Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Appalachian Power Company
(Exact name of registrant as specified in its charter)
Virginia 54-0124790
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
40 Franklin Road
Roanoke, Virginia 24011
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 540-985-2300
ARMANDO A. PENA, Treasurer
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza
Columbus, Ohio 43215
614-223-2850
(Name, address and telephone number of agent for service)
It is respectfully requested that the Commission send copies
of all notices, orders and communications to:
Simpson Thacher & Bartlett Dewey Ballantine
425 Lexington Avenue 1301 Avenue of the Americas
New York, NY 10017-3909 New York, NY 10019-6092
Attention: James M. Cotter Attention: E. N. Ellis, IV
Approximate date of commencement of proposed sale to the public:
At such time or times after the effective date of the Registra-
tion Statement as the registrant shall determine.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box. [ ]
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, please check the following box. [X]
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
[ ]
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of Proposed Proposed
Each Class of Maximum Maximum
of Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Unit* Price* Fee
Debt
Securities $75,000,000 100% $75,000,000 $22,728
*Estimated solely for purpose of calculating the registration
fee.
The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until the registration statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
The within Prospectus contains the information required by Rule
429 of the Commission under the Securities Act of 1933 with
respect to $25,000,000 of Debt Securities of the registrant
remaining unsold under Registration Statement No. 333-01049,
declared effective February 27, 1996.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE
ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY
SALE OF THESE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.
SUBJECT TO COMPLETION, DATED JANUARY 23, 1997
PROSPECTUS
Appalachian Power Company
$100,000,000
Debt Securities
Appalachian Power Company (the "Company") intends to offer,
from time to time, up to $100,000,000 aggregate principal amount
of its Debt Securities, consisting of First Mortgage Bonds (the
"First Mortgage Bonds"), First Mortgage Bonds, Designated Secured
Medium Term Notes (the "Notes") and/or its unsecured debt
securities (the "Unsecured Notes"). (The First Mortgage Bonds
and the Notes are hereinafter collectively referred to as the
"New Bonds"). (The First Mortgage Bonds, the Notes and the
Unsecured Notes are hereinafter collectively referred to as the
"Debt Securities"). The Debt Securities will be offered in one
or more series in amounts, at prices and on terms to be
determined at the time or times of sale. The title, aggregate
principal amount, rate and time of payment of interest, maturity,
initial public offering price, if any, redemption provisions, if
any, credit enhancement, if any, improvement fund, if any,
dividend restrictions in addition to those described herein, if
any, and other specific terms of each series of Debt Securities
in respect of which this Prospectus is being delivered will be
set forth in an accompanying prospectus or pricing supplement
("Prospectus Supplement").
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The Company may sell the Debt Securities through underwrit-
ers, dealers or agents, or directly to one or more institutional
purchasers. A Prospectus Supplement will set forth the names of
underwriters or agents, if any, any applicable commissions or
discounts and the net proceeds to the Company from any such sale.
The date of this Prospectus is January , 1997
No dealer, salesperson or other person has been authorized
to give any information or to make any representation not
contained in this Prospectus in connection with the offer made by
this Prospectus or any Prospectus Supplement relating hereto,
and, if given or made, such information or representation must
not be relied upon as having been authorized by the Company or
any underwriter, agent or dealer. Neither this Prospectus nor
this Prospectus as supplemented by any Prospectus Supplement
constitutes an offer to sell, or a solicitation of an offer to
buy, by any underwriter, agent or dealer in any jurisdiction in
which it is unlawful for such underwriter, agent or dealer to
make such an offer or solicitation. Neither the delivery of this
Prospectus or this Prospectus as supplemented by any Prospectus
Supplement nor any sale made thereunder shall, under any
circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or
thereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934 (the "1934 Act") and in
accordance therewith files reports and other information with the
Securities and Exchange Commission (the "SEC"). Such reports and
other information may be inspected and copied at the public
reference facilities maintained by the SEC at 450 Fifth Street,
N.W., Washington, D.C., 20549; Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois, 60661; and 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such
material can be obtained from the Public Reference Section of the
SEC, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The SEC maintains a Web site at http://www.sec.gov
containing reports, proxy and information statements and other
information regarding registrants that file electronically with
the SEC, including the Company. Certain of the Company's
securities are listed on the New York Stock Exchange and on the
Philadelphia Stock Exchange, where reports and other information
concerning the Company may also be inspected.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the SEC
are incorporated in this Prospectus by reference:
-- The Company's Annual Report on Form 10-K for the year
ended December 31, 1995;
-- The Company's Quarterly Reports on Form 10-Q for the
periods ended March 31, 1996, June 30, 1996 and
September 30, 1996;
-- The Company's Current Report on Form 8-K dated March
19, 1996; and
-- The Company's Current Report on Form 8-K dated December
23, 1996.
All documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date
of this Prospectus and prior to the termination of the offering
made by this Prospectus shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other
subsequently filed document which is deemed to be incorporated by
reference herein or in a Prospectus Supplement modifies or
supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to
whom a copy of this Prospectus has been delivered, on the written
or oral request of any such person, a copy of any or all of the
documents described above which have been incorporated by
reference in this Prospectus, other than exhibits to such
documents. Written requests for copies of such documents should
be addressed to Mr. G. C. Dean, American Electric Power Service
Corporation, 1 Riverside Plaza, Columbus, Ohio 43215 (telephone
number: 614-223-1000). The information relating to the Company
contained in this Prospectus or any Prospectus Supplement
relating hereto does not purport to be comprehensive and should
be read together with the information contained in the documents
incorporated by reference.
THE COMPANY
The Company is engaged in the generation, purchase,
transmission and distribution of electric power to approximately
865,000 customers in Virginia and West Virginia, and in supplying
electric power at wholesale to other electric utility companies
and municipalities in those states and in Tennessee. Its
principal executive offices are located at 40 Franklin Road,
S.W., Roanoke, Virginia 24011 (telephone number: 540-985-2300).
The Company is a subsidiary of American Electric Power Company,
Inc. ("AEP") and is a part of the American Electric Power
integrated utility system (the "AEP System"). The executive
offices of AEP are located at 1 Riverside Plaza, Columbus, Ohio
43215 (telephone number: 614-223-1000).
USE OF PROCEEDS
The Company proposes to use the proceeds from the sales of
the Debt Securities to refund long-term debt, to fund its
construction program, or to repay short-term unsecured
indebtedness incurred in connection with its construction
program. The Company's First Mortgage Bonds, 9.35% Series due
2021 ($43,250,000 principal amount outstanding) may be redeemed
at their regular redemption price of 107.02%. Such Bonds may
also be redeemed at a lower special redemption price (but not
lower than 100% of the principal amount thereof) through the
application of cash deposited with the Trustee (as defined
below), pursuant to certain provisions of the Mortgage (as
defined below).
The Company has estimated that its consolidated construction
costs (inclusive of allowance for funds used during construction)
during 1997 will be approximately $229,000,000. At January 6,
1997, the Company had approximately $61,000,000 of short-term
unsecured indebtedness outstanding.
RATIO OF EARNINGS TO FIXED CHARGES
Below is set forth the ratio of earnings to fixed charges
for each of the years in the period 1991 through 1995 and for the
12 month period ended September 30, 1996:
12-Month
Period Ended Ratio
December 31, 1991 2.85
December 31, 1992 2.58
December 31, 1993 2.69
December 31, 1994 2.37
December 31, 1995 2.54
September 30, 1996 2.84
DESCRIPTION OF NEW BONDS
The New Bonds will be issued under the Mortgage and Deed of
Trust, dated as of December 1, 1940, made by the Company to
Bankers Trust Company, New York City, as Trustee, as heretofore
supplemented and amended and as to be further supplemented (the
"Mortgage"). All First Mortgage Bonds (including the New Bonds)
issued and to be issued under the Mortgage are herein sometimes
referred to as "Bonds". Copies of the Mortgage, including the
respective forms of Supplemental Indenture pursuant to which each
series of the New Bonds will be issued (the "new Supplemental
Indenture") are filed as exhibits to the Registration Statement.
The following statements include brief summaries of certain
provisions of instruments under which securities of the Company,
including Bonds, have been issued. Certain of these instruments
apply to the issuance of New Bonds. Such instruments, including
amendments and supplements thereto, have been filed by the
Company as exhibits to the Registration Statement. Such
summaries do not purport to be complete and reference is made to
such instruments for complete statements of such provisions.
Such summaries are qualified in their entirety by such reference
and do not relate or give effect to provisions of statutory or
common law.
Form and Exchange
Unless otherwise set forth in a Prospectus Supplement, New
Bonds in definitive form will be issued only as registered Bonds
without coupons in denominations of $1,000 and in multiples
thereof authorized by the Company. New Bonds will be
exchangeable for a like aggregate principal amount of the same
series of New Bonds of other authorized denominations, and will
be transferable, at the office or agency of the Company in New
York City, and at such other office or agency of the Company as
the Company may from time to time designate, in either case
without payment, until further action by the Company, of any
charge other than for any tax or taxes or other governmental
charge required to be paid by the Company. Bankers Trust Company
is to be designated by the Company to act as agent for payment,
registration, transfer and exchange of the New Bonds in New York
City.
Maturity, Interest, Redemption, Credit Enhancement, Improvement
Fund, Additional Dividend Restrictions and Payment
Information concerning the maturity, interest, redemption
provisions, if any, credit enhancement, if any, improvement fund,
if any, any dividend restrictions in addition to those described
herein and payment with respect to any series of the New Bonds
will be contained in a Prospectus Supplement.
Security
The New Bonds will be secured, pari passu with Bonds of all
other series now or hereafter issued, by the lien of the Mortgage
which, except as provided in the following paragraph,
constitutes, in the opinion of counsel for the Company, a first
lien on substantially all of the fixed physical property and
franchises of the Company, subject only to (a) the conditions and
limitations in the instruments through which the Company claims
title to its properties, (b) "excepted encumbrances" as defined
in Section 6 of the Mortgage, including claims later perfected
into statutory liens or equitable priorities for taxes, services,
materials and supplies, (c) the prior lien of the Trustee for its
compensation, expenses and liabilities, and (d) in the case of
property acquired of record by the Company since the recordation
of the supplemental indenture dated as of March 1, 1996 (not
affixed to other property so as thereby to become subject to the
Mortgage), recordation of a supplemental indenture conveying such
property to the Trustee.
Property acquired after the recordation of the most recent
supplemental indenture may be subject to liens, ranking prior to
the lien of the Mortgage, existing thereon at the time of
acquisition of such property, and the lien thereon of the
Mortgage may be subject to the rights of others which may attach
prior to recordation of a supplemental indenture conveying such
property to the Trustee after its acquisition. The provisions of
the Mortgage, in substance, permit releases of property from the
lien and the withdrawal of cash proceeds of property released
from the lien, not only against new property then becoming
subject to the lien, but also against property already subject to
the lien of the Mortgage, unless such property was owned at
August 31, 1940, or has been made the basis of the issue of Bonds
or a credit under Sections 20 or 40 of the Mortgage.
Accordingly, any increase in the amount of the mortgaged and
pledged property as a result of the after-acquired property
clause may be eliminated by means of such releases and
withdrawals.
Issuance of Additional Bonds
Additional Bonds of any series may be issued in a principal
amount equal to:
1. 60% of the cost or the then fair value, whichever
is less, of unfunded property additions after deduction for
retirements;
2. The principal amount of Bonds or prior lien bonds
retired or then to be retired; and
3. The amount of cash deposited with the Trustee;
but, except as otherwise provided in the Mortgage, only if the
net earnings (as defined in Section 7 of the Mortgage) are at
least twice the annual interest requirement on all outstanding
Bonds and indebtedness having an equal or prior lien, including
the additional issue. However, no Bonds may be issued against
property additions subject to prior liens, as defined in Section
6 of the Mortgage (a) if the principal amount of outstanding
prior lien bonds secured thereby exceeds 40% of the cost or fair
value (whichever is less) of such property additions or (b) if
the principal amount of all Bonds theretofore issued on such
basis and continuing on such basis, and the amount of certain
other items representing deposited cash withdrawn or property
released on such basis, in the aggregate, exceeds 15% of the
aggregate principal amount of all Bonds theretofore issued
(except Bonds issued under Article VII upon retirement of Bonds
previously outstanding under the Mortgage), including the
additional issue. (See Sections 4, 7, 24, 26, 27, 28, 29, 30, 31
and 40 of the Mortgage and "Description of New Bonds--Maintenance
and Replacement Provisions" below.)
The requirement, referred to above, that net earnings be at
least twice the annual interest requirements on all outstanding
Bonds and indebtedness having an equal or prior lien, including a
proposed additional issue of Bonds, is not applicable under
certain circumstances where additional Bonds are issued in a
principal amount equal to the principal amount of Bonds or prior
lien bonds retired or then to be retired (see Section 30 of the
Mortgage). In calculating earnings coverages under the
provisions of the Mortgage, the Company includes, as a component
of earnings, revenues being collected subject to refund and, to
the extent not limited by the terms of the Mortgage, an allowance
for funds used during construction, including amounts positioned
and classified as an allowance for borrowed funds used during
construction. The coverage under such requirement calculated as
of September 30, 1996 based on the amounts then recorded in the
accounts of the Company, was at least 4.06.
It is estimated that as of January 7, 1997, the Company had
available for use in connection with the authentication of Bonds
approximately $950,000,000 of unbonded bondable property
additions. The Company expects that the New Bonds will be
authenticated upon the basis of Bonds previously retired or to be
retired and/or property additions.
Other Restrictions Upon Creation and/or Issuance of New Bonds and
Other Senior Securities
There are, in addition to the foregoing restrictions,
additional limitations upon the creation and/or issuance by the
Company of long-term debt securities and of shares of stock
ranking, as to dividends and distributions of assets, prior to
the common stock equity of the Company.
The issuance of additional securities is limited by
provisions of the Restated Articles of Incorporation of the
Company which require the consent of the holders of the
Cumulative Preferred Stock then outstanding prior to certain
corporate actions.
The favorable vote of holders of at least two-thirds of the
total voting power of the Cumulative Preferred Stock then
outstanding is required (see Restated Articles of Incorporation,
Article V, Paragraph (7)(A)) (a) to increase the total authorized
amount of the Cumulative Preferred Stock; (b) to create or
authorize any series of stock (other than a series of the
Cumulative Preferred Stock) ranking prior to or on a parity with
the Cumulative Preferred Stock as to assets or dividends, or to
create or authorize any obligation or security convertible into
shares of any such stock, or to issue any such prior ranking
stock or security more than twelve months after the date as of
which the Company was empowered to create or authorize such stock
or security; or (c) to change any of the express terms of the
Cumulative Preferred Stock or of any outstanding series thereof
in a manner prejudicial to the holders thereof. Under Paragraph
(7)(A)(c) of Article V of the Restated Articles of Incorporation,
if less than all series are prejudicially affected, only the
consent of the holders of two-thirds of the total number of votes
which holders of the shares of each series so affected are
entitled to cast is required.
The favorable vote of the holders of a majority of the total
voting power of the Cumulative Preferred Stock then outstanding
is required before the Company may (see Restated Articles of
Incorporation, Article V, Paragraph (7)(B)):
(a) merge or consolidate with or into any other
corporation or corporations, or sell all or substantially
all of its assets, unless such action has been approved by
the SEC or by a successor regulatory authority;
(b) issue or assume any evidences of indebtedness,
secured or unsecured (other than (i) Bonds issued under the
Company's Mortgage, (ii) bonds issued under a new mortgage
replacing the Mortgage, (iii) bonds issued under any other
new mortgage, provided the Mortgage shall have been
irrevocably closed against the authentication of additional
Bonds thereunder, (iv) indebtedness secured by bonds of the
Company or by bonds issued under any such new mortgage, (v)
indebtedness secured by bonds issued under a mortgage
existing at the time of acquisition of property acquired by
the Company, provided such mortgage, or any mortgage
replacing it, is irrevocably closed against authentication
of additional bonds thereunder, or (vi) obligations to pay
the purchase price of materials or equipment made in the
ordinary course of the Company's business), for purposes
other than the refunding or renewing of evidences of
indebtedness previously issued or assumed by the Company
resulting in equal or longer maturities or redeeming or
otherwise retiring all outstanding shares of the Cumulative
Preferred Stock, if immediately after such issue or
assumption, (x) the total principal amount of all such
indebtedness (other than those referred to in (i) through
(vi) above) issued or assumed by the Company and then
outstanding (including the evidences of indebtedness then to
be issued or assumed) would exceed 20% of the sum of (1) the
total principal amount of all debt securities of the
character hereinbefore described in (i) through (vi) above,
issued or assumed by the Company and then to be outstanding,
and (2) the stated capital and surplus of the Company, or
(y) the total outstanding principal amount of all unsecured
debt securities of the Company (other than obligations of
the character described in (vi) above) would exceed 20% of
the sum of (1) the total outstanding principal amount of all
bonds or other secured debt of the Company, and (2) the
stated capital and surplus of the Company, or (z) the total
outstanding principal amount of all unsecured debt
securities of the Company (other than obligations of the
character described in (vi) above) of maturities of less
than 10 years would exceed 10% of the sum of (1) the total
principal amount of all bonds or other secured debt of the
Company, and (2) the stated capital and surplus of the
Company; provided that the payment due upon the maturity of
unsecured debt having an original single maturity of 10 or
more years or the payment due upon the final maturity of any
unsecured serial debt which had original maturities of 10 or
more years is not regarded for purposes of this subparagraph
(b) as unsecured debt of a maturity of less than 10 years
until payment thereof is required within 3 years;
(c) issue or reissue any shares of the Cumulative
Preferred Stock or of any other class of stock ranking on a
parity with the outstanding shares of Cumulative Preferred
Stock as to dividends or assets for any purpose other than
to refinance an amount of outstanding Cumulative Preferred
Stock, or stock ranking prior to or on a parity with the
Cumulative Preferred Stock as to dividends or assets, having
an aggregate involuntary liquidation amount equal to the
aggregate involuntary liquidation amount of such issued or
reissued shares, unless (i) the net income of the Company,
determined in accordance with generally accepted accounting
principles to be available for the payment of dividends for
a period of 12 consecutive calendar months within the 15
calendar months immediately preceding the calendar month of
such issuance, is equal to at least twice the annual
dividend requirements on the Cumulative Preferred Stock
(including dividend requirements on such prior or parity
stock), which will be outstanding immediately after such
issuance; (ii) the gross income of the Company for the same
period determined in accordance with generally accepted
accounting principles (but in any event after all taxes
including taxes based on income) is equal to at least one
and one-half times the aggregate of annual interest charges
on indebtedness (excluding interest charges on indebtedness
to be retired by the application of the proceeds from the
issuance of such shares) and the annual dividend
requirements on the Cumulative Preferred Stock (including
dividend requirements on such prior or parity stock), which
will be outstanding immediately after such issuance; and
(iii) the aggregate of the Common Stock Equity, as defined,
is at least equal to the aggregate amount payable in
connection with an involuntary liquidation of the Company
with respect to all shares of Cumulative Preferred Stock and
all shares of such prior or parity stock, if any, which will
be outstanding immediately after such issuance. No
dividends may be paid on Common Stock which would result in
the reduction of the Common Stock Equity, as defined, below
the requirements of clause (iii).
The restrictions and limitations described or referred to
above, which are designed to protect the relative positions of
the holders of outstanding senior securities of the Company, can
operate in such manner as to limit substantially the additional
amounts of senior securities which can be issued by the Company.
The Company believes that its ability to issue short and long-
term debt securities and preferred stock in the amounts required
to finance its operations and construction program may depend
upon timely rate recovery. If the Company is unable to continue
the issue and sale of securities on an orderly basis, the Company
will be required to consider the obtaining of additional amounts
of common equity, the use of possibly more costly alternative
financing arrangements, if available, or the curtailment of its
construction program and other outlays.
Other than the security afforded by the lien of the Mortgage
and restrictions on the incurrence of additional debt described
above and under "Description of New Bonds--Issuance of Additional
Bonds" herein, there are no provisions of the Mortgage which
afford holders of New Bonds protection in the event of a highly
leveraged transaction involving the Company. However, such a
transaction would require regulatory approval and management of
the Company believes such approval would be unlikely in a
transaction which would result in the Company having a highly
leveraged capital structure.
Maintenance and Replacement Provisions
Section 40 of the Mortgage provides (A) in Part I thereof
for the annual deposit by the Company with the Trustee on or
before April 30 of an amount in cash or principal amount of Bonds
of any series equal to the amount by which a defined percentage
(currently 15%) of the base operating revenues, as defined in
Section 40, less the cost of purchased power during the preceding
calendar year exceeds the aggregate amounts expended during such
period by the Company for repairs and maintenance and for
property substituted for property retired since August 31, 1940;
and (B) in Part II thereof for the annual deposit (which the
Mortgage requires to be made so long as any of the Bonds of any
series issued prior to December 31, 1992 are outstanding and
which, except as disclosed in a Prospectus Supplement, the new
Supplemental Indenture will not require to be made so long as any
of the New Bonds are outstanding) by the Company with the Trustee
on or before April 30 of an amount in cash or principal amount of
Bonds of any series equal to the excess of the product of a
specified percentage (currently 2.25% but subject to change as
provided in the Mortgage) and the average of the Depreciable
Property (as defined) of the Company at the first and the last
day of the preceding calendar year over the sum of (i) the
aggregate amount expended during the preceding calendar year for
property substituted for retired property, (ii) the aggregate of
the property additions certified, and the cash and/or Bonds
deposited pursuant to the requirements of Part I of Section 40
with respect to such year, and (iii) any credit applicable to
prior years. The Company may under this covenant certify to the
Trustee, in lieu of depositing cash or Bonds, property additions
which are not then funded property (which thereupon become funded
property) at cost or fair value, whichever is less.
The Supplemental Indenture dated as of May 1, 1979 amended
Article XX to provide that the Mortgage may at a future date be
amended (i) to delete the requirement for annual deposits
pursuant to Part I of Section 40 of the Mortgage and/or (ii) to
delete the 15% limit on Bonds issued on the basis of property
additions subject to prior liens, upon compliance with the
provisions of the Mortgage but without the favorable vote or
consent of the holder of any new Bond or any other Bond issued
after April 30, 1979 or including any such new Bond or other such
Bond in determining whether a quorum exists or a specified
percentage of holders of Bonds participated in action on any such
amendment. The Company, in its application to the SEC with
respect to the issuance of $70,000,000 principal amount of First
Mortgage Bonds, 11% Series due 1987, proposed, and the SEC
approved, a change in the specified percentage in Part II of
Section 40 of the Mortgage from 2.25% to 2.90%, such change to
become effective on the date the Mortgage is amended as
contemplated in clause (i) above and to continue at 2.90% until
another change in such percentage shall be authorized or approved
upon application by the Company to the SEC. In connection with
the amendment contemplated by the next two sentences, the Company
has elected, and the SEC has authorized the Company to retain,
the applicable percentage at 2.25%. Since all Bonds issued prior
to April 30, 1979 have matured or been redeemed, the Company may
now amend the Mortgage to make such changes described above. The
Company proposes to amend the Mortgage to delete (i) the
requirement for annual deposits pursuant to Part I of Section 40
of the Mortgage and (ii) the 15% limit on Bonds issued on the
basis of property additions subject to prior liens.
Release and Substitution of Property
The Mortgage permits property to be released from the lien
of the Mortgage upon compliance with the provisions thereof.
Such provisions require that, in certain specified cases, cash be
deposited with the Trustee in an amount equal to the excess of
the fair value of the property to be released over the aggregate
of certain computations required by the Mortgage. (See Sections
65 and 69 of the Mortgage.) The Mortgage also contains certain
requirements relating to the withdrawal of release moneys. (See
Section 67 of the Mortgage.)
Modification of the Mortgage
Article XX of the Mortgage provides for modifying or
altering the Mortgage with the consent of the Company and by vote
of the holders of at least 75% in principal amount of the
outstanding Bonds which are affected by the proposed modification
or alteration. No modification or alteration, without the
consent of the holder of a Bond, may modify the terms of payment
of the principal amount of or interest on such Bond or create an
equal or prior lien or deprive such holder of a lien on the
mortgaged property or reduce the above percentage.
Restriction on Common Stock Dividends
Various restrictions on the use of retained earnings for
cash dividends on Common Stock and other purposes are contained
in or result from other covenants in the charter. At September
30, 1996, the Company's consolidated unrestricted retained
earnings amounted to $211,865,000. Unless otherwise specified in
a Prospectus Supplement, there will be no additional restrictions
on common stock dividends.
Concerning the Trustee
AEP System companies, including the Company, utilize many of
the banking services offered by Bankers Trust Company in the
normal course of their businesses. Among such services are the
making of short-term loans and in certain cases term loans,
generally at rates related to the prime commercial interest rate,
and acting as a depositary. In addition, Bankers Trust Company
will serve as Trustee under the Company's Indenture for the
Unsecured Notes. (See "Description of Unsecured Notes" herein.)
The Trustee may, and upon written request of the holders of
a majority in principal amount of the Bonds shall, declare the
principal due upon occurrence of a completed default, but the
holders of a majority in principal amount of the Bonds may annul
such declaration if the default has been cured. (See Section 71
of the Mortgage.) The holders of a majority in principal amount
of the Bonds may direct the time, method and place of conducting
any proceeding for the enforcement of the Mortgage. (See Section
76 of the Mortgage.) No Bondholder has the right to institute
any proceeding for the enforcement of the Mortgage unless such
holder shall have given the Trustee written notice of a completed
default, the holders of 25% in principal amount of the Bonds
shall have offered to the Trustee indemnity against costs,
expenses and liabilities, requested the Trustee to take action
and given the Trustee reasonable opportunity to take such action.
The foregoing does not affect or impair the right of a holder of
a Bond to enforce the payment of the principal of and interest on
such Bond on the respective due dates. (See Section 86 of the
Mortgage.) The Trustee is entitled to be indemnified before
taking action to enforce the lien at the request of such
Bondholders. (See Section 75 of the Mortgage.)
Defaults
By Section 71 of the Mortgage, the following are defined as
"completed defaults": default in the payment of principal;
default for 60 days in the payment of interest; default in
payment of principal or interest on outstanding prior lien bonds
in certain cases; certain events of bankruptcy, insolvency or
reorganization; and default continued for 60 days after notice in
the performance of any other covenant. By Section 59 of the
Mortgage, a failure to provide money for the redemption of Bonds
called for redemption also constitutes a completed default. The
Company is required to furnish annually to the Trustee a
certificate as to compliance with all conditions and covenants
under the Mortgage.
DESCRIPTION OF UNSECURED NOTES
The Unsecured Notes will be issued in series under an
Indenture to be entered into between the Company and Bankers
Trust Company, as Trustee (the "Trustee") (the "Indenture"). The
following summary does not purport to be complete and is subject
in all respects to the provisions of, and is qualified in its
entirety by reference to, the form of Indenture, and the form of
Supplemental Indenture thereto, which are filed as exhibits to
the Registration Statement of which this Prospectus forms a part.
Whenever particular provisions or defined terms in the Indenture
are referred to herein, such provisions or defined terms are
incorporated by reference herein. Section and Article references
used herein are references to provisions of the Indenture unless
otherwise noted.
General
The Unsecured Notes will be unsecured obligations of the
Company and will rank pari passu with all other unsecured and
unsubordinated debt of the Company. The Indenture does not limit
the aggregate principal amount of notes that may be issued
thereunder and provides that Unsecured Notes issued thereunder
may be issued thereunder from time to time in one or more series,
as authorized by a Board Resolution, and set forth in a Company
Order (as defined in the Indenture) or one or more supplemental
indentures creating such series. The Restated Articles of
Incorporation of the Company, however, limit the issuance of
long-term securities. (See "Description of New Bonds--Other
Restrictions Upon Creation and/or Issuance of New Bonds and Other
Senior Securities" above.)
Substantially all of the fixed properties and franchises of
the Company are subject to the lien of the Mortgage under which
the Company's First Mortgage Bonds are outstanding. See
"Description of New Bonds".
The Unsecured Notes are not convertible into any other
security of the Company. The Indenture does not contain any
provisions that afford holders of Unsecured Notes protection in
the event of a highly leveraged transaction involving the
Company. Such a transaction would require regulatory approval,
and management of the Company believes such approval would be
unlikely in a transaction which would result in the Company
having a highly leveraged capital structure. The Indenture also
does not contain any provisions that afford holders of Unsecured
Notes protection against the Company incurring other
indebtedness.
Maturity, Interest, Redemption, Credit Enhancement, Covenants and
Restrictions and Payment
Information concerning the maturity, interest, redemption
provisions, if any, sinking fund, if any, credit enhancement, if
any, any covenants or restrictions, such as limitations on liens
or dividend restrictions, and payment with respect to any series
of the Unsecured Notes will be contained in a Prospectus
Supplement.
Form and Exchange
Unless otherwise set forth in a Prospectus Supplement,
Unsecured Notes in definitive form will be issued only as
registered Unsecured Notes without coupons in denominations of
$1,000 and in integral multiples thereof authorized by the
Company. Unsecured Notes will be exchangeable for a like
aggregate principal amount of the same series of Unsecured Notes
of other authorized denominations, and will be transferable, at
the office or agency designated by the Company in New York City,
or at such other office or agency designated by the Company, in
either case without payment, until further action by the Company,
of any charge other than for any tax or taxes or other
governmental charge required to be paid by the Company. Bankers
Trust Company is to be designated by the Company to act as agent
for payment, registration, transfer and exchange of the Unsecured
Notes in New York City.
Payment and Paying Agents
Payment of principal of and premium (if any) on any
Unsecured Note will be made only against surrender to the Paying
Agent of such Unsecured Note. Principal of and any premium and
interest on Unsecured Notes will be payable at the office of such
Paying Agent or Paying Agents as the Company may designate from
time to time, except that at the option of the Company payment of
any interest may be made by check mailed to the address of the
person entitled thereto as such address shall appear in the Note
Register with respect to such Unsecured Notes.
The Trustee will initially act as Paying Agent with respect
to Unsecured Notes. The Company may at any time designate
additional Paying Agents or rescind the designation of any Paying
Agents or approve a change in the office through which any Paying
Agent acts. (Sections 4.02 and 4.03 of the Indenture).
All moneys paid by the Company to a Paying Agent for the
payment of the principal of or premium or interest, if any, on
any Unsecured Note that remains unclaimed at the end of two years
after such principal, premium, if any, or interest shall have
become due and payable, subject to applicable law, will be repaid
to the Company and the holder of such Unsecured Note will
thereafter look only to the Company for payment thereof. (Section
11.04 of the Indenture).
Modification of the Indenture
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a
majority in principal amount of Unsecured Notes of each series
that are affected by the modification, to modify the Indenture or
any supplemental indenture affecting that series or the rights of
the holders of that series of Unsecured Notes; provided, that no
such modification may, without the consent of the holder of each
outstanding Unsecured Note affected thereby, (i) extend the fixed
maturity of any Unsecured Notes of any series, or reduce the
principal amount thereof, or reduce the rate or extend the time
of payment of interest thereon, or reduce any premium payable
upon the redemption thereof or (ii) reduce the percentage of
Unsecured Notes, the holders of which are required to consent to
any such supplemental indenture. (Section 9.02 of the
Indenture).
In addition, the Company and the Trustee may execute,
without the consent of any holder of Unsecured Notes, any
supplemental indenture for certain other usual purposes including
the creation of any new series of notes to be issued under the
Indenture. (Sections 2.01, 9.01 and 10.01 of the Indenture).
Events of Default
The Indenture provides that any one or more of the following
described events, which has occurred and is continuing,
constitutes an "Event of Default" with respect to each series of
Unsecured Notes:
(a) failure for 30 days to pay interest on Unsecured
Notes of that series when due; or
(b) failure to pay principal or premium, if any, on
Unsecured Notes of that series when due whether at maturity,
upon redemption, by declaration or otherwise; or
(c) failure for 30 days to pay any sinking fund
obligation on Unsecured Notes of that series; or
(d) failure by the Company to observe or perform any
other covenant (other than those specifically relating to
another series) contained in the Indenture for 90 days after
written notice to the Company from the Trustee or the
holders of at least 25% in principal amount of the
outstanding Unsecured Notes of that series; or
(e) certain events involving bankruptcy, insolvency or
reorganization of the Company; or
(f) any other event of default provided for in a
series of Unsecured Notes. (Section 6.01 of the Indenture).
The Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of any particular series of
Unsecured Notes may declare the principal due and payable
immediately upon an Event of Default with respect to such series,
but the holders of a majority in aggregate outstanding principal
amount of such series may annul such declaration and waive the
default with respect to such series if the default has been cured
and a sum sufficient to pay all matured installments of interest
and principal otherwise than by acceleration and any premium has
been deposited with the Trustee. (Sections 6.01 and 6.06 of the
Indenture).
The holders of a majority in aggregate outstanding principal
amount of any series of Unsecured Notes have the right to direct
the time, method and place of conducting any proceeding for any
remedy available to the Trustee for that series. (Section 6.06
of the Indenture). Subject to the provisions of the Indenture
relating to the duties of the Trustee in case an Event of Default
shall occur and be continuing, the Trustee will be under no
obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the holders of
the Unsecured Notes, unless such holders shall have offered to
the Trustee indemnity satisfactory to it. (Section 7.02 of the
Indenture).
The holders of a majority in aggregate outstanding principal
amount of any series of Unsecured Notes affected thereby may, on
behalf of the holders of all Unsecured Notes of such series,
waive any past default, except a default in the payment of
principal, premium, if any, or interest when due otherwise than
by acceleration (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and
principal otherwise than by acceleration and any premium has been
deposited with the Trustee) or a call for redemption of Unsecured
Notes of such series. (Section 6.06 of the Indenture). The
Company is required to file annually with the Trustee a
certificate as to whether or not the Company is in compliance
with all the conditions and covenants under the Indenture.
(Section 5.03(d) of the Indenture).
Consolidation, Merger and Sale
The Indenture does not contain any covenant that restricts
the Company's ability to merge or consolidate with or into any
other corporation, sell or convey all or substantially all of its
assets to any person, firm or corporation or otherwise engage in
restructuring transactions, provided that the successor
corporation assumes due and punctual payment of principal or
premium, if any, and interest on all notes issued under the
Indenture. (Section 10.01 of the Indenture).
Legal Defeasance and Covenant Defeasance Discharge
Unsecured Notes of a series may be defeased in accordance
with their terms and, unless the Supplemental Indenture or the
Company Order establishing the terms of the series otherwise
provides, as set forth below. The Company at any time may
terminate as to a series all of its obligations (except for
certain obligations, including obligations with respect to the
defeasance trust and obligations to register the transfer or
exchange of an Unsecured Note, to replace destroyed, lost or
stolen Unsecured Notes and to maintain agencies in respect of the
Unsecured Notes) with respect to the Unsecured Notes of the
series and the Indenture ("legal defeasance"). The Company at
any time may terminate as to a series its obligations with
respect to the Unsecured Notes of the series under any
restrictive covenant which may be applicable to a particular
series ("covenant defeasance").
The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance
option. If the Company exercises its legal defeasance option, a
series may not be accelerated because of an Event of Default. If
the Company exercises its covenant defeasance option, a series
may not be accelerated by reference to any restrictive covenant
which may be applicable to a particular series.
To exercise either defeasance option as to a series, the
Company must deposit in trust (the "defeasance trust") with the
Trustee, money or Governmental Obligations, or a combination, for
the payment of principal, premium, if any, and interest on the
Unsecured Notes of the series to redemption or maturity and must
comply with certain other conditions. In particular, the Company
must obtain an opinion of tax counsel that the defeasance will
not result in recognition of any gain or loss to holders for
Federal income tax purposes.
In the event the Company exercises its option to effect a
covenant defeasance with respect to the Unsecured Notes of any
series as described above and the Unsecured Notes of that series
are thereafter declared due and payable because of the occurrence
of any Event of Default other than the Event of Default caused by
failing to comply with the covenants which are defeased, the
amount of money and securities on deposit with the Trustee would
be sufficient to pay amounts due on the Unsecured Notes of that
series at the time of their stated maturity but may not be
sufficient to pay amounts due on the Unsecured Notes of that
series at the time of the acceleration resulting from such Event
of Default. However, the Company would remain liable for such
payments. (Section 11.01 of the Indenture).
Governing Law
The Indenture and Unsecured Notes will be governed by, and
construed in accordance with, the laws of the State of New York.
(Section 13.05 of the Indenture).
Concerning the Trustee
AEP System companies, including the Company, utilize many of
the banking services offered by Bankers Trust Company in the
normal course of their businesses. Among such services are the
making of short-term loans and in certain cases term loans,
generally at rates related to the prime commercial interest rate,
and acting as a depositary. In addition, Bankers Trust Company
serves as Trustee under the Company's Mortgage. (See
"Description of New Bonds" herein.)
RECENT DEVELOPMENTS
Reference is made to page C-5 of the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1996, for
a discussion of a settlement agreement filed with the Public
Service Commission of West Virginia ("WVPSC") on November 12,
1996, regarding the Company's rates in West Virginia. The WVPSC
on December 27, 1996, approved the settlement agreement with
certain minor exceptions.
LEGAL OPINIONS
Opinions with respect to the legality of the New Bonds
and/or Unsecured Notes will be rendered by Simpson Thacher &
Bartlett (a partnership which includes professional
corporations), 425 Lexington Avenue, New York, New York, and 1
Riverside Plaza, Columbus, Ohio, counsel for the Company, and by
Dewey Ballantine, 1301 Avenue of the Americas, New York, New
York, counsel for any underwriters, dealers or agents. In
connection with the issuance of New Bonds, Simpson Thacher &
Bartlett and Dewey Ballantine will rely as to matters of Virginia
law, upon the opinion of Hunton & Williams, as to matters of West
Virginia law, upon the opinion of Robinson & McElwee and as to
matters of Tennessee law, upon the opinion of Hunter, Smith &
Davis, LLP, all counsel for the Company. Additional legal
opinions in connection with the offering of the Unsecured Notes
may be given by John M. Adams, Jr. or Thomas G. Berkemeyer,
counsel for the Company. Mr. Adams is Assistant General Counsel,
and Mr. Berkemeyer is a Senior Attorney, in the Legal Department
of American Electric Power Service Corporation, a wholly owned
subsidiary of AEP. From time to time, Dewey Ballantine acts as
counsel to affiliates of the Company in connection with certain
matters.
EXPERTS
The financial statements and related financial statement
schedule incorporated in this prospectus by reference from the
Company's Annual Report on Form 10-K have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their
reports, which are incorporated herein by reference, and have
been so incorporated in reliance upon the reports of such firm
given upon their authority as experts in accounting and auditing.
The legal conclusions in "Security" under the caption
"Description of New Bonds", as to those matters governed by the
laws of the Commonwealth of Virginia have been reviewed by Hunton
& Williams, Richmond, Virginia; as to those matters governed by
the laws of the State of West Virginia by Robinson & McElwee,
Charleston, West Virginia; and as to those matters governed by
the laws of the State of Tennessee by Hunter, Smith & Davis, LLP,
Kingsport, Tennessee, all counsel for the Company. All of said
statements are made on the authority of said firms as experts.
PLAN OF DISTRIBUTION
The Company may sell the New Bonds and/or Unsecured Notes in
any of three ways: (i) through underwriters or dealers; (ii)
directly to a limited number of purchasers or to a single
purchaser; or (iii) through agents. The Prospectus Supplement
relating to a series of the New Bonds and/or Unsecured Notes will
set forth the terms of the offering of the New Bonds and/or
Unsecured Notes, including the name or names of any underwriters,
dealers or agents, the purchase price of such New Bonds and/or
Unsecured Notes and the proceeds to the Company from such sale,
any underwriting discounts or agency fees and other items
constituting underwriters' or agents' compensation, any initial
public offering price and any discounts or concessions allowed or
reallowed or paid to dealers. Any initial public offering price
and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time after the initial public
offering.
If underwriters are used in the sale, the New Bonds and/or
Unsecured Notes will be acquired by the underwriters for their
own account and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time
of the sale. The underwriters with respect to a particular
underwritten offering of New Bonds and/or Unsecured Notes will be
named in the Prospectus Supplement relating to such offering and,
if an underwriting syndicate is used, the managing underwriters
will be set forth on the cover page of such Prospectus
Supplement. Unless otherwise set forth in the Prospectus
Supplement, the obligations of the underwriters to purchase the
New Bonds and/or Unsecured Notes will be subject to certain
conditions precedent, and the underwriters will be obligated to
purchase all such New Bonds and/or Unsecured Notes if any are
purchased.
New Bonds and/or Unsecured Notes may be sold directly by the
Company or through agents designated by the Company from time to
time. The Prospectus Supplement will set forth the name of any
agent involved in the offer or sale of the New Bonds and/or
Unsecured Notes in respect of which the Prospectus Supplement is
delivered as well as any commissions payable by the Company to
such agent. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a reasonable best
efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company
will authorize agents, underwriters or dealers to solicit offers
by certain specified institutions to purchase New Bonds and/or
Unsecured Notes from the Company at the public offering price set
forth in the Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date
in the future. Such contracts will be subject to those
conditions set forth in the Prospectus Supplement, and the
Prospectus Supplement will set forth the commission payable for
solicitation of such contracts.
Subject to certain conditions, the Company may agree to
indemnify any underwriters, dealers, agents or purchasers and
their controlling persons against certain civil liabilities,
including certain liabilities under the Securities Act of 1933.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.*
Estimation based upon the issuance of all of the Debt
Securities in one issuance:
Securities and Exchange Commission
Filing Fees $ 22,728
State Filing and Recordation fees and
expenses 40,000
Printing Registration Statement,
Prospectus, etc. 25,000
Printing and Engraving Debt Securities 10,000
Independent Auditors' fees 15,000
Charges of Trustee (including counsel fees) 17,500
Legal fees 103,500
Rating Agency fees 57,500
Miscellaneous expenses 20,000
Total $311,228
* Estimated, except for filing fees.
Item 15. Indemnification of Directors and Officers.
The Bylaws of the Company provide that the Company shall
indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal because such person
is or was a director, officer or employee of the Company or is or
was serving at the request of the Company as a director, officer,
partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise, against any obligations to pay judgments,
settlements, penalties, fines (including any excise tax) or
reasonable expenses (including attorneys' fees) incurred by such
person in connection with such action, suit or proceeding if (a)
such person conducted him or herself in good faith, (b) such
person believed in the case of conduct in such person's official
capacity with the Company (as defined) that his or her conduct
was in the best interests of the Company, and, in all other
cases, that his or her conduct was at least not opposed to its
best interests, (c) with respect to any criminal action or
proceeding, such person had no reasonable cause to believe his or
her conduct was unlawful and (d) such person was not grossly
negligent or guilty of willful misconduct. Such indemni-fication
in connection with a proceeding by or in the right of the Company
is limited to reasonable expenses incurred in connection with the
proceeding. Any such indemnification (unless ordered by a court)
shall be made by the Company only as authorized in the specific
case upon a determination that indemnification of the director is
proper in the circumstances because such person has met the
applicable standard of conduct.
Section 13.1-698 of the Code of Virginia provides that
unless limited by the articles of incorporation, a corporation
shall indemnify a director who entirely prevails in the defense
of any proceeding to which such person was a party because such
person is or was a director of the corporation against reasonable
expenses incurred in connection with such proceeding. Section
13.1-699 provides that a corporation may pay for or reimburse
reasonable expenses incurred by a director who is a party to such
a proceeding in advance of final disposition of such proceeding
if (a) the director furnishes a written statement of his or her
good faith belief that the standard of conduct described in
Section 13.1-697 has been met; (b) the director furnishes the
corporation a written undertaking by or on behalf of the director
to repay the advance if it is ultimately determined that such
person did not meet the standard of conduct; and (c) a
determination is made that the facts then known to those making
the determination would not preclude indemnification. Section
13.1-700.1 provides procedures which allow directors to apply to
a court for an order directing advances or indemnification.
Section 13.1-702 provides that unless limited by the
articles of incorporation, (a) officers are entitled to mandatory
indemnification under Section 13.1-698 and to apply for court
ordered indemnification under Section 13.1-700.1 to the same
extent as a director, and (b) that a corporation may indemnify
and advance expenses to an officer, employee or agent to the same
extent as to a director. Section 13.1-704 provides that any
corporation shall have the power to make any further indemnity to
any director, officer, employee or agent that may be authorized
by the articles of incorporation or any bylaw made by the
stockholders or any resolution adopted, before or after the
event, by the stockholders, except an indemnity against willful
misconduct or a knowing violation of criminal law.
The above is a general summary of certain provisions of the
Company's Bylaws and the Code of Virginia and is subject in all
respects to the specific and detailed provisions of the Company's
Bylaws and the Code of Virginia.
Reference is made to the Selling Agency Agreement filed as
Exhibit 1(a) hereto and to the Underwriting Agreement filed as
Exhibit 1(b) hereto, which provide for indemnification of the
Company, certain of its directors and officers, and persons who
control the Company, under certain circumstances.
The Company maintains insurance policies insuring its
directors and officers against certain obligations that may be
incurred by them.
Item 16. Exhibits.
Reference is made to the information contained in the
Exhibit Index filed as part of this Registration Statement.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of Debt Securities (if the
total dollar value of Debt Securities would not exceed that
which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant
to Rule 424(b) of the Securities Act of 1933 if, in the
aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
Provided, however, that (i) and (ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(4) That, for purposes of determining any liability under
the Securities Act of 1933, each filing of the registrant's
annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference
in the registration statement shall be deemed to be a new
registration statement relating to the Debt Securities, and the
offering thereof at that time shall be deemed to be the initial
bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the laws of the Commonwealth of Virginia, the registrant's Bylaws
or otherwise, the registrant has been advised that in the opinion
of the SEC such indemnification is against public policy as
expressed in said Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the Debt Securities, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
said Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable cause to believe
that it meets all of the requirements for filing on Form S-3 and
has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City
of Columbus and State of Ohio, on the 23rd day of January, 1997.
APPALACHIAN POWER COMPANY
E. Linn Draper, Jr.*
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
(i) Principal Executive
Officer Chairman of the Board
and Chief Executive
E. Linn Draper, Jr.* Officer January 23, 1997
(ii) Principal Financial
Officer:
G. P. Maloney* Vice President January 23, 1997
(iii) Principal Accounting
Officer:
P. J. DeMaria* Controller January 23, 1997
(iv) A Majority of the
Directors:
P. J. DeMaria*
E. Linn Draper, Jr.*
H. W. Fayne*
Wm. J. Lhota*
G. P. Maloney*
James J. Markowsky*
J. H. Vipperman* January 23, 1997
*By_/s/ A. A. Pena_____
(A. A. Pena, Attorney-in-Fact)
EXHIBIT INDEX
Certain of the following exhibits, designated with an
asterisk (*), are filed herewith. The exhibits not so designated
have heretofore been filed with the Commission and, pursuant to
17 C.F.R. Sections 201.24 and 230.411, are incorporated herein by
reference to the documents indicated following the descriptions
of such exhibits.
Exhibit No. Description
* 1(a) - Copy of proposed form of Selling Agency Agreement
for the Debt Securities.
* 1(b) - Copy of proposed form of Underwriting Agreement
for the Debt Securities.
4(a) - Copy of Mortgage and Deed of Trust, dated as of
December 1, 1940, between the Company and Bankers
Trust Company and R. Gregory Page, as Trustees, as
amended and supplemented [Registration Statement
No. 2-7289, Exhibit 7(b); Registration Statement
No. 2-19884, Exhibit 2(1); Registration Statement
No.2-24453, Exhibit 2(n); Registration Statement
No. 2-60015, Exhibits 2(b)(2), 2(b)(3), 2(b)(4),
2(b)(5), 2(b)(6), 2(b)(7), 2(b)(8), 2(b)(9),
2(b)(10), 2(b)(12), 2(b)(14), 2(b)(15), 2(b)(16),
2(b)(17), 2(b)(18), 2(b)(19), 2(b)(20), 2(b)(21),
2(b)(22), 2(b)(23), 2(b)(24), 2(b)(25), 2(b)(26),
2(b)(27) and 2(b)(28); Registration Statement No.
2-64102, Exhibit 2(b)(29); Registration Statement
No. 2-66457, Exhibits 2(b)(30) and 2(b)(31);
Registration Statement No. 2-69217, Exhibit
2(b)(32); Registration Statement No. 2-86237,
Exhibit 4(b); Registration Statement No. 33-11723,
Exhibit 4(b); Registration Statement No. 33-17003,
Exhibit 4(a)(ii); Registration Statement No. 33-
30964, Exhibit 4(b); Registration Statement No.
33-40720, Exhibit 4(b); Registration Statement No.
33-45219, Exhibit 4(b); Registration Statement No.
33-50112, Exhibits 4(b) and 4(c); Registration
Statement No. 33-53410, Exhibit 4(b); Registration
Statement No. 33-59834, Exhibit 4(b); Registration
Statement No. 33-50229, Exhibits 4(b) and 4(c);
Registration Statement No. 33-58431, Exhibits
4(b), 4(c), 4(d) and 4(e); Registration Statement
No. 333-01049, Exhibits 4(b) and 4(c)].
* 4(b) - Copy of Supplemental Indenture, dated as of March
1, 1996, between the Company and Bankers Trust
Company, providing for the issuance of
$100,000,000 principal amount of First Mortgage
Bonds, 6-3/8% Series due March 1, 2001 and
$100,000,000 principal amount of First Mortgage
Bonds, 6.80% Series due March 1, 2006.
* 4(c) - Copy of form of proposed Supplemental Indenture to
be entered into between the Company and Bankers
Trust Company, as Trustee, for the New Bonds.
* 4(d) - Copy of form of proposed Indenture to be entered
into between the Company and Bankers Trust
Company, as Trustee, for the Unsecured Notes.
* 4(e) - Copy of form of proposed Supplemental Indenture to
be entered into between the Company and Bankers
Trust Company, as Trustee, for the Unsecured
Notes.
* 5 - Opinion of Simpson Thacher & Bartlett with respect
to the Debt Securities.
12 - Statement re Computations of Ratios [Quarterly
Report on Form 10-Q of the Company for the period
ended September 30, 1996, File No. 1-3457, Exhibit
12].
*23(a) - Consent of Deloitte & Touche LLP.
23(b) - Consent of Simpson Thacher & Bartlett (included in
Exhibit 5 filed herewith).
*23(c) - Consent of Hunton & Williams.
*23(d) - Consent of Robinson & McElwee.
*23(e) - Consent of Hunter, Smith & Davis, LLP.
*24 - Powers of Attorney and resolutions of the Board of
Directors of the Company.
*25(a) - Form T-1 re eligibility of Bankers Trust Company
to act as Trustee under the First Mortgage Bond
Indenture.
*25(b) - Form T-1 re eligibility of Bankers Trust Company
to act as Trustee under the Unsecured Note
Indenture.