As filed with the Securities and Exchange Commission on September 17, 2003 | |
Registration No. 333- | |
SECURITIES AND EXCHANGE COMMISSION | |
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NEW JERSEY | 21-0398280 |
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(Address, including zip code, and telephone number, including area code, | |
ELLEN SHERIFF ROGERS | |
(Name, address, including zip code, and telephone number, | |
Copy to: | |
Approximate date of commencement of proposed sale to the public: |
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] |
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] |
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] |
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] |
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] |
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CALCULATION OF REGISTRATION FEE |
Title of Each Class of Securities to be Registered | Proposed Maximum Aggregate Offering Price (1)(2)(3) | Amount of | |
Senior Notes | |||
First Mortgage Bonds | |||
Medium Term Notes | |||
Total | $250,000,000 | $20,225 | |
(1) | Includes an indeterminate principal amount of senior notes, first mortgage bonds and medium term notes, provided that in no event will the aggregate initial price of all senior notes, first mortgage bonds and medium term notes sold under this registration statement exceed $250,000,000. If any such securities are issued at an original issue discount, then the aggregate initial offering price as so discounted shall not exceed $250,000,000 notwithstanding that the stated principal amount of such securities may exceed such amount. | ||
(2) | Estimated solely for the purpose of determining the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. The proposed maximum initial offering price per security will be determined from time to time by the registrant in connection with the issuance of the securities. | ||
(3) | Exclusive of accrued interest on senior notes, first mortgage bonds and medium term notes, if any. | ||
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. |
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. |
SUBJECT TO COMPLETION, DATED SEPTEMBER 17, 2003 |
PROSPECTUS |
$250,000,000 |
By this prospectus, we may offer these securities from time to time in one or more series with an aggregate offering price not to exceed $250,000,000. We will provide you with specific information about the offering and the terms of these securities in supplements to this prospectus. You should read this prospectus and the relevant prospectus supplement carefully before you invest. This prospectus may not be used to sell securities unless accompanied by a prospectus supplement. |
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Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. |
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The date of this prospectus is , 2003. |
TABLE OF CONTENTS | |
Page | |
About This Prospectus | i |
Where You Can Find More Information | i |
Forward-Looking Statements | ii |
Atlantic City Electric Company | 1 |
Use of Proceeds | 2 |
Ratio of Earnings to Fixed Charges | 2 |
Description of Senior Notes | 2 |
Description of First Mortgage Bonds | 16 |
Description of Medium Term Notes | 24 |
Information About the Trustee | 33 |
Plan of Distribution | 34 |
Legal Matters | 36 |
Experts | 36 |
This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission. You should rely only on the information we have provided or incorporated by reference in this prospectus or any prospectus supplement. We have not authorized anyone to provide you with additional or different information. We are not making an offer of these securities in any jurisdiction where the offer is not permitted. You should assume that the information in this prospectus or any prospectus supplement is accurate only as of the date on the front of the document and that any information we have incorporated by reference is accurate only as of the date of the document incorporated by reference. | |
ABOUT THIS PROSPECTUS | |
This prospectus is part of a registration statement that we filed with the SEC utilizing a "shelf" registration process. Under this shelf process, we may from time to time sell any combination of the securities described in this prospectus in one or more offerings up to a total amount of $250,000,000. This prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and the relevant prospectus supplement together with additional information described under the heading "Where You Can Find More Information." | |
�� For more detailed information about the securities, you can also read the exhibits to the registration statement. The exhibits have been either filed with the registration statement or incorporated by reference to earlier SEC filings listed in the registration statement. | |
In this prospectus, unless the context indicates otherwise, the words "ACE," "the company," "we," "our," "ours" and "us" refer to Atlantic City Electric Company and its consolidated subsidiaries. | |
WHERE YOU CAN FIND MORE INFORMATION | |
We file annual, quarterly and special reports and other information with the SEC. Our SEC filings are available to the public over the internet at the SEC's web site athttp://www.sec.gov. You may also read and copy any document we file at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can obtain further information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. | |
This prospectus is part of a registration statement on Form S-3 filed with the SEC under the Securities Act of 1933, as amended. It does not contain all of the information that is important to you. You should read the registration statement for further information about us and the securities. Statements contained in this prospectus | |
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concerning the provisions of any document filed as an exhibit to the registration statement or otherwise filed with the SEC highlight selected information, and in each instance reference is made to the copy of the document filed. | ||
The SEC allows us to "incorporate by reference" the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will automatically update and may supersede this information. We incorporate by reference the documents listed below that we have filed with the SEC and any future filing that we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, from the date of filing of the initial registration statement until we sell all of the securities. | ||
· | Our Annual Report on Form 10-K for the year ended December 31, 2002; | |
· | Our Current Report on Form 8-K dated January 13, 2003; | |
· | Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2003; | |
· | Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2003; and | |
· | Our Current Report on Form 8-K dated July 24, 2003. | |
If you request copies of any of the documents incorporated by reference, we will send you the copies you requested at no charge. However, we will not send exhibits to such documents, unless such exhibits are specifically incorporated by reference in such documents. You should direct requests for such copies to Atlantic City Electric Company, 701 Ninth Street, N.W., Washington, D.C. 20068, attention: Corporate Secretary. Our telephone number is (202) 872-2900. | ||
FORWARD-LOOKING STATEMENTS | ||
Some of the statements contained in this prospectus and incorporated by reference into this prospectus are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. These statements include declarations regarding our or our management's intents, beliefs and current expectations. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of such terms or other comparable terminology. Any forward-looking statements are not guarantees of future performance, and actual results could differ materially from those indicated by the forward-looking statements. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. | ||
The forward-looking statements contained and incorporated by reference herein are qualified in their entirety by reference to the following important factors, which are difficult to predict, contain uncertainties, are beyond our control and may cause actual results to differ materially from those contained in forward-looking statements: | ||
· | Prevailing governmental policies and regulatory actions affecting the energy industry, including with respect to allowed rates of return, industry and rate structure, acquisition and disposal of assets and facilities, operation and construction of plant facilities, recovery of purchased power expenses and present or prospective wholesale and retail competition (including but not limited to retail wheeling and transmission costs); | |
· | Changes in and compliance with environmental and safety laws and policies; | |
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· | Weather conditions; | |
· | Population growth rates and demographic patterns; | |
· | Competition for retail and wholesale customers; | |
· | General economic conditions, including potential negative impacts resulting from an economic downturn; | |
· | Growth in demand, sales and capacity to fulfill demand; | |
· | Changes in tax rates or policies or in rates of inflation; | |
· | Changes in project costs; | |
· | Unanticipated changes in operating expenses and capital expenditures; | |
· | Capital market conditions; | |
· | Restrictions imposed by the Public Utility Holding Company Act of 1935, which we refer to as "PUHCA"; | |
· | Legal and administrative proceedings (whether civil or criminal) and settlements that influence our business and profitability; | |
· | Pace of entry into new markets; | |
· | Ability to secure electric and natural gas supply to fulfill sales commitments at favorable prices; | |
· | Volatility in market demand and prices for energy, capacity and fuel; | |
· | Interest rate fluctuations and credit market concerns; and | |
· | Effects of geopolitical events, including the threat of domestic terrorism. | |
Any forward-looking statements speak only as of the date of this prospectus or any prospectus supplement, and we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statements are made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict all of such factors, nor can we assess the impact of any such factor on our business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. The foregoing review of factors should not be construed as exhaustive. | ||
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ATLANTIC CITY ELECTRIC COMPANY |
We are a public utility company engaged in the generation, transmission and distribution of electricity in southern New Jersey. Our regulated service area covers about 2,700 square miles within the southern one-third of New Jersey and has a population of approximately 900,000. Under the provisions of New Jersey's 1999 Electric Discount and Energy Competition Act and orders of the New Jersey Board of Public Utilities (which we refer to as the NJBPU) concerning the restructuring of our electric utility business, we are obligated to provide default electricity supply to customers in our service area who do not choose an alternative supplier. We refer to this default supply obligation as basic generation service, or BGS. As of August 2003, we obtained all of the power needed to fulfill our BGS obligations through BGS supplier agreements entered into with the winning bidders of auctions conducted in February 2003 th at were approved by the NJBPU. The rates for BGS paid by customers were determined pursuant to the auctions. If any of the winning bidders defaults on its supply commitments, we will offer the defaulted load to other winning bidders or make arrangements to purchase the needed supply from markets administered by the Pennsylvania/New Jersey/Maryland power pool, or PJM. Any costs related to the replacement supply that are not covered by remuneration from the supplier in default will be included in the calculation of deferred electric service costs, which are subject to review by the NJBPU and recovery by us through future customer rate increases. |
We currently own fossil fuel-fired electric generating plants with 740 MW of capacity. We sell the electricity generated by these plants in the wholesale market. In May 2002, we initiated a competitive bidding process to sell these plants. In January 2003, we announced that we had terminated the competitive bidding process because conditions in the electric energy market prevented us from reaching agreements for the sale of these assets. We remain interested in selling these assets on acceptable terms, but cannot predict whether or not any or all of the plants will be sold, whether the NJBPU will grant the required approval of any sales agreements, or any related impacts upon recoverable stranded costs. |
We are an indirect wholly owned subsidiary of Pepco Holdings, Inc., or PHI, and a direct wholly owned subsidiary of Conectiv, each of which is a registered holding company under PUHCA. PHI's other subsidiaries include Potomac Electric Power Company and Delmarva Power & Light Company. PHI is a publicly held company and files periodic reports and other documents with the SEC. All members of our Board of Directors and many of our executive officers are executive officers of PHI. |
Our headquarters are located at 800 King Street, P.O. Box 231, Wilmington, DE 19899, and our telephone number is (202) 872-2000. |
USE OF PROCEEDS |
Unless otherwise set forth in a prospectus supplement, we will use the net proceeds from the sale of the securities offered by this prospectus for general corporate purposes, which may include the repayment of debt or the redemption of securities. |
RATIO OF EARNINGS TO FIXED CHARGES |
Set forth below is our ratio of earnings to fixed charges for the six months ended June 30, 2003 and for each year in the five-year period ended December 31, 2002. |
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2003 | 2002 | 2001 | 2000 | 1999 | 1998 | |||
Ratio of Earnings to Fixed Charges | 1.45 | 1.71 | 2.67 | 2.03 | 2.57 | 1.66 | ||
For purposes of calculating the ratio of earnings to fixed charges, earnings consist of net income, plus taxes based on income, plus fixed charges, which consist of interest expense, distributions on Company Obligated Mandatorily Redeemable Preferred Securities of Subsidiary Trust and interest factor in rentals, less subsidiary capitalized interest. | ||||||||
DESCRIPTION OF SENIOR NOTES | ||||||||
The following description of the senior notes sets forth some of the general terms and provisions of the senior notes that we may offer pursuant to this prospectus. The particular terms of any senior notes and the extent, if any, to which these general provisions will not apply to such senior notes will be described in the prospectus supplement relating to the senior notes. | ||||||||
The senior notes will be issued in one or more series under the indenture, dated as of , 2003, between us and The Bank of New York, as trustee. In this prospectus we refer to this indenture as the senior indenture and the trustee under the senior indenture as the senior trustee. The statements set forth below include brief summaries of some of the provisions contained in the senior indenture. These summaries do not purport to be complete and are qualified in their entirety by reference to the senior indenture, the form of which is filed as an exhibit to the registration statement of which this prospectus is a part. | ||||||||
General | ||||||||
The relevant prospectus supplement will describe the terms of the senior notes being offered, including: | ||||||||
· | the title of the senior notes; | |||||||
· | any limit on the aggregate principal amount of the senior notes; | |||||||
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· | the date or dates on which the principal of and any premium on the senior notes will be payable; | |
· | the rate or rates at which the senior notes will bear interest, if any; | |
· | the currency or currency unit of payment if other than United States dollars; | |
· | the date from which interest, if any, on the senior notes will accrue, the dates on which interest, if any, will be payable, the date on which payment of interest, if any, will commence, and the record dates for any interest payments; | |
· | our right, if any, to extend interest payment periods and the duration of any extension; | |
· | any redemption, repayment or sinking fund provisions; | |
· | the place or places where the principal of and any premium and interest on the senior notes will be payable; | |
· | the denominations in which the senior notes will be issuable; | |
· | the index, if any, with reference to which the amount of principal of or any premium or interest on the senior notes will be determined; | |
· | any addition to or change in the events of default set forth in the senior indenture applicable to the senior notes and any change in the right of the senior trustee or the holders to declare the principal amount of the senior notes due and payable; | |
· | any addition to or change in the covenants set forth in the senior indenture; and | |
· | any other terms of the senior notes not inconsistent with the provisions of the senior indenture. | |
The senior indenture does not contain any covenants or other provisions that specifically are intended to afford holders of the senior notes special protection in the event of a highly leveraged transaction. | ||
Security; Release Date | ||
General Until the release date, the payment of principal of, and any premium and interest on, each series of senior notes offered by this prospectus and the accompanying prospectus supplement will be secured by a corresponding series of first mortgage bonds issued under the mortgage described below and held by the senior trustee. See "Description of First Mortgage Bonds" below. In this prospectus we refer to first mortgage bonds held by the senior trustee as security for senior notes as collateral bonds. At any time after all first mortgage bonds issued and outstanding under the mortgage, other than collateral bonds, have been retired through payment or redemption (including first mortgage bonds "deemed to have been paid" within the meaning of Section 107 of the mortgage), so long as no default or Event of Default has occurred and is continuing under the senior indenture and certain other requirements are met, the senior trustee will surrender all collateral bonds to us on a date specified by us. We refer to this date as the release date. After the release date, the senior notes will cease to be secured by collateral bonds and will become our unsecured general obligations. (Senior Indenture, Section 1303) | ||
Delivery of Collateral Bonds | ||
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· | in an aggregate principal amount equal to or exceeding the aggregate principal amount of the senior notes of such series; | |
· | with a stated maturity date that is the same as the stated maturity date of the senior notes of such series; | |
· | bearing an interest rate equal to the interest rate borne by the senior notes of such series; | |
· | having interest payment dates that are the same as the interest payment dates of the senior notes of such series; | |
· | with the same redemption provisions, if any, as the senior notes of such series (in addition to those described below under "Description of First Mortgage Bonds - Mandatory Redemption"); and | |
· | in all other material respects conforming as nearly as is practicable to the terms of the senior notes of such series. | |
(Senior Indenture, Section 1302) | ||
· | the full and prompt payment of the principal of and premium, if any, on the corresponding series of senior notes when and as the same shall become due in accordance with the terms and provisions of the senior notes and the senior indenture, whether at stated maturity or by declaration of acceleration, call for redemption or otherwise; and | |
· | the full and prompt payment of interest on such senior notes when and as the same shall become due in accordance with the terms and provisions of the senior notes and the senior indenture. | |
(Senior Indenture, Section 1303) | ||
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Section 1302; Form of Supplemental Indenture with respect to Collateral First Mortgage Bonds, Section 1) In such event, the senior trustee is required under the senior indenture to file with us a demand for redemption of the collateral bonds. (Senior Indenture, Section 802) | ||
· | effectively securing the senior notes equally and ratably with such Indebtedness (but only so long as such Indebtedness is so secured) or | |
· | delivering to the senior trustee bonds, notes or other evidences of indebtedness secured by the Lien which secures such Indebtedness in an aggregate principal amount equal to the aggregate principal amount of the senior notes then outstanding and meeting certain other requirements set forth in the senior indenture. | |
· | Liens on Operating Property, other than the lien of the mortgage, existing on the date of the senior indenture; | |
· | any Lien existing on Operating Property existing at the time we acquire it, provided that (i) the Lien is not created in contemplation of or in connection with such acquisition and (ii) the Lien does not extend to any of our other property or assets; | |
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· | Liens on property of a corporation existing at the time such corporation is merged into or consolidated with us; provided that (i) the Lien is not created in contemplation of or in connection with such transaction and (ii) the Lien does not extend to any of our other property or assets; | |||||
· | Liens on any Operating Property that we acquire, construct or improve, if the Liens are created or incurred within 18 months after the acquisition, construction or improvement to secure or provide for the payment of any part of the purchase price of such Operating Property or the cost of such construction or improvement, including carrying costs; provided that the Liens do not apply to any of our other property; | |||||
· | Liens in favor of any state or the District of Columbia or any department, agency, or instrumentality or political subdivision thereof, or for the benefit of holders of securities issued by any such entity (or providers of credit enhancement with respect to such securities), to secure any Indebtedness incurred to finance all or part of the purchase price or the cost of constructing, developing, or substantially repairing, altering, or improving any Operating Property; | |||||
· | extensions, renewals and replacements of Liens described above, provided that any such extension, renewal or replacement Lien is limited to the property or assets covered by the Lien extended, renewed or replaced and the obligations secured by any such extension, renewal or replacement Lien are in an amount not greater than the amount of the obligations secured by the Lien extended, renewed or replaced; and | |||||
· | Liens on Operating Property resulting from any Sale and Leaseback Transaction as described below. | |||||
The senior indenture also provides that, so long as any senior notes are outstanding, after the release date we will not enter into or permit to exist any Sale and Leaseback Transaction, except this restriction will not prevent us from entering into or permitting to exist: | ||||||
· | any Sale and Leaseback Transaction involving a lease with a term of four years or shorter; | |||||
· | any Sale and Leaseback Transaction of a corporation existing at the time such corporation is merged into or consolidated with us and any extensions, renewals and replacements thereof; | |||||
· | any Sale and Leaseback Transaction with respect to any Operating Property if such lease is entered into within 18 months after the later of the acquisition of, completion of construction or improvements to, or commencement of operation of such Operating Property and any extensions, renewals and replacements thereof; and | |||||
· | any Sale and Leaseback Transaction if, within 120 days after the effective date of the lease, we apply to the retirement of our Secured Debt an amount equal to the greater of (i) the net proceeds of the sale of the Operating Property leased in such Sale and Leaseback Transaction and (ii) the fair market value (as determined in good faith by our Board of Directors) of the Operating Property on any date within 90 days prior to the effective date of the lease, except that the amount we are required to apply to the retirement of Secured Debt will be reduced by the principal amount of any senior notes surrendered to the trustee for cancellation within 120 days after the effective date of the lease and the principal amount of Secured Debt, other than senior notes, we voluntarily retire within 120 days after the effective date of the lease. | |||||
In addition to the permitted Liens and Sale and Leaseback Transactions described above, the senior indenture permits us to incur Indebtedness secured by Liens on any Operating Property and enter into Sale and Leaseback Transactions so long as the aggregate amount of all Indebtedness secured by the Liens resulting from these transactions does not exceed the greater of: | ||||||
· | 15% of Tangible Assets as of the date of our most recent consolidated balance sheet filed with the SEC pursuant to the Exchange Act and | |||||
· | 15% of Capitalization as shown on our most recent consolidated balance sheet filed with the SEC pursuant to the Exchange Act. | |||||
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For purposes of this section of the prospectus: | ||||||
"Capitalization" means the total of all the following items appearing on, or included in, our consolidated balance sheet: (i) all liabilities for Indebtedness and (ii) common stock, preferred stock, hybrid preferred securities, premium on capital stock, capital surplus, capital in excess of par value, and retained earnings (however the foregoing may be designated), less, to the extent not otherwise deducted, the cost of shares of capital stock that we hold in our treasury. | ||||||
"Indebtedness" means all of our outstanding indebtedness for money borrowed evidenced by notes, debentures, bonds or other securities or guarantees of any thereof and all of our Capital Lease obligations; | ||||||
"Lien" means any mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest in or on an asset and (ii) the interest of a vendor or a lessor under any conditional sale agreement, Capital Lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to an asset; | ||||||
"Operating Property" means (i) any interest in real property we own and (ii) any asset we own that is depreciable in accordance with generally accepted accounting principles, excluding, in either case, any interest as lessee under a Capital Lease (except for a Capital Lease that results from a Sale and Leaseback Transaction); | ||||||
"Sale and Leaseback Transaction" means any arrangement with any person or entity providing for the leasing to us of any property, which property prior to the leasing thereof to us was Operating Property and was sold by us to such person or entity; provided, however, Sale and Leaseback Transaction shall not include any arrangement entered into prior to the date of the senior indenture and shall not include any transaction pursuant to which we sell Operating Property to, and thereafter purchase energy or services from, any person or entity which transaction is ordered or authorized by any regulatory authority having jurisdiction over us or our operations or is entered into pursuant to any plan or program of industry restructuring ordered or authorized by any such regulatory authority; and | ||||||
"Tangible Assets" means the amount shown as total assets on our consolidated balance sheet, less all intangible assets, including, but without limitation, such items as goodwill, trademarks, trade names, patents and unamortized debt discount and expense, all as determined by us in accordance with generally accepted accounting principles applicable to the type of business in which we are engaged. | ||||||
Global Securities | ||||||
· | the depositary may transfer the whole registered global security to a nominee; | |||||
· | the depositary's nominee may transfer the whole registered global security to the depositary; | |||||
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· | the depositary's nominee may transfer the whole registered global security to another of the depositary's nominees; and | |
· | the depositary (or its nominee) may transfer the whole registered global security to its (or its nominee's) successor. | |
Depositary Arrangements | ||
Generally, ownership of beneficial interests in a registered global security will be limited to persons that have accounts with the depositary for such registered global security, which persons are referred to in this prospectus as participants, or persons that may hold interests through participants. Upon the issuance of a registered global security, the depositary will credit, on its book-entry registration and transfer system, the participants' accounts with the respective principal amounts of the senior notes represented by such registered global security that are beneficially owned by such participants. | ||
Any dealers, underwriters or agents participating in the distribution of such senior notes will designate the accounts to credit. For participants, the depositary will maintain the only record of their ownership of a beneficial interest in the registered global security and they will only be able to transfer such interests through the depositary's records. For people who hold through a participant, the relevant participant will maintain such records for beneficial ownership and transfer. The laws of some states may require that some purchasers of securities take physical delivery of such securities in definitive form. These restrictions and such laws may impair the ability to own, transfer or pledge beneficial interests in registered global securities. | ||
So long as the depositary (or its nominee) is the record owner of a registered global security, such depositary (or its nominee) will be considered the sole owner or holder of the senior notes represented by such registered global security for all purposes under the senior indenture. Except as set forth below, owners of beneficial interests in a registered global security will not be entitled to have the senior notes represented by such registered global security registered in their names, and will not receive or be entitled to receive physical delivery of such senior notes in definitive form and will not be considered the owners or holders under the senior indenture. Accordingly, each person owning a beneficial interest in a registered global security must rely on the procedures of the depositary and, if such person is not a participant, on the procedures of the participant through which such person owns its inte rest, to exercise any rights of a holder under the senior indenture. We understand that under existing industry practices, if we request any action of holders, or if any owner of a beneficial interest in a registered global security desires to give or take any action allowed under the senior indenture, the depositary would authorize the participants holding the relevant beneficial interests to give or take such action, and such participants would authorize beneficial owners owning through such participants to give or take such action or would otherwise act upon the instruction of beneficial owners holding through them. | ||
Interest and Premium | ||
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We expect that the depositary for any senior notes represented by a registered global security, upon receipt of any payment of principal, premium, if any, or any interest in respect of such registered global security, will promptly credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in such registered global security as shown on the depositary's records. We also expect that payments by participants to owners of beneficial interests in such registered global security held through such participants will be governed by standing customer instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such participants. |
Withdrawal of Depositary |
Payment and Paying Agents |
Unless the relevant prospectus supplement indicates otherwise, principal of, premium, if any, and any interest on the senior notes will be payable at the office of the paying agent designated by us. However, we may elect to pay interest by check mailed to the address of the person entitled to such payment at the address appearing in the security register. Unless otherwise indicated in the relevant prospectus supplement, the corporate trust office of the senior trustee in the City of New York will be designated as our sole paying agent for payments with respect to senior notes of each series. Any other paying agents initially designated by us for the senior notes of a particular series will be named in the relevant prospectus supplement. We may at any time designate additional paying agents or rescind the designation of any paying agent or approve a change in the office through which any paying agent acts, except that we will be required to maintain a paying agent in each place of payment for the senior notes of a particular series. (Senior Indenture, Section 602) |
All moneys paid by us to a paying agent for the payment of the principal of, premium, if any, or any interest on any senior note which remain unclaimed for two years after such principal, premium or interest has become due and payable will be repaid to us, and the holder of such senior note thereafter may look only to us for payment. (Senior Indenture, Section 603) |
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Registration and Transfer | |
No service charge will be made for any transfer or exchange of the senior notes. However, we may require payment to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange. We will not be required to register the transfer of, or to exchange, the senior notes of any series during the 15 days prior to the date on which notice of redemption of any senior notes of that series is mailed or any senior note that is selected for redemption. (Senior Indenture, Section 305) | |
Defeasance | |
(i) | irrevocably depositing in trust with the senior trustee money or Eligible Obligations (which are defined in the senior indenture and principally consist of obligations of, or guaranteed by, the United States) or a combination of money and Eligible Obligations, which will be sufficient to pay when due the principal of, and any premium and interest on, the senior notes and |
(ii) | satisfying other conditions specified in the senior indenture. |
We may not effect a legal defeasance or a covenant defeasance unless we deliver to the senior trustee an opinion of counsel to the effect that the holders of the affected senior notes will: | |
(i) | not recognize income, gain or loss for United States federal income tax purposes as a result of the legal defeasance or the covenant defeasance and |
(ii) | be subject to United States federal income tax on the same amounts, in the same manner and at the same times as if the legal defeasance or covenant defeasance had not occurred. |
In the case of legal defeasance, such opinion must be based upon a change in law or a ruling of the Internal Revenue Service. (Senior Indenture, Article Seven) | |
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Consolidation, Merger and Sale of Assets | |
(i) | The surviving or successor entity is organized and validly existing under the laws of the United States, a state of the United States or the District of Columbia and it expressly assumes our obligations on all senior notes under the senior indenture and, if such transaction occurs prior to the release date, our obligations on collateral bonds securing any series of senior notes; |
(ii) | In the case of a lease, such lease is made expressly subject to termination at any time during the continuance of an Event of Default, by (a) us or the senior trustee and (b) the purchaser of the property so leased at any sale thereof under the senior indenture, whether the sale be made under any power of sale conferred by the senior indenture or pursuant to judicial proceedings; |
(iii) | Immediately after giving effect to the transaction, no Event of Default under the senior indenture or no event which, after notice or lapse of time or both, would become an Event of Default shall have occurred and be continuing; and |
(iv) | We shall have delivered to the senior trustee an officer's certificate and an opinion of counsel as provided in the senior indenture. |
(Senior Indenture, Section 1101) | |
Event of Default | |
(i) | Failure to pay interest on such senior notes within 30 days after it is due; |
(ii) | Failure to pay the principal of or any premium on any such senior notes when due; |
(iii) | Failure to perform or breach of any other covenant or warranty in the senior indenture, other than a covenant or warranty that does not relate to such series of senior notes, that continues for 90 days after we receive written notice from the senior trustee, or we and the senior trustee receive a written notice from the holders of a majority in aggregate principal amount of the senior notes of that series; provided, however, that the 90 day period will be extended if we initiate corrective action within such period and diligently pursue such action; |
(iv) | Events relating to our bankruptcy, insolvency or reorganization specified in the senior indenture; or |
(v) | Prior to the release date, the occurrence and continuation of an "event of default" under Sections 53 or 65 of the mortgage, which we refer to as a mortgage default. |
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(Senior Indenture, Section 801) | ||
Remedies | ||
In the case of an Event of Default under the senior indenture resulting from a mortgage default, the senior notes will become due and payable only upon the acceleration of the collateral bonds in accordance with the terms of the mortgage. (Senior Indenture, Section 802(c)) | ||
There is no automatic acceleration of the senior notes, even in the event of our bankruptcy, insolvency or reorganization. (Senior Indenture, Section 802) | ||
At any time after a declaration of acceleration with respect to the senior notes of any series has been made and before a judgment or decree for payment of the money due has been obtained, the Event of Default under the senior indenture giving rise to the declaration of acceleration will be considered waived, and the declaration and its consequences will be considered rescinded and annulled, if: | ||
(i) | We have paid or deposited with the senior trustee a sum sufficient to pay: | |
(a) | all matured installments of interest on all senior notes of the series; | |
(b) | the principal of and premium, if any, on any senior notes of the series which have become due otherwise than by acceleration; | |
(c) | interest on overdue interest (to the extent allowed by law) and on principal and any premium which have become due otherwise than by acceleration at the prescribed rates, if any, set forth in such senior notes; and | |
(d) | all amounts due to the trustee under the senior indenture; and | |
(ii) | Any other Event of Default under the senior indenture with respect to the senior notes of that series (other than the nonpayment of principal that has become due solely by declaration of acceleration) has been cured or waived as provided in the senior indenture. | |
(Senior Indenture, Section 802(e)) | ||
The waiver or cure of any mortgage default and the rescission and annulment of its consequences in accordance with the terms of the mortgage also will constitute an automatic waiver of the corresponding Event of Default under the senior indenture and an automatic rescission and annulment of the consequences thereunder, provided that all other applicable conditions specified above shall have been satisfied. (Senior Indenture, Section 802(c)) | ||
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The senior trustee is not obligated to exercise any of its rights or powers under the senior indenture at the request, order or direction of any of the holders, unless the holders offer the senior trustee indemnity reasonably satisfactory to it. (Senior Indenture, Section 903) If they provide this reasonable indemnity, the holders of a majority in principal amount of any series of senior notes will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the senior trustee or exercising any power conferred upon the senior trustee, including the exercise by the senior trustee of the powers possessed by the senior trustee as holder of the collateral bonds securing such series of senior notes. However, if the Event of Default under the senior indenture relates to more than one series, only the holders of a majority in aggregate principal amount of all affected series will have the right to give this direction. The senior trustee is not obligated to comply with directions that conflict with law or other provisions of the senior indenture. (Senior Indenture, Section 812) | |
No holder of senior notes of any series will have any right to institute any proceeding under the senior indenture, or for any remedy under the senior indenture, unless: | |
(i) | The holder has previously given to the senior trustee written notice of a continuing Event of Default under the senior indenture; |
(ii) | The holders of a majority in aggregate principal amount of the outstanding senior notes of all series in respect of which an Event of Default under the senior indenture has occurred and is continuing, considered as one class, have made a written request to the senior trustee, and have offered reasonable indemnity to the senior trustee, to institute proceedings; |
(iii) | The senior trustee has failed to institute any proceeding for 60 days after notice; and |
(iv) | No direction inconsistent with such written request has been given to the senior trustee during such 60-day period by the holders of a majority in aggregate principal amount of the outstanding senior notes of all series in respect of which an Event of Default under the senior indenture has occurred and is continuing, considered as one class. |
In addition, no holder of senior notes will have any right to institute any action under the senior indenture to disturb or prejudice the rights of any other holder of senior notes. (Senior Indenture, Section 807) | |
However, these limitations do not apply to a suit by a holder of a senior note for payment of the principal, premium, if any, or interest on the senior note on or after the applicable due date. (Senior Indenture, Section 808) | |
We will provide to the senior trustee an annual statement by an appropriate officer as to our compliance with all conditions and covenants under the senior indenture. (Senior Indenture, Section 606) | |
Without the consent of any holder of senior notes issued under the senior indenture, we and the senior trustee may enter into one or more supplemental indentures for any of the following purposes: | |
(i) | To evidence the assumption by any permitted successor of our covenants in the senior indenture and in the senior notes; |
(ii) | To add to our covenants or to surrender any of our rights or powers under the senior indenture; |
(iii) | To add additional events of default under the senior indenture; |
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(iv) | To change, eliminate or add any provision to the senior indenture; provided, however, that, if the change will adversely affect the interests of the holders of senior notes of any series in any material respect, the change, elimination or addition will become effective only: | |
(a) | when the consent of the holders of senior notes of such series has been obtained in accordance with the senior indenture; or | |
(b) | when no senior notes of the affected series remain outstanding under the senior indenture; | |
(v) | To provide collateral security for all but not part of the senior notes; | |
(vi) | To establish the form or terms of senior notes of any series as permitted by the senior indenture; | |
(vii) | To provide for the authentication and delivery of bearer securities; | |
(viii) | To evidence and provide for the acceptance of appointment of a successor trustee; | |
(ix) | To provide for the procedures required for use of a noncertificated system of registration for the senior notes of all or any series; | |
(x) | To change any place where principal, premium, if any, and interest shall be payable, senior notes may be surrendered for registration of transfer or exchange, and notices to us may be served; | |
(xi) | To cure any ambiguity or inconsistency or to make any other provisions with respect to matters and questions arising under the senior indenture; provided that the action does not adversely affect the interests of the holders of senior notes of any series in any material respect; or | |
(xii) | To modify, eliminate or add to the provisions of the senior indenture to such extent as shall be necessary to effect the qualification of the senior indenture under the Trust Indenture Act of 1939, as amended, and to add to the senior indenture such other provisions as may be expressly required under the Trust Indenture Act. | |
(Senior Indenture, Section 1201) | ||
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The consent of the holders of a majority in aggregate principal amount of the senior notes of all series then outstanding is required for all other modifications to the senior indenture. However, if less than all of the series or tranches of senior notes outstanding are directly affected by a proposed supplemental indenture, the consent only of the holders of a majority in aggregate principal amount of all series or tranches, as the case may be, that are directly affected, considered as one class, will be required. No such amendment or modification may: | |
(i) | Change the stated maturity of the principal of, or any installment of principal of or interest on, any senior note, or reduce the principal amount of any senior note or its rate of interest or change the method of calculating the interest rate or reduce any premium payable upon redemption, or change the currency in which payments are made, or impair the right to institute suit for the enforcement of any payment on or after the stated maturity of any senior note, without the consent of the holder; |
(ii) | Reduce the percentage in principal amount of the outstanding senior notes of any series the consent of the holders of which is required for any supplemental indenture or any waiver of compliance with a provision of the senior indenture or any default thereunder and its consequences without the consent of all the holders of the series; |
(iii) | Modify certain provisions of the senior indenture relating to supplemental indentures, waivers of some covenants and waivers of past defaults with respect to the senior notes of any series, without the consent of the holder of each outstanding senior note affected thereby; or |
(iv) | Prior to the release date, impair the interest of the senior trustee hereunder in such collateral bonds, or reduce the principal amount of collateral bonds securing the senior notes of such series to an amount less than the principal amount of such senior notes outstanding, without the consent of all the holders of the series. |
(Senior Indenture, Section 1202) | |
The senior indenture provides, subject to certain exceptions, that senior notes owned by us or anyone else required to make payment on the senior notes shall be disregarded and considered not to be outstanding in determining whether the required holders have given a request or consent. (Senior Indenture, Section 101) | |
We may fix in advance a record date to determine the required number of holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or other such act of the holders, but we shall have no obligation to do so. If we fix a record date, that request, demand, authorization, direction, notice, consent, waiver or other act of the holders may be given before or after that record date, but only the holders of record at the close of business on that record date will be considered holders for the purposes of determining whether holders of the required percentage of the outstanding senior notes have authorized or agreed or consented to the request, demand, authorization, direction, notice, consent, waiver or other act of the holders. For that purpose, the outstanding senior notes shall be computed as of the record date. Any request, demand, authorization, direction, notice, consent, electi on, waiver or other act of a holder will bind every future holder of the same senior notes and the holder of every senior note issued upon the registration of transfer of or in exchange of those senior notes. A transferee will be bound by acts of the senior trustee or us in reliance thereon, whether or not notation of that action is made upon the senior note. (Senior Indenture, Section 104) | |
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Resignation of the Senior Trustee; Removal |
Notices |
Title |
Governing Law |
DESCRIPTION OF FIRST MORTGAGE BONDS |
The following description of the first mortgage bonds sets forth some of the general terms and provisions of the first mortgage bonds that we may offer pursuant to this prospectus, which we refer to as new bonds, and the first mortgage bonds that we may issue and deliver to the senior trustee as collateral bonds to secure senior notes. The particular terms of any new bonds or collateral bonds and the extent, if any, to which these general provisions will not apply to such new bonds or collateral bonds will be described, as the case may be, in the prospectus supplement relating to the new bonds or the prospectus supplement relating to the senior notes that will be secured by the collateral bonds. |
The new bonds and the collateral bonds will be issued in one or more series under the Mortgage and Deed of Trust, dated as of January 15, 1937, between us and The Bank of New York as trustee (as successor in such capacity to Irving Trust Company), as amended and supplemented and as further supplemented by a separate supplemental indenture each time new bonds or collateral bonds are issued. In this prospectus we refer to the Mortgage and Deed of Trust, as so amended and supplemented, as the mortgage, and we refer to the trustee under the mortgage as the mortgage trustee. The statements set forth below are brief summaries of some of the provisions contained in the mortgage. These summaries do not purport to be complete and are qualified in their entirety by reference to the mortgage, which is incorporated by reference as an exhibit to the registration statement of which this prospectus is a part. The form of suppl emental indenture to be used in connection with each issuance of new bonds and the form of supplemental indenture to be used in connection with each issuance of collateral bonds are also filed as exhibits to the registration statement. |
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General - New Bonds | ||
· | the designation and aggregate principal amount of such new bonds; | |
· | the date on which such new bonds will mature; | |
· | the rate per annum at which such new bonds will bear interest, or the method of determining such rate; | |
· | the dates on which such interest will be payable; | |
· | any redemption terms; and | |
· | other specific terms applicable to the new bonds not inconsistent with the provisions of the mortgage. | |
Payment of Principal and Interest. | ||
Registration and Transfer | ||
So long as any first mortgage bonds remain outstanding, we must maintain an office or agency where holders can present or surrender the first mortgage bonds for payment or for transfer or exchange and where holders can serve notices and demands to or upon us. (Mortgage, Section 35) We have designated the corporate trust office of The Bank of New York in the City of New York as our agent for these purposes. We will not impose any charges for exchanges of the new bonds. | ||
No Sinking Fund | ||
General - Collateral Bonds | ||
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Highly Leveraged Transactions | ||
Security | ||
· | cash, shares of stock and obligations (including bonds, notes and other securities) not specifically pledged, paid, deposited or delivered under the mortgage; | |
· | goods and equipment acquired for the purpose of sale or resale in the ordinary course of our business or for consumption in the operation of any of our properties; | |
· | materials, supplies and construction equipment; and | |
· | judgments, accounts and choses in action, the proceeds of which we are not obligated to deposit with the mortgage trustee under the mortgage. | |
The lien of the mortgage also extends to after-acquired property (other than the types of property described above). However, after-acquired property may be subject to liens existing or placed thereon at the time of acquisition and, in certain circumstances, to liens attaching to such property prior to the recording and/or filing of an instrument specifically describing such property as being subject to the lien of the mortgage. The after-acquired property clause may not be effective as to property acquired subsequent to the filing of a case with respect to us under the Federal bankruptcy code. | ||
Under New Jersey law, the State of New Jersey owns in fee simple for the benefit of the public schools all lands now or formerly flowed by the tide up to the mean high-water line, unless it has made a valid conveyance of its interests in such property. In 1981, because of uncertainties raised as to possible claims of State ownership, the New Jersey constitution was amended to provide that lands formerly tidal-flowed, but which were not then tidal-flowed at any time for a period of 40 years, were not to be subject to the State's claim unless the State had specifically defined and asserted a claim within the one year period ending November 2, 1982. As a result, the State published maps of the eastern coast of New Jersey depicting claims to portions of many properties, including portions of certain of our properties relating to one of our plants. We believe that we have good title to these properties and will vigoro usly defend our title, or will obtain grants from the State as may ultimately be required. The cost to acquire any grants may be covered by title insurance policies. Assuming that all of the State's claims were determined adversely to us, they would relate to land, which would amount to less than one percent of net utility plant. No maps depicting State claims to property owned by us on the western side of New Jersey were published within the one year period mandated by the constitutional amendment. Nevertheless, we believe that we have obtained all necessary grants from the State for our properties along the Delaware River. | ||
The mortgage trustee has a lien prior to the lien of holders of first mortgage bonds on the mortgaged property to secure the payment of its reasonable compensation and expenses. (Mortgage, Section 99) | ||
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Issuance of Additional First Mortgage Bonds | ||
(i) | 70% of the cost or the then fair value to us (whichever is less) of property additions (excluding property that we acquired to replace other property that we retired) we have constructed or acquired after November 30, 1936 but on or before June 30, 1950; | |
(ii) | 65% of the cost or the then fair value to us (whichever is less) of property additions (excluding property that we acquired to replace other property that we retired) we have constructed or acquired after June 30, 1950; | |
(iii) | the amount of cash deposited with the mortgage trustee for such purpose (which we may, subject to certain conditions, thereafter direct the mortgage trustee to use to repurchase or redeem first mortgage bonds, or withdraw to the extent of 100% of the principal amount of first mortgage bonds purchased or redeemed by the mortgage trustee); and | |
(iv) | the aggregate principal amount of previously issued first mortgage bonds that have been paid, retired, redeemed or cancelled, or that will be paid, retired, redeemed or cancelled upon the issuance of additional first mortgage bonds and that we have not previously used as the basis for the authentication and delivery of first mortgage bonds, the withdrawal of cash, or the release of property. | |
Property additions generally include property which is used or useful for the business of generating, transmitting or distributing electricity. If we acquire property that is subject to a lien prior to the lien of the mortgage, under certain circumstances we may incur additional indebtedness secured by that lien. (Mortgage, Sections 4, 23, 25, 26, 27, 29, 30, 31 and 32) | ||
Except as otherwise provided in the mortgage, we cannot issue additional first mortgage bonds unless our net earnings for any 12 consecutive calendar months during the immediately preceding 15 months have been at least twice the annual interest charges on all outstanding indebtedness secured by any equal or prior lien, including the additional issue of first mortgage bonds. However, this limitation does not apply, under limited circumstances, if the first mortgage bonds are being issued on the basis of certain property additions. "Net earnings" is defined generally as the sum of: | ||
(i) | our total operating revenues from property subject to the lien of the mortgage less our total operating expenses (excluding certain charges, such as amounts for renewals, replacements or depreciation) from property subject to the lien of the mortgage, including property to be acquired through the additional issuance of bonds, and | |
(ii) | the aggregate of net non-operating income and net income derived from the operation of or in connection with property not subject to the lien of the mortgage (subject to certain exceptions); provided that the aggregate amount described in this clause (ii) may not exceed 15% of the balance described in clause (i) above. | |
(Mortgage, Sections 7, 26, 27, 29 and 31) | ||
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Release of Property | ||
The mortgage allows us to sell or dispose of obsolete property or personal property that in a period of 12 consecutive months does not exceed $50,000 without any release by the mortgage trustee if we replace the same property by or substitute for the same other property of at least equal value to the property sold or disposed of. We may also surrender or modify certain franchises or rights without any release by the mortgage trustee. (Mortgage, Section 58) | ||
The mortgage trustee will release unimproved real estate that we no longer desire to retain as long as the aggregate value of the unimproved real estate released in a period of 12 consecutive months does not exceed $50,000. We must deposit the consideration received from any sale or disposition of unimproved property with the mortgage trustee. (Mortgage, Section 60) | ||
Cash deposited with the mortgage trustee, including cash deposited to obtain a release of property, may be used by the mortgage trustee, at our discretion, to redeem or repurchase first mortgage bonds. (Mortgage, Sections 55 and 61) | ||
Withdrawal of Cash Deposited with Mortgage Trustee | ||
Consolidation, Merger, Transfer of Assets | ||
· | consolidating with another corporation; | |
· | merging into another corporation where the other corporation is the survivor; or| | |
· | selling or leasing our property as an entirety or substantially as an entirety; | |
provided that | ||
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· | in the case of a consolidation or merger, the surviving entity is a corporation having the corporate authority to generate, manufacture, transport, transmit, distribute or supply electricity for light, heat, power or other purposes, or in the case of any conveyance, transfer or lease, the acquiror or lessee is a corporation lawfully entitled to acquire or lease and operate the same; | |
· | the terms of the transaction do not impair the lien and security of the mortgage or the rights and powers of the mortgage trustee or the holders of first mortgage bonds; | |
· | the surviving entity or transferee, or, in the case of a lease which extends beyond the date of maturity of any first mortgage bonds, the lessee, assumes by supplemental indenture all of our obligations under the mortgage and on the first mortgage bonds; and | |
· | in the case of a lease, such lease is made expressly subject to termination at any time during the continuance of a completed default, by (a) us or the mortgage trustee or (ii) the purchaser of the property so leased at any sale thereof under the mortgage or pursuant to judicial proceedings. | |
(Mortgage, Section 86) | ||
If we consummate a consolidation, merger or sale, the mortgage will not (unless the successor corporation elects otherwise) be or become a lien upon any of the properties or franchises owned by the successor corporation except: | ||
· | those properties acquired from us and improvements and additions thereon and appurtenant thereto; | |
· | property used by the successor corporation as a basis for authentication of first mortgage bonds, the withdrawal of cash or the release of property; and | |
· | such franchises, repairs and additional property as may be acquired, made or constructed by the successor corporation (a) to maintain, renew and preserve the franchises covered by the mortgage and to maintain the mortgaged property as an operating system in good repair, working order and condition, or (b) in pursuance of some covenant or agreement under the mortgage to be kept or performed by us. | |
(Mortgage, Section 88) | ||
Modification | ||
· | to waive, surrender or restrict any power, privilege or right conferred on us by the mortgage; | |
· | to add covenants, limitations or restrictions for the benefit of the holders of one or more series of first mortgage bonds and provide that a breach thereof is equivalent to a default under the mortgage; and | |
· | to cure any ambiguity, or correct or supplement any defective or inconsistent provisions in the mortgage or any supplemental indenture; | |
provided, however, that any such act, waiver, surrender or restriction does not adversely affect the interests of the holders of the outstanding first mortgage bonds. | ||
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Modifications Requiring Consent | ||
· | extend the maturity of the principal of such bond; | |
· | reduce the rate of interest on such bond or otherwise modify the terms of payment of the principal or interest on any such bond; | |
· | create an equal or prior lien; | |
· | deprive a non-assenting bondholder of a lien on the mortgaged property; or | |
· | reduce the percentage of bondholders required to effect any change with respect to any first mortgage bond. | |
(Mortgage, Section 114) | ||
Our Board of Directors may, at any time, pass a resolution stipulating that none of the provisions relating to modifications to the mortgage with the consent of the bondholders will have any force and effect for all outstanding first mortgage bonds and/or any first mortgage bonds issued after the date of the Board's resolution. (Mortgage, Section 117) | ||
The mortgage provides that any first mortgage bonds owned by us, any other obligor on the first mortgage bonds, or any of our or their affiliates, shall be disregarded and considered not to be outstanding in determining whether the required holders have given a request or consent. (Mortgage, Section 2) | ||
If any provision of the mortgage limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under the Trust Indenture Act to be a part of and govern the mortgage, the provision of the Trust Indenture Act will control. (June 1, 1949 Supplemental Indenture, Section 45) | ||
Completed Defaults | ||
· | Failure to pay principal on any first mortgage bond when due; | |
· | Failure to pay interest on any first mortgage bond within 90 days after such payment is due; | |
· | Failure to pay principal of or interest on any indebtedness subject to a prior lien, beyond any applicable grace period, in certain cases; | |
· | Events relating to our bankruptcy, insolvency or reorganization as specified in the mortgage; | |
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· | Failure to perform any other covenant, agreement or condition in the mortgage for a period of 90 days after we are given notice thereof by the mortgage trustee; and | |
· | Failure to provide money for the redemption of first mortgage bonds called for redemption by us. | |
(Mortgage, Sections 53 and 65) | ||
We will furnish to the mortgage trustee an annual certificate as to our compliance with the covenants and conditions in the mortgage. (Mortgage, Section 46D) | ||
Remedies | ||
If a completed default occurs and is continuing, the mortgage trustee in its discretion may, and upon the written request of the holders of at least 25% in principal amount of all outstanding first mortgage bonds and upon being indemnified to its satisfaction the mortgage trustee shall, enforce the lien of the mortgage by foreclosing on the trust estate. (Mortgage, Section 68) | ||
The holders of a majority in principal amount of first mortgage bonds may direct proceedings for the sale of the trust estate, or for the appointment of a receiver or any other proceedings under the mortgage, but have no right to involve the Trustee in any personal liability without indemnifying it to its satisfaction. (Mortgage, Sections 69 and 79) | ||
No holder of a first mortgage bond has the right to institute proceedings for the enforcement of the mortgage, unless: | ||
(i) | such holder previously has given the mortgage trustee written notice of an existing default, | |
(ii) | the holders of at least 25% in principal amount of the outstanding first mortgage bonds have requested in writing that the mortgage trustee take action under the mortgage (and provided the mortgage trustee with indemnity satisfactory to it) and | |
(iii) | such holders have offered the mortgage trustee a reasonable opportunity to exercise its powers as mortgage trustee or to institute an action, suit or proceeding in its own name. | |
However, this provision does not impair the right of any holder of a first mortgage bond to enforce our obligation to pay the principal of and interest on such first mortgage bond when due. (Mortgage, Section 79) | ||
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The laws of the State of New Jersey, where the mortgaged property is located, may limit or deny the ability of the mortgage trustee or the bondholders to enforce certain rights and remedies provided in the mortgage in accordance with their terms. |
Defeasance and Discharge |
Title |
Resignation or Removal of Mortgage Trustee |
DESCRIPTION OF MEDIUM TERM NOTES |
The following description of the medium term notes sets forth some of the general terms and provisions of the medium term notes that we may offer pursuant to this prospectus. The particular terms of any medium term notes and the extent, if any, to which these general provisions will not apply to such medium term notes will be described in the prospectus supplement relating to the medium term notes. |
The medium term notes will be issued in one or more series under the indenture, dated as of March 1, 1997, between us and The Bank of New York, as trustee. In this prospectus we refer to this indenture as the note indenture and we refer to the trustee under the note indenture as the note trustee. The statements set forth below include brief summaries of some of the provisions contained in the note indenture. These summaries do not purport to be complete and are qualified in their entirety by reference to the note indenture, which is incorporated by reference as an exhibit to the registration statement of which this prospectus is a part. |
General |
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· | the purchase price, or a statement that the medium term notes are being offered by an agent as principal at varying market prices; | |
· | the original issue date; | |
· | the stated maturity date; | |
· | if fixed rate notes, the rate per annum at which such notes will bear interest; | |
· | if floating rate notes, the interest rate formula and other variable terms; | |
· | the date or dates from which any such interest shall accrue; | |
· | the terms for redemption, if any; and | |
· | any other terms of such medium term notes not inconsistent with the note indenture. | |
The note indenture does not contain any covenants or other provisions that specifically are intended to afford holders of the medium term notes special protection in the event of a highly leveraged transaction. | ||
No Sinking Fund | ||
Unsecured Obligations | ||
Book-Entry Notes | ||
· | by the depositary to a nominee of the depositary; | |
· | by a nominee of the depositary to the depositary; | |
· | by a nominee of the depositary to another nominee of the depositary; or | |
· | by the depositary or any nominee to a successor of the depositary or a nominee of such successor. | |
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Depositary Arrangements |
Generally, ownership of beneficial interests in a book-entry note will be limited to participants that have accounts with the depositary for such book-entry note or persons that may hold interests through participants. Upon the issuance of a book-entry note, the depositary will credit, on its book-entry registration and transfer system, the respective principal amounts of the medium term notes represented by such book-entry note to the accounts of participants. The accounts to be credited will be designated by the agents for such medium term notes, or by us if we offer and sell such notes directly. |
Ownership of beneficial interests in a book-entry note will be shown on, and the transfer of that ownership will be effected only through, records maintained by the depositary, or by participants or persons that may hold interests through participants. The laws of some states require that some purchasers of securities take physical delivery of such securities in certificated form. Such limits and such laws may impair the ability to transfer beneficial interests in a book-entry note. |
So long as the depositary or its nominee is the registered owner of a book-entry note, the depositary or its nominee, as the case may be, will be considered the sole owner or holder of the medium term notes represented by such book-entry note for all purposes under the note indenture. Except as provided below, owners of beneficial interests in a book-entry note will not be entitled to have medium term notes represented by a book-entry note registered in their names, will not receive or be entitled to receive physical delivery of medium term notes in certificated form and will not be considered the owners or holders thereof under the note indenture. Accordingly, each person owning a beneficial interest in a book entry note must rely on the procedures of the depositary and, if such person is not a participant, on the procedures of the participant through which such person owns its interest, to exercise any rights of a holder under the note indenture. We understand that under existing industry practices, if we request any action of holders, or if any owner of a beneficial interest in a book entry note desires to give or take any action allowed under the note indenture, the depositary would authorize the participants holding the relevant beneficial interests to give or take such action, and such participants would authorize beneficial owners owning through such participants to give or take such action or would otherwise act upon the instruction of beneficial owners holding through them. |
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We expect that the depositary, upon receipt of any payment of principal, premium, if any, or interest in respect of a book-entry note, will credit promptly the accounts of the related participants with payment in amounts proportionate to their respective holdings in principal amount of beneficial interest in such book-entry note as shown on the records of the depositary. We also expect that payments by participants to owners of beneficial interests in a book-entry note will be governed by standing customer instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name" and will be the responsibility of such participants. |
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Withdrawal of Depositary |
Registration and Transfer |
If medium term notes are issued in certificated form, the transfer of the medium term notes may be registered, and medium term notes may be exchanged for other medium term notes of the same series, of authorized denominations and with the same terms and aggregate principal amount, at the offices of the note trustee. We may change the place for registration of transfer and exchange of the medium term notes and designate additional places for registration of transfer and exchange. (Note Indenture, Sections 305 and 602) |
No service charge will be made for any transfer or exchange of the medium term notes. However, we may require payment to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange. We will not be required to register the transfer of, or to exchange, the medium term notes of any series during the 15 business days prior to the date of mailing notice of redemption of any medium term notes of that series or any medium term note that is selected for redemption. (Note Indenture, Section 305) |
Payment and Paying Agents |
Unless the relevant prospectus supplement indicates otherwise, principal of, premium, if any, and any interest on the medium term notes will be payable at the office of the paying agent designated by us. However, we may elect to pay interest by check mailed to the address of the person entitled to such payment at the address appearing in the security register. Unless otherwise indicated in the relevant prospectus supplement, the corporate trust office of the note trustee in the Borough of Manhattan, City of New York will be designated as our sole paying agent for payments with respect to medium term notes of each series. Any other paying agents initially designated by us for the medium term notes of a particular series will be named in the relevant prospectus supplement. We may at any time designate additional paying agents or rescind the designation of any paying agent or approve a change in the office t hrough which any paying agent acts, except that we will be required to maintain a paying agent in each place of payment for the medium term notes of a particular series. (Note Indenture, Sections 601 and 602) |
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All moneys paid by us to a paying agent for the payment of the principal of, premium, if any, or any interest on any medium term note which remain unclaimed for two years after such principal, premium or interest has become due and payable will be repaid to us, and the holder of such medium term note thereafter may look only to us for payment. (Note Indenture, Section 603) | ||
Defeasance and Discharge | ||
· | money, | |
· | government obligations (as defined in the note indenture, which generally means (a) direct obligations of, or obligations unconditionally guaranteed by, the United States and (b) subject to certain conditions, certificates, depositary receipts or other instruments evidencing a direct ownership interest in obligations described in clause (a) above or in any specific interest or principal payments due in respect thereof), or | |
· | a combination of money or governmental obligations | |
which will be sufficient to pay when due the entire indebtedness on such medium term notes, including principal, any premium and interest, and if such deposit is made prior to the maturity of the medium term notes, we deliver to the note trustee an opinion of counsel to the effect that the holders of the affected medium term notes will (i) not realize income, gain or loss for United States federal income tax purposes as a result of the defeasance and (ii) be subject to United States federal income tax on the same amounts, in the same manner and at the same times as if the defeasance had not occurred. The opinion must be accompanied by a ruling of the Internal Revenue Service or based upon a change in law. (Note Indenture, Section 701) | ||
Consolidation, Merger and Sale of Assets | ||
(i) | the successor entity is organized and existing under the laws of the United States, a state of the United States or the District of Columbia and expressly assumes our obligations on all medium term notes outstanding under the note indenture; | |
(ii) | immediately after giving effect to the transaction, no Event of Default under the note indenture or no event which, after notice or lapse of time or both, would become an Event of Default has occurred and is continuing; | |
(iii) | any lease provides that it will remain in effect as long as any medium term notes are outstanding; and | |
(iv) | we have delivered to the note trustee an officer's certificate and an opinion of counsel as provided in the note indenture. | |
(Note Indenture, Section 1101) | ||
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(i) | Failure to pay interest on such medium term notes within 60 days after it is due; |
(ii) | Failure to pay the principal of or any premium on any such medium term notes within 3 business days after it is due; |
(iii) | Failure to perform or breach any other covenant in the note indenture, other than a covenant that does not relate to such series of medium term notes, that continues for 90 days after we receive written notice from the note trustee, or we and the note trustee receive a written notice from the holders of at least 33% in aggregate principal amount of the medium term notes of that series; |
(iv) | Events relating to our bankruptcy, insolvency or reorganization specified in the note indenture; or |
(v) | Any other Event of Default specified with respect to a series of medium term notes. |
(Note Indenture, Section 801) | |
Remedies | |
There is no automatic acceleration, even in the event of our bankruptcy, insolvency or reorganization. (Note Indenture, Section 802) | |
At any time after a declaration of acceleration with respect to the medium term notes of any series has been made and before a judgment or decree for payment of the money due has been obtained, the Event of Default will be deemed to have been waived and the declaration and its consequences annulled if: | |
(i) | We have paid or deposited with the note trustee a sum sufficient to pay: |
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(a) | all overdue installments of interest on all medium term notes of the series; | |
(b) | the principal of and premium, if any, on any medium term notes of the series which have become due otherwise than by acceleration and interest thereon at the prescribed rates, if any, set forth in such medium term notes; | |
(c) | interest on overdue interest (to the extent allowed by law) at the prescribed rates, if any, set forth in such medium term notes; | |
(d) | all amounts due to the trustee under the note indenture; and | |
(ii) | Any other Event of Default under the note indenture with respect to the medium term notes of that series (other than the nonpayment of principal that has become due solely by declaration of acceleration) has been cured or waived as provided in the note indenture. | |
(Note Indenture, Section 802) | ||
The note trustee is not obligated to exercise any of its rights or powers under the note indenture at the request or direction of any of the holders, unless the holders offer the note trustee a reasonable indemnity. (Note Indenture, Section 904) If they provide this reasonable indemnity, the holders of a majority in principal amount of any series of medium term notes, and if more than one series is affected, the holders of a majority in principal amount of all affected series, considered as one class, will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the note trustee or exercising any trust or power conferred upon the note trustee. The note trustee is not obligated to comply with directions that conflict with law or other provisions of the note indenture or that would result in personal liability for the note trustee which, in the note trustee's sole discretion, would exceed the indemnity provided by the note holders. The note trustee may take any other action that it deems proper and is not inconsistent with such direction. (Note Indenture, Section 812) | ||
No holder of medium term notes of any series will have any right to institute any proceeding under the note indenture, or for any remedy under the note indenture, unless: | ||
(i) | the holder has previously given to the note trustee written notice of a continuing Event of Default with respect to medium term notes of such series; | |
(ii) | the holders of not less than a majority in aggregate principal amount of the outstanding medium term notes of all series in respect of which an Event of Default under the note indenture has occurred and is continuing, considered as one class, have made a written request to the note trustee, and have offered reasonable indemnity to the note trustee, to institute proceedings; | |
(iii) | the note trustee has failed to institute any proceeding for 60 days after notice; and | |
(iv) | no direction inconsistent with such written request has been given to the note trustee during such 60-day period by the holders of a majority in aggregate principal amount of the outstanding medium term notes of all series in respect of which an Event of Default under the note indenture has occurred and is continuing, considered as one class. | |
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In addition, no holder of medium term notes of such series notes will have any right under the note indenture to disturb or prejudice the rights of any other holder of medium term notes. However, these limitations do not apply to a suit by a holder of a medium term note for payment of the principal, premium, if any, or interest on the medium term note on or after the applicable due date. (Note Indenture, Sections 807 and 808) | |
We will provide to the note trustee an annual statement by an appropriate officer as to our compliance with all obligations under the note indenture. (Note Indenture, Section 1004) | |
(i) | To evidence the assumption by any permitted successor of our covenants in the note indenture and in the medium term notes; |
(ii) | To add to our covenants for the benefit of the holders of all or any series of medium term notes or to surrender any of our rights or powers under the note indenture; |
(iii) | To add any additional Event of Default with respect to all or any series of medium term notes; |
(iv) | To change or eliminate any provision in the note indenture or to add any new provision to the note indenture; provided, however, that if such change, elimination or addition adversely affects the holders of the medium term notes of any series, or a tranche of such series, in any material respect, such change, elimination or addition will become effective with respect to such series or tranche of medium term notes only when no medium term notes of the affected series or tranche remain outstanding under the note indenture; |
(v) | To provide security for the medium term notes; |
(vi) | To provide procedures required to permit us to use a non-certificated system of registration for the medium term notes; |
(vii) | To establish the form or terms of medium term notes of any series as permitted by the note indenture; |
(viii) | To evidence and provide for the acceptance of appointment of a successor trustee; |
(ix) | To change any place where principal, premium, if any, and interest shall be payable, medium term notes may be surrendered for registration of transfer or exchange, and notices to us may be served; |
(x) | To provide for the payment by us of additional amounts in respect of certain taxes imposed on the holders of the medium term notes and for the treatment of such additional amounts as interest; |
(xi) | To provide for the authentication and delivery of medium term notes denominated in a currency other than dollars or in a composite currency; |
(xii) | To provide for the authentication and delivery of bearer securities; |
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(xiii) | To cure any ambiguity, inconsistency or defect or to make any other provisions with respect to matters and questions arising under the note indenture which do not adversely affect the interests of the holders of medium term notes of any series in any material respect; or |
(xiv) | To modify, eliminate or add to the provisions of the note indenture to such extent as shall be necessary to effect the qualification of the note indenture under the Trust Indenture Act and to add to the note indenture such other provisions as may be expressly required under the Trust Indenture Act, or to eliminate provisions no longer required by the Trust Indenture Act. |
(Note Indenture, Section 1201) | |
(i) | Change the stated maturity of the principal of, or any installment of principal of or interest on, any medium term note, or reduce the principal amount of any medium term note or its rate of interest or reduce any amount payable upon redemption, or modify the method of calculating the interest rate, or impair the right to institute suit for the enforcement of any payment on or after the stated maturity of any medium term note; |
(ii) | Reduce the percentage in principal amount of the outstanding medium term notes the consent of the holders of which is required for any supplemental indenture or any waiver of compliance with a provision of the note indenture or any default thereunder and its consequences, or reduce the requirements for quorum or voting of medium term note holders; or |
(iii) | Modify some of the provisions of the note indenture relating to supplemental indentures, waivers of some covenants and waivers of past defaults with respect to the medium term notes of any series, except to increase the percentages in principal amount or to provide that other provisions of the note indenture cannot be modified or waived. |
A supplemental indenture which changes the note indenture solely for the benefit of one or more particular series of medium term notes, or modifies the rights of the holders of medium term notes of one or more series, will not affect the rights under the note indenture of the holders of the medium term notes of any other series. (Note Indenture, Section 1202) | |
The note indenture provides that medium term notes owned by us, or anyone else required to make payment on the medium term notes, or any of our or their affiliates, shall be disregarded and considered not to be outstanding in determining whether the required holders have given a request or consent. (Note Indenture, Section 101) | |
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We may fix in advance a record date to determine the required number of holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or other such act of the holders, but we shall have no obligation to do so. If we fix a record date, that request, demand, authorization, direction, notice, consent, waiver or other act of the holders may be given before or after that record date, but only the holders of record at the close of business on that record date will be considered holders for the purposes of determining whether holders of the required percentage of the outstanding medium term notes have authorized or agreed or consented to the request, demand, authorization, direction, notice, consent, waiver or other act of the holders. For that purpose, the outstanding medium term notes shall be computed as of the record date. Any request, demand, authorization, direction, notice, consen t, election, waiver or other act of a holder will bind every future holder of the same medium term note and the holder of every medium term note issued upon the registration of transfer of or in exchange of that medium term note. A transferee will be bound by acts of the note trustee or us in reliance thereon, whether or not notation of that action is made upon the medium term note. (Note Indenture, Section 104) |
Removal or Resignation of the Note Trustee |
Notices |
Title |
Governing Law |
INFORMATION ABOUT THE TRUSTEE |
The Bank of New York acts as trustee under the senior indenture, the mortgage and the note indenture. In addition, The Bank of New York acts, and may act, as trustee and paying agent under various other indentures, trusts and guarantees of us and our affiliates. We and our affiliates maintain deposit accounts and credit and liquidity facilities and conduct other banking transactions with The Bank of New York in the ordinary course of our businesses. |
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PLAN OF DISTRIBUTION | ||
We may sell the securities offered by this prospectus directly to purchasers or indirectly through underwriters, dealers or agents. The names of any such underwriters, dealers or agents will be set forth in the relevant prospectus supplement. We will also set forth in the relevant prospectus supplement: | ||
· | the terms of the offering of the securities; | |
· | the proceeds we will receive from such a sale; | |
· | any underwriting discounts, sales commissions and other items constituting underwriters' compensation; | |
· | any initial public offering price; | |
· | any commissions payable to agents; | |
· | any discounts or concessions allowed or reallowed or paid to dealers; and | |
· | any securities exchanges on which we may list the securities. | |
We may distribute the securities from time to time in one or more transactions at: | ||
· | a fixed price; | |
· | prices that may be changed; | |
· | market prices at the time of sale; | |
· | prices related to prevailing market prices; and | |
· | negotiated prices. | |
We will describe the method of distribution in the relevant prospectus supplement. | ||
If we use underwriters with respect to a series of the securities, we will set forth in the relevant prospectus supplement: | ||
· | the name of the managing underwriter, if any; | |
· | the name of any other underwriters; and | |
· | the terms of the transaction, including any underwriting discounts and other items constituting compensation of the underwriters and dealers, if any. | |
The underwriters will acquire any securities for their own accounts and they may resell the securities 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. | ||
Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. We anticipate that any underwriting agreement pertaining to any securities will: | ||
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· | entitle the underwriters to indemnification by us against certain civil liabilities under the Securities Act, or to contribution with respect to payments that the underwriters may be required to make related to any such civil liability; | |
· | subject the obligations of the underwriters to certain conditions precedent; and | |
· | obligate the underwriters to purchase all securities offered in a particular offering if any such securities are purchased. | |
In connection with an offering of the securities, underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the securities. Specifically, underwriters may: | ||
· | overallot in connection with the offering, creating a short position; | |
· | bid for, and purchase, the securities in the open market to cover short positions; | |
· | bid for, and purchase, the securities in the open market to stabilize the price of the securities; and | |
· | reclaim selling concessions allowed for distributing the securities in the offering if the underwriter repurchases previously distributed securities in covering transactions, in stabilization transactions or otherwise. | |
Any of these activities may stabilize or maintain the market price of the securities above independent market levels. Underwriters are not required to engage in these activities, and may end any of these activities at any time. No assurance can be given as to the liquidity of any trading market for the securities. | ||
If we use a dealer in an offering of the securities, we will sell such securities to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by such dealer at the time of resale. We will set forth the name of the dealer and the terms of the transaction in the prospectus supplement. | ||
If we use an agent in an offering of the securities, we will name the agent and describe the terms of the agency in the relevant prospectus supplement. Unless we indicate otherwise in the prospectus supplement, we will require an agent to act on a best efforts basis for the period of its appointment. | ||
Any underwriters, agents or dealers participating in the distribution of the securities may be deemed to be underwriters under the Securities Act and any discounts or commissions received by them on the sale or resale of the securities may be deemed to be underwriting discounts and commissions under the Securities Act. We may indemnify them against some civil liabilities under the Securities Act. In the ordinary course of business, we may engage in transactions with underwriters, dealers and agents and they may perform services for us. | ||
We may solicit offers to purchase the securities and make sales directly to institutional investors or others who may be considered underwriters under the Securities Act with respect to such sales. We will describe the terms of any such offer in the relevant prospectus supplement. | ||
We may authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase securities at the public offering price under delayed delivery contracts. These contracts would provide for payment and delivery on a specified date in the future. The contracts would be subject only to those conditions described in the prospectus supplement. The relevant prospectus supplement will describe the commission payable for solicitation of those contracts. | ||
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Offered securities may also be offered and sold, if so indicated in the relevant prospectus supplement, in connection with a remarketing upon their purchase, in accordance with a redemption or repayment pursuant to their terms, or otherwise, by one or more remarketing firms, acting as principals for their own accounts or as agents for us. Any remarketing firm will be identified and the terms of its agreements, if any, with us and its compensation will be described in the relevant prospectus supplement. |
We will set forth in the relevant prospectus supplement the anticipated delivery date of the securities and the prospectus delivery obligations of dealers. |
LEGAL MATTERS |
Certain legal matters with respect to the securities offered hereby will be passed upon for us by Kirk Emge, Esq., our General Counsel, and by Covington & Burling, Washington, D.C. |
EXPERTS |
The financial statements incorporated in this Prospectus by reference to Atlantic City Electric Company's Annual Report on Form 10-K for the year ended December 31, 2002 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. |
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PART II | |||
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. | |||
Registration fee | $20,225* | ||
Fees of rating agencies | 160,000 | ||
Printing | 40,000 | ||
Accounting fees | 40,000 | ||
Legal fees | 125,000 | ||
Trustee's fees and expenses | 20,000 | ||
Blue sky expenses | 10,000 | ||
Miscellaneous, including traveling, telephone copying, shipping and other out-of-pocket expenses |
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Total | 440,225 | ||
* All items are estimated except the registration fee. | |||
Article VI of our amended and restated bylaws provides, among other things, that we shall, to the fullest extent permitted by the laws of the State of New Jersey as from time to time in effect, indemnify any person who is or was made a party or is threatened to be made a party to any proceeding by reason of the fact that he or she is or was a director or officer of ours or, while serving as our director or officer, is or was serving at our request as a director, officer, trustee, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against all expenses and liabilities. Article VI further provides that we shall, from time to time, reimburse or advance to any such director or officer the funds necessary for payment of expenses incurred in connection with any proceeding, upon receipt of a written undertaking by or on behalf of such director or officer t o repay such amount unless it shall ultimately be determined that he or she is not entitled to indemnification. The rights and authority conferred in Article VI are not exclusive of any other right which an indemnified party may have or acquire under any statute, provision of our bylaws, agreement, vote of the shareholders or directors or otherwise. Our bylaws specify that the right to indemnification is a contract right. | |||
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Section 14A:3-5 of the New Jersey Business Corporation Act generally provides that a corporation may, and in certain circumstances, shall, indemnify (i) its officers, directors, employees and agents (each of which we refer to as a corporate agent), (ii) corporate agents of constituent corporations that it has absorbed by merger or consolidation and (iii) corporate agents of other corporations if such corporate agents serve at the indemnifying corporation's request. A corporation may indemnify such corporate agent in a civil proceeding if the corporate agent acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and, in a criminal proceeding, if he or she had no reasonable cause to believe his or her conduct was unlawful, except that indemnification is not permitted in an action by or in the right of the corporation if the corporate agent is adjudged to be liable to the corporation, unless the court in which the proceeding was brought shall have determined that indemnification is appropriate in light of the circumstances of the case. |
We are an indirect wholly-owned subsidiary of Pepco Holdings, Inc. To the extent that any of our officers or directors are determined to be serving in such capacity at the direction of Pepco Holdings, Inc., such person may be entitled to indemnification under the Delaware General Corporation Law and/or the certificate of incorporation of Pepco Holdings, Inc. |
ITEM 16. EXHIBITS. | ||
* | 1.01 | Form of Underwriting Agreement relating to Senior Notes |
* | 1.02 | Form of Underwriting Agreement relating to First Mortgage Bonds |
* | 1.03 | Form of Agency Agreement relating to Medium Term Notes |
* | 4.01 | Form of Senior Notes |
4.02 | Form of New First Mortgage Bonds (included in Exhibit 4.07) | |
4.03 | Form of Collateral First Mortgage Bonds (included in Exhibit 4.08) | |
4.04 | Form of Medium Term Notes (Filed as Exhibit 4(f) to ACE's Registration Statement No. 333-23475 dated March 17, 1997 and incorporated by reference herein) | |
4.05 | Mortgage and Deed of Trust dated January 15, 1937 between ACE and The Bank of New York (formerly Irving Trust Company) (Filed as Exhibit 2(a) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(a) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated June 1, 1949 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(b) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated July 1, 1950 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(c) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated November 1, 1950 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
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4.05(d) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated March 1, 1952 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(e) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated January 1, 1953 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(f) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated March 1, 1954 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(g) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated March 1, 1955 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(h) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated January 1, 1957 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(i) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated April 1, 1958 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(j) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated April 1, 1959 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(k) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated March 1, 1961 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(l) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated July 1, 1962 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(m) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated March 1, 1963 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(n) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated February 1, 1966 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(o) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated April 1, 1970 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(p) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated September 1, 1970 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
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4.05(q) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated May 1, 1971 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(r) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated April 1, 1972 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(s) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated June 1, 1973 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(t) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated January 1, 1975 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(u) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated May 1, 1975 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(v) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated December 1, 1976 (Filed as Exhibit 2(b) to ACE's Registration Statement No. 2-66280 dated December 21, 1979 and incorporated by reference herein) | |
4.05(w) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated January 1, 1980 (Filed as Exhibit 4(e) to ACE's Form 10-K dated March 25, 1981 (File No. 1-03559) and incorporated by reference herein) | |
4.05(x) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated May 1, 1981 (Filed as Exhibit 4(a) to ACE's Form 10-Q dated August 10, 1981 (File No. 1-03559) and incorporated by reference herein) | |
4.05(y) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated November 1, 1983 (Filed as Exhibit 4(d) to ACE's Form 10-K dated March 30, 1984 (File No. 1-03559) and incorporated by reference herein) | |
4.05(z) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated April 15, 1984 (Filed as Exhibit 4(a) to ACE's Form 10-Q dated May 14, 1984 (File No. 1-03559) and incorporated by reference herein) | |
4.05(aa) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated July 15, 1984 (Filed as Exhibit 4(a) to ACE's Form 10-Q dated August 13, 1984 (File No. 1-03559) and incorporated by reference herein) | |
4.05(bb) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated October 1, 1985 (Filed as Exhibit 4 to ACE's Form 10-Q dated November 12, 1985 (File No. 1-03559) and incorporated by reference herein) | |
4.05(cc) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated May 1, 1986 (Filed as Exhibit 4 to ACE's Form 10-Q dated May 12, 1986 (File No. 1-03559) and incorporated by reference herein) | |
II-4 |
4.05(dd) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated July 15, 1987 (Filed as Exhibit 4(d) to ACE's Form 10-K dated March 28, 1988 (File No. 1-03559) and incorporated by reference herein) | |
4.05(ee) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated October 1, 1989 (Filed as Exhibit 4(a) to ACE's Form 10-Q for quarter ended September 30, 1989 (File No. 1-03559) and incorporated by reference herein) | |
4.05(ff) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated March 1, 1991 (Filed as Exhibit 4(d)(1) to ACE's Form 10-K dated March 28, 1991 (File No. 1-03559) and incorporated by reference herein) | |
4.05(gg) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated May 1, 1992 (Filed as Exhibit 4(b) to ACE's Registration Statement 33-49279 dated January 6, 1993 and incorporated by reference herein) | |
4.05(hh) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated January 1, 1993 | |
4.05(ii) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated August 1, 1993 (Filed as Exhibit 4(a) to ACE's Form 10-Q dated November 12, 1993 (File No. 1-03559) and incorporated by reference herein) | |
4.05(jj) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated September 1, 1993 (Filed as Exhibit 4(b) to ACE's Form 10-Q dated November 12, 1993 (File No. 1-03559) and incorporated by reference herein) | |
4.05(kk) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated November 1, 1993 (Filed as Exhibit 4(c)(1) to ACE's Form 10-K dated March 29, 1994 (File No. 1-03559) and incorporated by reference herein) | |
4.05(ll) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated June 1, 1994 (Filed as Exhibit 4(a) to ACE's Form 10-Q dated August 14, 1994 (File No. 1-03559) and incorporated by reference herein) | |
4.05(mm) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated October 1, 1994 | |
4.05(nn) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated November 1, 1994 (Filed as Exhibit 4(c)(1) to ACE's Form 10-K dated March 21, 1995 (File No. 1-03559) and incorporated by reference herein) | |
4.05(oo) | Supplemental Indenture to the aforesaid Mortgage and Deed of Trust dated March 1, 1997 (Filed as Exhibit 4(b) to ACE's Form 8-K dated March 24, 1997 (File No. 1-03559) and incorporated by reference herein) | |
4.06 | Indenture, dated as of March 1, 1997, between ACE and The Bank of New York (Filed as Exhibit 4(e) to ACE's Form 8-K dated March 24, 1997 (File No. 1-03559) and incorporated by reference herein) | |
4.07 | Form of Supplemental Indenture with respect to New First Mortgage Bonds | |
4.08 | Form of Supplemental Indenture with respect to Collateral First Mortgage Bonds | |
4.09 | Form of Indenture between ACE and The Bank of New York, as Trustee, with respect to the Senior Notes | |
II-5 |
5.01 | Opinion of Kirk Emge, Esq. | |
| 12.01 | Statement of computation of ratio of earnings to fixed charges (Filed as Exhibit 12.5 to ACE's Form 10-Q dated August 13, 2003 (File No. 1-03559) and incorporated by reference herein) |
| 23.01 | Independent Accountants' Consent |
| 23.02 | Consent of Kirk Emge, Esq. (included in Exhibit 5.01) |
23.03 | Consent of Covington & Burling | |
25.01 | Form T-1 Statement of Eligibility of The Bank of New York to act as Trustee under the Senior Note Indenture | |
25.02 | Form T-1 Statement of Eligibility of The Bank of New York to act as Trustee under the Mortgage | |
25.03 | Form T-1 Statement of Eligibility of The Bank of New York to act as Trustee under the Note Indenture | |
* | To be filed as an exhibit to a subsequent current report on Form 8-K. |
ITEM 17. UNDERTAKINGS. | |||
1. | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: | ||
(i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; | ||
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; | ||
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; | ||
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement; | |||
2. | That, for the purpose of determining any liability under the Securities 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; and | ||
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. | ||
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The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange 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. |
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 15 above, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities 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 officer, director 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 j urisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
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SIGNATURES | ||||
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Wilmington, State of Delaware, on the 17th day of September, 2003. | ||||
ATLANTIC CITY ELECTRIC COMPANY | ||||
Pursuant to the requirements of Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated. | ||||
Signature | Title | Date | ||
/s/ John M. Derrick, Jr. | Chairman and Director | September 17, 2003 | ||
/s/ Joseph M. Rigby | President, Chief Executive Officer and | September 17, 2003 | ||
/s/ Andrew W. Williams | Chief Financial Officer and Director | September 17, 2003 | ||
/s/ James P. Lavin | Controller (principal accounting officer) | September 17, 2003 | ||
/s/ Dennis R. Wraase | Director | September 17, 2003 | ||
/s/ William T. Torgerson | Director | September 17, 2003 | ||
/s/ Thomas S. Shaw | Director | September 17, 2003 | ||
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