby
confers like authoritygenerally to signdo all things in their name in their capacities
as officers and file on its behalf.
Signature Title
/s/JOHN B. ADAMS, JR.
John B. Adams, Jr. Director
/s/JOHN B. BERNHARDT
John B. Bernhardt Director
/s/THOS. E. CAPPS
Thos. E. Capps Chairmandirectors to enable the registrant to comply with the
provisions of the BoardSecurities Act of Directors, President1933 and Chief
Executive Officer
/s/BENJAMIN J. LAMBERT, III
Benjamin J. Lambert, III Director
/s/RICHARD L. LEATHERWOODall requirements of the Securities
and Exchange Commission.
Signature Title
--------- -----
/s/ John B. Adams, Jr. Director
____________________________________
John B. Adams, Jr.
/s/ John B. Bernhardt Director
____________________________________
John B. Bernhardt
/s/ Thos. E. Capps Chairman of the Board of Directors,
____________________________________ President and Chief Executive Officer
Thos. E. Capps
/s/ J. W. Harris Director
____________________________________
J. W. Harris
/s/ Benjamin J. Lambert, III Director
____________________________________
Benjamin J. Lambert, III
/s/ Richard L. Leatherwood Director
____________________________________
Richard L. Leatherwood
Director
/s/HARVEY L. LINDSAY, JR.
Harvey L. Lindsay, Jr. Director
/s/K. A. RANDALL
K. A. Randall Director
/s/WILLIAM T. ROOS
William T. Roos Director
R-4
II-5
Signature Title
/s/FRANK S. ROYAL
Frank S. Royal Director
Judith B. Sack Director
/s/S. DALLAS SIMMONS
S. Dallas Simmons Director
Robert H. Spilman Director
/s/E. M. ROACH, JR.
E. M. Roach, Jr.
Signature Title
--------- -----
/s/ K. A. Randall Director
____________________________________
K. A. Randall
Director
____________________________________
Frank S. Royal
/s/ S. Dallas Simmons Director
____________________________________
S. Dallas Simmons
/s/ Robert H. Spilman Director
____________________________________
Robert H. Spilman
/s/ Judith B. Warrick Director
____________________________________
Judith B. Warrick
/s/ David A. Wollard Director
____________________________________
David A. Wollard
/s/ Thomas N. Chewning Executive Vice President (Chief Financial
____________________________________ Officer)
Thomas N. Chewning
/s/ J. L. Trueheart Senior Vice President and Controller
____________________________________ (Principal Accounting Officer)
/s/J. L. TRUEHEART
J. L. Trueheart
Vice President and Controller
(Principal Accounting Officer)
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Pursuant to the requirements of the Securities Act of 1933, Dominion
Resources Capital Trust II has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Richmond, the Commonwealth of Virginia, on the 21st day of December 1999.
Dominion Resources Capital Trust II
By Dominion Resources, Inc., as
Sponsor
By: /s/ G. Scott Hetzer
----------------------------------
Name: G. Scott Hetzer
Pursuant to the requirements of the Securities Act of 1933, Dominion
Resources Capital Trust III has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Richmond, the Commonwealth of Virginia, on the 21st day of December 1999.
Dominion Resources Capital Trust III
By Dominion Resources, Inc., as
Sponsor
By: /s/ G. Scott Hetzer
----------------------------------
Name: G. Scott Hetzer
II-7