Filed Pursuant to Rule 424(b)(5)
Registration Nos. 333-59942
333-59942-01
333-59942-02
Prospectus Supplement to Prospectus dated June 1, 2001
$60,000,000
OF GULF POWER COMPANY APPEARS HERE
Series C 4.69% Senior Notes due August 1, 2003
---------------
Gulf Power Company will pay interest on the Series C Senior Notes on February
1 and August 1 of each year. The first payment will be made on February 1,
2002. The Series C Senior Notes will be issued only in denominations of $1,000
and integral multiples of $1,000.
Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus supplement or the accompanying prospectus. Any
representation to the contrary is a criminal offense.
---------------
Per
Series C
Senior Note Total
----------- -----------
Initial Public Offering Price*......................... 100.000% $60,000,000
Underwriting Discounts and Commissions................. 0.250% $ 150,000
Net Proceeds, before expenses, to Gulf Power Company... 99.750% $59,850,000
---------------
* The initial public offering price set forth above does not include accrued
interest, if any. Interest on the Series C Senior Notes will accrue from the
date the Series C Senior Notes are issued.
The underwriters expect to deliver the Series C Senior Notes in book-entry
form only through the facilities of The Depository Trust Company against
payment in New York, New York on August 3, 2001.
---------------
Banc One Capital Markets, Inc.
SunTrust Robinson Humphrey
The date of this Prospectus Supplement is July 31, 2001
THE COMPANY
Gulf Power Company (the "Company") is a corporation organized under the laws
of the State of Maine on November 2, 1925, and admitted to do business in
Florida on January 15, 1926, in Mississippi on October 25, 1976 and in Georgia
on November 20, 1984. The mailing address of the Company's principal executive
offices is One Energy Place, Pensacola, Florida 32520-0100, and the telephone
number is (850) 444-6111. The Company is a wholly owned subsidiary of The
Southern Company.
The Company is a regulated public utility engaged in the generation,
transmission, distribution and sale of electric energy within an approximately
7,400 square mile service area within the northwestern portion of the State of
Florida.
SELECTED FINANCIAL INFORMATION
The following data is qualified in its entirety by reference to and,
therefore, should be read together with the detailed information and financial
statements appearing herein, in the accompanying Prospectus or in the
documents incorporated herein by reference.
Twelve
Year Ended December 31, Months
-------------------------------------------- Ended
1996 1997 1998 1999 2000 June 30, 2001
-------- -------- -------- -------- -------- -------------
(Thousands, except ratios) (unaudited)
Operating Revenues...... $634,365 $625,856 $650,518 $674,099 $714,319 $739,160
Earnings Before Interest
and Income Taxes....... 131,856 124,428 120,946 119,576 116,892 126,509
Net Income After
Dividends on Preferred
Stock.................. 57,845 57,610 56,521 53,667 51,843 59,229
Ratio of Earnings to
Fixed Charges(1)....... 4.29 4.18 3.83 3.62 3.38 3.82
Capitalization
As of March 31, 2001
-----------------------
Actual As Adjusted(2)
-------- --------------
(Thousands, except
percentages)
Common Stock Equity................................... $494,074 $494,074 50.5%
Cumulative Preferred Stock............................ 4,236 4,236 0.4
Company Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trusts Holding Company
Junior Subordinated Notes............................ 85,000 85,000 8.7
Senior Notes.......................................... 98,002 158,002 16.1
Other Long-Term Debt.................................. 268,007 238,007 24.3
-------- -------- -----
Total............................................... $949,319 $979,319 100.0%
======== ======== =====
- --------
(1) This ratio is computed as follows: (i) "Earnings" have been calculated by
adding to "Earnings Before Interest and Income Taxes" the debt portion of
allowance for funds used during construction; and (ii) "Fixed Charges"
consist of "Net Interest Charges" plus the debt portion of allowance for
funds used during construction.
(2) Reflects (i) the proposed redemption in September 2001 of $30,000,000
principal amount of First Mortgage Bonds, 6 1/8% Series due July 1, 2003;
and (ii) the issuance of the Series C Senior Notes offered hereby.
USE OF PROCEEDS
The proceeds from the sale of the Series C Senior Notes will be applied by
the Company to redeem in September 2001 the $30,000,000 outstanding principal
amount of its First Mortgage Bonds, 6 1/8% Series due July 1, 2003 and to
repay a portion of its outstanding short-term indebtedness, which aggregated
approximately $30,000,000 as of July 31, 2001. The redemption of the First
Mortgage Bonds is subject to the Company's closing the sale of the Series C
Senior Notes.
S-2
RECENT RESULTS OF OPERATIONS
For the twelve months ended June 30, 2001, "Operating Revenues," "Earnings
Before Interest and Income Taxes" and "Net Income After Dividends on Preferred
Stock" were $739,160,000, $126,509,000 and $59,229,000, respectively. In the
opinion of the management of the Company, the above amounts for the twelve
months ended June 30, 2001 reflect all adjustments (which were only normal
recurring adjustments) necessary to present fairly the results of operations
for such period. The "Ratio of Earnings to Fixed Charges" for the twelve
months ended June 30, 2001 was 3.82.
DESCRIPTION OF THE SERIES C SENIOR NOTES
Set forth below is a description of the specific terms of the Series C 4.69%
Senior Notes due August 1, 2003 (the "Series C Senior Notes"). This
description supplements, and should be read together with, the description of
the general terms and provisions of the Senior Notes set forth in the
accompanying Prospectus under the caption "Description of the Senior Notes."
The following description does not purport to be complete and is subject to,
and is qualified in its entirety by reference to, the description in the
accompanying Prospectus and the Senior Note Indenture dated as of January 1,
1998 (the "Senior Note Indenture") between the Company and The Chase Manhattan
Bank, as trustee (the "Senior Note Indenture Trustee").
General
The Series C Senior Notes will be issued as a series of Senior Notes under
the Senior Note Indenture. The Series C Senior Notes will initially be issued
in the aggregate principal amount of $60,000,000. The Company may, without the
consent of the holders of the Series C Senior Notes, issue additional notes
having the same ranking and the same interest rate, maturity and other terms
as the Series C Senior Notes. Any additional notes having such similar terms,
together with the Series C Senior Notes, will constitute a single series of
Senior Notes under the Senior Note Indenture.
The entire principal amount of the Series C Senior Notes will mature and
become due and payable, together with any accrued and unpaid interest thereon,
on August 1, 2003. The Series C Senior Notes are not subject to any sinking
fund provision. The Series C Senior Notes are available for purchase in
denominations of $1,000 and any integral multiple thereof.
Interest
Each Series C Senior Note shall bear interest at the rate of 4.69% per annum
from the date of original issuance, payable semiannually in arrears on
February 1 and August 1 of each year to the person in whose name such Series C
Senior Note is registered at the close of business on the fifteenth calendar
day prior to such payment date. The initial interest payment date is February
1, 2002. The amount of interest payable will be computed on the basis of a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Series C Senior Notes is not a Business Day, then
payment of the interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), with the same force and effect as if
made on such date.
Ranking
The Series C Senior Notes will be direct, unsecured and unsubordinated
obligations of the Company ranking pari passu with all other unsecured and
unsubordinated obligations of the Company. The Series C Senior Notes will be
effectively subordinated to all secured debt of the Company, including its
first mortgage bonds, aggregating approximately $254,700,000 outstanding at
March 31, 2001. The Senior Note Indenture contains no restrictions on the
amount of additional indebtedness that may be incurred by the Company.
S-3
Redemption
The Series C Senior Notes will not be redeemable at the option of the
Company prior to maturity.
Book-Entry Only Issuance--The Depository Trust Company
The Depository Trust Company ("DTC") will act as the initial securities
depositary for the Series C Senior Notes. The Series C Senior Notes will be
issued only as fully registered securities registered in the name of Cede &
Co., DTC's nominee. One or more fully registered global Series C Senior Notes
certificates will be issued, representing in the aggregate the total principal
amount of Series C Senior Notes, and will be deposited with DTC.
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 Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations ("Direct Participants"). 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.
Access to the DTC system is also available to others such as securities
brokers and dealers, banks and trust companies that clear through or maintain
a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
Purchases of Series C Senior Notes within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Series C
Senior Notes on DTC's records. The ownership interest of each actual purchaser
of Series C Senior Notes ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the
Direct or Indirect Participants through which the Beneficial Owners purchased
Series C Senior Notes. Transfers of ownership interests in the Series C Senior
Notes are to be accomplished by entries made on the books of Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in Series C Senior Notes,
except in the event that use of the book-entry system for the Series C Senior
Notes is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Series C Senior
Notes. DTC's records reflect only the identity of the Direct Participants to
whose accounts such Series C Senior Notes are credited, which may or may not
be the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to DTC. If less than all of the Series C
Senior Notes are being redeemed, DTC will reduce the amount of the interest of
each Direct Participant in the Series C Senior Notes in accordance with its
procedures.
Although voting with respect to the Series C Senior Notes is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Series C Senior Notes. Under its usual
procedures, DTC would mail an Omnibus Proxy to the Company as soon as possible
after the record date. The
S-4
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Series C Senior Notes are credited on the
record date (identified in a listing attached to the Omnibus Proxy).
Payments on the Series C Senior Notes will be made to DTC. DTC's practice is
to credit Direct Participants' accounts on the relevant payment date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payments on such payment date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the account of customers registered in "street name," and will be the
responsibility of such Participant and not of DTC or the Company, subject to
any statutory or regulatory requirements as may be in effect from time to time.
Payment to DTC is the responsibility of the Company, disbursement of such
payments to Direct Participants is the responsibility of DTC, and disbursement
of such payments to the Beneficial Owners is the responsibility of Direct and
Indirect Participants.
Except as provided herein, a Beneficial Owner of a global Series C Senior
Note will not be entitled to receive physical delivery of Series C Senior
Notes. Accordingly, each Beneficial Owner must rely on the procedures of DTC to
exercise any rights under the Series C Senior Notes. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of securities in definitive form. Such laws may impair the ability to
transfer beneficial interests in a global Series C Senior Note.
DTC may discontinue providing its services as securities depositary with
respect to the Series C Senior Notes at any time by giving reasonable notice to
the Company. Under such circumstances, in the event that a successor securities
depositary is not obtained, Series C Senior Notes certificates will be printed
and delivered to the holders of record. Additionally, the Company may decide to
discontinue use of the system of book-entry transfers through DTC (or a
successor depositary) with respect to the Series C Senior Notes. In that event,
certificates for the Series C Senior Notes will be printed and delivered to the
holders of record.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable, but
the Company takes no responsibility for the accuracy thereof. The Company has
no responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
S-5
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated the date hereof, the Company has agreed to sell to each of the
Underwriters named below and each of the Underwriters severally has agreed to
purchase the principal amount of Series C Senior Notes set forth opposite its
name below:
Principal
Amount of
Series C Senior
Name Notes
---- ---------------
Banc One Capital Markets, Inc................................ $30,000,000
SunTrust Capital Markets, Inc................................ $30,000,000
-----------
Total....................................................... $60,000,000
===========
The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the Series C Senior Notes are
subject to, among other things, the approval of certain legal matters by their
counsel and certain other conditions. The Underwriters are obligated to take
and pay for all the Series C Senior Notes if any are taken.
The Underwriters propose initially to offer all or part of the Series C
Senior Notes to the public at the public offering price set forth on the cover
page of this prospectus supplement and to certain dealers at such price less a
concession not in excess of 0.150% of the principal amount of the Series C
Senior Notes. The Underwriters may allow, and such dealers may reallow, a
discount not in excess of 0.100% of the principal amount of the Series C
Senior Notes to certain other dealers. After the initial public offering, the
public offering price, concession and discount may be changed.
The underwriting discounts and commissions to be paid to the Underwriters by
the Company with this offering will be 0.250% per Series C Senior Note, for a
total of $150,000. In addition, the Company estimates that it will incur other
offering expenses of approximately $220,000.
In order to facilitate the offering of the Series C Senior Notes, the
Underwriters or their affiliates may engage in transactions that stabilize,
maintain or otherwise affect the price of the Series C Senior Notes.
Specifically, the Underwriters or their affiliates may over-allot in
connection with this offering, creating short positions in the Series C Senior
Notes for their own account. In addition, to cover over-allotments or to
stabilize the price of the Series C Senior Notes, the Underwriters or their
affiliates may bid for, and purchase Series C Senior Notes in the open market.
Finally, the Underwriters or their affiliates may reclaim selling concessions
allowed to an underwriter or dealer for distributing Series C Senior Notes in
this offering, if the Underwriters or their affiliates repurchase previously
distributed Series C Senior Notes in transactions that cover syndicate short
positions, in stabilization transactions or otherwise. Any of these activities
may stabilize or maintain the market price of the Series C Senior Notes above
independent market levels. The Underwriters or their affiliates are not
required to engage in these activities, and may end any of these activities at
any time.
Neither the Company nor either of the Underwriters makes any representation
or prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the Series C Senior
Notes. In addition, neither the Company nor either of the Underwriters makes
any representation that such transactions will be engaged in or that such
transactions, once commenced, will not be discontinued without notice.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
S-6
The Underwriters and their affiliates engage in transactions with and
perform services for the Company in the ordinary course of business and have
engaged, and may in the future engage, in commercial banking and/or investment
banking transactions with the Company or its affiliates.
The Series C Senior Notes will not have an established trading market when
issued. There can be no assurance of a secondary market for the Series C
Senior Notes or the continued liquidity of such market if one develops. It is
not anticipated that the Series C Senior Notes will be listed on any
securities exchange.
S-7
PROSPECTUS
$350,000,000
Gulf Power Company
Senior Notes
Junior Subordinated Notes
----------------
Gulf Power Capital Trust III
Gulf Power Capital Trust IV
Trust Preferred Securities
Fully and unconditionally guaranteed, as set forth herein, by
Gulf Power Company
a subsidiary of The Southern Company
----------------
We will provide the specific terms of these securities in supplements to
this Prospectus. You should read this Prospectus and the applicable prospectus
supplement carefully before you invest.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this Prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
June 1, 2001
ABOUT THIS PROSPECTUS
This Prospectus is part of a registration statement filed with the
Securities and Exchange Commission (the "Commission") using a "shelf"
registration process under the Securities Act of 1933, as amended (the "1933
Act"). Under the shelf process, Gulf Power Company (the "Company") may sell,
in one or more transactions,
. senior notes (the "Senior Notes")
. junior subordinated notes (the "Junior Subordinated Notes")
and Gulf Power Capital Trust III and Gulf Power Capital Trust IV
(individually, a "Trust" and collectively, the "Trusts") may sell
. trust preferred securities or capital securities (the "Preferred
Securities")
in one or more offerings up to a total dollar amount of $350,000,000. This
Prospectus provides a general description of those securities. Each time the
Company sells securities, the Company will provide a prospectus supplement
that will contain specific information about the terms of that offering
("Prospectus Supplement"). The Prospectus Supplement may also add, update or
change information contained in this Prospectus. You should read this
Prospectus and the applicable Prospectus Supplement together with additional
information under the heading "Available Information."
AVAILABLE INFORMATION
The Company and the Trusts have filed with the Commission a combined
registration statement on Form S-3 (the "Registration Statement," which term
encompasses any amendments thereof and exhibits thereto) under the 1933 Act.
As permitted by the rules and regulations of the Commission, this Prospectus
does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto, to which reference is hereby
made.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports and other information with the Commission. Such reports and
other information can be inspected and copied at the public reference
facilities of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Commission's Regional Offices at 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661 and Seven World Trade Center, 13th Floor,
New York, New York 10048. Copies of such material can also be obtained at
prescribed rates by writing to the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a
Web site that contains reports, proxy and information statements and other
information regarding registrants including the Company that file
electronically at http://www.sec.gov. In addition, reports and other material
concerning the Company can be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
No separate financial statements of any Trust are included herein. The
Company considers that such statements would not be material to holders of the
Preferred Securities because each Trust has no independent operations and
exists for the sole purpose of investing the proceeds of the sale of its Trust
Securities (as defined below) in Junior Subordinated Notes.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission pursuant to the
1934 Act and are incorporated herein by reference and made a part of this
Prospectus:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000; and
(b) the Company's Current Report on Form 8-K dated February 28, 2001.
2
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent to the date of this
Prospectus and prior to the termination of this offering shall be deemed to be
incorporated herein by reference and made a part of this Prospectus 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 also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any 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 this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all documents incorporated herein by reference (other than the
exhibits to such documents unless such exhibits are specifically incorporated
by reference). Such requests should be directed to Warren E. Tate, Secretary
and Treasurer, Gulf Power Company, One Energy Place, Pensacola, Florida 32520,
telephone: (850) 444-6111.
3
SELECTED INFORMATION
The following material, which is presented herein solely to furnish limited
introductory information regarding the Company, has been selected from, or is
based upon, the detailed information and financial statements appearing in the
documents incorporated herein by reference or elsewhere in this Prospectus, is
qualified in its entirety by reference thereto and, therefore, should be read
together therewith.
Gulf Power Company
Business..................... Generation, transmission, distribution and sale
of electric energy
Service Area................. Approximately 7,400 square miles within the
northwestern portion of the State of Florida
Service Area Population
(1990 Census)............... Approximately 740,000
Customers at December 31,
2000........................ 370,119
Generating Capacity at
December 31, 2000 2,188,150
(kilowatts).................
Sources of Generation during
2000 (kilowatt-hours)....... Coal (98%), Gas and Oil (2%)
Sources of Generation
Estimated for 2001
(kilowatt-hours)............ Coal (98%), Gas and Oil (2%)
Certain Ratios
The following table sets forth the Ratios of Earnings to Fixed Charges and
Earnings to Fixed Charges Plus Preferred Dividend Requirements (Pre-Income Tax
Basis) for the periods indicated.
Year Ended December 31,
------------------------
1996 1997 1998 1999 2000
---- ---- ---- ---- ----
Ratio of Earnings to Fixed Charges(1)................. 4.29 4.18 3.83 3.62 3.38
Ratio of Earnings to Fixed Charges Plus Preferred
Dividend Requirements (Pre-Income Tax Basis)(2)...... 3.31 3.53 3.72 3.58 3.34
- --------
(1) This ratio is computed as follows: (i) "Earnings" have been calculated by
adding to "Earnings Before Interest and Income Taxes" the debt portion of
allowance for funds used during construction, and (ii) "Fixed Charges"
consist of "Net Interest Charges" plus the debt portion of allowance for
funds used during construction.
(2) In computing this ratio, "Preferred Dividend Requirements" represent the
before tax earnings necessary to pay such dividends, computed at the
effective tax rates for the applicable periods.
4
GULF POWER COMPANY
The Company is a corporation organized under the laws of the State of Maine
on November 2, 1925, and was admitted to do business in Florida on January 15,
1926, in Mississippi on October 25, 1976 and in Georgia on November 20, 1984.
The principal executive offices of the Company are located at 500 Bayfront
Parkway, Pensacola, Florida 32501, and the telephone number is (850) 444-6111.
The Company is a wholly owned subsidiary of The Southern Company, a holding
company registered under the Public Utility Holding Company Act of 1935, as
amended. The Company is engaged, within the northwestern portion of the State
of Florida, in the generation and purchase of electricity and the distribution
and sale of such electricity at retail in 71 communities as well as in rural
areas, and at wholesale to a nonaffiliated utility and to a municipality.
THE TRUSTS
Each Trust is a statutory business trust created under Delaware law pursuant
to the filing of a certificate of trust with the Delaware Secretary of State
on November 26, 1997, with respect to Gulf Power Capital Trust III, and April
25, 2001, with respect to Gulf Power Capital Trust IV. Each Trust's business
is defined in a trust agreement, executed by the Company, as Depositor, and
the Delaware Trustee thereunder. This trust agreement of each Trust will be
amended and restated in its entirety substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus forms a part
(the "Trust Agreement"). Each Trust Agreement will be qualified as an
indenture under the Trust Indenture Act of 1939, as amended (the "1939 Act").
The Company will own all of the common securities (the "Common Securities"
and, together with the Preferred Securities, the "Trust Securities") of each
Trust. The Trust Securities represent undivided beneficial interests in the
assets of the respective Trusts. Each Trust exists for the exclusive purposes
of (i) issuing its Trust Securities representing undivided beneficial
interests in the assets of such Trust, (ii) investing the gross proceeds of
its Trust Securities in a related series of Junior Subordinated Notes, and
(iii) engaging in only those other activities necessary, appropriate,
convenient or incidental thereto. The payment of periodic cash distributions
on the Preferred Securities of each Trust and payments on liquidation and
redemption with respect to the Preferred Securities of each Trust, in each
case to the extent each Trust has funds legally and immediately available
therefor, will be guaranteed by the Company (individually, a "Guarantee" and
collectively, the "Guarantees") to the extent set forth under "Description of
the Guarantees."
Each Trust's business and affairs will be conducted by its trustees, which
shall be appointed by the Company as the holder of the Common Securities: two
employees of the Company as Administrative Trustees; The Chase Manhattan Bank
as Property Trustee; and Chase Manhattan Bank USA, National Association as
Delaware Trustee (collectively, the "Securities Trustees"). The Property
Trustee of each Trust will act as the indenture trustee with respect to such
Trust for purposes of compliance with the provisions of the 1939 Act.
The principal place of business of each Trust shall be c/o the Company, 500
Bayfront Parkway, Pensacola, Florida 32501, telephone (850) 444-6111, Attn:
Treasurer.
Reference is made to the Prospectus Supplement relating to the Preferred
Securities of a Trust for further information concerning such Trust.
5
ACCOUNTING TREATMENT OF TRUSTS
For financial reporting purposes, the Trusts will be treated as subsidiaries
of the Company and, accordingly, the accounts of the Trusts will be included
in the consolidated financial statements of the Company. The Preferred
Securities will be presented as a separate line item in the consolidated
balance sheet of the Company, and appropriate disclosures concerning the
Preferred Securities, the Guarantees and the Junior Subordinated Notes will be
included in the notes to the consolidated financial statements. For financial
reporting purposes, the Company will record distributions payable on the
Preferred Securities as an expense.
USE OF PROCEEDS
Each Trust will invest the proceeds received from the sale of its Preferred
Securities in Junior Subordinated Notes. Except as may be otherwise described
in an applicable Prospectus Supplement, the net proceeds received by the
Company from such investment and any proceeds received from the sale of its
Senior Notes or other sales of its Junior Subordinated Notes will be used in
connection with its ongoing construction program, to pay scheduled maturities
and/or refundings of its securities, to repay short-term indebtedness to the
extent outstanding and for other general corporate purposes.
DESCRIPTION OF THE SENIOR NOTES
Set forth below is a description of the general terms of the Senior Notes.
The following description does not purport to be complete and is subject to,
and is qualified in its entirety by reference to, the Senior Note Indenture,
dated as of January 1, 1998, between the Company and The Chase Manhattan Bank,
as trustee (the "Senior Note Indenture Trustee"), as to be supplemented by a
supplemental indenture thereto establishing the Senior Notes of each series
(the Senior Note Indenture, as so supplemented, is hereinafter referred to as
the "Senior Note Indenture"), the forms of which are filed as exhibits to the
Registration Statement of which this Prospectus forms a part. The terms of the
Senior Notes will include those stated in the Senior Note Indenture and those
made a part of the Senior Note Indenture by reference to the 1939 Act. Certain
capitalized terms used herein are defined in the Senior Note Indenture.
General
The Senior Notes will be issued as unsecured senior debt securities under
the Senior Note Indenture and will rank pari passu with all other unsecured
and unsubordinated debt of the Company. The Senior Notes will be effectively
subordinated to all secured debt of the Company, including its first mortgage
bonds, aggregating approximately $254,700,000 outstanding at December 31,
2000. The Senior Note Indenture does not limit the aggregate principal amount
of Senior Notes that may be issued thereunder and provides that Senior Notes
may be issued from time to time in one or more series pursuant to an indenture
supplemental to the Senior Note Indenture. The Senior Note Indenture gives the
Company the ability to reopen a previous issue of Senior Notes and issue
additional Senior Notes of such series, unless otherwise provided.
Reference is made to the Prospectus Supplement that will accompany this
Prospectus for the following terms of the series of Senior Notes being offered
thereby: (i) the title of such Senior Notes; (ii) any limit on the aggregate
principal amount of such Senior Notes; (iii) the date or dates on which the
principal of such Senior Notes is payable; (iv) the rate or rates at which
such Senior Notes shall bear interest, if any, or any method by which such
rate or rates will be determined, the date or dates from which such interest
will accrue, the interest payment dates on which such interest shall be
payable, and the regular record date for the interest payable on any interest
payment date; (v) the place or places where the principal of (and premium, if
any) and interest, if any, on such Senior Notes shall be payable; (vi) the
period or periods within which, the price or prices at which
6
and the terms and conditions on which such Senior Notes may be redeemed, in
whole or in part, at the option of the Company; (vii) the obligation, if any,
of the Company to redeem or purchase such Senior Notes; (viii) the
denominations in which such Senior Notes shall be issuable; (ix) if other than
the principal amount thereof, the portion of the principal amount of such
Senior Notes which shall be payable upon declaration of acceleration of the
maturity thereof; (x) any deletions from, modifications of or additions to the
Events of Default or covenants of the Company as provided in the Senior Note
Indenture pertaining to such Senior Notes; (xi) whether such Senior Notes
shall be issued in whole or in part in the form of a Global Security; and
(xii) any other terms of such Senior Notes.
The Senior Note Indenture does not contain provisions that afford holders of
Senior Notes protection in the event of a highly leveraged transaction
involving the Company.
Events of Default
The Senior Note Indenture provides that any one or more of the following
described events with respect to the Senior Notes of any series, which has
occurred and is continuing, constitutes an "Event of Default" with respect to
the Senior Notes of such series:
(a) failure for 10 days to pay interest on the Senior Notes of such
series, when due on an interest payment date other than at maturity or upon
earlier redemption; or
(b) failure to pay principal or premium, if any, or interest on the
Senior Notes of such series when due at maturity or upon earlier
redemption; or
(c) failure for three Business Days to deposit any sinking fund payment
when due by the terms of a Senior Note of such series; or
(d) failure to observe or perform any other covenant or warranty of the
Company in the Senior Note Indenture (other than a covenant or warranty
which has expressly been included therein solely for the benefit of one or
more series of Senior Notes other than such series) for 90 days after
written notice to the Company from the Senior Note Indenture Trustee or the
holders of at least 25% in principal amount of the outstanding Senior Notes
of such series; or
(e) certain events of bankruptcy, insolvency or reorganization of the
Company.
The holders of not less than a majority in aggregate outstanding principal
amount of the Senior Notes of any series have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Senior Note Indenture Trustee with respect to the Senior Notes of such series.
If a Senior Note Indenture Event of Default occurs and is continuing with
respect to the Senior Notes of any series, then the Senior Note Indenture
Trustee or the holders of not less than 25% in aggregate outstanding principal
amount of the Senior Notes of such series may declare the principal amount
thereof due and payable immediately by notice in writing to the Company (and
to the Senior Note Indenture Trustee if given by the holders), and upon any
such declaration such principal amount shall become immediately due and
payable. At any time after such a declaration of acceleration with respect to
the Senior Notes of any series has been made and before a judgment or decree
for payment of the money due has been obtained as provided in Article Five of
the Senior Note Indenture, the holders of not less than a majority in
aggregate outstanding principal amount of the Senior Notes of such series may
rescind and annul such declaration and its consequences if the default has
been cured or waived and the Company has paid or deposited with the Senior
Note Indenture Trustee a sum sufficient to pay all matured installments of
interest and principal due otherwise than by acceleration and all sums paid or
advanced by the Senior Note Indenture Trustee, including reasonable
compensation and expenses of the Senior Note Indenture Trustee.
The holders of not less than a majority in aggregate outstanding principal
amount of the Senior Notes of any series may, on behalf of the holders of all
the Senior Notes of such series, waive any past default with respect to such
series, except (i) a default in the payment of principal or interest or (ii) a
default in respect of a covenant or provision which under Article Nine of the
Senior Note Indenture cannot be modified or amended thereunder without the
consent of the holder of each outstanding Senior Note of such series affected
thereby.
7
Registration and Transfer
The Company shall not be required to (i) issue, register the transfer of or
exchange Senior Notes of any series during a period of 15 days immediately
preceding the date notice is given identifying the Senior Notes of such series
called for redemption, or (ii) register the transfer of or exchange any Senior
Notes so selected for redemption, in whole or in part, except the unredeemed
portion of any Senior Note being redeemed in part.
Payment and Paying Agent
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of any Senior Notes will be made only against surrender to the
Paying Agent of such Senior Notes. Principal of and interest on Senior Notes
will be payable subject to any applicable laws and regulations, 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 wire transfer or by check mailed to the address of the person
entitled thereto as such address shall appear in the Security Register with
respect to the Senior Notes. Payment of interest on Senior Notes on any
interest payment date will be made to the person in whose name the Senior
Notes (or predecessor security) are registered at the close of business on the
record date for such interest payment.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Senior Note Indenture Trustee will act as Paying Agent with respect to the
Senior 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.
All moneys paid by the Company to a Paying Agent for the payment of the
principal of or interest on the Senior Notes of any series which remain
unclaimed at the end of two years after such principal or interest shall have
become due and payable will be repaid to the Company, and the holder of such
Senior Notes will thereafter look only to the Company for payment thereof.
Modification
The Senior Note Indenture contains provisions permitting the Company and the
Senior Note Indenture Trustee, with the consent of the holders of not less
than a majority in principal amount of the outstanding Senior Notes of each
series affected thereby, to modify the Senior Note Indenture or the rights of
the holders of the Senior Notes of such series; provided, that no such
modification may, without the consent of the holder of each outstanding Senior
Note affected thereby, (i) change the stated maturity of the principal of, or
any installment of principal of or interest on, any Senior Note, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or change the method of calculating the
rate of interest thereon, or impair the right to institute suit for the
enforcement of any such payment on or after the stated maturity thereof (or,
in the case of redemption, on or after the redemption date), or (ii) reduce
the percentage of principal amount of the outstanding Senior Notes of any
series, the consent of whose holders is required for any such supplemental
indenture, or the consent of whose holders is required for any waiver (of
compliance with certain provisions of the Senior Note Indenture or certain
defaults thereunder and their consequences) provided for in the Senior Note
Indenture, or (iii) modify any of the provisions of the Senior Note Indenture
relating to supplemental indentures, waiver of past defaults, or waiver of
certain covenants, except to increase any such percentage or to provide that
certain other provisions of the Senior Note Indenture cannot be modified or
waived without the consent of the holder of each outstanding Senior Note
affected thereby.
In addition, the Company and the Senior Note Indenture Trustee may execute,
without the consent of any holders of Senior Notes, any supplemental indenture
for certain other usual purposes, including the creation of any new series of
senior notes.
8
Consolidation, Merger and Sale
The Company shall not consolidate with or merge into any other corporation
or convey, transfer or lease its properties and assets substantially as an
entirety to any person, unless (1) such other corporation or person is a
corporation organized and existing under the laws of the United States, any
state thereof or the District of Columbia and such other corporation or person
expressly assumes, by supplemental indenture executed and delivered to the
Senior Note Indenture Trustee, the payment of the principal of (and premium,
if any) and interest on all the Senior Notes and the performance of every
covenant of the Senior Note Indenture on the part of the Company to be
performed or observed; (2) immediately after giving effect to such
transactions, no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have happened and be
continuing; and (3) the Company has delivered to the Senior Note Indenture
Trustee an officers' certificate and an opinion of counsel, each stating that
such transaction complies with the provisions of the Senior Note Indenture
governing consolidation, merger, conveyance, transfer or lease and that all
conditions precedent thereto have been complied with.
Information Concerning the Senior Note Indenture Trustee
The Senior Note Indenture Trustee, prior to an Event of Default with respect
to Senior Notes of any series, undertakes to perform, with respect to Senior
Notes of such series, only such duties as are specifically set forth in the
Senior Note Indenture and, in case an Event of Default with respect to Senior
Notes of any series has occurred and is continuing, shall exercise, with
respect to Senior Notes of such series, the same degree of care as a prudent
individual would exercise in the conduct of his or her own affairs. Subject to
such provision, the Senior Note Indenture Trustee is under no obligation to
exercise any of the powers vested in it by the Senior Note Indenture at the
request of any holder of Senior Notes of any series, unless offered reasonable
indemnity by such holder against the costs, expenses and liabilities which
might be incurred thereby. The Senior Note Indenture Trustee is not required
to expend or risk its own funds or otherwise incur any financial liability in
the performance of its duties if the Senior Note Indenture Trustee reasonably
believes that repayment or adequate indemnity is not reasonably assured to it.
The Chase Manhattan Bank, the Senior Note Indenture Trustee, also serves as
Subordinated Note Indenture Trustee, as Property Trustee and as Guarantee
Trustee. The Company and certain of its affiliates maintain deposit accounts
and banking relationships with The Chase Manhattan Bank. The Chase Manhattan
Bank also serves as trustee under other indentures pursuant to which
securities of the Company and affiliates of the Company are outstanding.
Governing Law
The Senior Note Indenture and the Senior Notes will be governed by, and
construed in accordance with, the internal laws of the State of New York.
Miscellaneous
The Company will have the right at all times to assign any of its rights or
obligations under the Senior Note Indenture to a direct or indirect wholly-
owned subsidiary of the Company; provided, that, in the event of any such
assignment, the Company will remain primarily liable for all such obligations.
Subject to the foregoing, the Senior Note Indenture will be binding upon and
inure to the benefit of the parties thereto and their respective successors
and assigns.
9
DESCRIPTION OF THE JUNIOR SUBORDINATED NOTES
Set forth below is a description of the general terms of the Junior
Subordinated Notes. The following description does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, the
Subordinated Note Indenture, dated as of January 1, 1997, between the Company
and The Chase Manhattan Bank, as trustee (the "Subordinated Note Indenture
Trustee"), as to be supplemented by a supplemental indenture thereto
establishing the Junior Subordinated Notes of each series (the Subordinated
Note Indenture, as so supplemented, is hereinafter referred to as the
"Subordinated Note Indenture"), the forms of which are filed as exhibits to
the Registration Statement of which this Prospectus forms a part. The terms of
the Junior Subordinated Notes will include those stated in the Subordinated
Note Indenture and those made a part of the Subordinated Note Indenture by
reference to the 1939 Act. Certain capitalized terms used herein are defined
in the Subordinated Note Indenture.
General
The Junior Subordinated Notes will be issued as unsecured junior
subordinated debt securities under the Subordinated Note Indenture. The
Subordinated Note Indenture does not limit the aggregate principal amount of
Junior Subordinated Notes that may be issued thereunder and provides that
Junior Subordinated Notes may be issued from time to time in one or more
series pursuant to an indenture supplemental to the Subordinated Note
Indenture. The Subordinated Note Indenture gives the Company the ability to
reopen a previous issue of Junior Subordinated Notes and issue additional
Junior Subordinated Notes of such series, unless otherwise provided.
Reference is made to the Prospectus Supplement that will accompany this
Prospectus for the following terms of the series of Junior Subordinated Notes
being offered thereby: (i) the title of such Junior Subordinated Notes; (ii)
any limit on the aggregate principal amount of such Junior Subordinated Notes;
(iii) the date or dates on which the principal of such Junior Subordinated
Notes is payable; (iv) the rate or rates at which such Junior Subordinated
Notes shall bear interest, if any, or any method by which such rate or rates
will be determined, the date or dates from which such interest will accrue,
the interest payment dates on which such interest shall be payable, and the
regular record date for the interest payable on any interest payment date; (v)
the place or places where the principal of (and premium, if any) and interest,
if any, on such Junior Subordinated Notes shall be payable; (vi) the period or
periods within which, the price or prices at which and the terms and
conditions on which such Junior Subordinated Notes may be redeemed, in whole
or in part, at the option of the Company; (vii) the obligation, if any, of the
Company to redeem or purchase such Junior Subordinated Notes; (viii) the
denominations in which such Junior Subordinated Notes shall be issuable; (ix)
if other than the principal amount thereof, the portion of the principal
amount of such Junior Subordinated Notes which shall be payable upon
declaration of acceleration of the maturity thereof; (x) any deletions from,
modifications of or additions to the Events of Default or covenants of the
Company as provided in the Subordinated Note Indenture pertaining to such
Junior Subordinated Notes; (xi) whether such Junior Subordinated Notes shall
be issued in whole or in part in the form of a Global Security; (xii) the
right, if any, of the Company to extend the interest payment periods of such
Junior Subordinated Notes; and (xiii) any other terms of such Junior
Subordinated Notes. The terms of each series of Junior Subordinated Notes
issued to a Trust will correspond to those of the related Preferred Securities
of such Trust as described in the Prospectus Supplement relating to such
Preferred Securities.
The Subordinated Note Indenture does not contain provisions that afford
holders of Junior Subordinated Notes protection in the event of a highly
leveraged transaction involving the Company.
Subordination
The Junior Subordinated Notes are subordinated and junior in right of
payment to all Senior Indebtedness (as defined below) of the Company. No
payment of principal of (including redemption payments, if any), or premium,
if any, or interest on (including Additional Interest (as defined below)) the
Junior Subordinated Notes may be made if (a) any Senior Indebtedness is not
paid when due and any applicable grace period with respect to such default has
ended with such default not being cured or waived or otherwise ceasing to
exist, or (b) the
10
maturity of any Senior Indebtedness has been accelerated because of a default,
or (c) notice has been given of the exercise of an option to require
repayment, mandatory payment or prepayment or otherwise. Upon any payment or
distribution of assets of the Company to creditors upon any liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of
creditors, marshalling of assets or liabilities, or any bankruptcy, insolvency
or similar proceedings of the Company, the holders of Senior Indebtedness
shall be entitled to receive payment in full of all amounts due or to become
due on or in respect of all Senior Indebtedness before the holders of the
Junior Subordinated Notes are entitled to receive or retain any payment or
distribution. Subject to the prior payment of all Senior Indebtedness, the
rights of the holders of the Junior Subordinated Notes will be subrogated to
the rights of the holders of Senior Indebtedness to receive payments and
distributions applicable to such Senior Indebtedness until all amounts owing
on the Junior Subordinated Notes are paid in full.
The term "Senior Indebtedness" means, with respect to the Company, (i) any
payment due in respect of indebtedness of the Company, whether outstanding at
the date of execution of the Subordinated Note Indenture or thereafter
incurred, created or assumed, (a) in respect of money borrowed (including any
financial derivative, hedging or futures contract or similar instrument) and
(b) evidenced by securities, debentures, bonds, notes or other similar
instruments issued by the Company that, by their terms, are senior or senior
subordinated debt securities including, without limitation, all obligations
under its indentures with various trustees; (ii) all capital lease
obligations; (iii) all obligations issued or assumed as the deferred purchase
price of property, all conditional sale obligations and all obligations of the
Company under any title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business and long-term purchase
obligations); (iv) all obligations for the reimbursement of any letter of
credit, banker's acceptance, security purchase facility or similar credit
transaction; (v) all obligations of the type referred to in clauses (i)
through (iv) above of other persons the payment of which the Company is
responsible or liable as obligor, guarantor or otherwise; and (vi) all
obligations of the type referred to in clauses (i) through (v) above of other
persons secured by any lien on any property or asset of the Company (whether
or not such obligation is assumed by the Company), except for (1) any such
indebtedness that is by its terms subordinated to or pari passu with the
Junior Subordinated Notes and (2) any unsecured indebtedness between or among
the Company or its affiliates. Such Senior Indebtedness shall continue to be
Senior Indebtedness and be entitled to the benefits of the subordination
provisions contained in the Subordinated Note Indenture irrespective of any
amendment, modification or waiver of any term of such Senior Indebtedness.
The Subordinated Note Indenture does not limit the aggregate amount of
Senior Indebtedness that may be issued by the Company. As of December 31,
2000, Senior Indebtedness of the Company aggregated approximately
$416,000,000.
Additional Interest
"Additional Interest" is defined in the Subordinated Note Indenture as (i)
such additional amounts as may be required so that the net amounts received
and retained by a holder of Junior Subordinated Notes (if the holder is a
Trust) after paying taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed by the United States or
any other taxing authority will not be less than the amounts the holder would
have received had no such taxes, duties, assessments, or other governmental
charges been imposed; and (ii) any interest due and not paid on an interest
payment date, together with interest thereon from such interest payment date
to the date of payment, compounded quarterly, on each interest payment date.
Certain Covenants
The Company covenants in the Subordinated Note Indenture, for the benefit of
the holders of each series of Junior Subordinated Notes, that, (i) if at such
time the Company shall have given notice of its election to extend an interest
payment period for such series of Junior Subordinated Notes and such extension
shall be continuing, (ii) if at such time the Company shall be in default with
respect to its payment or other obligations under the Guarantee with respect
to the Trust Securities, if any, related to such series of Junior Subordinated
Notes, or (iii) if at such time an Event of Default thereunder with respect to
such series of Junior Subordinated Notes shall have occurred and be
continuing, (a) the Company shall not declare or pay any dividend or make any
11
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock, and (b) the
Company shall not make any payment of interest, principal or premium, if any,
on or repay, repurchase or redeem any debt securities (including guarantees
other than the Guarantees) issued by the Company which rank pari passu with or
junior to the Junior Subordinated Notes. None of the foregoing, however, shall
restrict (i) any of the actions described in the preceding sentence resulting
from any reclassifications of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock, or (ii) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged.
The Subordinated Note Indenture further provides that, for so long as the
Trust Securities of any Trust remain outstanding, the Company covenants (i) to
directly or indirectly maintain 100% ownership of the Common Securities of
such Trust; provided, however, that any permitted successor of the Company
under the Subordinated Note Indenture may succeed to the Company's ownership
of such Common Securities, and (ii) to use its reasonable efforts to cause
such Trust (a) to remain a statutory business trust, except in connection with
the distribution of Junior Subordinated Notes to the holders of Trust
Securities in liquidation of such Trust, the redemption of all of the Trust
Securities of such Trust, or certain mergers, consolidations or amalgamations,
each as permitted by the related Trust Agreement, and (b) to otherwise
continue to be classified as a grantor trust for United States federal income
tax purposes.
Events of Default
The Subordinated Note Indenture provides that any one or more of the
following described events with respect to the Junior Subordinated Notes of
any series, which has occurred and is continuing, constitutes an "Event of
Default" with respect to the Junior Subordinated Notes of such series:
(a) failure for 10 days to pay interest on the Junior Subordinated Notes
of such series, including any Additional Interest (as defined in clause
(ii) of the definition thereof in the Subordinated Note Indenture) in
respect thereof, when due on an interest payment date other than at
maturity or upon earlier redemption; provided, however, that a valid
extension of the interest payment period by the Company shall not
constitute a default in the payment of interest for this purpose; or
(b) failure for 10 days to pay Additional Interest (as defined in clause
(i) of the definition thereof in the Subordinated Note Indenture); or
(c) failure to pay principal or premium, if any, or interest, including
Additional Interest (as defined in clause (ii) of the definition thereof in
the Subordinated Note Indenture), on the Junior Subordinated Notes of such
series when due at maturity or upon earlier redemption; or
(d) failure for three Business Days to deposit any sinking fund payment
when due by the terms of a Junior Subordinated Note of such series; or
(e) failure to observe or perform any other covenant or warranty of the
Company in the Subordinated Note Indenture (other than a covenant or
warranty which has expressly been included therein solely for the benefit
of one or more series of Junior Subordinated Notes other than such series)
for 90 days after written notice to the Company from the Subordinated Note
Indenture Trustee or the holders of at least 25% in principal amount of the
outstanding Junior Subordinated Notes of such series; or
(f) certain events of bankruptcy, insolvency or reorganization of the
Company.
The holders of not less than a majority in aggregate outstanding principal
amount of the Junior Subordinated Notes of any series have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the Subordinated Note Indenture Trustee with respect to the
Junior Subordinated Notes of such series. If a Subordinated Note Indenture
Event of Default occurs and is continuing with respect to the Junior
Subordinated Notes of any series, then the Subordinated Note Indenture Trustee
or the holders of not less than 25% in aggregate outstanding principal amount
of the Junior Subordinated Notes of such series may declare the principal
amount thereof due and payable immediately by notice in writing to the Company
(and to the
12
Subordinated Note Indenture Trustee if given by the holders), and upon any
such declaration such principal amount shall become immediately due and
payable. At any time after such a declaration of acceleration with respect to
the Junior Subordinated Notes of any series had been made and before a
judgment or decree for payment of the money due has been obtained as provided
in Article Five of the Subordinated Note Indenture, the holders of not less
than a majority in aggregate outstanding principal amount of the Junior
Subordinated Notes of such series may rescind and annul such declaration and
its consequences if the default has been cured or waived and the Company has
paid or deposited with the Subordinated Note Indenture Trustee a sum
sufficient to pay all matured installments of interest (including any
Additional Interest) and principal due otherwise than by acceleration and all
sums paid or advanced by the Subordinated Note Indenture Trustee, including
reasonable compensation and expenses of the Subordinated Note Indenture
Trustee.
A holder of Preferred Securities may institute a legal proceeding directly
against the Company, without first instituting a legal proceeding against the
Property Trustee or any other person or entity, for enforcement of payment to
such holder of principal of or interest on the Junior Subordinated Notes of
the related series having a principal amount equal to the aggregate stated
liquidation amount of the Preferred Securities of such holder on or after the
due dates specified in the Junior Subordinated Notes of such series.
The holders of not less than a majority in aggregate outstanding principal
amount of the Junior Subordinated Notes of any series may, on behalf of the
holders of all the Junior Subordinated Notes of such series, waive any past
default with respect to such series, except (i) a default in the payment of
principal or interest or (ii) a default in respect of a covenant or provision
which under Article Nine of the Subordinated Note Indenture cannot be modified
or amended thereunder without the consent of the holder of each outstanding
Junior Subordinated Note of such series affected thereby.
Registration and Transfer
The Company shall not be required to (i) issue, register the transfer of or
exchange Junior Subordinated Notes of any series during a period of 15 days
immediately preceding the date notice is given identifying the Junior
Subordinated Notes of such series called for redemption, or (ii) register the
transfer of or exchange any Junior Subordinated Notes so selected for
redemption, in whole or in part, except the unredeemed portion of any Junior
Subordinated Note being redeemed in part.
Payment and Paying Agent
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of any Junior Subordinated Notes will be made only against
surrender to the Paying Agent of such Junior Subordinated Notes. Principal of
and interest on Junior Subordinated Notes will be payable, subject to any
applicable laws and regulations, 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 wire transfer or
by check mailed to the address of the person entitled thereto as such address
shall appear in the Security Register with respect to the Junior Subordinated
Notes. Payment of interest on Junior Subordinated Notes on any interest
payment date will be made to the person in whose name the Junior Subordinated
Notes (or predecessor security) are registered at the close of business on the
record date for such interest payment.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Subordinated Note Indenture Trustee will act as Paying Agent with respect to
the Junior Subordinated 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.
All moneys paid by the Company to a Paying Agent for the payment of the
principal of or interest on the Junior Subordinated Notes of any series which
remain unclaimed at the end of two years after such principal or interest
shall have become due and payable will be repaid to the Company, and the
holder of such Junior Subordinated Notes will thereafter look only to the
Company for payment thereof.
13
Modification
The Subordinated Note Indenture contains provisions permitting the Company
and the Subordinated Note Indenture Trustee, with the consent of the holders
of not less than a majority in principal amount of the outstanding Junior
Subordinated Notes of each series affected thereby, to modify the Subordinated
Note Indenture or the rights of the holders of the Junior Subordinated Notes
of such series; provided, that no such modification may, without the consent
of the holder of each outstanding Junior Subordinated Note affected thereby,
(i) change the stated maturity of the principal of, or any installment of
principal of or interest on, any Junior Subordinated Note, or reduce the
principal amount thereof or the rate of interest (including Additional
Interest) thereon or any premium payable upon the redemption thereof, or
change the method of calculating the rate of interest thereon, or impair the
right to institute suit for the enforcement of any such payment on or after
the stated maturity thereof (or, in the case of redemption, on or after the
redemption date), or (ii) reduce the percentage of principal amount of the
outstanding Junior Subordinated Notes of any series, the consent of whose
holders is required for any such supplemental indenture, or the consent of
whose holders is required for any waiver (of compliance with certain
provisions of the Subordinated Note Indenture or certain defaults thereunder
and their consequences) provided for in the Subordinated Note Indenture, or
(iii) modify any of the provisions of the Subordinated Note Indenture relating
to supplemental indentures, waiver of past defaults, or waiver of certain
covenants, except to increase any such percentage or to provide that certain
other provisions of the Subordinated Note Indenture cannot be modified or
waived without the consent of the holder of each outstanding Junior
Subordinated Note affected thereby, or (iv) modify the provisions of the
Subordinated Note Indenture with respect to the subordination of the Junior
Subordinated Notes in a manner adverse to such holder.
In addition, the Company and the Subordinated Note Indenture Trustee may
execute, without the consent of any holders of Junior Subordinated Notes, any
supplemental indenture for certain other usual purposes, including the
creation of any new series of junior subordinated notes.
Consolidation, Merger and Sale
The Company shall not consolidate with or merge into any other corporation
or convey, transfer or lease its properties and assets substantially as an
entirety to any person, unless (1) such other corporation or person is a
corporation organized and existing under the laws of the United States, any
state thereof or the District of Columbia and such other corporation or person
expressly assumes, by supplemental indenture executed and delivered to the
Subordinated Note Indenture Trustee, the payment of the principal of (and
premium, if any) and interest (including Additional Interest) on all the
Junior Subordinated Notes and the performance of every covenant of the
Subordinated Note Indenture on the part of the Company to be performed or
observed; (2) immediately after giving effect to such transactions, no Event
of Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing; and (3) the
Company has delivered to the Subordinated Note Indenture Trustee an officers'
certificate and an opinion of counsel, each stating that such transaction
complies with the provisions of the Subordinated Note Indenture governing
consolidation, merger, conveyance, transfer or lease and that all conditions
precedent thereto have been complied with.
Information Concerning the Subordinated Note Indenture Trustee
The Subordinated Note Indenture Trustee, prior to an Event of Default with
respect to Junior Subordinated Notes of any series, undertakes to perform,
with respect to Junior Subordinated Notes of such series, only such duties as
are specifically set forth in the Subordinated Note Indenture and, in case an
Event of Default with respect to Junior Subordinated Notes of any series has
occurred and is continuing, shall exercise, with respect to Junior
Subordinated Notes of such series, the same degree of care as a prudent
individual would exercise in the conduct of his or her own affairs. Subject to
such provision, the Subordinated Note Indenture Trustee is under no obligation
to exercise any of the powers vested in it by the Subordinated Note Indenture
at the request of any holder of Junior Subordinated Notes of any series,
unless offered reasonable indemnity by such holder against the costs, expenses
and liabilities which might be incurred thereby. The Subordinated Note
Indenture Trustee is not required to expend or risk its own funds or otherwise
incur any financial liability in the performance of its duties if the
Subordinated Note Indenture Trustee reasonably believes that repayment or
adequate indemnity is not reasonably assured to it.
14
The Chase Manhattan Bank, the Subordinated Note Indenture Trustee, also
serves as Senior Note Indenture Trustee, as Property Trustee and as Guarantee
Trustee. The Company and certain of its affiliates maintain deposit accounts
and banking relationships with The Chase Manhattan Bank. The Chase Manhattan
Bank also serves as trustee under other indentures pursuant to which
securities of the Company and affiliates of the Company are outstanding.
Governing Law
The Subordinated Note Indenture and Junior Subordinated Notes will be
governed by, and construed in accordance with, the internal laws of the State
of New York.
Miscellaneous
The Company will have the right at all times to assign any of its rights or
obligations under the Subordinated Note Indenture to a direct or indirect
wholly-owned subsidiary of the Company; provided, that, in the event of any
such assignment, the Company will remain primarily liable for all such
obligations. Subject to the foregoing, the Subordinated Note Indenture will be
binding upon and inure to the benefit of the parties thereto and their
respective successors and assigns.
DESCRIPTION OF THE PREFERRED SECURITIES
Each Trust may issue only one series of Preferred Securities having terms
described in the Prospectus Supplement relating thereto. The Trust Agreement
of each Trust will authorize the Administrative Trustees, on behalf of the
Trust, to issue the Preferred Securities of such Trust. The Preferred
Securities of each Trust will have such terms, including distributions,
redemption, voting, liquidation rights and such other preferred, deferral or
other special rights or such restrictions as shall be set forth in the Trust
Agreement of such Trust. Reference is made to the Prospectus Supplement
relating to the Preferred Securities of a Trust for specific terms, including
(i) the distinctive designation of such Preferred Securities; (ii) the number
of Preferred Securities issued by such Trust; (iii) the annual distribution
rate (or method of determining such rate) for Preferred Securities of such
Trust and the date or dates on which such distributions shall be payable; (iv)
whether distributions on such Preferred Securities shall be cumulative and, in
the case of Preferred Securities having cumulative distribution rights, the
date or dates, or method of determining the date or dates, from which
distributions on such Preferred Securities shall be cumulative; (v) the amount
or amounts that shall be paid out of the assets of such Trust to the holders
of the Preferred Securities of such Trust upon voluntary or involuntary
dissolution, winding-up or termination of such Trust; (vi) the obligation, if
any, of such Trust to purchase or redeem such Preferred Securities and the
price or prices at which, the period or periods within which, and the terms
and conditions upon which such Preferred Securities shall be purchased or
redeemed, in whole or in part, pursuant to such obligation; (vii) the voting
rights, if any, of such Preferred Securities in addition to those required by
law, including the number of votes per Preferred Security and any requirement
for the approval by the holders of Preferred Securities as a condition to
specified action or amendments to the Trust Agreement of such Trust; (viii)
the rights, if any, to defer distributions on the Preferred Securities by
extending the interest payment period on the related Junior Subordinated
Notes; and (ix) any other relative rights, preferences, privileges,
limitations or restrictions of such Preferred Securities not inconsistent with
the Trust Agreement of such Trust or applicable law. All Preferred Securities
offered hereby will be guaranteed by the Company to the extent set forth under
"Description of the Guarantees." Any material United States federal income tax
considerations applicable to an offering of Preferred Securities will be
described in the Prospectus Supplement relating thereto.
15
DESCRIPTION OF THE GUARANTEES
Set forth below is a summary of information concerning the Guarantees that
will be executed and delivered by the Company for the benefit of the holders
of Preferred Securities of the respective Trusts from time to time. Each
Guarantee will be qualified as an indenture under the 1939 Act. The Chase
Manhattan Bank will act as indenture trustee under each Guarantee (the
"Guarantee Trustee") for purposes of the 1939 Act. The terms of the respective
Guarantees will be those set forth therein and those made part thereof by the
1939 Act. 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 Guarantees, the form of which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, and the 1939
Act. Each Guarantee will be held by the Guarantee Trustee for the benefit of
holders of the Preferred Securities to which it relates.
General
Pursuant to each Guarantee, the Company will irrevocably and unconditionally
agree, to the extent set forth therein, to pay in full, to the holders of the
related Preferred Securities, the Guarantee Payments (as defined herein), to
the extent not paid by, or on behalf of, the related Trust, regardless of any
defense, right of set-off or counterclaim that the Company may have or assert
against any person. The following payments or distributions with respect to
the Preferred Securities of any Trust to the extent not paid or made by, or on
behalf of, such Trust will be subject to the Guarantee related thereto
(without duplication): (i) any accrued and unpaid distributions required to be
paid on the Preferred Securities of such Trust but if and only if and to the
extent that such Trust has funds legally and immediately available therefor,
(ii) the redemption price, including all accrued and unpaid distributions to
the date of redemption (the "Redemption Price"), with respect to any Preferred
Securities called for redemption by such Trust, but if and only to the extent
such Trust has funds legally and immediately available therefor, and (iii)
upon a dissolution, winding-up or termination of such Trust (other than in
connection with the distribution of Junior Subordinated Notes to the holders
of Trust Securities of such Trust or the redemption of all of the Preferred
Securities of such Trust), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid distributions on the Preferred Securities of
such Trust to the date of payment, to the extent such Trust has funds legally
and immediately available therefor, and (b) the amount of assets of such Trust
remaining available for distribution to holders of Preferred Securities of
such Trust in liquidation of such Trust (the "Guarantee Payments"). The
Company's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Company to the holders of the related
Preferred Securities or by causing the related Trust to pay such amounts to
such holders.
Each Guarantee will be a guarantee of the Guarantee Payments with respect to
the related Preferred Securities from the time of issuance of such Preferred
Securities, but will not apply to the payment of distributions and other
payments on such Preferred Securities when the related Trust does not have
sufficient funds legally and immediately available to make such distributions
or other payments. If the Company does not make interest payments on the
Junior Subordinated Notes held by the Property Trustee under any Trust, such
Trust will not make distributions on its Preferred Securities.
Subordination
The Company's obligations under each Guarantee to make the Guarantee
Payments will constitute an unsecured obligation of the Company and will rank
(i) subordinate and junior in right of payment to all other liabilities of the
Company, including the Junior Subordinated Notes, except those obligations or
liabilities made pari passu or subordinate by their terms, (ii) pari passu
with the most senior preferred or preference stock now or hereafter issued by
the Company and with any guarantee now or hereafter entered into by the
Company in respect of any preferred or preference securities of any affiliate
of the Company, and (iii) senior to all common stock of the Company. The terms
of the Preferred Securities will provide that each holder of Preferred
Securities by acceptance thereof agrees to the subordination provisions and
other terms of the Guarantee related thereto. The Company has outstanding
preferred stock that ranks pari passu to the Guarantees and common stock that
ranks junior to the Guarantees.
16
Each Guarantee will constitute a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly
against the guarantor to enforce its rights under the guarantee without first
instituting a legal proceeding against any other person or entity).
Amendments and Assignment
Except with respect to any changes that do not materially and adversely
affect the rights of holders of the related Preferred Securities (in which
case no consent will be required), each Guarantee may be amended only with the
prior approval of the holders of not less than 66 2/3% in liquidation amount
of such outstanding Preferred Securities. The manner of obtaining any such
approval of holders of the Preferred Securities will be as set forth in an
accompanying Prospectus Supplement. All guarantees and agreements contained in
each Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the holders
of the related Preferred Securities then outstanding.
Termination
Each Guarantee will terminate and be of no further force and effect as to
the related Preferred Securities upon full payment of the Redemption Price of
all such Preferred Securities, upon distribution of Junior Subordinated Notes
to the holders of such Preferred Securities, or upon full payment of the
amounts payable upon liquidation of the related Trust. Each Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of the related Preferred Securities must restore payment of
any sums paid with respect to such Preferred Securities or under such
Guarantee.
Events of Default
An event of default under each Guarantee will occur upon the failure by the
Company to perform any of its payment obligations thereunder. The holders of a
majority in liquidation amount of the Preferred Securities to which any
Guarantee relates have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of such Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under such Guarantee. Any holder of the
related Preferred Securities may institute a legal proceeding directly against
the Company to enforce its rights under such Guarantee without first
instituting a legal proceeding against the Guarantee Trustee or any other
person or entity. The holders of a majority in liquidation amount of Preferred
Securities of any series may, by vote, on behalf of the holders of all the
Preferred Securities of such series, waive any past event of default and its
consequences.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, prior to the occurrence of any event of default with
respect to any Guarantee and after the curing or waiving of all events of
default with respect to such Guarantee, undertakes to perform only such duties
as are specifically set forth in such Guarantee and, in case an event of
default has occurred, shall exercise the same degree of care as a prudent
individual would exercise in the conduct of his or her own affairs. Subject to
such provisions, the Guarantee Trustee is under no obligation to exercise any
of the powers vested in it by any Guarantee at the request of any holder of
the related Preferred Securities, unless offered reasonable indemnity against
the costs, expenses and liabilities which might be incurred thereby.
The Chase Manhattan Bank, the Guarantee Trustee, also serves as Property
Trustee, as Senior Note Indenture Trustee and as Subordinated Note Indenture
Trustee. The Company and certain of its affiliates maintain deposit accounts
and banking relationships with The Chase Manhattan Bank. The Chase Manhattan
Bank serves as trustee under other indentures pursuant to which securities of
the Company and affiliates of the Company are outstanding.
Governing Law
Each Guarantee will be governed by, and construed in accordance with, the
internal laws of the State of New York.
17
The Agreements as to Expenses and Liabilities
Pursuant to an Agreement as to Expenses and Liabilities to be entered into
by the Company under each Trust Agreement, the Company will irrevocably and
unconditionally guarantee to each person or entity to whom each Trust becomes
indebted or liable the full payment of any indebtedness, expenses or
liabilities of such Trust, other than obligations of such Trust to pay to the
holders of the related Preferred Securities or other similar interests in such
Trust the amounts due such holders pursuant to the terms of such Preferred
Securities or such other similar interests, as the case may be.
RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE JUNIOR SUBORDINATED NOTES AND
THE GUARANTEES
As long as payments of interest and other payments are made when due on each
series of Junior Subordinated Notes issued to a Trust, such payments will be
sufficient to cover distributions and payments due on the related Trust
Securities of such Trust primarily because (i) the aggregate principal amount
of each series of Junior Subordinated Notes will be equal to the sum of the
aggregate stated liquidation amount of the related Trust Securities; (ii) the
interest rate and interest and other payment dates on each series of Junior
Subordinated Notes will match the distribution rate and distribution and other
payment dates for the related Preferred Securities; (iii) the Company shall
pay for all costs and expenses of each Trust pursuant to the Agreements as to
Expenses and Liabilities; and (iv) each Trust Agreement provides that the
Securities Trustees thereunder shall not cause or permit the Trust to, among
other things, engage in any activity that is not consistent with the purposes
of the Trust.
Payments of distributions (to the extent funds therefor are legally and
immediately available) and other payments due on the Preferred Securities (to
the extent funds therefor are legally and immediately available) will be
guaranteed by the Company as and to the extent set forth under "Description of
the Guarantees." If the Company does not make interest payments on any series
of Junior Subordinated Notes, it is not expected that the related Trust will
have sufficient funds to pay distributions on its Preferred Securities. Each
Guarantee is a guarantee from the time of its issuance, but does not apply to
any payment of distributions unless and until the related Trust has sufficient
funds legally and immediately available for the payment of such distributions.
If the Company fails to make interest or other payments on any series of
Junior Subordinated Notes when due (taking into account any extension period
as described in the applicable Prospectus Supplement), the Trust Agreement
provides a mechanism whereby the holders of the related Preferred Securities
may appoint a substitute Property Trustee. Such holders may also direct the
Property Trustee to enforce its rights under the Junior Subordinated Notes of
such series, including proceeding directly against the Company to enforce such
Junior Subordinated Notes. If the Property Trustee fails to enforce its rights
under any series of Junior Subordinated Notes, to the fullest extent permitted
by applicable law, any holder of related Preferred Securities may institute a
legal proceeding directly against the Company to enforce the Property
Trustee's rights under such series of Junior Subordinated Notes without first
instituting any legal proceeding against the Property Trustee or any other
person or entity. Notwithstanding the foregoing, a holder of Preferred
Securities may institute a legal proceeding directly against the Company,
without first instituting a legal proceeding against the Property Trustee or
any other person or entity, for enforcement of payment to such holder of
principal of or interest on Junior Subordinated Notes of the related series
having a principal amount equal to the aggregate stated liquidation amount of
the Preferred Securities of such holder on or after the due dates specified in
the Junior Subordinated Notes of such series.
If the Company fails to make payments under any Guarantee, such Guarantee
provides a mechanism whereby the holders of the Preferred Securities to which
such Guarantee relates may direct the Guarantee Trustee to enforce its rights
thereunder. In addition, any holder of Preferred Securities may institute a
legal proceeding directly against the Company to enforce the Guarantee
Trustee's rights under the related Guarantee without first instituting a legal
proceeding against the Guarantee Trustee or any other person or entity.
18
Each Guarantee, the Subordinated Note Indenture, the Junior Subordinated
Notes of the related series, the related Trust Agreement and the related
Agreement as to Expenses and Liabilities, as described above, constitute a
full and unconditional guarantee by the Company of the payments due on the
related series of Preferred Securities.
Upon any voluntary or involuntary dissolution, winding-up or termination of
any Trust, unless Junior Subordinated Notes of the related series are
distributed in connection therewith, the holders of Preferred Securities of
such Trust will be entitled to receive, out of assets legally available for
distribution to holders, a liquidation distribution in cash as described in
the applicable Prospectus Supplement. Upon any voluntary or involuntary
liquidation or bankruptcy of the Company, the Property Trustee, as holder of
the related series of Junior Subordinated Notes, would be a subordinated
creditor of the Company, subordinated in right of payment to all Senior
Indebtedness, but entitled to receive payment in full of principal and
interest, before any stockholders of the Company receive payments or
distributions. Because the Company is guarantor under each Guarantee and has
agreed to pay for all costs, expenses and liabilities of each Trust (other
than the Trust's obligations to holders of the Preferred Securities) pursuant
to the related Agreement as to Expenses and Liabilities, the positions of a
holder of Preferred Securities and a holder of Junior Subordinated Notes of
the related series relative to other creditors and to stockholders of the
Company in the event of liquidation or bankruptcy of the Company would be
substantially the same.
A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the Subordinated Note
Indenture. However, in the event of payment defaults under, or acceleration
of, Senior Indebtedness, the subordination provisions of the Junior
Subordinated Notes provide that no payments may be made in respect of the
Junior Subordinated Notes until such Senior Indebtedness has been paid in full
or any payment default thereunder has been cured or waived. Failure to make
required payments on the Junior Subordinated Notes of any series would
constitute an Event of Default under the Subordinated Note Indenture with
respect to the Junior Subordinated Notes of such series except that failure to
make interest payments on the Junior Subordinated Notes of such series will
not be an Event of Default during an extension period as described in the
applicable Prospectus Supplement.
PLAN OF DISTRIBUTION
The Company may sell the Senior Notes and the Junior Subordinated Notes and
the Trusts may sell the Preferred Securities in one or more of the following
ways from time to time: (i) to underwriters for resale to the public or to
institutional investors; (ii) directly to institutional investors; or (iii)
through agents to the public or to institutional investors. The Prospectus
Supplement with respect to each series of Senior Notes, Junior Subordinated
Notes or Preferred Securities will set forth the terms of the offering of such
Senior Notes, Junior Subordinated Notes or Preferred Securities, including the
name or names of any underwriters or agents, the purchase price of such Senior
Notes, Junior Subordinated Notes or Preferred Securities and the proceeds to
the Company or the applicable Trust from such sale, any underwriting discounts
or agency fees and other items constituting underwriters' or agents'
compensation, any initial public offering price, any discounts or concessions
allowed or reallowed or paid to dealers and any securities exchange on which
such Senior Notes, Junior Subordinated Notes or Preferred Securities may be
listed.
If underwriters participate in the sale, such Senior Notes, Junior
Subordinated Notes or Preferred Securities will be acquired by the
underwriters for their own account and may be resold from time to time in one
or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale.
Unless otherwise set forth in the Prospectus Supplement, the obligations of
the underwriters to purchase any series of Senior Notes, Junior Subordinated
Notes or Preferred Securities will be subject to certain conditions precedent
and the underwriters will be obligated to purchase all of such series of
Senior Notes, Junior Subordinated Notes or Preferred Securities, if any are
purchased.
19
Underwriters and agents may be entitled under agreements entered into with
the Company and/or the applicable Trust to indemnification against certain
civil liabilities, including liabilities under the 1933 Act. Underwriters and
agents may engage in transactions with, or perform services for, the Company
in the ordinary course of business.
Each series of Senior Notes, Junior Subordinated Notes or Preferred
Securities will be a new issue of securities and will have no established
trading market. Any underwriters to whom Senior Notes, Junior Subordinated
Notes or Preferred Securities are sold for public offering and sale may make a
market in such Senior Notes, Junior Subordinated Notes or Preferred
Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. The Senior Notes,
Junior Subordinated Notes or Preferred Securities may or may not be listed on
a national securities exchange.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the Preferred
Securities will be passed upon on behalf of the Company and the Trusts by
Richards, Layton & Finger, Wilmington, Delaware, special Delaware counsel to
the Company and the Trusts. The validity of the Senior Notes, the Junior
Subordinated Notes, the Guarantees and certain matters relating thereto will
be passed upon on behalf of the Company by Beggs & Lane, Pensacola, Florida,
and by Troutman Sanders LLP, Atlanta, Georgia. Certain legal matters will be
passed upon for the Underwriters by Dewey Ballantine LLP, New York, New York.
EXPERTS
The financial statements and schedules of the Company included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2000,
incorporated by reference in this Prospectus, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports
with respect thereto, and are incorporated herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.
20
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$60,000,000
GULF POWER COMPANY APPEARS HERE
Series C 4.69% Senior Notes due August 1, 2003
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TABLE OF CONTENTS
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Page
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Prospectus Supplement
The Company.............................................................. S-2
Selected Financial Information........................................... S-2
Use of Proceeds.......................................................... S-2
Recent Results of Operations............................................. S-3
Description of the Series C Senior Notes................................. S-3
Underwriting............................................................. S-6
Prospectus
About this Prospectus.................................................... 2
Available Information.................................................... 2
Incorporation of Certain Documents by Reference.......................... 2
Selected Information..................................................... 4
Gulf Power Company....................................................... 5
The Trusts............................................................... 5
Accounting Treatment of Trusts........................................... 6
Use of Proceeds.......................................................... 6
Description of the Senior Notes.......................................... 6
Description of the Junior Subordinated Notes............................. 10
Description of the Preferred Securities.................................. 15
Description of the Guarantees............................................ 16
Relationship Among the Preferred Securities, the Junior Subordinated
Notes and the Guarantees................................................ 18
Plan of Distribution..................................................... 19
Legal Matters............................................................ 20
Experts.................................................................. 20
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PROSPECTUS SUPPLEMENT
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Banc One Capital Markets, Inc.
SunTrust Robinson Humphrey
July 31, 2001
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