Registration No.333-
SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Baltimore Gas and Electric Company
(Exact Name of Registrant as Specified in its Charter)
Maryland
(State of Incorporation)
52-0280210
(I.R.S. Employer Identification No.)
David A. Brune, Vice President
39 W. Lexington Street, Baltimore, Maryland 21201
(410) 234-5511
(Address, including Zip Code, and Telephone Number, including Area Code
of Registrant's Principal Executive Offices and Agent for Service)
Approximate date of commencement of proposed sale to the public: After
the effective date of this Registration Statement as determined by market
conditions.
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. [ ]
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Title of each Proposed Proposed
class of maximum maximum Amount of
securities Amount to offering aggregate registration
to be registered be registered price per unit offering price fee
- --------------------------------------------------------------------------------
Medium-Term Notes, $200,000,000 100%* $200,000,000 $60,607
Series G
- --------------------------------------------------------------------------------
* Inserted solely for the 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.
PROSPECTUS
$200,000,000 [GRAPHIC OMITTED]
MEDIUM-TERM NOTES
SERIES G
Baltimore Gas and Electric Company
39 W. Lexington Street
Baltimore, Maryland 21201
(410) 234-5000
- --------------------------------------------------------------------------------
TERMS OF SALE
The following terms may apply to the notes which we may sell at one or more
times. The final terms for each note will be included in a pricing supplement.
We will receive between $199,750,000 and $198,500,000 of the proceeds from the
sale of the notes, after paying the agents commissions of between $250,000 and
$1,500,000.
- - Mature 9 months to 30 years
- - Fixed or floating interest rate. The floating interest rate formula would be
based on:
Commercial paper rate
Prime rate
CD rate
Federal Funds effective rate
LIBOR
Treasury rate
CMT rate
- - Remarketing features
- - Certificate or book-entry form
- - Subject to redemption and repurchase at option of BGE or holder
- - Not convertible, amortized or subject to a sinking fund
- - Interest paid on fixed rate notes on May 1 and November 1
- - Interest paid on floating rate notes monthly, quarterly, semi-annually, or
annually
- - Minimum denominations of $1,000, increased in multiples of $1,000
- -------------------------------------------------------------------------------
The notes have not been approved by the SEC or any state securities commission,
nor have these organizations determined that this prospectus is accurate or
complete. Any representation to the contrary is a criminal offense.
- --------------------------------------------------------------------------------
LEHMAN BROTHERS GOLDMAN, SACHS & CO.
AGENTS
(Once the registration statement is effective, the date of the prospectus
will be inserted here.)
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
from our web site at htpp://www.bge.com or at the SEC's web site at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus, and later information that we file with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until we sell all the notes. This prospectus is part of a registration statement
we filed with the SEC.
- - Annual Report on Form 10-K for the year ended December 31, 1996;
- - Quarterly Report on Form 10-Q for the quarter ended March 31, 1997;
- - Registration Statement on Form S-4 of Constellation Energy Corporation, as
amended, effective February 9, 1996 (Registration No. 33-64799). This filing
describes our proposed merger with Potomac Electric Power Company; and
- - Current Reports on Form 8-K dated February 26, 1997, March 7, 1997, April 7,
1997, April 17, 1997 and July 24, 1997.
You may request a copy of these filings, at no cost, by writing or telephoning
us at the following address:
Shareholder Services
Baltimore Gas and Electric Company
39 W. Lexington Street
Baltimore, Maryland 21201
410-783-5920
You should rely only on the information incorporated by reference or provided in
this prospectus or any supplement. We have not authorized anyone else to provide
you with different information. We are not making an offer of these notes in any
state where the offer is not permitted. You should not assume that the
information in this prospectus or any supplement is accurate as of any date
other than the date on the front of those documents.
THE COMPANY
BGE is a public utility that has served the central Maryland area for over 175
years. We produce, purchase and sell electricity and purchase, transport and
sell natural gas. We also jointly own and operate two electric generating plants
and one hydroelectric plant in Pennsylvania.
We also have several wholly owned subsidiaries that are engaged in several
diversified business activities, including,
- - energy marketing activities, specifically power marketing, natural gas
brokering, energy services and district heating and cooling projects,
- - power generation projects outside our service territory,
- - investment activities,
- - real estate,
2
- - senior living facilities, and
- - appliance sales and service, heating and air conditioning sales and service,
and home improvement.
BGE and Potomac Electric Power Company (PEPCO) have agreed to merge to form
Constellation Energy Corporation once all conditions to the merger are satisfied
or waived. Please see our most recent filing under the Securities Exchange Act
of 1934 for the status of the proposed merger. PEPCO is a neighboring electric
utility serving Washington, D.C. and major portions of Montgomery and Prince
George's Counties in Maryland. The reasons for the merger and other information
about it are discussed in more detail in the registration statement on Form S-4.
See the section titled Where You Can Find More Information.
PRICING SUPPLEMENT
The pricing supplement for each offering of notes will contain the specific
information and terms for that offering. The pricing supplement may also add,
update or change information contained in this prospectus. It is important for
you to consider the information contained in this prospectus and the pricing
supplement in making your investment decision.
USE OF PROCEEDS
The net proceeds from the sale of the notes will be used for general corporate
purposes relating to our utility business, including repayment of commercial
paper borrowings used to finance construction, other capital expenditures, and
operations. If we do not use the net proceeds immediately, we temporarily invest
them in short-term, interest-bearing obligations. For current information on our
commercial paper balances and average interest rate, see our most recent Form
10-K and 10-Q. See Where You Can Find More Information.
RATIO OF EARNINGS TO FIXED CHARGES
The Ratio of Earnings to Fixed Charges for each of the periods indicated is as
follows:
Twelve Months Twelve Months Ended Dec. 31,
ended ------------------------------------------------------------
March 31, 1997 1996 1995 1994 1993 1992
- -------------- ---- ---- ---- ---- ----
2.88 3.10 3.21 3.14 3.00 2.65
For current information on the Ratio of Earnings to Fixed Charges, please see
our most recent Form 10-K and 10-Q. See Where You Can Find More Information.
3
DESCRIPTION OF THE NOTES
General
We will issue the notes under an indenture between us and the Trustee, The Bank
of New York, dated July 1, 1985 and supplemented on October 1, 1987 and January
26, 1993. This prospectus briefly outlines some of the indenture provisions. If
you would like more information on these provisions, review the indenture and
its supplements that we filed with the SEC. See Where You Can Find More
Information on how to locate the indenture and the supplements. You may also
review the indenture at the Trustee's offices at 101 Barclay Street, New York,
New York.
The indenture does not limit the amount of notes that may be issued. Each series
of notes may differ as to their terms. For current information on our debt
outstanding see our most recent Form 10-K and 10-Q. See Where You Can Find More
Information.
The notes are unsecured and will rank equally with all our unsecured
indebtedness. The notes will be denominated in U.S. dollars and we will pay
principal and interest in U.S. dollars. The notes will not be subject to any
conversion, amortization, or sinking fund. It is anticipated that the notes will
be "book-entry," represented by a permanent global note registered in the name
of The Depository Trust Company, or its nominee. However, we reserve the right
to issue notes in certificate form registered in the name of the noteholders.
In the discussion that follows, whenever we talk about paying principal on the
notes, we mean at maturity, redemption or repurchase. Also, in discussing the
time for notices and how the different interest rates are calculated, all times
are New York City time, unless otherwise noted.
The following terms may apply to each note as specified in the applicable
pricing supplement and the note.
Redemptions
We may redeem notes at our option. Notes may be redeemable in whole or in part
in increments of $1,000 upon no more than 60, and not less than 30, days prior
notice. If we do not redeem all the notes of a series at one time, the Trustee
selects the notes to be redeemed in a manner it determines to be fair.
Repurchases
The noteholder may have the right to cause us to repurchase the notes. We will
repurchase the notes in whole or in part in increments of $1,000. The method for
repurchases differs for book-entry and certificate notes, and is discussed on
page 6.
Remarketed Notes
We may issue notes with remarketing features. The applicable pricing supplement
will describe the terms for the notes including: interest rate, remarketing
provisions, our right to redeem notes, the holders' right to tender notes, and
any other provisions.
Book-Entry Notes - Registration, Transfer, and Payment of Interest and Principal
Book-entry notes of a series will be issued in the form of a global note that
will be deposited with The Depository Trust Company, New York, New York ("DTC").
This means that we will not issue certificates to each holder. One global note
will be issued to DTC who will keep a computerized record of its participants
(for example, your broker) whose clients have purchased the notes. The
participant will then keep a record of its clients who purchased the notes.
Unless it is exchanged in whole or in part for a certificate note, a global note
4
may not be transferred; except that DTC, its nominees, and their successors may
transfer a global note as a whole to one another.
Beneficial interests in global notes will be shown on, and transfers of global
notes will be made only through, records maintained by DTC and its participants.
DTC has provided us the following information: DTC is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the United States
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered under the
provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds
securities that its participants ("Direct Participants") deposit with DTC. DTC
also records the settlement among Direct Participants of securities
transactions, such as transfers and pledges, in deposited securities through
computerized records for Direct Participant's accounts. This eliminates the need
to exchange certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations.
DTC's book-entry system is also used by other organizations such as securities
brokers and dealers, banks and trust companies that work through a Direct
Participant. The rules that apply to DTC and its participants are on file with
the SEC.
DTC is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., The American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc.
We will wire principal and interest payments to DTC's nominee. We and the
Trustee will treat DTC's nominee as the owner of the global notes for all
purposes. Accordingly, we, the Trustee and any paying agent will have no direct
responsibility or liability to pay amounts due on the global notes to owners of
beneficial interests in the global notes.
It is DTC's current practice, upon receipt of any payment of principal or
interest, to credit Direct Participants' accounts on the payment date according
to their respective holdings of beneficial interests in the global notes as
shown on DTC's records. In addition, it is DTC's current practice to assign any
consenting or voting rights to Direct Participants whose accounts are credited
with notes on a record date, by using an omnibus proxy. Payments by participants
to owners of beneficial interests in the global notes, and voting by
participants, will be governed by the customary practices between the
participants and owners of beneficial interests, as is the case with notes held
for the account of customers registered in "street name." However, payments will
be the responsibility of the participants and not of DTC, the Trustee or us.
Notes represented by a global note will be exchangeable for certificate notes
with the same terms in authorized denominations only if:
- - DTC notifies us that it is unwilling or unable to continue as depositary
or if DTC ceases to be a clearing agency registered under applicable law
and a successor depositary is not appointed by us within 90 days; or
- - we determine not to require all of the notes of a series to be represented
by a global note and notify the Trustee of our decision.
5
Book-Entry Notes - Method of Repurchase
Participants, on behalf of the owners of beneficial interests in the global
notes, may exercise the repurchase option by delivering written notice to our
paying agent at least 30, but no more than 60, days prior to the date of
repurchase. The paying agent must receive notice by 5:00 p.m. on the last day
for giving notice. Procedures for the owners of beneficial interests in global
notes to notify their participants of their desire to have their note
repurchased will be governed by the customary practices of the participant. The
written notice to the paying agent must state the principal amount to be
repurchased. It is irrevocable and a duly authorized officer of the participant
(with signatures guaranteed) must sign it.
Certificate Notes-Registration, Transfer, and Payment of Interest and Principal
If we issue certificate notes, they will be registered in the name of the
noteholder. The notes may be transferred or exchanged, pursuant to
administrative procedures in the Indenture, without the payment of any service
charge (other than any tax or other governmental charge) by contacting the
paying agent.
Holders of over $5 million in principal amount of notes can request that payment
of principal and interest be wired to them by contacting the paying agent at the
address set forth above at least one business day prior to the payment date.
Otherwise, payments will be made by check.
Certificate Notes - Method of Repurchase
Noteholders desiring to exercise their repurchase option must notify the paying
agent at least 30 but not more than 45 calendar days prior to the repayment date
by providing the bank:
- - the note, with the section entitled "Option to Elect Repayment" on the reverse
of the note completed; or
- - a fax or letter (first class, postage prepaid) from a member of a national
securities exchange, the National Association of Securities Dealers, or a bank
or trust company in the United States which states the following:
- - the name of the holder;
- - the principal amount of the note and the amount to be repurchased;
- - the certificate number or the maturity and a description of the terms of the
note;
- - a statement that you wish to sell all or a portion of your note; and
- - a guaranty that the note with the section entitled "Option to Elect Repayment"
on the reverse of the note completed will be received by the paying agent
within 5 business days.
The note and form must be received by the paying agent by such 5th business day.
Your notice of repurchase is irrevocable.
If you sell a portion of a note, the old note will be canceled and a new note
for the remaining principal amount will be issued to you.
Interest Rate
General
We have provided a Glossary at the end of this prospectus to define the
capitalized words used in discussing the interest rates payable on the notes.
The interest rate on the notes will either be fixed or floating. The interest
paid will include interest accrued to, but excluding, the date of maturity,
6
redemption or repurchase. Interest is generally payable to the person in whose
name the note is registered at the close of business on the record date before
each interest payment date. Interest payable at maturity, redemption, or
repurchase, however, will be payable to the person to whom principal is payable.
The first interest payment on any note originally issued between a record date
and interest payment date or on an interest payment date will be made on the
interest payment date after the next record date. Interest payments, other than
those payable at maturity, redemption or repurchase will be paid, at our option,
by check or wire transfer.
Fixed Rate Notes
Each pricing supplement will designate the fixed rate of interest payable on a
note. Interest will be paid May 1 and November 1, and upon maturity, redemption
or repurchase. If any payment date falls on a day that is not a Business Day,
payment will be made on the next Business Day and no additional interest will be
paid. The record dates for such notes will be April 15 (for interest to be paid
on May 1) and October 15 (for interest to be paid on November 1). Interest
payments will be the amount of interest accrued to, but excluding, each May 1
and November 1. Interest will be computed using a 360-day year of twelve 30-day
months.
Floating Rate Notes
General
Each floating rate note will have an interest rate formula. The formula may be
based on:
- - the commercial paper rate;
- - the prime rate;
- - the CD rate;
- - the federal funds effective rate;
- - the LIBOR;
- - the Treasury rate;
- - the CMT rate; or
- - another interest rate index.
The applicable pricing supplement will also indicate the Spread and/or Spread
Multiplier, if any. In addition, any floating rate note may have a maximum or
minimum interest rate limitation.
Upon request, the Calculation Agent will provide the current interest rate and,
if different, the interest rate which will become effective on the next Interest
Reset Date.
Date of Interest Rate Change
The interest rate on each floating rate note may be reset daily, weekly,
monthly, quarterly, semi-annually, or annually. The Interest Reset Date will be:
- - for notes which reset daily, each Business Day;
- - for notes (other than Treasury rate notes) which reset weekly, the Wednesday
of each week;
- - for Treasury rate notes which reset weekly, the Tuesday of each week;
- - for notes which reset monthly, the third Wednesday of each month;
- - for notes which reset quarterly, the third Wednesday of March, June, September
and December;
- - for notes which reset semi-annually, the third Wednesday of the two months of
each year indicated in the applicable pricing supplement; and
- - for notes which reset annually, the third Wednesday of the month of each
year indicated in the applicable pricing supplement.
The initial interest rate or interest rate formula on each note effective until
the first Interest Reset Date will be indicated in the applicable pricing
supplement. Thereafter, the interest rate will be the rate determined on the
next Interest Determination Date, as explained below. Each time a new interest
rate is determined, it will become effective on the subsequent Interest Reset
Date. If
7
any Interest Reset Date is not a Business Day, then the Interest Reset
Date will be postponed to the next Business Day. However, in the case of a LIBOR
note, if the next Business Day is in the next calendar month, the Interest Reset
Date will be the immediately preceding Business Day.
When Interest Rate Is Determined
The Interest Determination Date for all notes (except Treasury rate notes) is
the second Business Day before the Interest Reset Date.
The Interest Determination Date for Treasury rate notes will be the day of the
week in which the Interest Reset Date falls on which Treasury bills would
normally be auctioned. Treasury bills are usually sold at auction on Monday of
each week, unless that day is a legal holiday, in which case the auction is
usually held on Tuesday. However, the auction may be held on the preceding
Friday. If an auction is held on the preceding Friday, that day will be the
Interest Determination Date pertaining to the Interest Reset Date occurring in
the next week. If an auction date falls on any Interest Reset Date then the
Interest Reset Date will instead be the first Business Day immediately following
the auction date.
When Interest Is Paid
Interest is paid as follows:
- - for notes which reset daily or weekly, on the third Wednesday of March, June,
September and December;
- - for notes which reset monthly, on the third Wednesday of each month or on
the third Wednesday of March, June, September and December (as indicated in
the applicable pricing supplement);
- - for notes which reset quarterly, on the third Wednesday of March, June,
September, and December;
- - for notes which reset semi-annually, on the third Wednesday of the two
months specified in the applicable pricing supplement;
- - for notes which reset annually, on the third Wednesday of the month specified
in the applicable pricing supplement; and
- - at maturity, redemption or repurchase.
If interest is payable on a day which is not a Business Day, payment will be
postponed to the next Business Day. However, for LIBOR notes, if the next
Business Day is in the next calendar month, interest will be paid on the
preceding Business Day.
The record date will be 15 calendar days prior to each day interest is paid,
whether or not such day is a Business Day.
The interest payable will be the amount of interest accrued to, but excluding,
the interest payment date. However, for notes on which the interest resets daily
or weekly, the interest payable will include interest accrued to and including
the record date prior to the interest payment date. If the interest payment date
is also a day that principal is due, the interest payable will include interest
accrued to, but exclude, the date of maturity, redemption or repurchase.
The accrued interest for any period is calculated by multiplying the principal
amount of a note by an accrued interest factor. The accrued interest factor is
computed by adding the interest factor calculated for each day in the period to
the date for which accrued interest is being calculated. The interest factor
(expressed as a decimal rounded upwards if necessary, as described below) is
computed by dividing the interest rate (expressed as a decimal rounded upwards
if necessary) applicable to such date by 360, unless the notes are Treasury rate
notes or CMT rate notes in which case it will be
8
divided by the actual number of days in the year.
All percentages resulting from any calculation of floating rate notes will be
rounded, if necessary, to the nearest one-hundred thousandth of a percentage
point, with five one-millionths of a percentage point rounded upwards (e.g.,
9.876545% (or .09876545) being rounded to 9.87655% (or .0987655) and 9.876544%
(or .09876544) being rounded to 9.87654% (or .0987654)), and all dollar amounts
used in or resulting from such calculation will be rounded to the nearest cent
(with one-half cent being rounded upwards).
Commercial Paper Rate Notes
Each commercial paper rate note will bear interest at the rate (calculated with
reference to the Commercial Paper Rate and the Spread and/or Spread Multiplier,
if any) specified on the commercial paper rate note and in the applicable
pricing supplement.
"Commercial Paper Rate" means, with respect to any Commercial Paper Interest
Determination Date, the Money Market Yield (calculated as described below) of
the rate on such date for commercial paper having the Index Maturity specified
in the applicable pricing supplement as published in H.15(519) under the heading
"Commercial Paper."
The following procedures will occur if the rate cannot be set as described
above:
(a) If that rate is not published in H.15(519) prior to 9:00 A.M. on the
Calculation Date, then the Commercial Paper Rate will be the Money Market Yield
of the rate on the Commercial Paper Interest Determination Date for commercial
paper having the Index Maturity specified in the applicable pricing supplement
as published in Composite Quotations under the heading "Commercial Paper."
(b) If the rate is not published or in Composite Quotations by 3:00 P.M. on the
Calculation Date, the Commercial Paper Rate for that Commercial Paper Interest
Determination Date will then be calculated by the Calculation Agent in the
following manner.
The Commercial Paper Rate will be calculated as the Money Market Yield of the
average for the offered rates, as of 11:00 A.M., on that date, of three leading
dealers of commercial paper in New York selected for commercial paper having the
applicable Index Maturity placed for an industrial issuer whose bond rating is
"AA," or the equivalent, from a nationally recognized rating agency.
(c) Finally, if fewer than three dealers are quoting as mentioned, the rate of
interest in effect for the applicable period will be the same as the rate of
interest in effect for the prior interest reset period.
Prime Rate Notes
Each prime rate note will bear interest at the rate (calculated with reference
to the Prime Rate and the Spread and/or Spread Multiplier, if any) specified on
the prime rate note and in the applicable pricing supplement.
"Prime Rate" means, with respect to any Prime Rate Interest Determination Date,
the rate set forth on such date in H.15(519) under the heading "Bank Prime
Loan."
The following procedures will occur if the rate cannot be set as described
above:
(a) If that rate is not published in H.15(519) prior to 9:00 A.M. on the
Calculation Date, then the Prime Rate will be the average (rounded upwards, if
necessary, to the next higher one-
9
hundred thousandth of a percentage point) of the rates of interest publicly
announced by each bank that appear on the Reuters Screen USPRIMEONE Page as its
prime rate or base lending rate as in effect for that Prime Rate Interest
Determination Date.
(b) If fewer than four, but more than one, rates appear on the Reuters Screen
USPRIMEONE Page, the Prime Rate will be the average of the prime rates (quoted
on the basis of the actual number of days in the year divided by a 360-day year)
as of the close of business on the Prime Rate Interest Determination Date by
four major money center banks in New York selected by the Calculation Agent.
(c) If fewer than two rates appear, the Prime Rate shall be determined on the
basis of the rates furnished in New York by the appropriate number of substitute
banks or trust companies organized and doing business under the laws of the
United States, or any State thereof, having total equity capital of at least
$500 million and being subject to supervision or examination by a Federal or
State authority, as selected by the Calculation Agent.
(d) Finally, if the banks are not quoting as mentioned above, the rate of
interest in effect for the applicable period will be the same as the rate of
interest in effect for the prior interest reset period.
CD Rate Notes
Each CD rate note will bear interest at the rate (calculated with reference to
the CD Rate and the Spread and/or Spread Multiplier, if any) specified on the CD
rate note and in the applicable pricing supplement.
"CD Rate" means, with respect to any CD Rate Interest Determination Date, the
rate on that date for negotiable certificates of deposit having the Index
Maturity specified in the applicable pricing supplement as published in
H.15(519) under the heading "CDs (Secondary Market)."
The following procedures will occur if the rate cannot be set as described
above:
(a) If that rate is not published in H.15(519) prior to 9:00 A.M. on the
Calculation Date, then the CD Rate will be the rate on that CD Rate Interest
Determination Date for negotiable certificates of deposit having the applicable
Index Maturity as published in Composite Quotations under the heading
"Certificates of Deposit."
(b) If that rate is not published in Composite Quotations by 3:00 P.M. on that
Calculation Date, the CD Rate for that CD Interest Determination Date shall be
calculated by the Calculation Agent as follows:
The CD Rate will be calculated as the average of the secondary market offered
rates, as of 10:00 A.M., of three leading nonbank dealers of negotiable U.S.
dollar certificates of deposit in New York selected by the Calculation Agent for
negotiable certificates of deposit of major United States money market banks
with a remaining maturity closest to the Index Maturity specified in the
applicable pricing supplement in a denomination of $5,000,000.
(c) Finally, if fewer than three dealers are quoting as mentioned, the rate of
interest in effect for the applicable period will be the same as the rate of
interest in effect for the prior interest reset period.
Federal Funds Effective Rate Notes
Each federal funds effective rate note will bear interest at the rate
(calculated with reference to the Federal Funds Effective Rate and the Spread
and/or Spread Multiplier, if any) specified on the federal funds effective rate
note and in the applicable pricing supplement.
10
"Federal Funds Effective Rate" means, with respect to any Federal Funds
Effective Interest Determination Date, the rate on such date for Federal Funds
as published in H.15(519) prior to 11:00 A.M. under the heading "Federal Funds
(Effective)."
The following procedures will occur if the rate cannot be set as described
above:
(a) If that rate is not published in H.15(519) prior to 11:00 A.M. on the
Calculation Date, then the Federal Funds Effective Rate will be the rate on that
Federal Funds Effective Interest Determination Date as published in Composite
Quotations under the heading "Federal Funds/Effective Rate."
(b) If that rate is not published in Composite Quotations by 3:00 P.M. on the
Calculation Date, the Federal Funds Effective Rate for that Federal Funds
Effective Interest Determination Date will be calculated by the Calculation
Agent as follows:
The Federal Funds Effective Rate will be the average of the rates, as of 11:00
A.M. on that date, for the last transaction in overnight Federal Funds arranged
by three leading brokers of federal funds transaction in New York selected by
the Calculation Agent.
(c) Finally, if fewer than three brokers are quoting as mentioned above, the
rate of interest in effect for the applicable period will be the same as the
rate of interest in effect for the prior interest reset period.
LIBOR Notes
Each LIBOR note will bear interest at the rate (calculated with reference to
LIBOR and the Spread and/or Spread Multiplier, if any) specified on the LIBOR
note and in the applicable pricing supplement.
LIBOR will be determined by the Calculation Agent as follows:
(a) With respect to any LIBOR Interest Determination Date, LIBOR will be
determined by either:
(1) the average of the offered rates for deposits of not less than
$1,000,000 in U.S. dollars having the Index Maturity specified in the applicable
pricing supplement, beginning on the second Business Day immediately after that
date, that appear on the Reuters Screen LIBO Page as of 11:00 A.M., London time,
on that date, if at least two offered rates appear on the Reuters Screen LIBO
Page; or
(2) the rate for deposits in U.S. dollars having the Index Maturity
designated in the applicable pricing supplement, beginning on the second London
Business Day immediately after such date, that appears on the Telerate Page 3750
as of 11:00 A.M., London time, on that date.
If neither Reuters Screen LIBO Page nor Telerate Page 3750 is specified in the
applicable pricing supplement, LIBOR will be determined as if Telerate Page 3750
had been specified.
In the case where (1) above applies, if fewer than two offered rates appear on
the Reuters Screen LIBO Page, or, in the case where (2) above applies, if no
rate appears on the Telerate Page 3750, LIBOR for that date will be determined
as follows:
(b) LIBOR will be determined based on the rates at approximately 11:00
A.M., London time, on that LIBOR Interest Determination Date at which deposits
of not less than $1,000,000 in U.S. dollars having the applicable Index Maturity
are offered to prime banks in the London interbank market by four major banks in
the London interbank market selected by the Calculation Agent that in the
Calculation Agent's judgment is representative for a single
11
transaction in such market at such time (a "Representative Amount"). The
offered rates must begin on the second Business Day immediately after that
LIBOR Interest Determination Date.
The Calculation Agent will request the principal London office of each such bank
to provide a quotation of its rate. If at least two such quotations are
provided, LIBOR for such date will be the average of such quotations.
(c) If fewer than two quotations are provided, LIBOR for that date will be the
average of the rates quoted at approximately 11:00 A.M., New York City time, on
such date by three major banks in New York, selected by the Calculation Agent.
The rates will be for loans in U.S. dollars to leading European banks having the
specified Index Maturity beginning on the second Business Day after that date
and in a Representative Amount.
(d) Finally, if fewer than three banks are quoting as mentioned, the rate of
interest in effect for the applicable period will be the same as the rate of
interest in effect for the prior interest reset period.
Treasury Rate Notes
Each Treasury rate note will bear interest at the rate (calculated with
reference to the Treasury Rate and the Spread and/or Spread Multiplier, if any)
specified on the Treasury rate note and in the applicable pricing supplement.
"Treasury Rate" means, with respect to any Treasury Interest Determination Date,
the rate for the most recent auction of direct obligations of the United States
("Treasury bills") having the Index Maturity specified in the applicable pricing
supplement as published in H.15(519) under the heading "U.S. Government
Securities/Treasury Bills/Auction Average (Investment)."
The following procedures will occur if the rate cannot be set as described
above:
(a) If that rate is not published in H.15(519) by 9:00 A.M. on the applicable
Calculation Date, the rate will be the auction average rate (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) for such auction as otherwise announced by the United
States Department of the Treasury.
(b) If the results of the auction of Treasury bills having the applicable Index
Maturity are not published in H.15(519) by 9:00 A.M., or otherwise published or
reported as provided above by 3:00 P.M., on the Calculation Date, or if no
auction is held in a particular week, then the Treasury Rate shall be calculated
by the Calculation Agent as follows:
The rate will be calculated as a yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the average of the secondary market bid rates as of
approximately 3:30 P.M. on the Treasury Interest Determination Date, of three
leading primary United States government securities dealers in New York selected
by the Calculation Agent for the issue of Treasury bills with a remaining
maturity closest to the specified Index Maturity.
(c) Finally, if fewer than three dealers are quoting as mentioned, the rate of
interest in effect for the period will be the same as the rate of interest in
effect for the prior interest reset period.
CMT Rate Notes
Each CMT rate note will bear interest at the rate (calculated with reference to
the CMT Rate and the Spread or Spread Multiplier, if any) specified on such CMT
12
rate note and in the applicable pricing supplement.
"CMT Rate" means, with respect to any CMT Interest Determination Date, the rate
displayed on the Designated CMT Telerate Page under the caption "... Treasury
Constant Maturities.. Federal Reserve Board Release H.15... Mondays
Approximately 3:45 P.M.," under the column for the applicable Index Maturity
designated in the applicable pricing supplement for:
(1) if the Designated CMT Telerate Page is 7055, the rate for the applicable
CMT Interest Determination Date; or
(2) if the Designated CMT Telerate Page is 7052, the week, or the month,
as applicable, ended immediately preceding the week in which the CMT Interest
Determination Date occurs.
The following procedures will occur if the rate cannot be set as described
above:
(a) If no page is specified in the applicable pricing supplement and on the face
of such CMT Rate Note, the Designated CMT Telerate Page shall be 7052, for the
most recent week. If such rate is no longer displayed on the relevant page, or
if it is not displayed by 3:00 P.M. on the related Calculation Date, then the
CMT Rate will be the Treasury constant maturity rate for the applicable Index
Maturity as published in the relevant H.15 (519).
(b) If that rate is no longer published in H.15(519), or is not published by
3:00 P.M. on the related Calculation Date, then the CMT Rate for such CMT
Interest Determination Date will be the Treasury constant maturity rate for the
applicable Index Maturity (or other United States Treasury rate for such Index
Maturity for that CMT Interest Determination Date with respect to such Interest
Reset Date) as may then be published by either the Federal Reserve Board or the
United States Department of the Treasury that the Calculation Agent determines
to be comparable to the rate formerly displayed on the Designated CMT Telerate
Page and published in the relevant H.15(519).
(c) If that information is not provided by 3:00 P.M. on the related Calculation
Date, then the CMT Rate for that CMT Interest Determination Date will be
calculated by the Calculation Agent as follows:
The rate will be calculated as a yield to maturity, based on the average of the
secondary market closing offer side prices as of approximately 3:30 P.M. on that
CMT Interest Determination Date reported, according to their written records, by
three leading primary United States government securities dealers (each, a
"Reference Dealer") in New York selected by the Calculation Agent.
These dealers will be selected from five such Reference Dealers.
The Calculation Agent will eliminate the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for the most recently issued direct noncallable
fixed rate obligations of the United States ("Treasury Note") with an original
maturity of approximately the applicable Index Maturity and a remaining term to
maturity of not less than such Index Maturity minus one year.
If two Treasury Notes with an original maturity as described in the preceding
sentence have remaining terms to maturity equally close to the applicable Index
Maturity, the quotes for the Treasury Note with the shorter remaining term to
maturity will be used.
(d) If the Calculation Agent cannot obtain three such Treasury Note quotations,
the CMT Rate for that CMT Interest Determination Date will be
13
calculated by the Calculation Agent as follows:
The rate will be calculated as a yield to maturity based on the average of the
secondary market offer side prices as of approximately 3:30 P.M. on that CMT
Interest Determination Date of three Reference Dealers in New York selected by
the Calculation Agent using the same method described above, for Treasury Notes
with an original maturity of the number of years that is the next highest to the
applicable Index Maturity with a remaining term to maturity closest to such
Index Maturity and in an amount of at least $100 million.
If three or four (and not five) of the Reference Dealers are quoting as
described above, then the CMT Rate will be based on the average of the offer
prices obtained and neither the highest nor the lowest of such quotes will be
eliminated.
(e) Finally, if fewer than three Reference Dealers are quoting as mentioned, the
rate of interest in effect for the applicable period will be the same as the
rate of interest in effect for the prior interest reset period.
Event of Default
"Event of Default" means any of the following:
- - failure to pay the principal of (or premium, if any, on) any note of a series
when due and payable;
- - failure to pay for 30 days any interest on any note of any series;
- - failure to perform any other requirements in the notes, or in the indenture
in regard to such notes, for 60 days after notice; or
- - certain events of insolvency.
An Event of Default for a particular series of notes does not necessarily mean
that an Event of Default has occurred for any other series of notes issued under
the indenture. If an Event of Default shall have occurred and be continuing the
Trustee or the holders of at least 25% of the principal amount of the notes of
the series affected by an Event of Default may require us to repay the entire
principal of the notes of such series immediately. Subject to certain
conditions, this requirement may be rescinded by the holders of at least a
majority in aggregate principal amount of the notes of the series.
The Trustee must within 90 days after a default occurs, notify the holders of
the notes of the series of the default if we have not remedied it (default is
defined to include the events specified above without the grace periods or
notice). The Trustee may withhold notice to the holders of such notes of any
default (except in the payment of principal or interest) if it in good faith
considers such withholding in the interest of the holders. We are required to
file an annual certificate with the Trustee, signed by an officer, about any
default by us under any provisions of the indenture.
Subject to the provisions of the indenture relating to its duties in case of
default, the Trustee shall be under no obligation to exercise any of its rights
or powers under the indenture at the request, order or direction of any holders
unless such holders offer the Trustee reasonable indemnity. Subject to the
provisions for indemnification, the holders of a majority in principal amount of
the notes of any series may direct the time, method and place of conducting any
proceedings for any remedy available to, or exercising any trust or power
conferred on, the Trustee with respect to such notes.
14
Modification of Indenture
Under the indenture, our rights and obligations and the rights of the holders of
any notes may be changed. Any change requires the consent of the holders of not
less than 66 2/3% in aggregate principal amount of the outstanding notes of all
series to be affected, voting as one class. However, no changes to the terms of
payment of principal or interest, or reducing the percentage required for
changes, is effective against any holder without its consent.
Consolidation, Merger or Sale
We may not merge or consolidate with any corporation or sell substantially all
of our assets as an entirety unless:
- - we are the continuing corporation or the successor corporation expressly
assumes the payment of principal, and premium, if any, and interest on the
notes and the performance and observance of all the covenants and conditions
of the indenture binding on us (our proposed merger with Potomac Electric
Power Company will satisfy this requirement); and
- - we, or the successor corporation, are not immediately after the merger,
consolidation, or sale in default in the performance of a covenant or
condition in the indenture.
PLAN OF DISTRIBUTION
We may sell the notes (a) through agents; (b) through underwriters or dealers;
or (c) directly to one or more purchasers.
By Agents
Notes may be sold on a continuing basis through agents designated by us. The
agents agree to use their reasonable efforts to solicit purchases for the period
of their appointment.
The notes will be sold to the public at 100% of their principal amount. Agents
will receive commissions from .125% to .75% of the principal amount per note
depending on the maturity of the note they sell. We will receive from 99.875% to
99.25% of the principal amount of each note, before deducting expenses of
approximately $310,000.
The Agents will not be obligated to make a market in the notes. We cannot
predict the amount of trading or liquidity of the notes.
By Underwriters
If underwriters are used in the sale, the notes will be acquired by the
underwriters for their own account. The underwriters may resell the notes in one
or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase the notes will be subject to certain
conditions. The underwriters will be obligated to purchase all the notes of the
series offered if any of the notes are purchased. Any initial public offering
price and any discounts or concessions allowed or re-allowed or paid to dealers
may be changed from time to time.
In connection with an underwritten offering, the SEC rules permit the
underwriters to engage in transactions that stabilize the price of the notes.
These transactions may include purchases for the purpose of fixing or
maintaining the price of the notes.
The underwriters may create a short position in the notes in connection with the
offering. That means they sell a larger principal amount of the notes than is
shown on the cover page of the prospectus or the applicable pricing supplement.
If they create a short position, the underwriters may purchase
15
notes in the open market to reduce the short position.
If the underwriters purchase the notes to stabilize the price or to reduce their
short position, the price of the notes could be higher than it might be if they
had not made such purchases. The underwriters make no representation or
prediction about any effect that the purchases may have on the price of the
notes.
Direct Sales
We may also sell notes directly. In this case, no underwriters or agents would
be involved.
General Information
Underwriters, dealers, and agents that participate in the distribution of the
notes may be underwriters as defined in the Securities Act of 1933 (the "Act"),
and any discounts or commissions received by them from us and any profit on the
resale of the notes by them may be treated as underwriting discounts and
commissions under the Act.
We may have agreements with the underwriters, dealers and agents to indemnify
them against certain civil liabilities, including liabilities under the Act, or
to contribute with respect to payments which the underwriters, dealers or agents
may be required to make.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, us or our subsidiaries in the ordinary course of their businesses.
LEGAL OPINIONS
One of our lawyers, will issue an opinion about the legality of the notes for
us. Cahill Gordon & Reindel, New York, NY will issue an opinion for the agents
or underwriters. Cahill Gordon & Reindel will rely on the opinion of our lawyer
as to matters of Maryland law and the applicability of the Public Utility
Holding Company Act of 1935.
EXPERTS
Coopers & Lybrand, L.L.P., independent accountants, audited our annual financial
statements and schedules incorporated by reference in this prospectus and
elsewhere in the registration statement. These documents are incorporated by
reference herein in reliance upon the authority of Coopers & Lybrand as experts
in accounting and auditing in giving the report.
16
GLOSSARY
Set forth below are definitions of some of the terms used in this Prospectus.
"Business Day" means any day other than a Saturday or Sunday that (a) is
not a day on which banking institutions in Baltimore, Maryland, or in New York,
New York, are authorized or obligated by law or executive order to be closed,
and (b) with respect to LIBOR Notes only, is a day on which dealings in deposits
in U.S. dollars are transacted in the London interbank market.
"Calculation Agent" means the entity chosen by the Company to perform the
duties related to interest rate calculation and resets for floating rate notes.
"Calculation Date" means the date on which the Calculation Agent calculates
an interest rate for a floating rate note, which will be one of the following:
"Prime Rate" - tenth day after the related Prime Rate Interest
Determination Date or, if such day is not a Business Day, the next
Business Day.
"CD Rate" - tenth day after the related CD Rate Interest Determination
Date or, if such day is not a Business Day, the next Business Day.
"CMT Rate" - tenth day after the related CMT Rate Interest
Determination Date or, if such day is not a Business Day, the next Business
Day.
"Commercial Paper Rate" - tenth day after the related Commercial Paper
Rate Interest Determination Date or, if such day is not a Business Day, the
next Business Day.
"LIBOR" - the LIBOR Interest Determination Date.
"Treasury Rate" - tenth day after the related Treasury Rate Interest
Determination Date or, if such day is not a Business Day, the next Business
Day.
"Federal Funds Effective Rate" - tenth day after the related Federal
Funds Effective Rate Interest Determination Date or, if such day is not a
Business Day, the next Business Day.
"Composite Quotations" means the daily statistical release entitled
"Composite 3:30 P.M. Quotations for U.S. Government Securities," or any
successor publication, published by The Federal Reserve Bank of New York.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page designated in the applicable pricing supplement and on the
face of such CMT Rate Note (or any other page as may replace such page on that
service) for the purpose of displaying Treasury Constant Maturities as reported
in H.15(519).
"H.15(519)" means the weekly statistical release entitled "Statistical
Release H.15(519), Selected Interest Rates," or any successor publication,
published by the Board of Governors of the Federal Reserve System.
"Index Maturity" means, with respect to a floating rate note, the period to
maturity of the note on which the interest rate formula is based, as indicated
in the applicable pricing supplement.
17
"Interest Determination Date" means the date as of which the interest rate
for a floating rate note is to be calculated, to be effective as of the
following Interest Reset Date and calculated on the related Calculation Date
(except in the case of LIBOR which is calculated on the related LIBOR Interest
Determination Date). The Interest Determination Dates will be indicated in the
applicable pricing supplement and in the note.
"Interest Reset Date" means the date on which a floating rate note will
begin to bear interest at the variable interest rate determined on any Interest
Determination Date. The Interest Reset Dates will be indicated in the applicable
pricing supplement and in the note.
"Money Market Yield" is the yield (expressed as a percentage rounded
upwards, if necessary, to the next higher one-hundred thousandth of a percentage
point) calculated in accordance with the following formula:
D X 360
Money Market Yield = ___________________ X 100
360 - (D X M)
where "D" refers to the per annum rate for commercial paper quoted on a
bank discount basis and expressed as a decimal; and "M" refers to the actual
number of days in the period for which interest is being calculated.
"Reuters Screen LIBO Page" means the display designated as page "LIBO" on
the Reuters Monitor Money Rates Service (or such other page as may replace the
LIBO page on that service for the purpose of displaying London interbank offered
rates of major banks).
"Reuters Screen USPRIMEONE Page" means the display designated as page
USPRIMEONE on the Reuters Monitor Money Rates Service (or such other page as may
replace the USPRIMEONE page on that service for the purpose of displaying prime
rates or base lending rates of major United States banks).
"Spread" means the number of basis points specified in the applicable
pricing supplement as being applicable to the interest rate for a floating rate
note.
"Spread Multiplier" means the percentage specified in the applicable
pricing supplement as being applicable to the interest rate for a floating rate
note.
"Telerate Page 3750" means the display designated as page "3750" on the
Telerate Service (or such other page as may replace the 3750 page on that
service or such other service or services as may be nominated by the British
Bankers Association for the purpose of displaying London interbank offered rates
for U.S. dollar deposits).
18
Table of Contents
Page
WHERE YOU CAN FIND MORE INFORMATION ............. 2
THE COMPANY ..................................... 2
PRICING SUPPLEMENT .............................. 3
USE OF PROCEEDS ................................. 3
RATIO OF EARNINGS TO FIXED CHARGES .............. 3
DESCRIPTION OF THE NOTES ........................ 4
General .................................... 4
Redemptions ................................. 4
Repurchases ................................. 4
Remarketed Notes ............................ 4
Book-Entry Notes - Registration, Transfer,
and Payment of Interest and Principal ..... 4
Book-Entry Notes- Method of Repurchase ...... 6
Certificate Notes- Registration, Transfer,
and Payment of Interest and Principal ...... 6
Certificate Notes- Method of Repurchase ..... 6
Interest Rate ............................... 6
General .............................. 6
Fixed Rate Notes ..................... 7
Floating Rate Notes ................. 7
General ........................ 7
Date of Interest Rate Change ... 7
When Interest Rate Is
Determined ...................... 8
When Interest Is Paid ........... 8
Commercial Paper Rate Notes .... 9
Prime Rate Notes ................ 9
CD Rate Notes ................... 10
Federal Funds Effective
Rate Notes ...................... 10
LIBOR Notes ..................... 11
Treasury Rate Notes ............. 12
CMT Rate Notes .................. 12
Event of Default ............................ 14
Modification of Indenture ................... 15
Consolidation, Merger or Sale ............... 15
PLAN OF DISTRIBUTION ............................. 15
LEGAL OPINIONS ................................... 16
EXPERTS .......................................... 16
GLOSSARY ......................................... 17
$200,000,000
[GRAPHIC OMITTED]
Medium-Term Notes
Series G
- --------------------------------------------------------------------------------
PROSPECTUS
(Once the registration statement is effective, the date of the Prospectus will
be inserted here)
- --------------------------------------------------------------------------------
LEHMAN BROTHERS
GOLDMAN, SACHS & CO.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Securities and Exchange Commission Registration Fee $60,607
Services of Independent Accountants 65,000*
Trustee Fees and Expenses 15,000*
Legal Fees and Expenses 35,000*
Debt Securities Rating Fees 108,500*
Printing and Delivery Expenses 15,000*
Miscellaneous Expenses 10,893*
----------
Total $ 310,000*
______________
* Estimated
Item 15. Indemnification of Directors and Officers.
The following description of indemnification allowed under
Maryland statutory law is a summary rather than a complete
description. Reference is made to Section 2-418 of the
Corporations and Associations Article of the Maryland Annotated
Code, which is incorporated herein by reference, and the
following summary is qualified in its entirety by such reference.
By a Maryland statute, a Maryland corporation may indemnify
any director 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 ("Proceeding") by reason of the fact that he is a
present or former director of the corporation and any person who,
while a director of the corporation, is or was serving at the
request of the corporation as a director, officer, partner,
trustee, employee, or agent of another corporation, partnership,
joint venture, trust, other enterprise, or employee benefit plan
("Director"). Such indemnification may be against judgments,
penalties, fines, settlements and reasonable expenses actually
incurred by him in connection with the Proceeding unless it is
proven that (a) the act or omission of the Director was material
to the matter giving rise to the Proceeding and (i) was committed
in bad faith, or (ii) was the result of active and deliberate
dishonesty; or (b) the Director actually received an improper
personal benefit in money, property, or services; or (c) in the
case of any criminal action or proceeding, the Director had
reasonable cause to believe his act or omission was unlawful.
However, the corporation may not indemnify any Director in
connection with a Proceeding by or in the right of the
corporation if the Director has been adjudged to be liable to the
corporation. A Director or officer who has been successful in
the defense of any Proceeding described above shall be
indemnified against reasonable expenses incurred in connection
with the Proceeding. The corporation may not indemnify a
Director in respect of any Proceeding charging improper personal
benefits to the Director in which the Director was adjudged to be
liable on the basis that personal benefit was improperly
II-1
received. Notwithstanding the above provisions, a court of
appropriate jurisdiction, upon application of the Director or
officer, may order indemnification if it determines that in
view of all the relevant circumstances, the Director or officer
is fairly and reasonably entitled to indemnification; however,
indemnification with respect to any Proceeding by or in the right
of the corporation or in which liability was adjudged on the
basis that personal benefit was improperly received shall be
limited to expenses. A corporation may advance reasonable
expenses to a Director under certain circumstances, including a
written undertaking by or on behalf of such Director to repay the
amount if it shall ultimately be determined that the standard of
conduct necessary for indemnification by the corporation has not
been met.
A corporation may indemnify and advance expenses to an
officer of the corporation to the same extent that it may
indemnify Directors under the statute.
The indemnification and advancement of expenses provided or
authorized by this statute may not be deemed exclusive of any
other rights, by indemnification or otherwise, to which a
Director or officer may be entitled under the charter, by-laws, a
resolution of shareholders or directors, an agreement or
otherwise.
A corporation may purchase and maintain insurance on behalf
of any person who is or was a Director or officer, whether or not
the corporation would have the power to indemnify a Director or
officer against liability under the provision of this section of
Maryland law. Further, a corporation may provide similar
protection, including a trust fund, letter of credit or surety
bond, not inconsistent with the statute.
Article V of the Company's Charter reads as follows:
"A director or officer of the corporation shall not be
personally liable to the corporation or its stockholders for
monetary damages except (i) to the extent that it is proved
that the person actually received an improper benefit or
profit in money, property, or services for the amount of the
benefit or profit in money, property or services actually
received or (ii) to the extent that a judgment or other
final adjudication adverse to the person is entered in a
proceeding based on a finding in the proceeding that the
person's action or failure to act was the result of active
and deliberate dishonesty and was material to the cause of
action adjudicated in the proceeding. It is the intent of
this Article that the liability of directors and officers
shall be limited to the fullest extent permitted by the
Maryland General Corporation Law, as amended from time to
time.
Any repeal or modification of the foregoing paragraph by the
stockholders of the corporation shall not adversely affect
any right or protection of a director or officer of the
corporation existing at the time of such repeal or
modification."
II-2
Article IV of the Company's By-Laws reads as follows:
"Each person made or threatened to be made a party to
an action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that
such person is or was a director or officer of the Company,
or, at its request, is or was a director or officer of
another corporation, shall be indemnified by the Company (to
the extent indemnification is not otherwise provided by
insurance) against the liabilities, costs and expenses of
every kind actually and reasonably incurred by him as a
result of such action, suit or proceeding, or any threat
thereof or any appeal thereon, but in each case only if and
to the extent permissible under applicable common or
statutory law, state or federal. The foregoing indemnity
shall not be inclusive of other rights to which such person
may be entitled."
The Directors and officers of the Registrant are covered by
insurance indemnifying them against certain liabilities which
might be incurred by them in their capacities as such, including
certain liabilities arising under the Securities Act of 1933.
The premium for this insurance is paid by the Registrant.
Also, see indemnification provisions in the Form of Agency
Agreement and the Standard Purchase Provisions, both included in
Exhibit 1(a) to this Registration Statement.
Item 16. Exhibits.
Reference is made to the Exhibit Index filed as a part of
this Registration Statement.
Item 17. Undertakings.
(a) 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 securities offered (if the total dollar
value of securities offered would not exceed that which
was registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
II-3
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 paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the Registration Statement is on
Form S-3, Form S-8, or Form F-3 and the information required
to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or
furnished to the Securities and Exchange Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes 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 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) 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
provisions described under Item 15 above, or otherwise, the
Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses
incurred or paid by a Director, officer or controlling person of
the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Director, officer or controlling
person in connection with the securities being registered, the
II-4
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
Baltimore Gas and Electric Company, 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 Baltimore,
State of Maryland on the 29th day of July, 1997.
BALTIMORE GAS AND ELECTRIC COMPANY
(Registrant)
By: /s/ David A. Brune
David A. Brune, Vice President
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
Principal executive
officer and director:
*C. H. Poindexter Chairman of the July 29, 1997
Board and Director
Principal financial and
accounting officer:
/s/ David A. Brune Vice President July 29, 1997
David A. Brune
Directors:
* H. Furlong Baldwin
* J. Owen Cole
* Dan A. Colussy
* Edward A. Crooke
* Jerome W. Geckle Directors July 29, 1997
* Freeman A. Hrabowski III
* Nancy Lampton
* George V. McGowan
* George L. Russell, Jr.
* Michael D. Sullivan
*By: /s/ David A. Brune
David A. Brune, Attorney-in-Fact
II-6
EXHIBIT INDEX
Exhibit
Number
1(a) - Form of Agency Agreement, including Administrative
Procedures; and Form of Purchase Agreement, including
Standard Purchase Provisions.
1(b) - Form of Interest Calculation Agency Agreement.
4(a)* - Indenture dated as of July 1, 1985 between the Company
and The Bank of New York (successor to Mercantile-Safe
Deposit and Trust Company), Trustee (Designated as
Exhibit 4(a) in File No. 2-98443 Registration Statement).
4(b)* - Supplemental Indenture dated as of October 1, 1987
between the Company and The Bank of New York (successor to
Mercantile-Safe Deposit and Trust Company), Trustee
(Designated as Exhibit 4(b) in Form 8-K dated November 13,
1987, File No. 1-1910).
4(c)* - Supplemental Indenture dated as of January 26, 1993 between
the Company and The Bank of New York (successor to
Mercantile-Safe Deposit and Trust Company), Trustee
(Designated as Exhibit 4(c) in Form 8-K dated January 29,
1993, File No. 1-1910).
4(d) - Form of Medium-Term Note, Series G (Fixed Rate).
4(e) - Form of Medium-Term Note, Series G (Floating Rate).
5 - Opinion of Company Counsel.
12* - Computation of Ratio of Earnings to Fixed Charges
(Designated as Exhibit 12 in Form 10-Q for the quarterly
period ended March 31, 1997 filed, May 14, 1997 File No.
1-1910).
23(a) - Consent of Company Counsel (included in Exhibit 5).
23(b) - Consent of Coopers & Lybrand, Independent Accountants.
24 - Power of Attorney.
II-7
25 - Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 (Form T-1) of The Bank of New York
(successor to Mercantile-Safe Deposit and Trust Company),
Trustee.
99* - Corporations and Associations Article, Section 2-418 of the
Annotated Code of Maryland (Designated as Exhibit 28(b) to
the Annual Report on Form 10-K for the year ended
December 31, 1987, File No. 1-1910).
__________________
* Incorporated by reference.
II-8