As filed with the Securities and Exchange Commission on June 5, 1996May 15, 2003.
Registration No. 333-[_____]
- --------------------------------------------------------------------------------33-49135
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTONWashington, D.C. 20549
------------------POST-EFFECTIVE AMENDMENT NO. 1
to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------
OHIO EDISON COMPANY
(Exact name of Registrantthe registrant as specified in its charter)
------------------
OHIO 34-0437786
(State or other jurisdiction (I.R.S. Employer
of
incorporation or organization) Identification No.)
76 SOUTH MAIN STREET, AKRON, OHIO 44308
(Address of principal executive offices)
Registrant's Telephone Number Including Area Code: (330) 384-5100
------------------
N.C. ASHCOM, Secretary(I.R.S. employer identification number)
76 South Main Street
Akron, Ohio 4430844308-1890
(330) 384-5504
(Name, address384-5100
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
Leila L. Vespoli, Esq.
Senior Vice President and General Counsel
FirstEnergy Corp.
76 South Main Street
Akron, Ohio 44308-1890
(330) 384-5800
(name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------
The Commission is requested to mail signedWith copies of all
orders, notices and communications to:
MICHAELLucas F. CUSICK VINCENT PAGANO, JR.Torres, Esq.
Pillsbury Winthrop Stimson, Putnam & Roberts Simpson Thacher & BartlettLLP
One Battery Park Plaza
425 Lexington Avenue
New York, NY 10004-1490
New York, NY 10017-3954
------------------(212) 858-1000
Fax: (212) 858-1500
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.Completed.
If the only securities being registered on this Formform are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.
/ //__/
If any of the securities being registered on this Formform are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /X//__/
If this Formform 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 Formform is a post-effective amendment filed pursuant to Rule 462(c) 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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Proposed Proposed
maximum maximum Amount of
Title of each class of Amount being offering price aggregate registration
securities being registered registered per unit offering price fee
- ------------------------------------------------------------------------------------------------------------------------------------
Mortgage Bonds...................................... $50,000,000 100% $50,000,000 $17,242
====================================================================================================================================
Estimated solely for the purpose of calculating the registration fee.
The Registrant hereby amends this/__/
This Post-Effective Amendment No. 1 to Registration Statement on such date
or dates as may be necessary to delay its effective date until the RegistrantForm
S-3 (File No. 33-49135) shall file a further amendment which specifically states that this Registration
Statement shall thereafterhereafter become effective in accordance with the
provisions of Section 8(a)8(c) of the Securities Act of 1933 or until1933.
==============================================================================
PURPOSE OF AMENDMENT
Termination of Offering and Removal of Securities from Registration
Pursuant to this Registration Statement shall becomeon Form S-3 (File No.
33-49135), declared effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a)of October 29, 1992 (the "Registration
Statement"), may determine.
Subject to Completion, Dated June 5, 1996
PROSPECTUS
$50,000,000
Ohio Edison Company
MORTGAGE BONDS
--------------------------- Ohio Edison Company (the "Company") intends from time to time to offer
its mortgage bonds (the "New Bonds") in an aggregate principal amount not to
exceed $50,000,000, in amounts, at prices and on terms to be determined at the
time or times of sale. For each issue of New Bonds for which this Prospectus is
being delivered (the "Offered Bonds") there is an accompanying Prospectus
Supplement (the "Prospectus Supplement") that sets forth, as applicable, the
aggregate principal amount, maturity, rate and time of payment of interest,
purchase price, any terms for redemption and any other special terms of the
Offered Bonds.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
---------------------------
The Company may sell the New Bonds through underwriters, dealers or
agents, or directly to one or a limited number of purchasers. The initial public
offering price, if any, and the net proceeds to Ohio Edison Company from the
sale of any Offered Bonds, together with the names of any underwriters, dealers
or agents relating to such sale and any applicable commissions or discounts,
will be set forth in the applicable Prospectus Supplement.
June __, 1996
---------------------------
Information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the Registration Statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
No person is authorized in connection with the offering made hereby to
give any information or to make any representation not contained or incorporated
by reference in this Prospectus or any Prospectus Supplement, and any
information or representation not contained or incorporated herein must not be
relied upon as having been authorized by Ohio Edison Company or any underwriter
or agent. This Prospectus or any Prospectus Supplement does not constitute an
offer to sell or a solicitation of an offer to buy by any person in any
jurisdiction in which it is unlawful for such person to make such an offer or
solicitation. Neither the delivery of this Prospectus or any Prospectus
Supplement at any time nor any sale made hereunder shall, under any
circumstance, imply that the information herein or therein is correct as of any
date subsequent to the date hereof or thereof.
AVAILABLE INFORMATION
Ohio Edison Company (the "Company") is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports and other information with the
Securities and Exchange Commission (the "Commission"). Information, as of
particular dates, concerning the Company's directors and officers, their
remuneration, the principal holders of the Company's securities and any material
interest of such persons in transactions with the Company is disclosed in proxy
statements distributed to stockholders of the Company and filed with the
Commission. Such reports, proxy statements and other information filed by the
Company may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's Regional Offices located at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661, and 7 World Trade Center, New York,
New York 10048. Copies of such materials can be obtained by mail from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. In addition, such material may also be inspected and
copied at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005, on which certain of the Company's securities are listed.
Information relating to the Depository Trust Company ("DTC") and DTC's
book-entry only system is based upon information furnished by DTC.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have heretofore been filed by the
Company with the Commission pursuant to the Exchange Act, are incorporated by
reference in this Prospectus and shall be deemed to be a part hereof:
1. Annual Report on Form 10-K for the year ended December 31, 1995.
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 1996.
All other documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the New Bonds hereunder shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the respective dates of the filing of such documents (such
documents, and the documents enumerated above, being hereinafter referred to as
"Incorporated Documents"; provided, however, that all documents filed by the
Company pursuant to Section 13, 14 or 15 of the Exchange Act in each year during
which the offering made by this Prospectus is in effect prior to the filing with
the Commission of the Company's Annual Report on Form 10-K covering such year
shall not be incorporated by reference in this Prospectus or be a part hereof
from and after such filing of such Annual Report on Form 10-K).
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed Incorporated
Document modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
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The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, upon the written or oral request of any such person, a copy of any
and all of the documents referred to above which have been or may be
incorporated by reference, other than exhibits to such documents (unless such
exhibits are specifically incorporated by reference into such documents).
Requests for such copies should be directed to Ohio Edison Company, Investor
Services, 76 South Main Street, Akron, Ohio 44308, telephone number
1-800-736-3402. The information relating to the Company contained in this
document does not purport to be comprehensive and should be read together with
the information contained in the Incorporated Documents.
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SUMMARY INFORMATION
The following is qualified in its entirety by the information and
financial statements (including notes thereto) appearing elsewhere herein, in
documents incorporated herein by reference and in any Prospectus Supplement.
THE OFFERING
Securities
Mortgage bonds in an aggregate principal amount not to exceed
$50,000,000.
Redemption Provisions
To be determined at the time of sale of the Offered Bonds and set forth
in the related Prospectus Supplement.
Use of Proceeds
Proceeds are expected to be used for general corporate purposes. The
use of the proceeds from any particular Offered Bonds will be set forth in the
related Prospectus Supplement.
Priority and Security
The New Bonds will be secured primarily by the First Mortgage Bonds (as
defined herein) held by the New Mortgage Trustee (as defined herein) and by the
lien of the New Mortgage (as defined herein) on the Company's properties used in
the generation, production, transmission or distribution of electric energy.
Substantially all of such property, while subject to the lien of the New
Mortgage, will be also subject to the prior lien of the First Mortgage (as
defined herein) which is, in the opinion of the Company's counsel, a direct
first lien on substantially all of the Company's physical property and
franchises, subject only to excepted encumbrances as defined in the First
Mortgage.
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CERTAIN CONSOLIDATED FINANCIAL INFORMATION
(Thousands, except per share amounts, ratios and percentages)
Twelve Months
Year Ended December 31, Ended March
1991 1992 1993 1994 1995 31, 1996
---------- ---------- ---------- ---------- ---------- -------------
Income Summary: (Unaudited)
Operating Revenues....................... $2,358,946 $2,332,378 $2,369,940 $2,368,191 $2,465,846 $2,489,748
Net Income............................... $ 264,823 $ 276,986 $ 82,724 $ 303,531 $ 317,241 $ 319,055
Earnings on Common Stock................. $ 240,069 $ 253,060 $ 59,017 $ 281,852 $ 294,747 $ 298,795
Earnings per share of Common Stock....... $1.60 $1.70 $.39 $1.97 $2.05 $2.08
Ratio of Earnings to Fixed Charges... 1.95 2.01 1.12 2.24 2.32 2.34
March 31, 1996
----------------------
Outstanding Ratio
----------- -----
Capitalization Summary: (Unaudited)
Common Stockholders' Equity......................................................... $2,426,113 43.6%
Preferred Stock Not Subject to Mandatory Redemption................................. 211,870 3.8%
Preferred Stock Subject to Mandatory Redemption..................................... 40,000 0.7%
Company obligated mandatorily redeemable preferred
securities of subsidiary trust holding solely
Company subordinated debentures................................................... 120,000 2.2%
Long-Term Debt................................................................... 2,759,970 49.7%
--------- -----
Total Capitalization................................................ $5,557,953 100.0%
=========== =====
- -------------------------
Derived from audited financial information.
Includes net after tax charges of $218,377,000 ($1.43 per share) relating
primarily to the termination of Perry Unit 2, partially offset by the
cumulative effect of a change in accounting for unbilled revenues.
"Earnings" for purposes of these calculations have been computed by adding
to "income before extraordinary items" all taxes based on income or
profits, total interest charges and the estimated interest element of
rentals charged to income. "Fixed charges" include total interest charges,
the estimated interest element of rentals and subsidiaries' preferred stock
dividend requirements, determined on a "pre-income tax" basis (computed,
where applicable, at the effective income tax rates for the applicable
periods). These ratios exclude fixed charges applicable to the guarantee of
the debt of a coal supplier aggregating $13,298,000, $9,762,000,
$8,565,000, $7,424,000, $6,315,000 and $5,957,000 for each of the five
years in the period ended December 31, 1995 and the twelve months ended
March 31, 1996, respectively.
Excludes $302,707,000 of long-term debt due to be repaid or subject to put options within one year.
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OHIO EDISON COMPANY
The Company was organized under the laws of the State of Ohio in 1930
and owns property and does business as an electric public utility in that state.
The Company also has ownership interests in certain facilities located in the
Commonwealth of Pennsylvania. The Company's principal executive offices are
located at 76 South Main Street, Akron, Ohio 44308, telephone number
1-800-736-3402.
The Company furnishes electric service to communities in a 7,500 square
mile area of central and northeastern Ohio. It also provides transmission
services and electric energy for resale to certain municipalities in the
Company's service area and transmission services to certain rural cooperatives.
The Company also engages in the sale, purchase and interchange of electric
energy with other electric companies. The area it serves has a population of
approximately 2,530,000.
The Company owns all of the outstanding common stock of Pennsylvania
Power Company ("Penn Power"), a Pennsylvania corporation, which furnishes
electric service to communities in a 1,500 square mile area of western
Pennsylvania. Penn Power also provides transmission services and electric energy
for resale to certain municipalities in Pennsylvania. The area served by Penn
Power has a population of approximately 342,000.
Sources of generation for the Company and Penn Power (the "Companies")
during the twelve months ended March 31, 1996 were 74.0% coal and 26.0% nuclear.
USE OF PROCEEDS
The Company proposes to use the proceeds from the sale of the New Bonds
for general corporate purposes. The specific uses to which the proceeds may be
applied will be set forth in the related Prospectus Supplement. Pending
application of the proceeds, the Company may make short-term cash investments.
FINANCING AND CONSTRUCTION PROGRAMS
The Companies' total construction costs, excluding nuclear fuel,
amounted to approximately $166,000,000 in 1995. Such costs included expenditures
for the betterment of existing facilities and for the construction of
transmission lines, distribution lines, substations and other additions. The
Companies currently forecast expenditures of approximately $650,000,000 for
property additions and improvements from 1996-2000, of which approximately
$160,000,000 is applicable to 1996. Various Federal, state and local authorities
regulate the Companies with regard to air and water quality and other
environmental matters. The Companies have estimated additional capital
expenditures for environmental compliance of approximately $17,000,000 for the
period 1996 through 2000, which is included in the construction forecast.
During the 1996-2000 period, maturities of, and sinking fund
requirements for, long-term debt and preferred stock will require expenditures
of approximately $1,300,000,000, of which approximately $264,000,000 is
applicable to 1996. In addition, the Companies optionally redeemed approximately
$105,000,000 of long-term debt through May 1, 1996.
Nuclear fuel purchases are financed through OES Fuel, Incorporated
("OES Fuel," a wholly owned subsidiary of the Company) commercial paper and
loans, both of which are supported by a $225,000,000 long-term bank credit
agreement. Investments for additional nuclear fuel during the 1996-2000 period
are estimated to be approximately $180,000,000, of which approximately
$29,000,000 applies to 1996. During the same periods, the Companies' nuclear
fuel investments are expected to be reduced by approximately $191,000,000 and
$39,000,000, respectively, as the nuclear fuel is consumed. Also, the Companies
have operating lease commitments of approximately $594,000,000 for the 1996-2000
period, of which approximately $108,000,000 relates to 1996. The Companies
recover the cost of nuclear fuel consumed and operating leases through their
electric rates.
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Short-term borrowings of $119,008,000 at March 31, 1996, represented
debt of OES Capital, Incorporated ("OES Capital," a wholly owned subsidiary of
the Company), which is secured by customer accounts receivable. OES Capital can
borrow up to $120,000,000 under a receivables financing agreement at rates based
on certain bank commercial paper. The Companies also had $52,000,000 of unused
short-term bank lines of credit as of March 31, 1996. In addition, $50,000,000
was available through bank facilities that provide for borrowings on a
short-term basis at the banks' discretion. The Company had the capability to
borrow $135,000,000 as of March 31, 1996 through OES Fuel credit facilities.
Based on their present plans, the Companies could provide for their
cash requirements during the remainder of 1996 from the following sources: funds
to be received from operations; available cash and temporary cash investments
(approximately $30,000,000 as of March 31, 1996); the issuance of long-term debt
(for refunding purposes); and funds available under the short-term bank credit
arrangements.
For the period 1996-2000, external financings may be used to provide a
portion of the Companies' cash requirements. The extent and type of future
financings will depend on the need for external funds as well as market
conditions, the maintenance of an appropriate capital structure and the ability
of the Companies to comply with coverage requirements in order to issue first
mortgage bonds and preferred stock. The Companies will continue to monitor
financial market conditions and, where appropriate, may take advantage of
economic opportunities to refund debt and preferred stock to the extent that
their financial resources permit.
DESCRIPTION OF THE NEW BONDS
General
The New Bonds will be authenticated and delivered under a General
Mortgage Indenture and Deed of Trust, between the Company and The Bank of New
York (the "New Mortgage Trustee"), dated as of June 1, 1996. The New Mortgage
Trustee will act as indenture trustee for the purposes of the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). Such General Mortgage and
Deed of Trust, as supplemented by various supplemental indentures, including one
or more supplemental indentures relating to the New Bonds, is hereinafter
referred to as the "New Mortgage." The summaries herein do not purport to be
complete and are subject to the detailed provisions of the New Mortgage.
Capitalized terms used herein which are not otherwise defined in this Prospectus
shall have the meanings ascribed thereto in the New Mortgage. Wherever
particular provisions of the New Mortgage or terms defined therein are referred
to, such provisions or definitions are incorporated by reference as a part of
the statements made herein and such statements are qualified in their entirety
by such reference. References to article and section numbers in this description
of the New Bonds, unless otherwise indicated, are references to article and
section numbers of the New Mortgage or the First Mortgage (as defined herein),
as the case may be.
The New Mortgage provides that additional bonds may be issued
thereunder on the basis of Pledged Bonds (as hereinafter defined), property
additions, retired bonds and cash. (See "Issuance of Additional Mortgage Bonds"
below.) The New Bonds and all other bonds heretofore or hereafter issued under
the New Mortgage are collectively referred to herein as the "Mortgage Bonds."
Reference is made to the Prospectus Supplement for a description of the
following terms of the series of New Bonds in respect of which this Prospectus
is being delivered (the "Offered Bonds"): (i) the title (series designation) of
the Offered Bonds; (ii) the limit, if any, upon the aggregateregistered $666,441,000
principal amount of the Offered Bonds; (iii) the date or dates on which the principal of the
Offered Bonds, or any Tranche thereof, is payable; (iv) the rate or rates at
which the Offered Bonds, or any Tranche thereof, will bear interest, if any, the
date or dates from which such interest will accrue, the dates on which any such
interest will be payable ("Interest Payment Dates") and the regular record dates
for any interest payable on the Interest Payment Dates; (v) the basis on which
the Offered Bonds will be issued; (vi) the option, if any, of the Company to
redeem the Offered Bonds and the periods within which or the dates on which, the
prices at which and the terms and conditions upon which, the Offered Bonds, or
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any Tranche thereof, may be redeemed, in whole or in part, upon the exercise of
such option; (vii) the obligation, if any, of the Company to redeem or purchase
the Offered Bonds pursuant to any sinking fund or analogous provisions or at the
option of the Holder and the periods within which or the dates on which, the
prices at which and the terms and conditions upon which the Offered Bonds, or
any Tranche thereof, will be redeemed, in whole or in part, pursuant to such
obligation; (viii) the denominations in which the Offered Bonds, or any Tranche
thereof, will be issuable; (ix) whether the Offered Bonds will be originally
issued in book-entry only form as discussed below under "Book-Entry Only
System"; and (x) any other terms of the Offered Bonds not inconsistent with the
provisions of the New Mortgage.
While the New Mortgage contains provisions for the maintenance of the
Mortgaged Property, it does not contain any provisions for a maintenance or
sinking fund and, except as may be provided in a Supplemental Indenture (and
described in the applicable Prospectus Supplement), there will be no provisions
for any such funds for the New Bonds.
Form and Exchange
New Bonds in definitive form will be issued only as registeredits collateralized lease bonds
without coupons in denominations of $1,000 or any multiple thereof authorized by
the Company. New Bonds will be exchangeable for a like aggregate principal
amount of New Bonds of the same series of other authorized denominations and
will be transferable at the office of the Company in New York, New York, without
service charge in either case other than for any taxes or other governmental
charge imposed in connection with such exchange or transfer. See "Transfer or
Exchange."
Redemption of the New Bonds
Any terms for the optional or mandatory redemption of any Offered Bonds
will be set forth in the applicable Prospectus Supplement. Except as shall
otherwise be provided in the applicable Prospectus Supplement with respect to
any Offered Bonds redeemable at the option of the Holder, New Bonds will be
redeemable only upon notice by mail not less than 30 days nor more than 180 days
prior to the date fixed for redemption, and, if less than all the New Bonds of a
series, or any Tranche thereof, are to be redeemed, the particular New Bonds to
be redeemed will be selected by such method as shall be provided for the
particular series or Tranche, or in the absence of any such provision, by such
method as the Bond Registrar deems fair and appropriate. (Sections 5.03 and
5.04.)
Any notice of redemption at the option of the Company may state that
such redemption shall be conditioned upon receipt by the New Mortgage Trustee or
Paying Agent, on or prior to the dated fixed for such redemption, of money
sufficient to pay the principal of and premium, if any, and interest, if any, on
such New Bonds and that if such money has not been so received, such notice will
be of no force and effect and the Company will not be required to redeem such
New Bonds. (Section 5.04.)
Security
General. Except as discussed below, Mortgage Bonds now or hereafter
issued under the New Mortgage will be secured primarily by:
(a) bonds ("First Mortgage Bonds") issued under the Company's
Indenture dated August 1, 1930 (the "First Mortgage"), to The Bank of
New York (successor trustee to Bankers Trust Company), as trustee (the
"First Mortgage Trustee"), and delivered to the New Mortgage Trustee
under the New Mortgage, which First Mortgage Bonds will be secured,
equally and ratably with all other bonds issued under the First
Mortgage, by a valid first lien on substantially all of the Company's
physical property and franchises, subject only to excepted encumbrances
as defined in the First Mortgage (Article I, Section 2); and
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(b) the lien of the New Mortgage on the Company's properties
used or to be used in or in connection with the generation, production,
transmission or distribution of electric energy, which lien is junior
to the lien of the First Mortgage.
The First Mortgage permits, with certain limitations, the
acquisition of property subject to prior liens and, under certain conditions,
permits the issuance of additional indebtedness under such prior liens to the
extent of 60% of net property additions made by the Company to the property
subject to such prior liens.
As discussed below under "Pledged Bonds," following a merger or
consolidation of another corporation into the Company, the Company could deliver
to the New Mortgage Trustee bonds issued under an existing mortgage on the
properties of such other corporation in lieu of or in addition to bonds issued
under the First Mortgage. In such event, the Mortgage Bonds would be secured,
additionally, by such bonds and by the lien of the New Mortgage on the
properties of such other corporation, which would be junior to the liens of such
existing mortgage and the First Mortgage. The First Mortgage and all such other
mortgages are hereinafter, collectively, called the "Class "A" Mortgages," and
all bonds issued under the Class "A" Mortgages and delivered to the New Mortgage
Trustee are hereinafter collectively called the "Pledged Bonds." If and when no
Class "A" Mortgages are in effect, the New Mortgage will constitute a first
mortgage lien on the Company's properties used or to be used in or in connection
with the generation, production, transmission or distribution of electric
energy.
Pledged Bonds. The Pledged Bonds will be issued and delivered to, and
registered in the name of, the New Mortgage Trustee or its nominee and will be
owned and held by the New Mortgage Trustee, subject to the provisions of the New
Mortgage, for the benefit of the Holders of all Mortgage Bonds Outstanding from
time to time, and the Company will have no interest in such Pledged Bonds.
Except as may be otherwise set forth in the supplemental indenture or board
resolution or officer's certificate pursuant to a supplemental indenture or a
board resolution pursuant to which any Mortgage Bonds are to be issued, Pledged
Bonds issued as the basis for the authentication and delivery of such Mortgage
Bonds (a) will mature on the same dates, and in the same principal amounts, as
such Mortgage Bonds, and (b) will contain, in addition to any mandatory
redemption provisions applicable to all Pledged Bonds Outstanding under the
related Class "A" Mortgage, mandatory redemption provisions correlative to
provisions for mandatory redemption, or for redemption at the option of the
Holder, of such Mortgage Bonds. Pledged Bonds issued as the basis for
authentication and delivery of a series or Tranche of Mortgage Bonds (x) may,
but need not, bear interest, any such interest to be payable at the same times
as interest on the Mortgage Bonds of such series or Tranche, and (y) may, but
need not, contain provisions for the redemption thereof at the option of the
Company, any such redemption to be made at a redemption price or prices not less
than the principal amount of such Pledged Bonds. (Sections 4.02 and 7.01.)
Any payment by the Company of principal of or premium or interest on
the Pledged Bonds held by the New Mortgage Trustee will be applied by the New
Mortgage Trustee to the payment of any principal, premium or interest, as the
case may be, in respect of the Mortgage Bonds which is then due, and, to the
extent of such application, the obligation of the Company under the New Mortgage
to make such payment in respect of the Mortgage Bonds will be deemed satisfied
and discharged. If, at the time of any such payment of principal of Pledged
Bonds, there shall be no principal then due in respect to the Mortgage Bonds,
the proceeds of such payment will be deemed to constitute Funded Cash and will
be held by the New Mortgage Trustee as part of the New Mortgaged Property, to be
withdrawn, used or applied as provided in the New Mortgage. If, at the time of
any such payment of premium or interest on Pledged Bonds, there shall be no
premium or interest, as the case may be, then due in respect of the Mortgage
Bonds, the proceeds of such payment will be remitted to the Company at its
request. Any payment by the Company of principal of or premium or interest on
Mortgage Bonds authenticated and delivered on the basis of the deposit with the
New Mortgage Trustee of Pledged Bonds (other than by application of the proceeds
in respect of such Pledged Bonds) will, to the extent thereof, be deemed to
satisfy and discharge the obligation of the Company, if any, to make a payment
of principal, premium or interest, as the case may be, in respect of such
Pledged Bonds which is then due. (Section 7.02; and see "Withdrawal of Cash"
below.)
The New Mortgage Trustee may not sell, assign or otherwise transfer any
Pledged Bonds except to a successor trustee under the New Mortgage. (Section
7.04.) At the time any Mortgage Bonds of any series, or any Tranche thereof,
which have been authenticated and delivered upon the basis of Pledged Bonds
cease to be
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Outstanding (other than as a result of the application of the proceeds of the
payment or redemption of such Pledged Bonds), the New Mortgage Trustee shall
surrender to or upon the order of the Company an equal principal amount of such
Pledged Bonds having the same Stated Maturity and mandatory redemption
provisions as such Mortgage Bonds. (Section 7.03.)
At the date of this Prospectus, the only Class "A" Mortgage is the
First Mortgage and the only Pledged Bonds issuable at this time are First
Mortgage Bonds issuable thereunder. The New Mortgage provides that in the event
of the merger or consolidation of another company with or into the Company, an
existing mortgage constituting a lien on properties of such other company prior
to the lien of the New Mortgage may be designated by the Company as an
additional Class "A" Mortgage. Bonds thereafter issued under such additional
mortgage would be Pledged Bonds and could provide the basis for the
authentication and delivery of Mortgage Bonds under the New Mortgage. (Section
7.06.) When no Pledged Bonds are Outstanding under a Class "A" Mortgage except
for Pledged Bonds held by the New Mortgage Trustee, then, at the request of the
Company and subject to satisfaction of certain conditions, the New Mortgage
Trustee will surrender such Pledged Bonds for cancellation, and the related
Class "A" Mortgage will be satisfied and discharged, the lien of such Class "A"
Mortgage on the Company's property will cease to exist and the priority of the
lien of the New Mortgage will be increased. (Section 7.07.)
The New Mortgage provides that, so long as any Mortgage Bonds are
Outstanding, the Company will not issue any additional bonds under any Class "A"
Mortgage except (i) to replace mutilated, destroyed, lost or stolen bonds issued
under such Class "A" Mortgage or (ii) Pledged Bonds issued to the New Mortgage
Trustee as the basis for the authentication and delivery of Mortgage Bonds.
First Mortgage Bonds may currently be issued under the First Mortgage on the
basis of property additions, retirements of bonds previously issued under the
First Mortgage and cash deposited with the First Mortgage Trustee. As of March
31, 1996, $1,276,225,000 of First Mortgage Bonds (other than Pledged Bonds) were
outstanding.
Lien of the New Mortgage. The properties of the Company used or to be
used in or in connection with the generation, production, transmission or
distribution of electric energy are subject to the lien of the New Mortgage.
Substantially all of such property, while subject to the lien of the New
Mortgage, will be also subject to the prior lien of the First Mortgage. The
Mortgage Bonds will have the benefit of the prior lien of the First Mortgage on
such property, and the benefit of the prior lien of any additional Class "A"
Mortgage on any property subject thereto, to the extent of the aggregate
principal amount of Pledged Bonds, issued under the respective Class "A"
Mortgages, held by the New Mortgage Trustee.
The lien of the New Mortgage is subject to Permitted Liens which
include tax liens and other governmental charges which are not delinquent and
which are being contested, construction and materialmen's liens, certain
judgment liens, easements, reservations and rights of others (including
governmental entities) in, and defects of title in, certain property of the
Company, certain leasehold interests, liens on the Company's pollution control
and sewage and solid waste facilities and certain other liens and encumbrances.
(Section 1.01.)
There are excepted from the lien of the New Mortgage, among other
things, cash and securities not paid to, deposited with or held by the New
Mortgage Trustee under the New Mortgage; contracts, leases and other agreements
of all kinds, contract rights, bills, notes and other instruments, accounts
receivable, claims, certain intellectual property rights and other general
intangibles; permits, licenses and franchises; automobiles, other vehicles,
movable equipment, aircraft and vessels; all goods, wares and merchandise held
for sale or lease in the ordinary course of business or for use by or for the
benefit of the Company; fuel, materials, supplies and other personal property
consumable in the operations of the Company's business; computers, machinery,
and equipment; coal, ore, gas, oil, minerals and timber mined or extracted from
the land; gas transmission lines connecting wells with main or branch trunk
lines or field gathering lines connecting wells with main or branch trunk lines;
electric energy, gas, steam, water and other products generated, produced or
purchased; leasehold interests; and all books and records. (Granting Clauses.)
The First Mortgage contains similar, but not identical, exceptions.
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Without the consent of the Holders, the Company and the New Mortgage
Trustee may enter into supplemental indentures to subject to the lien of the New
Mortgage additional property, whether or not used in the electric utility
business (including property which would otherwise be excepted from such lien).
(Section 14.01.) Such property, so long as the same would otherwise constitute
Property Additions (as described below), would thereupon constitute Property
Additions and be available as a basis for the issuance of Mortgage Bonds. (See
"Issuance of Additional Mortgage Bonds" below.)
The New Mortgage contains provisions subjecting after-acquired property
to the lien thereof, subject to the prior lien of the First Mortgage and any
other Class A Mortgage. These provisions are limited in the case of
consolidation or merger (whether or not the Company is the surviving
corporation) or sale of substantially all of the Company's assets. In the event
of consolidation or merger of the Company with or into another corporation and
such other corporation is the surviving corporation or the transfer of all the
mortgaged property as or substantially as an entirety, the New Mortgage will not
be required to be a lien upon any of the properties then owned or thereafter
acquired by the surviving corporation, except properties acquired from the
Company in or as a result of such transaction and improvements, extensions and
additions to such properties and renewals, replacements and substitutions of or
for any part or parts of such properties. In the event of a merger or
consolidation of a corporation with or into the Company and the Company is the
surviving corporation, unless a supplemental indenture to the New Mortgage shall
otherwise provide, the New Mortgage will not be required to be a lien upon any
of the properties acquired by the Company in or as result of such transaction or
any improvements, extensions or addition to such properties or any renewal
replacements or substitutions of or for any part or parts of such properties.
(Article Thirteen; and see "Consolidation, Merger, Conveyance, Transfer or
Lease" below.) In addition, after-acquired property may be subject to vendors'
liens, purchase money mortgages and other liens thereon at the time of
acquisition thereof, including the lien of any Class "A" Mortgage.
The New Mortgage provides that the New Mortgage Trustee will have a
lien, prior to the lien on behalf of the holders of Mortgage Bonds, upon
Mortgaged Property and any money collected by the New Mortgage Trustee as
proceeds of the Mortgaged Property, for the payment of its reasonable
compensation and expenses and for indemnity against certain liabilities.
(Section 11.07.)
Issuance of Additional Mortgage Bonds
The principal amount of Mortgage Bonds which may be issued under the
New Mortgage (Section 3.01) is not limited. Mortgage Bonds of any series may be
issued from time to time under Article Four of the New Mortgage on the basis of,
and in an aggregate principal amount not exceeding:
(1) the aggregate principal amount of Pledged Bonds issued
and delivered to the Trustee;
(2) 70% of the Cost or Fair Value to the Company (whichever
is less) of Property Additions (as described below) which do not
constitute Bonded Property Additions (being, generally, Property
Additions which have been made the basis of the authentication and
delivery of Mortgage Bonds, the release of mortgaged property or cash
withdrawals) after certain deductions and additions, primarily
including adjustments to offset property retirements;
(3) the aggregate principal amount of Retired Bonds (which
consist of Mortgage Bonds no longer Outstanding under the New Mortgage
(including Mortgage Bonds deposited under any sinking or analogous
funds) which have not been used for certain other purposes under the
New Mortgage and which are not to be paid, redeemed or otherwise
retired by the application of Funded Cash), but if Pledged Bonds have
been made the basis for the authentication and delivery of such Retired
Bonds, only if the related Class "A" Mortgage has been discharged: and
(4) an amount of cash deposited with the Trustee.
In general, the issuance of Mortgage Bonds is subject to Adjusted Net
Earnings of the Company for 12 consecutive months within the preceding 18 months
being at least two times the Annual Interest Requirements on all Mortgage Bonds
at the time Outstanding, Mortgage Bonds then applied for, all outstanding bonds
issued under a Class A Mortgage other than Pledged Bonds held by the New
Mortgage Trustee under the New Mortgage, and all other indebtedness (with
certain exceptions) secured by a lien prior to the lien of the New Mortgage,
except that no such net earnings requirement need be met if the additional
Mortgage Bonds to be issued are to have no Stated Interest Rate prior to
Maturity. The Company is not required to satisfy the net earnings requirement
prior to issuance of Mortgage Bonds as provided in (1) above if the Pledged
Bonds issued and delivered to the New Mortgage Trustee as the basis for such
issuance have been authenticated and delivered under the related Class "A"
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Mortgage on the basis of retired Class A Bonds. In addition, the Company is not
required to satisfy the net earnings requirement prior to issuance of Mortgage
Bonds as provided in (3) above unless (a) the Stated Maturity of the Retired
Bonds is a date less than five years after the date of the Company Order
requesting the authentication and delivery of such Mortgage Bonds and (b) the
maximum Stated Interest Rate, if any, on such Retired Bonds at the time of their
authentication and delivery is less than the maximum Stated Interest Rate, if
any, on such Mortgage Bonds to be in effect upon the initial authentication and
delivery of such Mortgage Bonds. In general, the interest requirement with
respect to variable interest rate indebtedness, if any, is determined with
reference to the rate or rates in effect on the date immediately preceding such
determination or the rate to be in effect upon initial authentication. (Section
1.03 and Article Four).
Adjusted Net Earnings are calculated before, among other things,
provisions for income taxes; depreciation or amortization of property; interest
on any indebtedness and amortization of debt discount and expense; any
non-recurring charge to income of whatever kind or nature (including without
limitation the recognition of expense or impairment due to the
non-recoverability of assets or expense), whether or not recorded as a
non-recurring item in the Company's books of account; and any refund of revenues
previously collected or accrued by the Company subject to possible refund. With
respect to Mortgage Bonds of a series subject to a Periodic Offering (such as a
medium-term note program), the New Mortgage Trustee may be entitled to receive a
certificate evidencing compliance with the net earnings requirements only once,
at or prior to the time of the first authentication and delivery of the Mortgage
Bonds of such series (unless the Company Order requesting the authentication and
delivery of such Mortgage Bonds is delivered on or after the date which is two
years after the most recent Net Earnings Certificate was delivered, in which
case an updated certificate would be required to be delivered). (Sections 1.03
and 4.01.)
Property Additions generally include any property which is owned by the
Company and is subject to the lien of the New Mortgage, except any property the
cost of acquisition or construction of which is properly chargeable to an
operating expense account of the Company. (Section 1.04.)
Unless otherwise provided in the applicable Prospectus Supplement, the
Company will issue the Mortgage Bonds on the basis of Pledged Bonds (i.e., First
Mortgage Bonds) issued under its First Mortgage.
Release of Property
The Company may obtain the release from the lien of the New Mortgage of
any Mortgaged Property if the Fair Value of all of the Mortgaged Property
(excluding the Mortgaged Property to be released but including any Mortgaged
Property to be acquired by the Company with the proceeds of, or otherwise in
connection with, such release) equals or exceeds an amount equal to
twenty-fourteenths (20/14ths) of the aggregate principal amount of Mortgage
Bonds Outstanding and bonds issued under Class "A" Mortgages outstanding (other
than Pledged Bonds).
The New Mortgage provides simplified procedures for the release of
property which has been released from the lien of a Class "A" Mortgage, minor
properties and property taken by eminent domain, and provides for dispositions
of certain obsolete property and grants or surrender of certain rights without
any release or consent by the New Mortgage Trustee.
If any property released from the lien of the New Mortgage continues to
be owned by the Company after such release, the New Mortgage will not become a
lien on any improvement, extension or addition to such property or renewals,
replacements or substitutions of or for any part or parts of such property.
(Article Eight.)
Withdrawal of Cash
Subject to certain limitations, cash held by the New Trustee may (1) be
withdrawn by the Company (a) to the extent of the Cost or Fair Value to the
Company (whichever is less) of Unbonded Property Additions, after certain
deductions and additions primarily including adjustments to offset retirements,
or (b) in an amount equal to twenty-fourteenths (20/14ths) of the aggregate
principal amount of Mortgage Bonds that the Company would be entitled to issue
on the basis of Retired Bonds (with the entitlement to such issuance being
waived by operation of
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such withdrawal), or (c) in an amount equal to twenty-fourteenths (20/14ths) of
the aggregate principal amount of any Outstanding Mortgage Bonds delivered to
the New Trustee, or (2) upon the request of the Company, be applied to (a) the
purchase of Mortgage Bonds (at prices not exceeding twenty-fourteenths
(20/14ths) of the principal amount thereof) or (b) the redemption or payment at
Stated Maturity of Mortgage Bonds (with any Mortgage Bonds received by the New
Trustee pursuant to these provisions being canceled by the New Trustee) (Section
8.06); provided, however, that cash deposited with the New Mortgage Trustee as
the basis for the authentication and delivery of Mortgage Bonds, as well as cash
representing a payment of principal of Pledged Bonds, may only be withdrawn in
an amount equal to the aggregate principal amount of Mortgage Bonds the Company
would be entitled to issue on any basis (with the entitlement to such issuance
being waived by operation of such withdrawal), or may, upon the request of the
Company, be applied to the purchase, redemption or payment of Mortgage Bonds at
prices not exceeding, in the aggregate, the principal amount thereof (Sections
4.05 and 7.02).
Consolidation, Merger, Conveyance, Transfer or Lease
The Company may not consolidate with or merge into any other
corporation or convey, transfer or lease the Mortgaged Property as or
substantially as an entirety to any person unless (a) such transaction is on
such terms as will fully preserve the lien and security of the New Mortgage and
the rights and powers of the New Mortgage Trustee and Holders, (b) the
corporation formed by such consolidation or into which the Company is merged or
the person which acquires by conveyance or transfer, or which leases, the
Mortgaged Property as or substantially as an entirety is a corporation organized
and existing under the laws of the United States of America or any state or
territory thereof or the District of Columbia, and such corporation executes and
delivers to the New Mortgage Trustee a supplemental indenture, which contains an
assumption by such corporation of the due and punctual payment of the principal
of and premium, if any, and interest, if any, on the Mortgage Bonds and the
performance of all of the covenants of the Company under the New Mortgage and
which contains a grant, conveyance, transfer and mortgage by the corporation
confirming the lien of the New Mortgage on the Mortgaged Property and subjecting
to such lien all property thereafter acquired by the corporation which shall
constitute an improvement, extension or addition to the Mortgaged Property or a
renewal, replacement or substitution of or for any part thereof, and, at the
election of the corporation, subjecting to the lien of the New Mortgage such
other property then owned or thereafter acquired by the corporation as the
corporation shall specify, and (c) in the case of a lease, such lease will be
made expressly subject to termination by the Company or the New Mortgage Trustee
at any time during the continuance of an Event of Default. (Section 13.01.)
Other than the security afforded by the lien of the First Mortgage and
the New Mortgage and the restrictions on the issuance of additional First
Mortgage Bonds and Mortgage Bonds, there are no provisions of the First Mortgage
or the New Mortgage which afford the holders of the Mortgage Bonds protection in
the event of a highly leveraged transaction, reorganization, restructuring,
merger or similar transaction involving the Company. Neither the First Mortgage
nor the New Mortgage contain provisions requiring the repurchase of the Mortgage
Bonds upon a change in control of the Company.
Modification of New Mortgage
Without the consent of any Holders, the Company and the New Mortgage
Trustee may enter into one or more supplemental indentures for any of the
following purposes:
(a) to evidence the succession of another person to the
Company and the assumption by any such successor of the covenants of
the Company in the New Mortgage and in the Mortgage Bonds
("Consolidation, Merger, Conveyance, Transfer or Lease" above); or
(b) to add one or more covenants of the Company or other
provisions for the benefit of all Holders or for the benefit of the
Holders of, or to remain in effect only so long as there shall be
Outstanding, Mortgage Bonds of one or more specified series, or one or
more specified Tranches thereof, or to surrender any right or power
conferred upon the Company by the New Mortgage; or
(c) to correct or amplify the description of any property at
any time subject to the lien of the New Mortgage, or better to assure,
convey and confirm to the New Mortgage Trustee any property subject
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or required to be subjected to the lien of the New Mortgage, or to
subject to the lien of the New Mortgage additional property; or
(d) to convey, transfer and assign to the New Mortgage
Trustee and to subject to the lien of the New Mortgage with the same
force and effect as if included in the New Mortgage, property of
subsidiaries of the Company used or to be used for one or more purposes
which if owned by the Company would constitute property used or to be
used for one or more of the Primary Purposes of the Company's Business,
which property shall for all purposes of the New Mortgage be deemed to
be property of the Company, together with such other provisions as may
be appropriate to express the respective rights of the New Mortgage
Trustee and the Company in regard thereto; or
(e) to change or eliminate any provision of the New Mortgage
or to add any new provision to the New Mortgage, provided that if such
change, elimination or addition adversely affects the interests of the
Holders of the Mortgage Bonds of any series or Tranche in any material
respect, such change, elimination or addition will become effective
with respect to such series or Tranche only when no Mortgage Bond of
such series or Tranche remains outstanding under the New Mortgage; or
(f) to establish the form or terms of the Mortgage Bonds of
any series or Tranche as permitted by the New Mortgage; or
(g) to provide for the authentication and delivery of bearer
securities and coupons appertaining thereto representing interest, if
any, thereon and for the procedures for the registration, exchange and
replacement thereof and for the giving of notice to, and the
solicitation of the vote or consent of, the holders thereof, and for
any and all other matters incidental thereto; or
(h) to evidence and provide for the acceptance of
appointment by a successor trustee or by a co-trustee or separate
trustee; or
(i) to provide for the procedures required to permit the
Company to utilize, at its option, a noncertificated system of
registration for all, or any series or Tranche of, the Mortgage Bonds;
or
(j) to change any place where (1) the principal of and
premium, if any, and interest, if any, on the Mortgage Bonds of any
series, or any Tranche thereof, will be payable, (2) any Mortgage Bonds
of any series, or any Tranche thereof, may be surrendered for
registration of transfer, (3) any Mortgage Bonds of any series, or any
Tranche thereof, may be surrendered for exchange, and (4) notices and
demands to or upon the Company in respect of the Mortgage Bonds of any
series, or any Tranche thereof, and the New Mortgage may be served; or
(k) to cure any ambiguity, to correct or supplement any
provision therein which may be defective or inconsistent with any other
provision therein, or to make any changes to the provisions thereof or
to add other provisions with respect to matters and questions arising
under the New Mortgage, so long as such other changes or additions do
not adversely affect the interests of the Holders of Mortgage Bonds of
any series or Tranche in any material respect; or
(l) to reflect changes in Generally Accepted Accounting
Principles; or
(m) to provide the terms and conditions of the exchange or
conversion, at the option of the holders of Mortgage Bonds of any
series, of the Mortgage Bonds of such series for or into Mortgage Bonds
of other series or stock or other securities of the Company or any
other corporation; or
(n) to change the words "Mortgage Bonds" to "First Mortgage
Bonds" in the descriptive title of all Outstanding Bonds at any time
after the discharge of the First Mortgage; or
(o) to comply with the rules or regulations of any national
securities exchange on which any of the Mortgage Bonds may be listed.
(Section 14.01.)
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Without limiting the generality of the foregoing, if the Trust
Indenture Act is amended after the date of the New Mortgage in such a way as to
require changes to the New Mortgage or the incorporation therein of additional
provisions or so as to permit changes to, or the elimination of, provisions
which, at the date of the New Mortgage or at any time thereafter, were required
by the Trust Indenture Act to be contained in the New Mortgage, the Company and
the New Mortgage Trustee may, without the consent of any Holders, enter into one
or more supplemental indentures to evidence or effect such amendment. (Section
14.01.)
Except as provided above, the consent of the Holders of not less than a
majority in aggregate principal amount of the Mortgage Bonds of all series then
Outstanding, considered as one class, is required for the purpose of adding any
provisions to, or changing in any manner, or eliminating any of the provisions
of, the New Mortgage pursuant to one or more supplemental indentures; provided,
however, if less than all of the series of Mortgage Bonds Outstanding are
directly affected by a proposed supplemental indenture, then the consent only of
the Holders of a majority in aggregate principal amount of Outstanding Mortgage
Bonds of all series so directly affected, considered as one class, will be
required; and provided further that if the Mortgage Bonds of any series have
been issued in more than one Tranche and if the proposed supplemental indenture
directly affects the rights of the Holders of one or more, but less than all, of
such Tranches, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Mortgage Bonds of all Tranches so directly
affected, considered as one class, will be required; and provided further that
no such amendment or modification may, without the consent of each Holder of the
Outstanding New Mortgage of each series or Tranche directly affected thereby,
(a) change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Mortgage Bond, or reduce the principal amount
thereof or the rate of interest thereon (or the amount of any installment of
interest thereon) or change the method of calculating such rate or reduce any
premium payable upon the redemption thereof, or reduce the amount of the
principal of a Discount Bond (i.e., Bond which by its terms pays less than the
principal amount thereof upon an acceleration of the maturity) that would be due
and payable upon a declaration of acceleration of maturity or change the coin or
currency (or other property) in which any Mortgage Bond or any premium or the
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof (or, in
the case of redemption, on or after the redemption date), (b) permit the
creation of any lien ranking prior to the lien of the New Mortgage with respect
to all or substantially all of the Mortgaged Property or terminate the lien of
the New Mortgage on all or substantially all of the Mortgaged Property, or
deprive such Holder of the benefit of the security of the lien of the New
Mortgage, (c) reduce the percentage in principal amount of the Outstanding
Mortgage Bonds of such series or Tranche, the consent of the Holders of which is
required for any such supplemental indenture, or the consent of the Holder of
which is required for any waiver of compliance with any provision of the New
Mortgage or any default thereunder and its consequences, or reduce the
requirements for quorum or voting, or (d) modify certain of the provisions of
the New Mortgage relating to supplemental indentures, waiver of certain
covenants and waivers of past defaults. A supplemental indenture which changes
or eliminates any covenant or other provision of the New Mortgage which has
expressly been included solely for the benefit of the Holders of, or which is to
remain in effect only so long as there shall be Outstanding Mortgage Bonds of
one or more specified series, or one or more Tranches thereof, or modifies the
rights of the Holders of Mortgage Bonds of such series or Tranches with respect
to such covenant or other provision, will be deemed not to affect the rights
under the New Mortgage of the Holders of the Mortgage Bonds of any other series
or Tranche. (Section 14.02.)
Waiver
The Holders of at least a majority in aggregate principal amount of all
Mortgage Bonds may waive the Company's obligations to comply with certain
covenants, including the Company's obligation to maintain its corporate
existence and properties, pay taxes and discharge liens, maintain certain
insurance and to make such recordings and filings as are necessary to protect
the security of the Holders and the rights of the New Mortgage Trustee, provided
that such waiver occurs before the time such compliance is required. The Holders
of at least a majority of the aggregate principal amount of Outstanding Mortgage
Bonds of all affected series or Tranches, considered as one class, may waive,
before the time for such compliance, compliance with the Company's obligation to
maintain an office or agency where the Mortgage Bonds of such series or Tranches
may be surrendered for payment, registration, transfer or exchange, and
compliance with any other covenant specified in a supplemental indenture
respecting such series or Tranches. (Section 6.09.)
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Events of Default
Each of the following events constitutes an Event of Default under the
New Mortgage:
(1) failure to pay interest on any Mortgage Bond within 60
days after the same becomes due;
(2) failure to pay principal or premium, if any, on any
Mortgage Bond within 15 days after its Maturity;
(3) failure to perform or breach of any covenant or warranty
of the Company in the New Mortgage (other than a covenant or a warranty
a default in the performance of which or breach of which is dealt with
elsewhere under this paragraph) for a period of 60 days after there has
been given to the Company by the New Mortgage Trustee, or to the
Company and the New Mortgage Trustee by the Holders of at least 50% in
principal amount of Outstanding Mortgage Bonds, a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default," unless the New
Mortgage Trustee, or the New Mortgage Trustee and the Holders of a
principal amount of Mortgage Bonds not less than the principal amount
of Mortgage Bonds the Holders of which gave such notice, as the case
may be, agree in writing to an extension of such period prior to its
expiration; provided, however, that the New Mortgage Trustee, or the
New Mortgage Trustee and such Holders, as the case may be, will be
deemed to have agreed to an extension of such period if corrective
action has been initiated by the Company within such period and is
being diligently pursued;
(4) certain events relating to reorganization, bankruptcy
and insolvency of the Company and appointment of a receiver or trustee
for its property; or
(5) the occurrence of an Event of Default under any Class
"A" Mortgage such that the maturity of amounts due thereunder may be
accelerated; provided that the waiver or cure of any such Event of
Default and the rescission and annulment of the consequences thereof
shall constitute a waiver of the corresponding Event of Default under
the New Mortgage and a rescission and annulment of the consequences
thereof. (Section 10.01.)
Remedies
If an Event of Default occurs and is continuing, then the New Mortgage
Trustee or the Holders of not less than a majority in principal amount of
Mortgage Bonds then Outstanding may declare the principal amount (or if the
Mortgage Bonds are Discount Bonds, such portion of the principal amount as may
be provided for such Discount Bonds pursuant to the terms of the New Mortgage)
of all of the Mortgage Bonds together with premium, if any, and interest
accrued, if any, thereon to be immediately due and payable. At any time after
such declaration of the maturity of the Mortgage Bonds then Outstanding, but
before the sale of any of the Mortgaged Property and before a judgment or decree
for payment of money shall have been obtained by the New Mortgage Trustee as
provided in the New Mortgage, the Event or Events of Default giving rise to such
declaration of acceleration will, without further act, be deemed to have been
waived, and such declaration and its consequences will, without further act, be
deemed to have been rescinded and annulled, if:
(a) the Company has paid or deposited with the New Mortgage
Trustee a sum sufficient to pay:
(1) all overdue interest, if any, on all Mortgage
Bonds then Outstanding;
(2) the principal of and premium, if any, on any
Mortgage Bonds then Outstanding which have become due
otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in
such Mortgage Bonds; and
(3) all amounts due to the New Mortgage Trustee as
compensation and reimbursement as provided in the New
Mortgage; and
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(b) any other Event or Events of Default other than the
non-payment of the principal of Mortgage Bonds which shall have become
due solely by such declaration of acceleration, shall have been cured
or waived as provided in the New Mortgage. (Sections 10.02 and 10.17.)
The New Mortgage provides that, under certain circumstances and to the
extent permitted by law, if an Event of Default occurs and is continuing, the
New Mortgage Trustee has the power to take possession of, and to hold, operate
and manage, the Mortgaged Property, or with or without entry, sell the Mortgaged
Property. If the Mortgaged Property is sold, whether by the New Mortgage Trustee
or pursuant to judicial proceedings, the principal of the Outstanding Mortgage
Bonds, if not previously due, will become immediately due, together with
premium, if any, and any accrued interest. (Sections 10.03, 10.04 and 10.05.)
If an Event of Default occurs and is continuing, the Holders of a
majority in principal amount of the Mortgage Bonds then Outstanding will have
the right to direct the time, method and place of conducting any proceedings for
any remedy available to the New Mortgage Trustee or exercising any trust or
power conferred on the New Mortgage Trustee, provided that (a) such direction
does not conflict with any rule of law or with the New Mortgage, and could not
involve the New Mortgage Trustee in personal liability in circumstances where
indemnity would not, in the New Mortgage Trustee's sole discretion, be adequate,
(b) such direction is not unduly prejudicial to the rights of the nonassenting
Holders, and (c) the New Mortgage Trustee may take any other action deemed
proper by the New Mortgage Trustee which is not inconsistent with such
discretion. (Section 10.16.)
The New Mortgage provides that no Holder of any Mortgage Bond will have
any right to institute any proceeding, judicial or otherwise, with respect to
the New Mortgage, or for the appointment of a receiver or trustee, or for any
other remedy thereunder, unless (a) such Holder has previously given to the New
Mortgage Trustee written notice of a continuing Event of Default; (b) the
Holders of not less than a majority in aggregate principal amount of the
Mortgage Bonds then Outstanding have made written request to the New Mortgage
Trustee to institute proceedings in respect of such Event of Default and have
offered the New Mortgage Trustee reasonable indemnity against cost and
liabilities incurred in complying with such request; and (c) for 60 days after
receipt of such notice, the New Mortgage Trustee has failed to institute any
such proceeding and no direction inconsistent with such request has been given
to the New Mortgage Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of Mortgage Bonds then Outstanding.
Furthermore, no Holder will be entitled to institute any such action if and to
the extent that such action would disturb or prejudice the rights of other
Holders. (Section 10.11.) Notwithstanding that the right of a Holder to
institute a proceeding with respect to the New Mortgage is subject to certain
conditions precedent, each Holder of a Mortgage Bond has the right, which is
absolute and unconditional, to receive payment of the principal of and premium,
if any, and interest, if any, on such Mortgage Bond when due and to institute
suit for the enforcement of any such payment, and such rights may not be
impaired without the consent of such Holder. (Section 10.12.) The New Mortgage
provides that the New Mortgage Trustee give the Holders notice of any default
under the New Mortgage to the extent required by the Trust Indenture Act, unless
such default shall have been cured or waived, except that no such notice to
Holders of a default of the character described in paragraph (3) under "Events
of Default" shall be given until at least 45 days after the occurrence thereof.
(Section 11.02.) The Trust Indenture Act currently permits the New Mortgage
Trustee to withhold notice of default (except for certain payment defaults) if
the New Mortgage Trustee in good faith determines the withholding of such notice
to be in the interests of the Holders.
As a condition precedent to certain actions by the New Mortgage Trustee
in the enforcement of the lien of the New Mortgage and institution of action on
the Mortgage Bonds, the New Mortgage Trustee may require adequate indemnity
against costs, expense and liabilities to be incurred in connection therewith.
(Sections 10.11 and 11.01.)
In addition to every other right and remedy provided in the New
Mortgage, the New Mortgage Trustee may exercise any right or remedy available to
the New Mortgage Trustee in its capacity as owner and holder of Pledged Bonds
which arises as a result of a default or Matured Event of Default under any
Class "A" Mortgage, whether or not an Event of Default under the New Mortgage
has then occurred and is continuing. (Section 10.20.)
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Defeasance
Any Mortgage Bond or Bonds, or any portion of the principal amount
thereof, will be deemed to have been paid for purposes of the New Mortgage, and
the entire indebtedness of the Company in respect thereof will be deemed to have
been satisfied and discharged, if there has been irrevocably deposited with the
New Mortgage Trustee, in trust: (a) money (including Funded Cash) in the amount
which will be sufficient, or (b) Eligible Obligations (as described below),
which do not contain provisions permitting the redemption or other prepayment
thereof at the option of the issuer thereof, the principal of and the interest
on which when due, without any regard to reinvestment thereof, will provide
monies which will be sufficient, or (c) a combination of (a) and (b) which will
be sufficient, to pay when due the principal of and premium, if any, and
interest, if any, due and to become due on such Mortgage Bond or Bonds or
portions thereof. (Section 9.01.) For this purpose, Eligible Obligations include
direct obligations of, or obligations unconditionally guaranteed by, the United
States of America, entitled to the benefit of the full faith and credit thereof,
and certificates, depositary receipts or other instruments which evidence a
direct ownership interest in such obligations or in any specific interest or
principal payments due in respect thereof.
While there is no legal precedent directly on point, it is possible
that, for federal income tax purposes, any deposit contemplated in the preceding
paragraph could be treated as a taxable exchange of the related Mortgage Bonds
for an issue of obligations of the trust or a direct interest in the cash and
securities held in the trust. In that case, Holders of such Mortgage Bonds would
recognize gain or loss as if the trust obligations or the cash or securities
deposited, as the case may be, had actually been received by them in exchange
for their Mortgage Bonds. Such Holders thereafter would be required to include
in income a share of the income, gain or loss of the trust. The amount so
required to be included in income could be different from the amount that would
be includible in the absence of such deposit. Prospective investors are urged to
consult their own tax advisors as to the specific consequences to them of such
deposit.
Resignation of the New Mortgage Trustee
The New Mortgage Trustee may resign at any time by giving written
notice thereof to the Company or may be removed at any time by Act of the
Holders of a majority in principal amount of Mortgage Bonds then Outstanding
delivered to the New Mortgage Trustee and the Company. No resignation or removal
of the New Mortgage Trustee and no appointment of a successor trustee will
become effective until the acceptance of appointment by a successor trustee in
accordance with the requirements of the New Mortgage. In addition, so long as no
Event of Default or event which, after notice or lapse of time, or both, would
become an Event of Default has occurred and is continuing, under certain
circumstances, if the Company has delivered to the New Mortgage Trustee a
resolution of its Board of Directors appointing a successor trustee and such
successor has accepted such appointment in accordance with the terms of the New
Mortgage, the New Mortgage Trustee will be deemed to have resigned and the
successor will be deemed to have been appointed as trustee in accordance with
the New Mortgage.
(Section 11.10.)
Concerning the New Mortgage Trustee
The Bank of New York, the Trustee under the New Mortgage, has been a
regular depositary of funds of the Company. As trustee under both the New
Mortgage and the First Mortgage, The Bank of New York may have a conflicting
interest for purposes of the Trust Indenture Act if an Event of Default were to
occur under either Mortgage. In that case, the New Mortgage Trustee may be
required to eliminate such conflicting interest by resigning either as New
Mortgage Trustee or as First Mortgage Trustee. There are other instances under
the Trust Indenture Act which would require the resignation of the New Mortgage
Trustee, such as an affiliate of the New Mortgage Trustee acting as underwriter
with respect to any of the Mortgage Bonds.
The Company and certain of its subsidiaries maintain deposit accounts
and conduct other banking transactions with The Bank of New York in the ordinary
course of their businesses. The Bank of New York also acts as trustee under
certain indentures relating to borrowings by or for the benefit of the lessors
to finance their acquisition of the Company's interest in the Perry Nuclear
Power Plant and Beaver Valley Power Station in connection with the sale and
leaseback of certain undivided interests in those plants. Under the
sale/leaseback
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documents, the Company is ultimately responsible for the payment of this
indebtedness. The Bank of New York also acts as trustee under the trust
agreement, guarantee and indenture relating to a series of preferred securities
issued by a trust subsidiary of the Company.
Transfer or Exchange
The transfer of the Mortgage Bonds may be registered, and Mortgage
Bonds may be exchanged for other Mortgage Bonds of the same series and Tranche,
of authorized denominations and of like tenor and aggregate principal amount, at
the office of the Company, as Bond Registrar for the Mortgage Bonds, in New
York, New York. The Company may change the place for registration of transfer of
the Mortgage Bonds, may appoint one or more additional Bond Registrars
(including the Company) and may remove any Bond Registrar, all at its
discretion. (Section 6.02.) The applicable Prospectus Supplement will identify
any new place for registration of transfer and additional Bond Registrar
appointed, and will disclose the removal of any Bond Registrar effected, prior
to the date of such Prospectus Supplement. Except as otherwise provided in the
applicable Prospectus Supplement, no service charge will be made for any
transfer or exchange of the Mortgage Bonds, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of the
Mortgage Bonds. The Company will not be required to issue, and no Bond Registrar
will be required to register, the transfer of or to exchange (a) Mortgage Bonds
of any series (including the Mortgage Bonds) during a period of 15 days prior to
giving any notice of redemption, or (b) any Mortgage Bond selected for
redemption in whole or in part, except the unredeemed portion of any Mortgage
Bond being redeemed in part. (Section 3.05.)
BOOK-ENTRY ONLY SYSTEM
A particular series of Offered Bonds may be issued initially under a
book-entry only system, registered in the name of Cede & Co., as registered
bondholder and nominee for DTC. DTC will act as securities depository for such
Offered Bonds. Individual purchases of Book-Entry Interests (as defined herein)
in any Offered Bonds will be made in book-entry form. Purchasers of Book-Entry
Interests will not receive certificates representing their interests in such
Offered Bonds. So long as Cede & Co., as nominee of DTC, is the bondholder,
references herein to the bondholders or registered owners of Offered Bonds will
mean Cede & Co., rather than the owners of Book- Entry Interests in such Offered
Bonds.
DTC is a limited purpose trust company organized under the banking laws
of the State of New York and a "banking organization" within the meaning of that
law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act, as
amended. DTC holds securities deposited by its participants (the "DTC
Participants") and facilitates the settlement of securities transactions among
DTC Participants in such securities through electronic computerized book-entry
changes in accounts of the DTC Participants, thereby eliminating the need for
physical movement of securities certificates. Direct DTC Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations, some of whom, together with the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. own DTC. Access to the DTC system is also available
to others such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a DTC Participant, either directly or
indirectly (the "Indirect Participants").
DTC Participants purchasing Book-Entry Interests (as defined below) in
any Offered Bonds will not receive certificates. Each DTC Participant will
receive a credit balance in the records of DTC in the amount of such DTC
Participant's interest in such Offered Bonds, which will be confirmed in
accordance with DTC's standard procedures. The ownership interest of each actual
purchaser of a Book-Entry Interest in an Offered Bond (the "Book-Entry
Interests") will be recorded through the records of the DTC Participant or
through the records of the Indirect Participant. Owners of Book-Entry Interests
should receive from the DTC Participant or Indirect Participant a written
confirmation of their purchase providing details of the Book-Entry Interests
acquired. Transfers of Book-Entry Interests will be accomplished by book entries
made by the DTC Participants or Indirect Participants who act on behalf of the
owners of Book-Entry Interests. Owners of Book-Entry Interests will not receive
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certificates representing their ownership of Book-Entry Interests with respect
to any related Offered Bonds except as described below upon the resignation of
DTC.
Under the New Mortgage, payments made to DTC or its nominee with
respect to the Offered Bonds will satisfy the Company's obligations under the
New Mortgage to the extent of the payments so made. Owners of Book-Entry
Interests in the Offered Bonds will not be or be considered by the Company or
the New Mortgage Trustee to be, and will not have any rights as, holders of
Offered Bonds under the New Mortgage.
NEITHER THE COMPANY NOR THE NEW MORTGAGE TRUSTEE NOR ANY OF THEIR
AGENTS WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO ANY DTC PARTICIPANT,
INDIRECT PARTICIPANT OR ANY OWNER OF A BOOK-ENTRY INTEREST OR ANY OTHER PERSON
NOT SHOWN ON THE REGISTRATION BOOKS OF THE NEW MORTGAGE TRUSTEE OR ANY BOND
REGISTRAR AS BEING A BONDHOLDER WITH RESPECT TO: (1) ANY OFFERED BONDS; (2) THE
ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DTC PARTICIPANT OR INDIRECT
PARTICIPANT; (3) THE PAYMENT BY DTC OR ANY DTC PARTICIPANT OR INDIRECT
PARTICIPANT OF ANY AMOUNT DUE TO ANY OWNER OF A BOOK-ENTRY INTEREST IN RESPECT
OF THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON ANY OFFERED BONDS; (4)
THE DELIVERY BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE
TO ANY OWNER OF A BOOK-ENTRY INTEREST WHICH IS REQUIRED OR PERMITTED UNDER THE
TERMS OF THE NEW MORTGAGE TO BE GIVEN TO BONDHOLDERS; (5) THE SELECTION OF THE
OWNERS OF A BOOK-ENTRY INTEREST TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL
REDEMPTION OF ANY OFFERED BONDS; OR (6) ANY CONSENT GIVEN OR OTHER ACTION TAKEN
BY DTC OR ITS NOMINEE AS THE HOLDER OF ANY OFFERED BONDS.
Principal and redemption price of, and interest on, Offered Bonds
registered in the name of DTC or its nominee will be made to DTC or such
nominee, as registered owner of such Offered Bonds. DTC is responsible for
disbursing such payments to the appropriate DTC Participants and such DTC
Participants, and any Indirect Participants, are in turn responsible for
disbursing the same to the owners of Book-Entry Interests. Unless it has reason
to believe it will not receive payment, DTC's current practice is to credit the
accounts of the DTC Participants on a payment date in accordance with their
respective holdings shown on the records of DTC. Payments by DTC Participants
and Indirect Participants to owners of Book-Entry Interests will be governed by
standing 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 such DTC Participant or
Indirect Participant and not of DTC, the Company or the New Mortgage Trustee,
subject to any statutory and regulatory requirements as may be in effect from
time to time.
DTC Participants and Indirect Participants carry the "position" of the
ultimate Book-Entry Interest owner on their records, and will be responsible for
providing information to the ultimate Book-Entry Interest owner as to the
Offered Bonds in which the Book-Entry Interest is held, debt service payments
received, and other information. Each person for whom a DTC Participant or
Indirect Participant acquires an interest in Offered Bonds, as nominee, may
desire to make arrangements with such DTC Participant or Indirect Participant to
receive a credit balance in the records of such DTC Participant or Indirect
Participant, to have all notices of redemption or other communications to or by
DTC which may affect such persons forwarded in writing by such DTC Participant
or Indirect Participant, and to have notification made of all debt service
payments.
Purchases, transfers and sales of Book-Entry Interests by the ultimate
Book-Entry Interest owners may be made through book entries made by DTC
Participants or Indirect Participants or others who act for the ultimate
Book-Entry Interest owner. The New Mortgage Trustee, the Company and the
underwriters have no role in those purchases, transfers or sales.
Owners of Book-Entry Interests may be charged a sum sufficient to cover
any tax, fee, or other governmental charge that may be imposed in relation to
any transfer or exchange of a Book-Entry Interest.
The Company, any Bond Registrar, any Paying Agent and the New Mortgage
Trustee will recognize and treat DTC (or any successor securities depository) or
its nominee as the holder of Offered Bonds registered in its name or the name of
its nominee for all
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purposes, including payment of debt service, notices, enforcement of remedies
and voting. Under DTC's current practice, a proxy will be given to the DTC
Participants holding Book-Entry Interests in Offered Bonds in connection with
any matter on which holders of such Offered Bonds are asked to vote or give
their consent. Crediting of debt service payments and transmittal of notices and
other communications by DTC to DTC Participants, by DTC Participants to Indirect
Participants and by DTC Participants and Indirect Participants to the ultimate
Book-Entry Interest owners are the responsibility of those persons and will be
handled by arrangements among them and are not the responsibility of the New
Mortgage Trustee, the Company or the underwriters involved in the sale of the
Offered Bonds.
The Company, any Bond Registrar or the New Mortgage Trustee, so long as
a book-entry system is used for any series of Offered Bonds, will send any
notice of redemption and any other notices required by the New Mortgage to be
sent to holders of such Offered Bonds only to DTC (or such successor securities
depository) or its nominee. Any failure of DTC to advise any DTC Participant, or
of any DTC Participant or Indirect Participant to notify the Book-Entry Interest
owner, of any such notice and its content or effect will not affect the validity
of the redemption of the Offered Bonds called for redemption, or any other
action premised on that notice. In the event of a call for redemption, the
Company's, any Bond Registrar's or the New Mortgage Trustee's notification to
DTC will initiate DTC's standard call process, and, in the event of a partial
call, its lottery process by which the call will be randomly allocated to DTC
Participants holding positions in the Offered Bonds to be redeemed. When DTC and
DTC Participants allocate the call for redemption, the owners of the Book-Entry
Interests that have been called should be notified by the broker or other person
responsible for maintaining the records of those interests and subsequently
credited by that person with the proceeds once such Offered Bonds are redeemed.
The Company, any paying Agent, the New Mortgage Trustee and any
underwriter or agent cannot and do not give any assurances that DTC, DTC
Participants or others will distribute debt service on Offered Bonds made to DTC
or its nominee as the registered owner, or any redemption or other notices, to
the Book-Entry Interest owners, or that they will do so on a timely basis, or
that DTC will serve and act in the manner described in this Prospectus.
The Company understands that the current "Rules" applicable to DTC are
on file with the Commission, and that the current "Procedures" of DTC to be
followed in dealing with DTC Participants are on file with DTC.
If DTC is at any time unwilling or unable to continue as depository,
and a successor depository is not appointed by the Company within 90 days, the
Company will issue individual certificates to owners of Book-Entry Interests in
exchange for the Offered Bonds held by DTC or its nominee. In such instance, an
owner of a Book- Entry Interest will be entitled to physical delivery of
certificates equal in principal amount to such Book-Entry Interest and to have
such certificates registered in its name. Individual certificates of Offered
Bonds so issued will be issued in denominations of $1,000 or any multiple
thereof.
LEGAL OPINIONS
Anthony J. Alexander, Esq., Akron, Ohio, who is Senior Vice President
and General Counsel of the Company, has rendered an opinion to the Company as to
the legality of the Mortgage Bonds offered hereby. Mr. Alexander and Winthrop,
Stimson, Putnam & Roberts, One Battery Park Plaza, New York, N.Y. 10004-1490,
also counsel for the Company, will render opinions to any underwriters or agents
as to the legality of any Offered Bonds. Simpson Thacher & Bartlett (a
partnership which includes professional corporations), 425 Lexington Avenue, New
York, N.Y. 10017-3954, will act as counsel for any underwriters or agents and
will render an opinion to them as to certain legal matters.
EXPERTS
The audited consolidated financial statements and related schedule
incorporated by reference or included in the Company's Annual Report on Form
10-K, incorporated by reference in this Prospectus, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports
dated February 8, 1996 with
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respect thereto, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports. Reference is made to said reports which include an explanatory
paragraph with respect to certain changes in accounting methods as discussed in
the Notes to the consolidated financial statements.
With respect to the unaudited interim consolidated financial
information for the quarter ended March 31, 1996 and 1995 incorporated by
reference herein, Arthur Andersen LLP has applied limited procedures in
accordance with professional standards for reviews of that information. However,
their separate report thereon states that they did not audit and they do not
express an opinion on that interim consolidated financial information.
Accordingly, the degree of reliance on their reports on that information should
be restricted in light of the limited nature of the review procedures applied.
In addition, the accountants are not subject to the liability provisions of
Section 11 of the Act for their report on the unaudited interim consolidated
financial information because that report is not a "report" or "part" of the
registration statement prepared or certified by the accountants within the
meaning of Sections 7 and 11 of the Act.
The statements as to matters of law and legal conclusions included in
the Company's Annual Report on Form 10-K and Form 10-Q Report incorporated
herein by reference, and such statements included herein, have been prepared
under the supervision of, and reviewed by, Anthony J. Alexander, Esq., Akron,
Ohio, who is Senior Vice President and General Counsel of the Company, and such
statements have been incorporated by reference or included herein upon his
authority as an expert.
PLAN OF DISTRIBUTION
The Company may sell the Mortgage Bonds (i) through underwriters or
dealers, (ii) directly to a limited number of institutional purchasers or to a
single purchaser, (iii) through agents or (iv) through any combination of the
above. An accompanying Prospectus Statement will set forth the terms of the
offering of the Offered Bonds, including the name or names of any underwriters,
the purchase price of the Offered Bonds and the net proceeds to the Company from
such sale, any underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers.
If underwriters are used in the sale, the Mortgage Bonds will be
acquired by the underwriters for their own account and may be resold from time
to time 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 Mortgage Bonds may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more underwriting firms. The underwriter or underwriters with respect to a
particular underwritten offering of Offered Bonds will be named in the
Prospectus Supplement relating to such offering and, if an underwriting
syndicate is used, the managing underwriter or underwriters will be set forth on
the cover page of such Prospectus Supplement. Unless otherwise set forth in the
Prospectus Supplement, the several obligations of the underwriters to purchase
the Offered Bonds will be subject to certain conditions precedent and the
underwriters will be obligated to take and pay for all of the Offered Bonds if
any are taken.
The Mortgage Bonds may be sold directly by the Company or through
agents designated by the Company from time to time. Any agent involved in the
offer or sale of the Offered Bonds will be named, and any commissions payable by
the Company to such agent will be set forth, in an accompanying Prospectus
Supplement. Unless otherwise indicated in such Prospectus Supplement, any such
agent will be acting on a best efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will
authorize underwriters or dealers to solicit offers by certain specified
institutions to purchase Mortgage Bonds from the Company at the public offering
price set forth in the Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the future.
Such contracts will be subject to those conditions set forth in the Prospectus
Supplement, and the Prospectus Supplement will set forth the commission payable
for solicitation of such contracts.
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Agents, dealers and underwriters may be entitled, under agreements
entered into with the Company, to indemnification by the Company against certain
civil liabilities, including liabilities under the Securities Act of
1933, as
amended.1933. As of the date hereof, $1,505,600 aggregate principal amount of such bonds
remains outstanding under the Registration Statement (the "Outstanding
Securities"). The placeCompany does not intend to sell any of the Outstanding
Securities, and timethe offering contemplated by the Registration Statement has
terminated. Therefore, in accordance with the applicable undertaking of delivery for the
Offered Bonds in respect of
which this Prospectus is delivered areCompany set forth in the accompanying Prospectus
Supplement.
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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Filing fees--Securities and Exchange Commission ................................................ $ 17,242
Printing and composition of registration statement, prospectus, etc. ........................... 80,000
Services of Trustee and its counsel ............................................................ 48,300
Services of Counsel - Winthrop, Stimson, Putnam & Roberts....................................... 75,000
Services of accountants--Arthur Andersen LLP. .................................................. 25,000
Blue Sky fees and expenses ..................................................................... 15,000
Rating fees:
Moody's Investors Service, Inc. ....................................................... 15,000
Standard & Poor's Corporation ......................................................... 10,000
Duff & Phelps.......................................................................... 10,000
Miscellaneous .................................................................................. 4,458
-------
Total............................................................................ $300,000
========
All of the above amounts, other than the filing fees, are estimates.
Item 15. Indemnification of Directors and Officers.
Section 1701.13(E) of Title 17 of Page's Ohio Revised Code
Annotated gives a corporation incorporated under the laws of Ohio power to
indemnify any person who is or has been a director, officer or employee of that
corporation, or of another corporation at the request of that corporation,
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with any threatened, pending or
completed action, suit or proceeding, criminal or civil, to which he is or may
be made a party because of being or having been such director, officer or
employee, provided that in connection therewith, such person is determined to
have acted in good faith in what he reasonably believed to be in or not opposed
to the best interest of the corporation of which he is a director, officer or
employee, without reasonable cause, in the case of a criminal matter, to believe
that his conduct was unlawful. The determination as to the conditions precedent
to the permitted indemnification of such person is made by the directors of the
indemnifying corporation acting at a meeting at which, for the purpose, any
director who is a party to or threatened with any such action, suit or
proceeding may not be counted in determining the existence of a quorum and may
not vote. If, because of the foregoing limitations, the directors are unable to
act in this regard, such determination may be made by the majority vote of the
corporation's voting shareholders (or without a meeting upon two-thirds written
consent of such shareholders), by judicial proceeding or by written opinion of
legal counsel not retained by the corporation or any person to be indemnified
during the five years preceding the date of determination.
Section 36 of The Company Company's Code of Regulations provides as
follows:
"The Corporation shall indemnify any person who is or was a
director, officer, employee or agent of the Corporation or any person
who is or has served at the request of the Corporation as a director,
officer, employee, agent or trustee of another corporation, joint
venture, trust or other enterprise (as his heirs, executors and
administrators) against expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement, actually and reasonably incurred
by him by reason of the fact that he is or was such director, officer,
employee, agent or trustee in connection with any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative to the full extent and according to the
procedures and requirements set forth in any applicable law as the same
may be in effect from time to time."
II-1
The following resolution was adopted by the Board of Directors ofRegistration Statement, the Company on December 19, 1995:
"RESOLVED, FURTHER: That, in additionis filing this
Post-Effective Amendment No. 1 to and not in derogation
of any other indemnity that may be available, with respect toremove the preparation and filing of registration statement or registration
statements with theOutstanding Securities and Exchange Commission in connection
with the proposed issuance and sale of the long-term indebtedness, the
Equity Securities and/or preferred stock issued in connection with the
Company's issuance of any Preferred Stock Note authorized at this
meeting, this Company is hereby authorized and directed to indemnify
and save harmless each and every officer and employee of the Company
executing and preparing any such registration statement in its original
or amended form and every director of the Company who was a director
thereof at the time of the filing of any such registration statement in
its original or amended form, against any and all expenses reasonably
incurred by them or any of them in connection with any action, suit or
proceeding arising out of the preparation, filing or use of any such
registration statement or the related prospectus whether brought under
the Securities Act of 1933 as amended, or under any other applicable
law where such action, suit or proceeding is finally adjudicated in
favor of such director, officer or employee and the time to appeal has
expired;"
Section 1701.13(E) of Title 17 of Page's Ohio Revised Code Annotated
provides that the indemnification thereby permitted shall not be exclusive of
any other rights that directors, officers or employees may have, including
rights under insurance purchased by the corporation. The Company has insurance
covering, subject to certain deductible provisions, its liabilities and expenses
which might arise in connection with its lawful indemnification of its directors
and officers for certain of their liabilities and expenses and also covering,
subject to certain deductible provisions, its officers against certain other
liabilities.
Item 16. Exhibits.
Exhibit
Number
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(1) - Form of Underwriting Agreement with respect to the New Bonds
(to be filed by amendment).
(4)(a) - Draft of the form of the New Bonds. The form of the New Bonds
is set forth in the form of Supplemental Indenture, Exhibit
(4)(c) hereto, to which reference is hereby made.
(4)(b) - Form of General Mortgage Indenture and Deed of Trust to be
dated as of June 1, 1996 between the Company and The Bank of
New York, as Trustee.
(4)(c) - Form of Supplemental Indenture for New Bonds (to be filed by
amendment).
(4)(d) - Indenture dated as of August 1, 1930 between the Company and
The Bank of New York (as successor to Bankers Trust Company),
as Trustee, as amended and supplemented by Supplemental
Indentures dated as of August 1, 1930, March 3, 1931, November
1, 1935, January 1, 1937, September 1, 1937, June 13, 1939,
August 1, 1974, July 1, 1976, December 1, 1976, and June 15,
1977 (which Indenture and Supplemental Indentures are hereby
incorporated by reference to the following filings in which
each has been respectively physically filed: Exhibits B-1,
B-1(a) and B-1(b) in Registration No. 2-1725; Exhibit B-4 in
Registration No. 2-2721; Exhibit B-5 in Registration No.
2-3402; Exhibit B-6 in Form 8-A, File No. 1-2578-B; Exhibit
7(a)-7 in Registration No. 2-5462; Exhibit 2(b) in Form 8-A
dated August 28, 1974, File No. 1-2578; Exhibit 2(b) in Form
8-A dated July 28, 1976, File No. 1-2578; Exhibit 2(b) in Form
8-A dated December 15, 1976, File No. 1-2578; and Exhibit 2(b)
in Form 8-A dated June 27, 1977, File No. 1-2578).
(4)(e) - Supplemental Indentures dated as of September 1, 1944, April
1, 1945, September 1, 1948, May 1, 1950, January 1, 1954, May
1, 1955, August 1, 1956, March 1, 1958, April 1, 1959, June 1,
1961, September 1, 1969, May 1, 1970, September 1, 1970, June
1, 1971, August 1, 1972, September 1, 1973, May 15,
II-2
1978, February 1, 1980, April 15, 1980, June 15, 1980, October
1, 1981, October 15, 1981, February 15, 1982, July 1, 1982,
March 1, 1983, March 1, 1984, September 15, 1984, September
27, 1984, November 8, 1984, December 1, 1984, December 5,
1984, January 30, 1985, February 25, 1985, July 1, 1985,
October 1, 1985, January 15, 1986, May 20, 1986, June 3, 1986,
October 1, 1986, July 15, 1989, August 25, 1989, February 15,
1991, May 1, 1991, May 15, 1991, September 15, 1991, April 1,
1992, June 15, 1992, September 15, 1992, April 1, 1993, June
15, 1993, September 15, 1993, November 15, 1993, April 1,
1995, May 1, 1995 and July 1, 1995. (Physically filed and
designated in Registration No. 2-61146, as Exhibit 2(b)2, in
Registration No. 2-66957, as Exhibits (b)(4) and (b)(5), in
Registration No. 2-68023 as Exhibits (b)(4) and (b)(5), in
Registration No. 2-74059 as Exhibit (4)d, in Registration No.
2-75917 as Exhibits (4)e and (4)f, in Registration No. 2-89360
as Exhibits (4)(d), (4)(e) and (4)(f), in Registration No.
2-92918 as Exhibit (4)(d), in Registration No. 33-2576 as
Exhibits 4(d) and 4(e), in Registration No. 33-8791 as
Exhibits 4(d) and 4(e), in Registration No. 33-29827 as
Exhibits (4)(d) and (4)(e), in Registration No. 33-34663 as
Exhibits (4)(d) and (4)(e), in Registration No. 33-39713 as
Exhibits (4)(d) and (4)(e), in Registration No. 33-45751 as
Exhibits 4(d) and 4(e), in Registration No. 33-48931 as
Exhibits (4)(d) and 4(e), in Registration No. 33-49413 as
Exhibit (4)(d), in Registration No. 33-51139 as Exhibit
(4)(d), in 1994 Form 10-K (File No. 1-2578) as Exhibit (4)(2)
and in 1995 Form 10-K (File No. 1-2578) as Exhibit (4)(2)).
(4)(f) - Form of Supplemental Indenture for Pledged Bonds (to be filed
by amendment).
(5) - Opinion of Counsel.
(12) - Computation of consolidated ratios of earnings to fixed
charges.
(15) - Letter of Arthur Andersen LLP regarding unaudited interim
financial information.
(23)(a) - Consent of Arthur Andersen LLP.
(23)(b) - Consent of Anthony J. Alexander, Esq. (contained in Exhibit 5
hereto).
(24) - Power of Attorney (set forth on the signature pages of the
Registration Statement).
(25) - Statement of Eligibility of Trustee.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933, as
amended (the "Act"); (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 end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Securities and Exchange Commission (the "Commission")
pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; (iii) to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement; provided, however, that (i) and (ii) do not apply if the
information required to be included in a post-effective amendment is contained
in periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), that are incorporated by reference in the
registration statement.
II-3
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Act, each
filing of the registrant's annual report pursuant to section 13(a) or section
15(d) of the 1934 Act 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.
(5) Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the 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 the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question 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.
(6) That for purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Act shall be deemed to be part of this registration statement as of
the time it was declared effective.
(7) That for purposes of determining any liability under the Act, 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.
II-4
Each of the undersigned directors and officers of the Registrant,
individually as such director and/or officer, hereby makes, constitutes and
appoints H. P. Burg, N. C. Ashcom, J. H. Byington and M. F. Cusick, and each of
them severally, as his true and lawful attorney-in-fact and agent to execute in
his name, place and stead, in any and all capacities, and to file with the
Commission, this registration statement and any and all amendments, including
post-effective amendments, to this registration statement pursuant to the above
undertaking, which amendment may make such other changes in the registration
statement as the registrant deems appropriate.registration.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the RegistrantCompany
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
StatementPost-Effective
Amendment No. 1 to the registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Thethe City of Akron, and State of Ohio, on
the 5th15th day of June, 1996.May, 2003.
OHIO EDISON COMPANY
By: /s/ W.R. HOLLAND
---------------------------
W.R. Holland(Registrant)
-------------------------------------------
H. Peter Burg
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statementregistration statement has been signed below by the following persons in the
capacities and on the datesdate indicated.
Name Title Date
---- ----- ----
W.R. HOLLAND President and Chief Executive June 5, 1996
- ------------------------ Officer and Director (Principal
(W.R. Holland) Executive Officer)
H.P. BURG Senior Vice President and Director June 5, 1996
- ------------------------ (Principal Financial Officer and
(H.P. Burg) Principal Accounting Officer)
DONALD C. BLASIUS Director June 5, 1996
- ------------------------
(Donald C. Blasius)
ROBERT M. CARTER Director June 5, 1996
- ------------------------
(Robert M. Carter)
CAROL A. CARTWRIGHT Director June 5, 1996
- ------------------------
(Carol A. Cartwright)
R.L. LOUGHHEAD Director June 5, 1996
- ------------------------
(R.L. Loughhead)
RUSSELL W. MAIER Director June 5, 1996
- ------------------------
(Russell W. Maier)
GLENN H. MEADOWS Director June 5, 1996
- ------------------------
(Glenn H. Meadows)
PAUL J. POWERS Director June 5, 1996
- ------------------------
(Paul J. Powers)
CHARLES W. RAINGER Director June 5, 1996
- ------------------------
(Charles W. Rainger)
GEORGE M. SMART Director June 5, 1996
- ------------------------
(George M. Smart)
JESSE T. WILLIAMS, SR. Director June 5, 1996
- ------------------------
(Jesse T. Williams, Sr.)
EXHIBIT INDEX
Exhibit
Number
- -------
(1) - Form of Underwriting Agreement with respect to the New Bonds
(to be filed by amendment).
(4)(a) - Draft of the form of the New Bonds. The form of the New Bonds
is set forth in the form of Supplemental Indenture, Exhibit
(4)(c) hereto, to which reference is hereby made.
(4)(b) - Form of General Mortgage Indenture and Deed of Trust to be
dated as of June 1, 1996 between the Company and The Bank of
New York, as Trustee.
(4)(c) - Form of Supplemental Indenture for New Bonds (to be filed by
amendment).
(4)(d) - Indenture dated as of August 1, 1930 between the Company and
The Bank of New York (as successor to Bankers Trust Company),
as Trustee, as amended and supplemented by Supplemental
Indentures dated as of August 1, 1930, March 3, 1931, November
1, 1935, January 1, 1937, September 1, 1937, June 13, 1939,
August 1, 1974, July 1, 1976, December 1, 1976, and June 15,
1977 (which Indenture and Supplemental Indentures are hereby
incorporated by reference to the following filings in which
each has been respectively physically filed: Exhibits B-1,
B-1(a) and B-1(b) in Registration No. 2-1725; Exhibit B-4 in
Registration No. 2-2721; Exhibit B-5 in Registration No.
2-3402; Exhibit B-6 in Form 8-A, File No. 1-2578-B; Exhibit
7(a)-7 in Registration No. 2-5462; Exhibit 2(b) in Form 8-A
dated August 28, 1974, File No. 1-2578; Exhibit 2(b) in Form
8-A dated July 28, 1976, File No. 1-2578; Exhibit 2(b) in Form
8-A dated December 15, 1976, File No. 1-2578; and Exhibit 2(b)
in Form 8-A dated June 27, 1977, File No. 1-2578).
(4)(e) - Supplemental Indentures dated as of September 1, 1944, April
1, 1945, September 1, 1948, May 1, 1950, January 1, 1954, May
1, 1955, August 1, 1956, March 1, 1958, April 1, 1959, June 1,
1961, September 1, 1969, May 1, 1970, September 1, 1970, June
1, 1971, August 1, 1972, September 1, 1973, May 15, 1978,
February 1, 1980, April 15, 1980, June 15, 1980, October 1,
1981, October 15, 1981, February 15, 1982, July 1, 1982, March
1, 1983, March 1, 1984, September 15, 1984, September 27,
1984, November 8, 1984, December 1, 1984, December 5, 1984,
January 30, 1985, February 25, 1985, July 1, 1985, October 1,
1985, January 15, 1986, May 20, 1986, June 3, 1986, October 1,
1986, July 15, 1989, August 25, 1989, February 15, 1991, May
1, 1991, May 15, 1991, September 15, 1991, April 1, 1992, June
15, 1992, September 15, 1992, April 1, 1993, June 15, 1993,
September 15, 1993, November 15, 1993, April 1, 1995, May 1,
1995 and July 1, 1995. (Physically filed and designated in
Registration No. 2-61146, as Exhibit 2(b)2, in Registration
No. 2-66957, as Exhibits (b)(4) and (b)(5), in Registration
No. 2-68023 as Exhibits (b)(4) and (b)(5), in Registration No.
2-74059 as Exhibit (4)d, in Registration No. 2-75917 as
Exhibits (4)e and (4)f, in Registration No. 2-89360 as
Exhibits (4)(d), (4)(e) and (4)(f), in Registration No.
2-92918 as Exhibit (4)(d), in Registration No. 33-2576 as
Exhibits 4(d) and 4(e), in Registration No. 33-8791 as
Exhibits 4(d) and 4(e), in Registration No. 33-29827 as
Exhibits (4)(d) and (4)(e), in Registration No. 33-34663 as
Exhibits (4)(d) and (4)(e), in Registration No. 33-39713 as
Exhibits (4)(d) and (4)(e), in Registration No. 33-45751 as
Exhibits 4(d) and 4(e), in Registration No. 33-48931 as
Exhibits (4)(d) and 4(e), in Registration No. 33-49413 as
Exhibit (4)(d), in Registration No. 33-51139 as Exhibit
(4)(d), in 1994 Form 10-K (File No. 1-2578) as Exhibit (4)(2)
and in 1995 Form 10-K (File No. 1-2578) as Exhibit (4)(2)).
(4)(f) - Form of Supplemental Indenture for Pledged Bonds (to be filed
by amendment).
(5) - Opinion of Counsel.
(12) - Computation of consolidated ratios of earnings to fixed
charges.
(15) - Letter of Arthur Andersen LLP regarding unaudited interim
financial information.
(23)(a) - Consent of Arthur Andersen LLP.
(23)(b) - Consent of
- ------------------------------------- President and Director May 15, 2003
H. Peter Burg (Principal Executive Officer)
- ------------------------------------- Senior Vice President and May 15, 2003
Richard H. Marsh Chief Financial Officer and Director
(Principal Financial Officer)
- ------------------------------------- Vice President and Controller May 15, 2003
Harvey L. Wagner (Principal Accounting Officer)
- ------------------------------------- Director May 15, 2003
Anthony J. Alexander
Esq. (contained in Exhibit 5
hereto).
(24) - Power of Attorney (set forth on the signature pages of the
Registration Statement).
(25) - Statement of Eligibility of Trustee.