PROSPECTUS SUPPLEMENT
(To Prospectus dated January 25, 2001)
$70,000,000
Entergy Mississippi, Inc.
FIRST MORTGAGE BONDS,
6 1/4% SERIES DUE FEBRUARY 1, 2003
------------------------
Interest payable on February 1 and August 1
------------------------
We may redeem the bonds prior to maturity, in whole or in part, at the times, at
the redemption prices and under the circumstances described herein.
As described in the accompanying prospectus, the bonds are a series of first
mortgage bonds issued under our mortgage and deed of trust, which has the
benefit of a first mortgage lien on substantially all of our property.
------------------------
PRICE 99.931% AND ACCRUED INTEREST, IF ANY
------------------------
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS ENTERGY MISSISSIPPI
-------- ------------- -------------------
Per bond........................ 99.931% .250% 99.681%
Total........................... $69,951,700 $175,000 $69,776,700
The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus
supplement or the accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The underwriters expect to deliver the bonds to purchasers on or about January
31, 2001.
------------------------
MORGAN STANLEY DEAN WITTER SG COWEN
January 26, 2001
You should rely only on the information contained or incorporated by
reference in this prospectus supplement or the accompanying prospectus. We have
not authorized anyone else to provide you with different information. You should
not assume that the information contained in this prospectus supplement, the
accompanying prospectus or the documents incorporated by reference is accurate
as of any date other than as of the dates of these documents or the date these
documents were filed with the SEC. We are not making an offer of the bonds in
any state where the offer is not permitted.
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TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUPPLEMENT
Selected Financial Information.............................. S-3
Use of Proceeds............................................. S-3
Description of the Bonds.................................... S-4
Underwriters................................................ S-6
PROSPECTUS
About This Prospectus....................................... 2
Entergy Mississippi, Inc. .................................. 2
Ratio of Earnings to Fixed Charges.......................... 2
Where You Can Find More Information......................... 3
Use of Proceeds............................................. 4
Description of the First Mortgage Bonds..................... 4
Description of Debt Securities.............................. 8
Book-Entry Only Securities.................................. 14
Experts and Legality........................................ 16
Plan of Distribution........................................ 17
S-2
SELECTED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
You should read our selected financial information set forth below in
conjunction with the financial statements and other financial information
contained in the documents incorporated by reference.
FOR THE TWELVE MONTHS ENDED
---------------------------------------------------------
DECEMBER 31,
SEPTEMBER 30, -----------------------------------------
2000 1999 1998 1997 1996
------------- -------- -------- -------- --------
(UNAUDITED)
Income Statement Data:
Operating Revenues.................. $884,927 $832,819 $976,300 $937,395 $958,430
Operating Income.................... 91,008 88,085 125,585 136,748 164,596
Interest Expense (net).............. 40,802 37,310 39,995 44,805 47,084
Net Income.......................... 42,550 41,588 62,638 66,661 79,211
Ratio of Earnings to Fixed
Charges(a)....................... 2.38 2.44 3.12 2.98 3.40
AS OF SEPTEMBER 30, 2000
--------------------------------------------------------------
ACTUAL AS ADJUSTED(B)
---------------------------- -------------------------------
PERCENT OF PERCENT OF
AMOUNT CAPITALIZATION AMOUNT CAPITALIZATION
----------- -------------- -------------- --------------
(UNAUDITED) (UNAUDITED)
Balance Sheet Data:
First Mortgage Bonds............... $ 540,000 50.1% $ 610,000 53.2%
Other Long-Term Debt............... 46,030 4.3 46,030 3.9%
Shareholders' Equity:
Preferred Stock (without sinking
fund)......................... 50,381 4.7 50,381 4.4%
Common Stock and Paid-in
Capital....................... 199,267 18.5 199,267 17.4%
Retained Earnings............... 241,451 22.4 241,451 21.0%
---------- ----- -------------- -----
Total Shareholders' Equity......... 491,099 45.6 491,099 42.8%
---------- ----- -------------- -----
Total Capitalization....... $1,077,129 100.0% $ 1,147,129 100.0%
========== ===== ============== =====
- ------------
(a) As defined by Item 503(d)(3) of SEC Regulation S-K, "Earnings" represent the
aggregate of (1) income before the cumulative effect of an accounting
change, (2) taxes based on income, (3) investment tax credit
adjustments--net and (4) fixed charges. "Fixed Charges" as defined by Item
503(d)(4) of SEC Regulation S-K include interest (whether expensed or
capitalized), related amortization and estimated interest applicable to
rentals.
(b) Adjusted to reflect the issuance and sale of the bonds.
USE OF PROCEEDS
We anticipate our net proceeds from the sale of the bonds will be
approximately $69,465,950 after deducting underwriting discounts and commissions
and estimated offering expenses of $310,750. We will use the net proceeds we
receive from the issuance and sale of the bonds to reduce short-term debt that
was incurred for our capital spending program, for working capital needs and for
other general corporate purposes.
S-3
DESCRIPTION OF THE BONDS
INTEREST, MATURITY AND PAYMENT
We are issuing $70,000,000 of First Mortgage Bonds, 6 1/4% Series due
February 1, 2003 under our mortgage described in the accompanying prospectus. We
will pay interest on the bonds on February 1 and August 1 of each year. So long
as the bonds are registered in the name of DTC or its nominee, the record date
for interest payable on any interest payment date shall be the close of business
on the Business Day immediately preceding such interest payment date. We will
begin paying interest on the bonds on August 1, 2001. Interest starts to accrue
from the date the bonds are issued. The bonds will be issued on the basis of net
property additions. As of September 30, 2000, approximately $89 million of first
mortgage bonds could have been issued on the basis of net property additions. We
have agreed to pay interest on any overdue principal and, if such payment is
enforceable under applicable law, on any overdue installment of interest on the
bonds at a rate of 7 1/4% per annum to holders of record at the close of
business on the Business Day immediately preceding our payment of such interest.
As long as the bonds are registered in the name of DTC or its nominee, we
will pay principal, any premium, and interest due on the bonds to DTC. DTC will
then make payment to its participants for disbursement to the beneficial owners
of the bonds as described in the accompanying prospectus under the heading
"Book-Entry Only Securities."
REDEMPTION OF BONDS
We may redeem the bonds, in whole or in part, at our option, at any time
before the maturity of the bonds, on not less than 30 days' nor more than 60
days' notice,
(1) by the application of proceeds of insurance or cash deposited
with the corporate trustee pursuant to the provisions of our mortgage
relating to eminent domain or sales to governmental entities or designees
thereof of property subject to our mortgage at the special redemption price
of 100% of the principal amount of the bonds being redeemed, or
(2) at a redemption price equal to the greater of
(a) 100% of the principal amount of the bonds being redeemed and
(b) as determined by the Independent Investment Banker, the sum of
the present values of the remaining scheduled payments of principal of
and interest on the bonds being redeemed (excluding the portion of any
such interest accrued to the redemption date), discounted (for purposes
of determining such present values) to the redemption date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate, plus .125%,
plus, in each case, accrued interest thereon to the redemption date.
If, at the time notice of redemption is given, the redemption monies are
not held by the corporate trustee, the redemption may be made subject to receipt
of such monies before the date fixed for redemption, and such notice shall be of
no effect unless such monies are so received.
We may apply cash we deposit under any provision of our Mortgage, with
certain exceptions, to the redemption or purchase, including the purchase from
us, of first mortgage bonds of any series, including the bonds offered by this
prospectus supplement.
S-4
CERTAIN DEFINITIONS
"Adjusted Treasury Rate" means, with respect to any redemption date:
(1) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical released designated "H.15(519)" or any successor publication
which is published weekly by the Board of Governors of the Federal Reserve
System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption
"Treasury Constant Maturities," for the maturity corresponding to the
Comparable Treasury Issue (if no maturity is within three months before or
after the remaining term of the bonds, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue
shall be determined and the Adjusted Treasury Rate shall be interpolated or
extrapolated from such yields on a straight line basis, rounding to the
nearest month); or
(2) if such release (or any successor release) is not published
during the week preceding the calculation date for the Adjusted Treasury
Rate or does not contain such yields, the rate per annum equal to the
semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price
for such redemption date.
The Adjusted Treasury Rate shall be calculated on the third Business Day
preceding the redemption date.
"Business Day" means any day other than a Saturday or a Sunday or a day on
which banking institutions in The City of New York are authorized or required by
law or executive order to remain closed or a day on which the corporate trust
office of the corporate trustee is closed for business.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable to
the remaining term of the bonds that would be utilized, at the time of selection
and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of the
bonds.
"Comparable Treasury Price" means, with respect to any redemption date, (1)
the average of five Reference Treasury Dealer Quotations for such redemption
date after excluding the highest and lowest such Reference Treasury Dealer
Quotations or (2) if the Independent Investment Banker obtains fewer than five
such Reference Treasury Dealer Quotations, the average of all such Reference
Treasury Dealer Quotations.
"Independent Investment Banker" means Morgan Stanley & Co. Incorporated or,
if such firm is unwilling or unable to select the Comparable Treasury Issue, an
independent investment banking institution of national standing appointed by us.
"Reference Treasury Dealer" means (1) Morgan Stanley & Co. Incorporated, SG
Cowen Securities Corporation, and their respective successors; provided,
however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), we
will substitute therefor another Primary Treasury Dealer, and (2) any other
Primary Treasury Dealer selected by the Independent Investment Banker after
consultation with us.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Independent Investment Banker, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Independent Investment Banker at 5:00
p.m. on the third Business Day preceding such redemption date.
DIVIDEND COVENANT
We will covenant that, so long as any bonds remain outstanding, we will not
pay any cash dividends on common stock or purchase common stock after December
31, 2000, unless, after giving effect to such dividend or purchase, the
aggregate amount of such dividends or purchases after December 31, 2000 (other
than
S-5
dividends we have declared on or before December 31, 2000) does not exceed
credits to earned surplus after December 31, 2000 plus $250 million plus such
additional amounts as the SEC shall approve.
ADDITIONAL INFORMATION
For additional important information about the bonds, see "Description of
the First Mortgage Bonds" in the accompanying prospectus, including:
(1) additional information about the terms of the bonds,
(2) general information about our mortgage and the trustees,
(3) a description of certain restrictions contained in our mortgage,
and
(4) a description of events of default under our mortgage.
UNDERWRITERS
Under the terms and conditions set forth in the underwriting agreement
dated the date of this prospectus supplement, we have agreed to sell to each of
the underwriters named below, and each of the underwriters has severally agreed
to purchase, the principal amount of the bonds set forth opposite its name
below:
PRINCIPAL
NAME AMOUNT
---- -----------
Morgan Stanley & Co. Incorporated........................... $63,000,000
SG Cowen Securities Corporation............................. 7,000,000
-----------
Total............................................. $70,000,000
===========
Under the terms and conditions of the underwriting agreement, the
underwriters have committed, subject to the terms and conditions set forth
therein, to take and pay for all of the bonds if any of the bonds are taken,
provided, that under certain circumstances involving a default of an
underwriter, less than all of the bonds may be purchased.
The underwriters have advised us that they propose to offer all or part of
the bonds directly to purchasers at the public offering price set forth on the
cover page of this prospectus supplement and to certain securities dealers at
such price less a concession not in excess of .1250% of the principal amount of
the bonds. The underwriters may allow, and such dealers may reallow to certain
brokers and dealers, a concession not in excess of .0625% of the principal
amount of the bonds. After the bonds are released for sale to the public, the
public offering price and other selling terms may from time to time be varied.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933.
There is presently no trading market for the bonds and there is no
assurance that a market will develop since we do not intend to apply for listing
of the bonds on a national securities exchange. Although they are under no
obligation to do so, the underwriters presently intend to act as market makers
for the bonds in the secondary trading market, but may discontinue such
market-making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the bonds.
In order to facilitate the offering of the bonds, the underwriters may
engage in transactions that stabilize, maintain or otherwise affect the price of
the bonds. Specifically, the underwriters may overallot in connection with the
offering, creating a short position in the bonds for their own account. In
addition, to cover overallotments or to stabilize the price of the bonds, the
underwriters may bid for, and purchase, the bonds in the open market. Finally,
the underwriters may reclaim selling concessions allowed to an underwriter or a
dealer for distributing the bonds in the offering, if they repurchase previously
distributed bonds in transactions to cover syndicate short positions, in
stabilization transactions or otherwise. Any of these activities may
S-6
stabilize or maintain the market price for the bonds above independent market
levels. The underwriters are not required to engage in these activities and may
end any of these activities at any time.
The underwriters or their affiliates may engage, or have engaged, in
various general financing and banking transactions from time to time with us or
our affiliates.
S-7
PROSPECTUS
$540,000,000
FIRST MORTGAGE BONDS
AND
DEBT SECURITIES
ENTERGY MISSISSIPPI, INC.
308 EAST PEARL STREET
JACKSON, MISSISSIPPI 39201
(601) 368-5000
ENTERGY MISSISSIPPI --
- May periodically offer its first mortgage bonds and its debt securities in
one or more series; and
- Will determine the price and other terms of each series of securities when
sold, including whether any series will be subject to redemption prior to
maturity.
THE FIRST MORTGAGE BONDS --
- Will be secured by a mortgage that constitutes a first mortgage lien on
substantially all of our property.
THE DEBT SECURITIES --
- Will be unsecured and will rank equally with all of our other unsecured and
unsubordinated debt; and
- Will be effectively subordinated to all of our secured debt, including our
first mortgage bonds.
SECURITYHOLDERS --
- Will receive interest payments in the amounts and on the dates specified in
an accompanying prospectus supplement.
This prospectus may be used to offer and sell series of securities only if
accompanied by the prospectus supplement for that series. Entergy Mississippi
will provide the specific terms of these securities, including their offering
prices, interest rates and maturities, in supplements to this prospectus. The
supplements may also add, update or change information in this prospectus. You
should read this prospectus and any supplements 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.
January 25, 2001
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement we filed with the
Securities and Exchange Commission, or SEC, utilizing a "shelf" registration
process. Under this shelf process, we may sell the securities described in this
prospectus in one or more offerings up to a total dollar amount of $540,000,000.
This prospectus provides a general description of the securities being offered.
Each time we sell a series of securities we will provide a prospectus supplement
containing specific information about the terms of that series of securities and
the related offering. It is important for you to consider the information
contained in this prospectus and the related prospectus supplement together with
additional information described under the heading "Where You Can Find More
Information" in making your investment decision.
ENTERGY MISSISSIPPI, INC.
Entergy Mississippi, Inc. is an electric public utility company providing
service to customers in the State of Mississippi since 1923.
We are owned by Entergy Corporation, which is a public utility holding company
registered under the Public Utility Holding Company Act of 1935. The other major
public utilities owned by Entergy Corporation are Entergy Arkansas, Inc.,
Entergy Gulf States, Inc., Entergy Louisiana, Inc. and Entergy New Orleans, Inc.
Entergy Corporation also owns all of the common stock of System Energy
Resources, Inc., the principal asset of which is the Grand Gulf Electric
Generating Station.
Capacity and energy from Grand Gulf is allocated among ourselves, Entergy
Arkansas, Inc., Entergy Louisiana, Inc. and Entergy New Orleans, Inc. under a
unit power sales agreement. Our allocated share of Grand Gulf's capacity and
energy, together with related costs is 33%. Payments we make under the unit
power sales agreement are generally recovered through rates set by the
Mississippi Public Service Commission, which regulates our electric service,
rates and charges.
Together with Entergy Arkansas, Inc., Entergy Louisiana, Inc. and Entergy New
Orleans, Inc., we own all of the capital stock of System Fuels, Inc. System
Fuels, Inc. is a special purpose company that implements and maintains certain
programs for the purchase, delivery and storage of fuel supplies for Entergy
Corporation's utility subsidiaries.
The information above is only a summary and is not complete. You should read
the incorporated documents listed under the caption "Where You Can Find More
Information" for more specific information concerning our business and affairs,
including significant contingencies, our general capital requirements, our
financing plans and capabilities, and pending legal and regulatory proceedings,
including the status of industry restructuring in our service areas.
RATIOS OF EARNINGS TO FIXED CHARGES
We have calculated ratios of earnings to fixed charges pursuant to Item 503 of
SEC Regulation S-K as follows:
TWELVE MONTHS
ENDED TWELVE MONTHS ENDED DECEMBER 31,
SEPTEMBER 30, --------------------------------
2000 1999 1998 1997 1996 1995
- ------------- ---- ---- ---- ---- ----
2.38 2.44 3.12 2.98 3.40 2.92
"Earnings," as defined by Regulation S-K, represent the aggregate of (1) income
before the cumulative effect of an accounting change, (2) taxes based on income,
(3) investment tax credit adjustments-net and (4) fixed charges.
"Fixed Charges" include interest (whether expensed or capitalized), related
amortization and estimated interest applicable to rentals.
2
WHERE YOU CAN FIND MORE INFORMATION
We are required to file annual, quarterly and current reports, proxy statements
and other information with the SEC. Our filings are available to the public on
the Internet at the SEC's home page located at (http://www.sec.gov) or you may
read and copy any document at the SEC Public Reference Room located at:
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549-1004.
Call the SEC at 1-800-732-0330 for more information about the public reference
room and how to request documents.
The SEC allows us to "incorporate by reference" the information filed by us
with the SEC, which means we can refer you to important information without
restating it in this prospectus. The information incorporated by reference is an
important part of this prospectus, and information that we file later with the
SEC will automatically update and supersede this information. We incorporate by
reference the documents listed below along with any future filings that we make
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 until we have sold all of the securities described in this
prospectus:
1. Annual Report on Form 10-K for the year ended December 31, 1999; and
2. Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and
September 30, 2000.
You may access a copy of any or all of these filings, free of charge, at our
web site (http://www.entergy.com) or by writing or telephoning us at the
following address:
Mr. Christopher T. Screen
Assistant Secretary
Entergy Mississippi, Inc.
P. O. Box 61000
New Orleans, Louisiana 70161
(504) 576-4212
You may also direct your requests via e-mail to cscreen@entergy.com.
You should rely only on the information incorporated by reference or provided
in this prospectus or any prospectus supplement. We have not, nor have any
underwriters, dealers or agents, authorized anyone else to provide you with
different information about us or the securities. We are not, nor are any
underwriters, dealers or agents, making an offer of the securities in any state
where the offer is not permitted. You should not assume that the information in
this prospectus or any prospectus supplement is accurate as of any date other
than the date on the front of those documents or that the documents incorporated
by reference in this prospectus are accurate as of any date other than the date
those documents were filed with the SEC.
3
USE OF PROCEEDS
The net proceeds from the offering of the securities will be used either (a) to
acquire or redeem one or more series of our outstanding securities on their
stated due dates or in some cases prior to their stated due dates or (b) for
other general corporate purposes. The specific purposes for the proceeds of a
particular series of securities or the specific securities, if any, to be
acquired or redeemed with the proceeds of a particular series of securities will
be set forth in the prospectus supplement relating to that series.
DESCRIPTION OF THE FIRST MORTGAGE BONDS
GENERAL
We will issue the first mortgage bonds offered by this prospectus from time to
time in one or more series under one or more separate supplemental indentures to
the Mortgage and Deed of Trust dated as of February 1, 1988, with The Bank of
New York, successor corporate trustee, and Stephen J. Giurlando, successor
co-trustee, together referred to in this prospectus as trustees. This Mortgage
and Deed of Trust, as amended and supplemented, is referred to in this
prospectus as the "mortgage." All first mortgage bonds issued or to be issued
under the mortgage, including the first mortgage bonds offered by this
prospectus, are referred to herein as "first mortgage bonds."
The statements in this prospectus and any accompanying prospectus supplement
concerning the first mortgage bonds and the mortgage are not comprehensive and
are subject to the detailed provisions of the mortgage. The mortgage and a form
of supplemental indenture are filed as exhibits to the registration statement.
You should read these documents for provisions that may be important to you. The
mortgage has been qualified under the Trust Indenture Act of 1939. You should
refer to the Trust Indenture Act for provisions that apply to the first mortgage
bonds. Wherever particular provisions or defined terms in the mortgage are
referred to under the "Description of the First Mortgage Bonds" those provisions
or defined terms are incorporated by reference in this prospectus.
TERMS OF SPECIFIC SERIES OF THE FIRST MORTGAGE BONDS
A prospectus supplement relating to each series of first mortgage bonds offered
by this prospectus will include a description of the specific terms relating to
the offering of that series. These terms will include any of the following terms
that apply to that series:
(1) the designation, or name, of the series of first mortgage bonds;
(2) the aggregate principal amount of the series;
(3) the offering price of the series;
(4) the date on which the series will mature;
(5) the rate or method for determining the rate at which the series will bear
interest;
(6) the date from which interest on the series accrues;
(7) the dates on which interest on the series will be payable;
(8) the prices and other terms and conditions, if any, upon which we may
redeem the series prior to maturity;
(9) the applicability of the dividend covenant described below to the series;
(10) the terms of any insurance policy that will be provided for the payment
of principal of and/or interest on the series; and
(11) any other terms or provisions relating to that series that are not
inconsistent with the mortgage.
4
Unless otherwise set forth in a prospectus supplement, the first mortgage bonds
offered by this prospectus will not have the benefit of any sinking or
improvement fund or any maintenance or replacement fund.
As of September 30, 2000, we had $540 million of first mortgage bonds
outstanding.
SECURITY
The first mortgage bonds offered by this prospectus, together with all other
first mortgage bonds outstanding now or in the future under the mortgage, will
be secured by the mortgage. In the opinion of our counsel, the mortgage
constitutes a first mortgage lien on substantially all of our property subject
to bankruptcy law and:
(1) minor defects and encumbrances customarily found in similar properties
that do not materially impair the use of the property in the conduct of our
business,
(2) other liens, defects and encumbrances, if any, existing or placed thereon
at the time of our acquisition of the property, and
(3) excepted encumbrances.
The mortgage does not create a lien on the following "excepted property":
(1) cash and securities;
(2) all merchandise, equipment, apparatus and supplies held for sale or other
disposition in the usual course of business or consumable during use;
(3) automobiles, vehicles and aircraft, timber, minerals, mineral rights and
royalties; and
(4) receivables, contracts, leases and operating agreements.
The mortgage contains provisions that impose a lien of the mortgage on property
we acquire after the date of the mortgage, other than excepted property, subject
to pre-existing liens. However, if we consolidate or merge with, or sell
substantially all of our assets to, another corporation, the lien created by the
mortgage will generally not cover the property of the successor company, other
than the property it acquires from us and improvements, replacements and
additions to that property.
The mortgage also provides that the trustees have a lien on the mortgaged
property to ensure the payment of their reasonable compensation, expenses and
disbursements and for indemnity against certain liabilities. This lien takes
priority over the lien securing the first mortgage bonds.
ISSUANCE OF ADDITIONAL FIRST MORTGAGE BONDS
There is no limit to the amount of first mortgage bonds that we can issue under
the mortgage. First mortgage bonds of any series may be issued from time to time
on the following bases:
(1) 70% of property additions after adjustments to offset retirements;
(2) retirements of first mortgage bonds or bonds issued under our discharged
Mortgage and Deed of Trust, dated as of September 1, 1944; or
(3) deposit of cash with the trustees.
Property additions generally include, among other things, electric, gas, steam
or hot water property acquired after December 31, 1987. Securities, automobiles,
vehicles or aircraft, or property used principally for the production or
gathering of natural gas may not be included as property additions. Deposited
cash may be withdrawn upon the bases stated in clause (1) or (2) above.
5
As of September 30, 2000, we could have issued approximately $89 million of
additional first mortgage bonds on the basis of net property additions and $325
million on the basis of retired bond credits.
With certain exceptions in the case of clause (2) above, the issuance of first
mortgage bonds must meet an "earnings" test. The adjusted net earnings, before
income taxes, for 12 consecutive months of the preceding 18 months, must be at
least twice the annual interest requirements on all first mortgage bonds
outstanding at the time, including the additional first mortgage bonds to be
issued, plus all indebtedness, if any, of prior rank. In general, interest on
variable interest rate bonds, if any, is calculated using the average rate in
effect during such 12-month period.
The mortgage contains restrictions on the issuance of first mortgage bonds
against property subject to liens.
Other than the security afforded by the lien of the mortgage and restrictions
on the issuance of additional first mortgage bonds described above, there are no
provisions of the mortgage which grant the holders of the first mortgage bonds
protection in the event of a highly leveraged transaction involving us. However,
such a transaction would require approval by the SEC and the Mississippi Public
Service Commission. We believe it unlikely that we could obtain those approvals
in a highly leveraged context.
RELEASE AND SUBSTITUTION OF PROPERTY
We may release property from the lien of the mortgage, without applying an
earnings test, on the following bases:
(1) the deposit of cash or, to a limited extent, purchase money mortgages;
(2) property additions, after adjustments in certain cases to offset
retirements and after making adjustments for certain prior lien bonds, if any,
outstanding against property additions; and
(3) a waiver of the right to issue first mortgage bonds.
We can withdraw cash upon the bases stated in clauses (2) and (3) above.
Property we owned on December 31, 1987, may be released on the basis of its
depreciated book value while all other property may be released on the basis of
its cost, as defined in the mortgage.
We may release unfunded property if after such release at least one dollar ($1)
in unfunded property remains subject to the lien of the mortgage.
DIVIDEND COVENANT
We may covenant that, so long as a particular series of first mortgage bonds
remains outstanding, we will not pay any cash dividends on common stock or
repurchase common stock after a selected date close to the date of the original
issuance of that series of first mortgage bonds, other than certain dividends
that we may declare prior to this date, except out of credits to retained
earnings after this selected date plus an amount not to exceed $250 million plus
any additional amounts that the SEC may approve. The prospectus supplement
relating to a particular series of first mortgage bonds will state if this
covenant will apply to that series.
6
MODIFICATION
Your rights as a bondholder may be modified with the consent of the holders of
a majority in aggregate principal amount of the first mortgage bonds, or, if
less than all series of first mortgage bonds are adversely affected, with the
consent of the holders of a majority in aggregate principal amount of the first
mortgage bonds adversely affected. In general, no modification:
(1) affecting the terms of payment of principal, premium, if any, or interest,
(2) affecting the lien of the mortgage, or
(3) reducing the percentage required for modification,
is effective against any bondholder without that bondholder's consent.
DEFAULTS AND NOTICES THEREOF
Defaults under the mortgage include:
(1) default in the payment of principal;
(2) default for 30 days in the payment of interest;
(3) certain events of bankruptcy, insolvency or reorganization;
(4) defaults under a supplemental indenture; and
(5) default in other covenants for 90 days after notice (unless we have in
good faith commenced efforts to perform the covenant).
The corporate trustee or the holders of 25% of the first mortgage bonds may
declare the principal and interest due and payable on default. However, a
majority of the holders may annul such declaration if the default has been
cured. No holder of first mortgage bonds may enforce the lien of the mortgage
without giving the trustees written notice of a default and unless
(1) the holders of 25% of the first mortgage bonds have requested the trustees
in writing to act and offered them reasonable opportunity to act and indemnify
satisfactory to them against the costs, expenses and liabilities to be incurred
thereby; and
(2) the trustees shall have failed to act within sixty (60) days of such
request.
The holders of a majority in aggregate principal amount of the first mortgage
bonds may direct the time, method and place of conducting any proceedings for
any remedy available to the trustees or exercising any trust or power conferred
on the trustees. The trustees are not required to risk their funds or incur
personal liability if there is reasonable ground for believing that repayment is
not reasonably assured.
EVIDENCE TO BE FURNISHED TO THE CORPORATE TRUSTEE
Compliance with the mortgage provisions is evidenced by written statements of
our officers or persons we select or pay. In certain cases, opinions of counsel
and certifications of an engineer, accountant, appraiser or other expert (who in
some cases must be independent) must be furnished. We must give the corporate
trustee an annual certificate as to whether or not we have fulfilled our
obligations under the mortgage throughout the preceding year.
SATISFACTION AND DISCHARGE OF MORTGAGE
After we provide for the payment of all of the first mortgage bonds (including
the first mortgage bonds offered by this prospectus) and after paying all other
sums due under the mortgage, the mortgage may be satisfied and discharged. The
first mortgage bonds will be deemed to have been paid when money or Eligible
Obligations (as defined below) sufficient to pay the first mortgage bonds (in
the opinion of an
7
independent accountant in the case of Eligible Obligations) at maturity or upon
redemption have been irrevocably set apart or deposited with the corporate
trustee, provided that the corporate trustee shall have received an opinion of
counsel to the effect that the setting apart or deposit does not require
registration under the Investment Company Act of 1940, does not violate any
applicable laws and does not result in a taxable event with respect to the
holders of the first mortgage bonds prior to the time of their right to receive
payment. "Eligible Obligations" means obligations of the United States of
America which do not permit the redemption thereof at the issuer's option.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The debt securities will be our direct unsecured general obligations. We will
issue the debt securities offered by this prospectus from time to time in one or
more series under one or more separate indentures between us and the financial
institution(s) that we will name in the prospectus supplement, as trustee. This
indenture or indentures are collectively referred to in this prospectus as the
"indenture."
The following description summarizes certain general terms and provisions of
the debt securities offered by this prospectus. This summary is not complete and
should be read together with the prospectus supplement describing the specific
terms of the debt securities. The form of the indenture is filed as an exhibit
to the registration statement. You should read the indenture for provisions that
may be important to you. The indenture will be qualified under the Trust
Indenture Act of 1939. You should refer to the Trust Indenture Act for
provisions that apply to the debt securities. Whenever particular provisions or
defined terms in the indenture are referred to under this "Description of Debt
Securities," those provisions or defined terms are incorporated by reference in
this prospectus.
The debt securities will rank equally with all of our other unsecured and
unsubordinated debt. As of September 30, 2000, we had $16 million of unsecured
and unsubordinated debt that would have ranked equally with the debt securities.
The debt securities will be effectively subordinated to all of our secured
debt, including our first mortgage bonds. As of September 30, 2000, we had $570
million of secured debt outstanding.
TERMS OF SPECIFIC SERIES OF THE DEBT SECURITIES
A prospectus supplement relating to each series of debt securities offered by
this prospectus will include a description of the specific terms relating to the
offering of that series. These terms will include any of the following terms
that apply to that series:
(1) the title of the debt securities;
(2) the total principal amount of the debt securities;
(3) the date or dates on which the principal of the debt securities will be
payable or how the date or dates will be determined;
(4) the rate or rates at which the debt securities will bear interest, or how
the rate or rates will be determined, the date or dates from which any such
interest will accrue, the interest payment dates for the debt securities and
the regular record dates for interest payments;
(5) the percentage, if less than 100%, of the principal amount of the debt
securities that will be payable if the maturity of the debt securities is
accelerated;
(6) any period or periods within which, or any date or dates on which, and the
price or prices at which and the terms and conditions upon which, we may redeem
the debt securities at our option and any restrictions on those redemptions;
8
(7) any sinking fund or other provisions or options held by holders of debt
securities that would obligate us to repurchase or otherwise redeem the debt
securities;
(8) any changes or additions to the events of default under the indenture or
changes or additions to our covenants under the indenture;
(9) if the debt securities will be issued in denominations other than $1,000;
(10) if payments on the debt securities may be made in a currency or
currencies other than United States dollars;
(11) any collateral, security, assurance or guarantee for the debt securities;
and
(12) any other terms of the debt securities not inconsistent with the terms of
the indenture.
Our amended and restated articles of incorporation generally limit the amount
of unsecured debt that we may issue to the equivalent of 20% of the total of all
our secured debt and total equity. As of September 30, 2000, approximately $99
million of additional unsecured debt with a maturity of less than ten years or
$167 million of additional unsecured debt with a maturity ten years or greater
could have been issued under this provision. The indenture does not limit the
principal amount of debt securities we may issue under the indenture.
We may sell debt securities at a discount below their principal amount. We may
describe in the prospectus supplement United States federal income tax
considerations applicable to debt securities sold at an original issue discount.
In addition, we may describe in the prospectus supplement important United
States federal income tax or other tax considerations applicable to any debt
securities denominated or payable in a currency or currency unit other than
United States dollars.
Except as we may otherwise describe in the prospectus supplement, the covenants
contained in the indenture will not afford holders of debt securities protection
in the event of a highly-leveraged or similar transaction involving us or in the
event of a change of control.
PAYMENT AND PAYING AGENTS
Except as we may otherwise provide in the prospectus supplement, we will pay
interest, if any, on each debt security payable on each interest payment date to
the person in whose name that debt security is registered as of the close of
business on the regular record date for that interest payment date. However,
interest payable at maturity will be paid to the person to whom the principal is
paid. If there has been a default in the payment of interest on any debt
security, the defaulted interest may be paid to the holder of such debt security
as of the close of business on a date to be fixed by the trustee between 10 and
15 days prior to the date proposed by us for payment of such defaulted interest
or in any other manner permitted by any securities exchange on which that debt
security may be listed, if the trustee finds it practicable.
Unless we otherwise specify in the prospectus supplement, principal of, and
premium, if any, and interest on the debt securities at maturity will be payable
upon presentation of the debt securities at the corporate trust office of the
trustee in The City of New York, as our paying agent. We may change the place of
payment on the debt securities, may appoint one or more additional paying
agents, including us, and may remove any paying agent, all at our discretion.
As long as the debt securities are registered in the name of The Depository
Trust Company, or DTC, or its nominee, as described under the caption
"Book-Entry Only Securities," payments of principal, premium, if any, and
interest will be made to DTC for subsequent disbursement to beneficial owners of
the debt securities.
REGISTRATION AND TRANSFER
Unless we otherwise specify in the prospectus supplement, and subject to
restrictions related to the issuance of debt securities through DTC's book-entry
system, the transfer of debt securities may be
9
registered, and debt securities may be exchanged for other debt securities of
the same series or tranche, of authorized denominations and with the same terms
and principal amount, at the corporate trust office of the trustee in The City
of New York. We may change the place for registration of transfer and exchange
of the debt securities and may designate additional places for registration and
exchange. Unless we otherwise provide in the prospectus supplement, no service
charge will be made for any registration of transfer or exchange of the debt
securities. However, we may require payment to cover any tax or other
governmental charge that may be imposed. We will not be required to execute or
to provide for the registration of transfer of, or the exchange of, (1) any debt
security during the 15 days prior to giving any notice of redemption or (2) any
debt security selected for redemption, except the unredeemed portion of any debt
security being redeemed in part.
SATISFACTION AND DISCHARGE
We will be discharged from our obligations on the debt securities of a
particular series if we deposit with the trustee sufficient cash or government
securities to pay the principal, interest, any premium and any other sums when
due on the stated maturity date or a redemption date of that series of debt
securities.
The indenture will be deemed satisfied and discharged when no debt securities
remain outstanding and when we have paid all other sums payable by us under the
indenture.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Under the terms of the indenture, we may not consolidate with or merge into any
other entity or convey, or transfer or lease our properties and assets
substantially as an entirety to any entity, unless:
(1) the surviving or successor entity is organized and validly existing under
the laws of any domestic jurisdiction and it expressly assumes our payment
obligations on all outstanding debt securities and our obligations under the
indenture;
(2) immediately after giving effect to the transaction, no event of default
and no event which, after notice or lapse of time or both, would become an
event of default, shall have occurred and be continuing; and
(3) we shall have delivered to the trustee an officer's certificate and an
opinion of counsel as provided in the indenture.
So long as we comply with the conditions in clauses (2) and (3) above, the
terms of the indenture do not restrict us in a merger in which we are the
surviving entity.
EVENTS OF DEFAULT
"Event of default," when used in the indenture with respect to any series of
debt securities, means any of the following:
(1) failure to pay interest on any debt security of that series for 60 days
after it is due;
(2) failure to pay the principal of or any premium on any debt security of
that series when due;
(3) failure to perform any other covenant in the indenture, other than a
covenant that does not relate to that series of debt securities, that continues
for 60 days after we receive written notice from the trustee, or after we and
the trustee receive written notice from the holders of at least 33% in
principal amount of the outstanding debt securities of that series; however,
the trustee or the trustee and the holders of that principal amount of debt
securities of that series can agree to an extension of the 60-day period and
such an agreement to extend will be automatically deemed to occur if we are
diligently pursuing action to correct the default;
(4) events in bankruptcy, insolvency or our reorganization specified in the
indenture; or
(5) any other event of default specified for that series of debt securities.
10
An event of default for a particular series of debt securities does not
necessarily constitute an event of default for any other series of debt
securities issued under the indenture. The trustee may withhold notice to the
holders of debt securities of any default, except default in the payment of
principal, premium or interest, if it considers the withholding of notice to be
in the interests of holders.
REMEDIES
Acceleration of Maturity
If an event of default for any series of debt securities occurs and continues,
then either the trustee or the holders of at least 33% in principal amount of
that series may declare the entire principal amount of all the debt securities
of that series, together with accrued interest, to be due and payable
immediately. However, if the event of default is applicable to more than one
series of debt securities under the indenture, only the trustee or holders of at
least 33% in principal amount of the outstanding debt securities of all affected
series, voting as one class, and not the holders of any one series, may make
that declaration of acceleration.
At any time after a declaration of acceleration with respect to the debt
securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained, the event of default giving rise to
that declaration of acceleration will be considered waived, and that declaration
and its consequences will be considered rescinded and annulled, if:
(1) we have paid or deposited with the trustee a sum sufficient to pay:
(a) all overdue interest on all debt securities of that series;
(b) the principal of and premium, if any, on any debt securities of that
series which have become due otherwise than by the declaration of acceleration
and interest that is due on that principal;
(c) interest on overdue interest; and
(d) all amounts due to the trustee under the indenture; and
(2) any other event of default with respect to the debt securities of that
series, other than the non-payment of principal which has become due solely by
the declaration of acceleration, has been cured or waived as provided in the
indenture.
There is no automatic acceleration, even in the event of our bankruptcy,
insolvency or reorganization.
Right to Direct Proceedings
Other than its duties in case of an event of default, the trustee is not
obligated to exercise any of its rights or powers under the indenture at the
request, order or direction of any of the holders, unless the holders offer the
trustee reasonable security or indemnity. If they provide this reasonable
security or indemnity, the holders of a majority in principal amount of any
series of debt securities will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the trustee, or
exercising any power conferred upon the trustee. However, if the event of
default relates to more than one series of debt securities, only the holders of
a majority in aggregate principal amount of all affected series, voting as one
class, will have the right to give this direction and not the holders of any one
series. The trustee is not obligated to comply with directions that conflict
with law or other provisions of the indenture.
11
Limitation on Right to Institute Proceedings
No holder of debt securities of any series will have any right to institute any
proceeding under the indenture, or any remedy under the indenture, unless:
(1) the holder has previously given to the trustee written notice of a
continuing event of default;
(2) the holders of a majority in aggregate principal amount of the outstanding
debt securities of all series in respect of which an event of default shall
have occurred and be continuing have made a written request to the trustee, and
have offered reasonable indemnity to the trustee to institute proceedings; and
(3) the trustee has failed to institute any proceeding for 60 days after that
notice, request and offer of indemnity.
However, these limitations do not apply to a suit by a holder of a debt
security for payment of the principal, premium, if any, or interest on that debt
security on or after the applicable due date.
Annual Notice to Trustee
We will provide to the trustee an annual statement by an appropriate officer as
to our compliance with all conditions and covenants under the indenture.
MODIFICATION AND WAIVER
Without the consent of any holder of debt securities, we may enter into one or
more supplemental indentures for any of the following purposes:
(1) to evidence the assumption by any permitted successor of our covenants in
the indenture and in the debt securities;
(2) to add additional covenants or to surrender any of our rights or powers
under the indenture;
(3) to add additional events of default;
(4) to change or eliminate any provision of the indenture or to add any new
provision to the indenture; provided, however, if the change, elimination or
addition will adversely affect the interests of the holders of debt securities
of any series in any material respect, the change, elimination or addition will
become effective only:
(a) when the consent of the holders of debt securities of that series has been
obtained in accordance with the indenture; or
(b) when no debt securities of the affected series remain outstanding under
the indenture;
(5) to provide collateral security for all but not part of the debt
securities;
(6) to establish the form or terms of debt securities of any series as
permitted by the indenture;
(7) to provide for the authentication and delivery of bearer securities and
coupons attached thereto;
(8) to evidence and provide for the acceptance of appointment of a successor
trustee;
(9) to provide for the procedures required for use of a non-certificated
system of registration for the debt securities of all or any series;
(10) to change any place where principal, premium, if any, and interest shall
be payable, debt securities may be surrendered for registration of transfer or
exchange and notices to us may be served; or
12
(11) to cure any ambiguity or inconsistency or to make any other change to the
provisions or to add other provisions with respect to matters or questions
arising under the indenture; provided that the action does not adversely affect
the interests of the holders of debt securities of any series in any material
respect.
The holders of a majority in aggregate principal amount of the debt securities
of all series then outstanding may waive our compliance with some restrictive
provisions of the indenture. The holders of a majority in principal amount of
the outstanding debt securities of any series may waive any past default under
the indenture with respect to that series, except a default in the payment of
principal, premium, if any, or interest and certain covenants and provisions of
the indenture that cannot be modified or amended without the consent of the
holder of each outstanding debt security of the series affected.
If the Trust Indenture Act of 1939 is amended after the date of the indenture
in such a way as to require changes to the indenture, the indenture will be
deemed to be amended so as to conform to that amendment to the Trust Indenture
Act of 1939. We and the trustee may, without the consent of any holders, enter
into one or more supplemental indentures to evidence that amendment.
The consent of the holders of a majority in aggregate principal amount of the
debt securities of all series then outstanding, voting as one class, is required
for all other modifications to the indenture. However, if less than all of the
series of debt securities outstanding are directly affected by a proposed
supplemental indenture, then only the consent of the holders of a majority in
aggregate principal amount of all series that are directly affected, voting as
one class, will be required. No supplemental indenture may:
(1) change the stated maturity of the principal of, or any installment of
principal of or interest on, any debt security, or reduce the principal amount
of any debt security or its rate of interest or change the method of
calculating the interest rate or reduce any premium payable upon redemption, or
reduce the amount of principal that would be due and payable upon a declaration
of acceleration of the maturity thereof, or change the currency in which
payments are made, or impair the right to institute suit for the enforcement of
any payment on or after the stated maturity of any debt security, without the
consent of the holder of that debt security;
(2) reduce the percentage in principal amount of the outstanding debt
securities of any series the consent of the holders of which is required for
any supplemental indenture or any waiver of compliance with a provision of the
indenture or any default thereunder and its consequences, or reduce the
requirements for quorum or voting, without the consent of all the holders of
the series; or
(3) modify some of the provisions of the indenture relating to supplemental
indentures, waivers of certain covenants and waivers of past defaults with
respect to the debt securities of any series, without the consent of the holder
of each outstanding debt security affected thereby.
A supplemental indenture which changes the indenture solely for the benefit of
one or more particular series of debt securities, or modifies the rights of the
holders of debt securities of one or more series, will not affect the rights
under the indenture of the holders of the debt securities of any other series.
The indenture provides that debt securities owned by us or anyone else required
to make payment on the debt securities shall be disregarded and considered not
to be outstanding in determining whether the required holders have given a
request or consent.
We may fix in advance a record date to determine the required number of holders
entitled to give any request, demand, authorization, direction, notice, consent,
waiver or other such act of the holders, but we shall have no obligation to do
so. If we fix a record date, that request, demand, authorization, direction,
notice, consent, waiver or other act of the holders may be given before or after
that record date, but only the holders of record at the close of business on
that record date will be considered holders for the purposes of determining
whether holders of the required percentage of the outstanding debt securities
have authorized or agreed or consented to the request, demand, authorization,
direction, notice, consent, waiver
13
or other act of the holders. For that purpose, the outstanding debt securities
shall be computed as of the record date. Any request, demand, authorization,
direction, notice, consent, election, waiver or other act of a holder will bind
every future holder of the same debt securities and the holder of every debt
security issued upon the registration of transfer of or in exchange of those
debt securities. A transferee will be bound by acts of the trustee or us in
reliance thereon, whether or not notation of that action is made upon the debt
security.
RESIGNATION OF TRUSTEE
A trustee may resign at any time by giving written notice to us or may be
removed at any time by act of the holders of a majority in principal amount of
all series of debt securities then outstanding delivered to the trustee and us.
No resignation or removal of a trustee and no appointment of a successor trustee
will be effective until the acceptance of appointment by a successor trustee. So
long as no event of default or event which, after notice or lapse of time, or
both, would become an event of default has occurred and is continuing and except
with respect to a trustee appointed by act of the holders, if we have delivered
to the trustee a resolution of our board of directors appointing a successor
trustee and such successor has accepted the appointment in accordance with the
terms of the respective indenture, the trustee will be deemed to have resigned
and the successor will be deemed to have been appointed as trustee in accordance
with the indenture.
NOTICES
Notices to holders of debt securities will be given by mail to the addresses of
such holders as they appear in the security register under the indenture.
TITLE
We, the trustee, and any of our agents or any agent of the trustee, may treat
the person in whose name debt securities are registered as the absolute owner
thereof, whether or not the debt securities may be overdue, for the purpose of
making payments and for all other purposes irrespective of notice to the
contrary.
GOVERNING LAW
Each indenture and the debt securities will be governed by, and construed in
accordance with, the laws of the State of New York.
BOOK-ENTRY ONLY SECURITIES
Unless otherwise specified in the applicable prospectus supplement, DTC, will
act as securities depository for the securities offered by this prospectus. The
securities will be issued only as fully registered securities registered in the
name of Cede & Co., DTC's partnership nominee or such other name as may be
requested by an authorized representative of DTC. One fully-registered
certificate will be issued for each series of securities, representing the
aggregate principal amount of that series of securities, and will be deposited
with DTC or its custodian. If, however, the aggregate principal amount of any
series of securities offered exceeds $400 million, one certificate will be
issued with respect to each $400 million of principal amount and an additional
certificate will be issued for any remaining principal amount of the series.
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. DTC holds securities that its participants ("Direct Participants")
deposit with DTC. DTC also facilitates the settlement among Direct Participants
of securities transactions, such as transfers and
14
pledges, in deposited securities through electronic computerized records for
Direct Participants' accounts. This eliminates the need for physical movement of
securities certificates.
Direct Participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. DTC is owned
by a number of its Direct Participants and 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 (the "Indirect Participants," and, together with the Direct
Participants, the "Participants"). The rules applicable to DTC and its
Participants are on file with the SEC.
Purchases of securities within the DTC system must be made by or through Direct
Participants which will receive a credit for the securities on DTC's records.
The ownership interest of each actual purchaser of a security (a "Beneficial
Owner") will, in turn, be recorded on the Direct and Indirect Participant's
respective 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 Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the securities 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 the securities, except in the event that
the use of the book-entry system for the securities is discontinued.
To facilitate subsequent transfers, all securities deposited by Direct
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of the securities with DTC and their
registration in the name of Cede & Co. or such other nominee do not effect any
change in beneficial ownership. DTC has no knowledge of actual beneficial
ownership of the securities; DTC's records reflect only the identity of the
Direct Participants to whose accounts the securities 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 that may be
applicable. Beneficial Owners of securities may wish to take certain steps to
augment transmission to them of notices of significant events with respect to
the securities, such as redemptions, tenders, defaults, and proposed amendments
to the security documents. Beneficial Owners of securities may wish to ascertain
that the nominee holding the securities for their benefit has agreed to obtain
and transmit notices to Beneficial Owners, or in the alternative, Beneficial
Owners may wish to provide their names and addresses to the registrar and
request that copies of the notices be provided directly to them.
Redemption notices, if any, will be sent to Cede & Co. If less than all of the
securities of a particular series are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in the
series to be redeemed.
Neither DTC nor Cede & Co., nor such other DTC nominee, will consent or vote
with respect to the securities. Under its usual procedures, DTC mails an omnibus
proxy (an "Omnibus Proxy") to the appropriate trustee as soon as possible after
the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting
rights to those Direct Participants to whose accounts the securities are
credited on the record date (identified in a listing attached to the Omnibus
Proxy).
Payments of redemption proceeds, principal of, premium, if any, and interest on
the securities will be made to DTC, or such other nominee as may be requested by
an authorized representative of 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. Payments by Participants to
Beneficial Owners will be
15
governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in
"street-name," and will be the responsibility of the Participant and not of DTC,
the underwriters, the appropriate trustee or us, subject to any statutory or
regulatory requirements that may be in effect from time to time. Payment of
redemption proceeds, principal, premium, if any, and interest to DTC is our
responsibility or that of the appropriate trustee. Disbursement of these
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.
DTC may discontinue providing its services as securities depository with
respect to the securities at any time by giving reasonable notice to us or the
appropriate trustee. Under these circumstances and in the event that a successor
securities depository is not obtained, certificates for the securities are
required to be printed and delivered. In addition, we may, at any time,
discontinue use of the system of book-entry transfers through DTC or a successor
securities depository. In that event, certificates for the securities will also
be printed and delivered.
We will not have any responsibility or obligation to Participants or the
persons for whom they act as nominees with respect to the accuracy of the
records of DTC, its nominee or any Direct or Indirect Participant with respect
to any ownership interest in the securities, or with respect to payments to, or
providing of notice to, the Direct Participants, the Indirect Participants or
the Beneficial Owners.
So long as Cede & Co. is the registered owner of any series of securities, as
nominee of DTC, references herein to holders of these series of securities shall
mean Cede & Co. or DTC and shall not mean the Beneficial Owners of the
securities.
The information in this section concerning DTC and its book-entry system has
been obtained from DTC. Neither ourselves, the appropriate trustee nor any
underwriters, dealers or agents take responsibility for its accuracy or
completeness.
EXPERTS AND LEGALITY
The financial statements incorporated in this prospectus by reference to our
Annual Report on Form 10-K for the year ended December 31, 1999 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The legality of the securities will be passed upon for us by Thelen Reid &
Priest LLP, New York, New York, and Wise Carter Child & Caraway, Professional
Association, and for any underwriters, dealers or agents by Pillsbury Winthrop
LLP, New York, New York. All legal matters pertaining to our organization,
titles to property, franchises and the lien of the mortgage and all matters
pertaining to Mississippi law will be passed upon only by Wise Carter Child &
Caraway, Professional Association.
The statements in this prospectus as to matters of law and legal conclusions
made under "Description of the First Mortgage Bonds -- Security," have been
reviewed by Wise Carter Child & Caraway, Professional Association, and are set
forth herein in reliance upon the opinion of said firm, and upon their authority
as experts.
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PLAN OF DISTRIBUTION
METHODS AND TERMS OF SALE
We may use a variety of methods to sell the securities including:
(1) through one or more underwriters or dealers;
(2) directly to one or more purchasers;
(3) through one or more agents; or
(4) through a combination of any of these methods of sale.
The prospectus supplement relating to a particular series of the securities will
set forth the terms of the offering of the securities, including:
(1) the name or names of any underwriters, dealers or agents and any syndicate
of underwriters;
(2) the initial public offering price;
(3) any underwriting discounts and other items constituting underwriters'
compensation;
(4) the proceeds we receive from that sale; and
(5) any discounts or concessions allowed or reallowed or paid by any
underwriters to dealers.
UNDERWRITERS
If we sell the securities through underwriters, they will acquire the
securities for their own account and may resell them from time to time in one or
more transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. The underwriters for
a particular underwritten offering of securities will be named in the prospectus
supplement and, if an underwriting syndicate is used, the managing underwriter
or underwriters will be named on the cover page. In connection with the sale of
securities, the underwriters may receive compensation from us or from purchasers
in the form of discounts, concessions or commissions. The obligations of the
underwriters to purchase securities will be subject to certain conditions. The
underwriters will be obligated to purchase all of the securities of a particular
series if any are purchased. However, the underwriters may purchase less than
all of the securities of a particular series should certain circumstances
involving a default of one or more underwriters occur.
The initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers by any underwriters may be changed from time to
time.
STABILIZING TRANSACTIONS
Underwriters may engage in stabilizing transactions and syndicate covering
transactions in accordance with Rule 104 under the Securities Exchange Act of
1934. Stabilizing transactions permit bids to purchase the underlying security
so long as the stabilizing bids do not exceed a specified maximum. Syndicate
covering transactions involve purchases of the securities in the open market
after the distribution has been completed in order to cover syndicate short
positions. These stabilizing transactions and syndicate covering transactions
may cause the price of the securities to be higher than it would otherwise be if
these transactions had not occurred.
AGENTS
If we sell the securities through agents, the prospectus supplement will set
forth the name of any agent involved in the offer or sale of the securities as
well as any commissions we will pay to them. Unless otherwise indicated in the
prospectus supplement, any agent will be acting on a best-efforts basis for the
period of its appointment.
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RELATED TRANSACTIONS
Underwriters, dealers and agents may engage in transactions with, or perform
services for, us or our affiliates in the ordinary course of business.
INDEMNIFICATION
We will agree to indemnify any underwriters, dealers, agents or purchasers and
their controlling persons against certain civil liabilities, including
liabilities under the Securities Act of 1933.
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