PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED OCTOBER 14, 1993)
$65,000,000
ENTERGY MISSISSIPPI, INC.
GENERAL AND REFUNDING MORTGAGE BONDS,
6 7/8% SERIES DUE JUNE 1, 2002
------------------------------
Interest on the General and Refunding Mortgage Bonds, 6 7/8% Series due June
1, 2002 (the "New G&R Bonds") of Entergy Mississippi, Inc. (formerly Mississippi
Power & Light Company) (the "Company") is payable on June 1 and December 1 of
each year, commencing December 1, 1997. The New G&R Bonds are redeemable in
whole at any time, or in part from time to time, at the option of the Company,
at a redemption price equal to the greater of (i) 100% of the principal amount
of such New G&R Bonds or (ii) as determined by a Quotation Agent (as defined
herein), the sum of the present values of the Remaining Scheduled Payments (as
defined herein) of principal and interest thereon, discounted to the redemption
date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate (as defined herein), plus, in each case,
accrued interest thereon to the redemption date. See "Description of the New G&R
Bonds -- Redemption and Purchase of New G&R Bonds" herein.
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
=====================================================================================================
UNDERWRITING
PRICE DISCOUNTS AND PROCEEDS TO
TO PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3)
- -----------------------------------------------------------------------------------------------------
Per Bond........................... 99.891% 0.157% 99.734%
- -----------------------------------------------------------------------------------------------------
Total.............................. $64,929,150 $102,050 $64,827,100
================================================================================
(1) Plus accrued interest from June 1, 1997.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deduction of expenses payable by the Company, estimated at $105,000.
------------------------------
The New G&R Bonds are offered subject to prior sale, when, as and if
delivered to and accepted by the Underwriter and subject to certain other
conditions. The Underwriter reserves the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that the New
G&R Bonds will be ready for delivery through the book-entry facilities of The
Depository Trust Company, New York, New York, on or about June 17, 1997.
------------------------------
BEAR, STEARNS & CO. INC.
------------------------------
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS JUNE 11, 1997.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE NEW G & R BONDS,
INCLUDING STABILIZING TRANSACTIONS AND SYNDICATE COVERING TRANSACTIONS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
---------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Reference is made to "Incorporation of Certain Documents by Reference" in
the accompanying Prospectus. At the date of this Prospectus Supplement, the
Incorporated Documents include the Company's Annual Report on Form 10-K for the
year ended December 31, 1996 and the Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1997.
SELECTED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
The selected financial information of the Company set forth below should be
read in conjunction with the audited financial statements and other financial
information contained in the Incorporated Documents.
TWELVE MONTHS ENDED
----------------------------------------------------------------
DECEMBER 31,
MARCH 31, ----------------------------------------------------
1997 1996 1995 1994 1993 1992
--------- -------- -------- -------- -------- --------
Income Statement Data:
Operating Revenues(a)....... $954,856 $958,430 $889,843 $859,845 $883,818 $799,483
Operating Income(b)......... 156,820 164,596 150,388 112,408 158,394 146,455
Interest Expense (net)...... 47,987 48,007 51,636 52,764 55,360 64,066
Net Income.................. 74,639 79,211 68,667 48,779 101,743(d) 65,036
Ratio of Earnings to Fixed
Charges(c)............... 3.24 3.40 2.92 2.12 3.79(d) 2.37
AS OF MARCH 31, 1997
---------------------------------------------------
AS ADJUSTED(E)
------------------------
PERCENT OF PERCENT OF
AMOUNT CAPITALIZATION AMOUNT CAPITALIZATION
------- -------------- ------- --------------
Balance Sheet Data:
Common Stock and Paid-in Capital............ $199,284 22.64% $199,284 21.20%
Retained Earnings........................... 223,800 25.43% 223,800 23.81%
Preferred Stock (without sinking fund)...... 57,881 6.58% 57,881 6.16%
General and Refunding Mortgage Bonds
(excluding current maturities)(f)........ 355,000 40.34% 415,000 44.14%
Other Long-Term Debt........................ 44,100 5.01% 44,100 4.69%
------- ------- ------- -------
Total............................... $880,065 100.00% $940,065 100.00%
======= ======= ======= =======
- ---------------
(a) Operating Revenues for the twelve months ended December 31, 1992 through
1994 have been restated due to the reclassification of certain items to
operating expenses.
(b) Operating Income for the twelve months ended December 31, 1992 through 1995
has been restated to exclude income tax.
(c) "Earnings" as defined by Item 503(d)(3) of Securities and Exchange
Commission ("SEC") Regulation S-K represent the aggregate of (1) net
income, (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 interest applicable to rentals
charged to operating expenses.
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(d) Net income and earnings for the year ended December 31, 1993 include
approximately $52 million pre-tax cumulative effect of a change in
accounting principle to provide for the accrual of estimated unbilled
revenues.
(e) Adjusted to reflect the sale of the New G & R Bonds.
(f) Current maturities of General and Refunding Mortgage Bonds as of March 31,
1997 totaled approximately $96 million. See "Use of Proceeds" below.
USE OF PROCEEDS
The net proceeds to be received from the issuance and sale of the New G&R
Bonds will be added to the Company's general funds, and are expected to provide
a portion of the funds that will be required to pay (a) $46,000,000 principal
amount of the Company's 11.2% G&R Bonds due to mature on July 15, 1997 and (b)
$50,000,000 principal amount of the Company's 6.95% G&R Bonds due to mature on
July 15, 1997.
DESCRIPTION OF THE NEW G&R BONDS
The following description of the particular terms of the New G&R Bonds,
offered hereby, supplements the description of the general terms and provisions
of the New G&R Bonds set forth in the accompanying Prospectus under the heading
"Description of the New G&R Bonds", to which description reference is hereby
made. As used hereinafter, the terms "G&R Bonds", "Trustee" and "G&R Mortgage"
shall have the same meanings as the same terms used under the heading
"Description of the New G&R Bonds" in the accompanying Prospectus.
INTEREST, MATURITY AND PAYMENT. The New G&R Bonds will mature on June 1,
2002 and will bear interest at the rate shown in their title, payable June 1 and
December 1 of each year, commencing December 1, 1997. Interest is payable to
holders of record at the close of business on the May 31 or November 30 next
preceding the interest payment date. Principal and interest are payable at the
office or agency of the Company in New York City. (See "Book-Entry G&R Bonds"
below for information on principal and interest payments to owners of beneficial
interests in the New G&R Bonds.) The Company has covenanted to pay interest on
any overdue principal and on any overdue installment of interest at the rate of
7 7/8% per annum. The New G&R Bonds will be issued on the basis of retired G&R
Bonds.
REDEMPTION AND PURCHASE OF NEW G&R BONDS. The New G&R Bonds will be
redeemable in whole at any time, or in part from time to time, at the option of
the Company, upon not less than 30 days' notice, at a redemption price equal to
the greater of (i) 100% of the principal amount of such New G&R Bonds or (ii) as
determined by a Quotation Agent, the sum of the present values of the Remaining
Scheduled Payments of principal and interest thereon, discounted to the
redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate, 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 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.
Cash deposited under any provision of the G&R Mortgage (with certain
exceptions) may be applied to the redemption or purchase (including the purchase
from the Company) of G&R Bonds of any series.
The New G&R Bonds are not subject to redemption under any sinking or
improvement fund or any maintenance or replacement fund.
CERTAIN DEFINITIONS. "Adjusted Treasury Rate" means, with respect to any
redemption date, the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, assuming 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, plus 0.125%.
S-3
"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 Trustee is closed for business.
"Comparable Treasury Issue" means the United States Treasury security
selected by a Quotation Agent as having a maturity comparable to the remaining
term of the New G&R 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
New G&R Bonds.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations or
(B) if the Trustee obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Reference Treasury Dealer Quotations.
"Quotation Agent" means one of the Reference Treasury Dealers appointed by
the Trustee after consultation with the Company.
"Reference Treasury Dealer" means each of Bear, Stearns & Co. Inc., Salomon
Brothers Inc and Goldman, Sachs & Co. 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"), the
Company shall substitute therefor another Primary Treasury Dealer, or any other
Primary Treasury Dealer selected by the Trustee after consultation with the
Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, 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 Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such redemption date.
"Remaining Scheduled Payments" means, with respect to any of the New G&R
Bonds, the remaining scheduled payments of the principal thereof to be redeemed
and interest thereon that would be due after the related redemption date but for
such redemption; provided, however, that, if such redemption date is not an
interest payment date with respect to such New G&R Bonds, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to such redemption date.
DIVIDEND COVENANT. The Company will covenant in substance that, so long as
any New G&R Bonds remain outstanding, it will not pay any cash dividends on
common stock or repurchase common stock after May 31, 1997, unless, after giving
effect to such dividend or purchase, the aggregate amount of such dividends or
purchases after May 31, 1997 (other than dividends that have been declared by
the Company before May 31, 1997) does not exceed credits to earned surplus after
May 31, 1997 plus $250,000,000 plus such additional amounts as shall be approved
by the SEC.
BOOK-ENTRY G&R BONDS. The information under the heading "Description of the
New G&R Bonds -- Form and Exchanges" in the accompanying Prospectus will not be
applicable to the New G&R Bonds. Except under the circumstances described below,
The Depository Trust Company ("DTC"), New York, NY, will act as securities
depository for the New G&R Bonds. The New G&R Bonds will be issued as
fully-registered securities registered in the name of Cede & Co. (DTC's
partnership nominee). One fully-registered New G&R Bond certificate will be
issued for the New G&R Bonds, in the aggregate principal amount of such issue,
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
S-4
"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. 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 SEC.
Purchases of New G&R Bonds under the DTC system must be made by or through
Direct Participants, which will receive a credit for the New G&R Bonds on DTC's
records. The ownership interest of each actual purchaser of each New G&R Bond
("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 purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, 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 New G&R Bonds 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 New G&R
Bonds, except in the event that use of the book-entry system for the New G&R
Bonds is discontinued.
To facilitate subsequent transfers, all New G&R Bonds deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of New G&R Bonds with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the New G&R Bonds; DTC's records
reflect only the identity of the Direct Participants to whose accounts such New
G&R Bonds 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 Cede & Co. If less than all of the New
G&R Bonds are being redeemed, DTC's practice is to determine by lot the amount
of the interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to New G&R
Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the Company 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
New G&R Bonds are credited on the record date (identified in a listing attached
to the Omnibus Proxy).
Principal and interest payments on the New G&R Bonds will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on payable date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on payable 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 accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC, the Trustee, or the Company,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of principal and interest to DTC is the responsibility of
the Company or the Trustee, disbursement of such payments to Direct
S-5
Participants shall be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to the New G&R Bonds at any time by giving reasonable notice to the
Company or the Trustee. Under such circumstances, in the event that a successor
securities depository is not obtained, New G&R Bond certificates are required to
be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources (including DTC) that the Company believes to be
reliable, but the Company takes no responsibility for the accuracy thereof.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event, New
G&R Bond certificates will be printed and delivered.
Neither the Company, the Trustee, the Underwriter of the New G&R Bonds nor
any agent for payment on or registration of transfer or exchange of such New G&R
Bonds will have any responsibility or liability for any of the records relating
to or payments made on account of beneficial interests in any of the New G&R
Bonds or for maintaining, supervising or reviewing any records relating to such
beneficial interests.
EXPERTS AND LEGALITY
The balance sheets as of December 31, 1996 and 1995 and the statements of
income, retained earnings and cash flows and the related financial statement
schedule for each of the three years in the period ended December 31, 1996,
incorporated by reference in this Prospectus Supplement from the Company's
Annual Report on Form 10-K, have been incorporated herein in reliance on the
reports of Coopers & Lybrand, L.L.P., given on the authority of that firm as
experts in accounting and auditing.
UNDERWRITING
Under the terms and conditions set forth in the Underwriting Agreement
dated the date hereof, the Company has agreed to sell to Bear, Stearns & Co.
Inc. (the "Underwriter"), and the Underwriter has agreed to purchase, the New
G&R Bonds.
Under the terms and conditions of the Underwriting Agreement, the
Underwriter is committed to take and pay for all of the New G&R Bonds offered
hereby if any are taken.
The Underwriter proposes to offer the New G&R Bonds in part directly to
retail purchasers at the public offering price set forth on the cover page of
this Prospectus Supplement and in part to certain securities dealers at such
price less a concession not in excess of 0.125% of the principal amount of the
New G&R Bonds. The Underwriter may allow, and such dealers may reallow, a
concession not in excess of 0.100% of the principal amount of the New G&R Bonds
to certain brokers and dealers. After the New G&R Bonds are released for sale to
the public, the offering price and other selling terms may from time to time be
varied by the Underwriter.
The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
The New G&R Bonds are a new issue of securities with no established trading
market. The Company has been advised by the Underwriter that it intends to make
a market in the New G&R Bonds but is not obligated to do so and may discontinue
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the New G&R Bonds.
The Underwriter may engage in stabilizing transactions and syndicate
covering transactions in accordance with Rule 104 under the Exchange Act.
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 New G&R Bonds in the open market after the
distribution has been completed in order to cover syndicate short positions.
Such stabilizing transactions and syndicate covering transactions may cause the
price of the New G&R Bonds to be higher than it would otherwise be in the
absence of such transactions.
S-6
PROSPECTUS
- --------------------
$350,000,000
MISSISSIPPI POWER & LIGHT COMPANY
GENERAL AND REFUNDING MORTGAGE BONDS
PREFERRED STOCK, CUMULATIVE, $100 PAR VALUE
Mississippi Power & Light Company (the "Company") may offer from time to
time its General and Refunding Mortgage Bonds (the "New G&R Bonds") and/or its
Preferred Stock, Cumulative, $100 Par Value (the "New Preferred Stock"),
aggregating $350,000,000 in principal amount and/or par value, as the case may
be. The New G&R Bonds and the New Preferred Stock will each be offered in one or
more series at prices and on terms to be determined at the time of sale. This
Prospectus will be supplemented by a prospectus supplement (the "Prospectus
Supplement") which will set forth, as applicable (1) the aggregate principal
amount, rate and time of payment of interest, maturity, purchase price, initial
public offering price, if any, redemption provisions and other specific terms of
the series of New G&R Bonds in respect of which this Prospectus is being
delivered, or (2) the specific number of shares, purchase price, initial public
offering price, if any, dividend rate (or method of calculation thereof), any
redemption or sinking fund terms and other specific terms of the series of New
Preferred Stock in respect of which this Prospectus is being delivered. The sale
of one series of any security will not be contingent upon the sale of any other
series of any security.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
---------------------
The Company may sell the New G&R Bonds and/or the New Preferred Stock
through underwriters, dealers or agents, or directly to one or more purchasers.
The Prospectus Supplement will set forth the names of underwriters, dealers or
agents, if any, any applicable commissions or discounts and the net proceeds to
the Company from any such sale. See "Plan of Distribution" for possible
indemnification arrangements for underwriters, dealers, agents and purchasers.
THE DATE OF THIS PROSPECTUS IS OCTOBER 14, 1993
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY OR ANY OTHER SECURITIES OF THE COMPANY AT LEVELS ABOVE THOSE
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
---------------------
AVAILABLE INFORMATION
Mississippi Power & Light Company ("Company") is subject to the
informational requirements of the Securities Exchange Act of 1934 ("Exchange
Act") and in accordance therewith files reports and other information with the
Securities and Exchange Commission ("SEC"). Such reports include information, as
of particular dates, concerning the Company's directors and officers, their
remuneration, the principal holders of the Company's securities and any material
interests of such persons in transactions with the Company. Such reports and
other information can be inspected and copied at the public reference facilities
maintained by the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549; 500 West Madison Street, 14th floor, Chicago, Illinois 60661; and Seven
World Trade Center, 13th floor, New York, New York 10048. Copies of this
material can also be obtained at prescribed rates from the Public Reference
Section of the SEC at its principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Shareholders of the Company are furnished copies of
financial statements as of the end of the most recent fiscal year audited and
reported upon (with an opinion expressed) by independent certified public
accountants.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the SEC pursuant to the Exchange Act are
incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1992; and
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1993 and June 30, 1993.
In addition, all documents subsequently filed with the SEC by the Company
pursuant to Section 13, 14 or 15(d) of the Exchange Act prior to the termination
of this offering shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents
(such documents, and the documents enumerated above, being hereinafter referred
to as "Incorporated Documents").
Any statement contained herein or in an Incorporated Document shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained in any other subsequently filed Incorporated
Document or in an accompanying Prospectus Supplement modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON,
INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN
DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY AND
ALL OF THE INCORPORATED DOCUMENTS, OTHER THAN EXHIBITS TO SUCH DOCUMENTS, UNLESS
SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE THEREIN. REQUESTS
SHOULD BE DIRECTED TO MR. CHRISTOPHER T. SCREEN, ASSISTANT SECRETARY,
MISSISSIPPI POWER & LIGHT COMPANY, P.O. BOX 61000, NEW ORLEANS, LOUISIANA 70161,
TELEPHONE NUMBER: 504-569-4212. THE INFORMATION RELATING TO THE COMPANY
CONTAINED IN THIS PROSPECTUS AND ANY ACCOMPANYING PROSPECTUS SUPPLEMENT DOES NOT
PURPORT TO BE COMPREHENSIVE AND SHOULD BE READ TOGETHER WITH THE INFORMATION
CONTAINED IN THE INCORPORATED DOCUMENTS.
2
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR, WITH RESPECT TO ANY SERIES
OF NEW G&R BONDS OR NEW PREFERRED STOCK, THE PROSPECTUS SUPPLEMENT RELATING
THERETO, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS
PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS AND A PROSPECTUS SUPPLEMENT NOR ANY
SALE MADE THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF THAT
PROSPECTUS SUPPLEMENT.
---------------------
THE COMPANY
The Company was incorporated under the laws of the State of Mississippi on
January 2, 1963 and is successor by merger to a predecessor Mississippi Power &
Light Company which was incorporated under the laws of the State of Florida on
October 3, 1927. The merger of the predecessor Mississippi Power & Light Company
into the Company became effective on May 1, 1963. The Company's principal
executive office is located in the Electric Building, 308 East Pearl Street,
Jackson, Mississippi 39201. Its telephone number, including area code, is
601-969-2311.
The Company is an electric public utility company with substantially all of
its operations in the State of Mississippi. Entergy Corporation ("Entergy"),
which is a registered public utility holding company under the Public Utility
Holding Company Act of 1935, as amended ("Holding Company Act"), owns all of the
outstanding common stock of the Company. The Company, Arkansas Power & Light
Company ("AP&L"), Louisiana Power & Light Company ("LP&L") and New Orleans
Public Service Inc. ("NOPSI") are the principal operating electric utility
subsidiaries of Entergy. Entergy also owns all of the common stock of System
Energy Resources, Inc. ("System Energy"), a generating company, Entergy
Services, Inc., a service company, Entergy Enterprises, Inc., a non-utility
company, Entergy Operations, Inc., a nuclear management services company, and
Entergy Power, Inc., a subsidiary formed to market capacity and energy from
certain Entergy System generating units in wholesale markets. Entergy also has
several subsidiaries formed to participate in utility projects located outside
the Entergy System's retail service territory, both domestically and in foreign
countries.
The Company, AP&L, LP&L and NOPSI own all the capital stock of System
Fuels, Inc., a special purpose company which implements and/or maintains certain
programs for the procurement, delivery and storage of fuel supplies for Entergy
subsidiaries.
USE OF PROCEEDS
The net proceeds to be received from the issuance and sale of the New G&R
Bonds and/or the New Preferred Stock will be used for general corporate
purposes, including the possible redemption or other acquisition, in whole or in
part, of certain of the Company's outstanding securities. Any specific
securities acquired with the proceeds of sales of a series of New G&R Bonds or
New Preferred Stock will be set forth in the Prospectus Supplement relating to
that series. Reference is made to the Incorporated Documents with respect to the
Company's most significant contingencies, its general capital requirements, and
its general financing plans and capabilities, including its short term borrowing
capability, earnings coverage requirements under the Company's Restated Articles
of Incorporation, as amended ("Articles of Incorporation"), which limit the
amount of additional preferred stock which the Company may issue, and earnings
coverage and other requirements under the Company's general and refunding
mortgage, which limit the amount of additional mortgage bonds which the Company
may issue.
3
DESCRIPTION OF THE NEW G&R BONDS
GENERAL. The New G&R Bonds are to be issued under the Company's Mortgage
and Deed of Trust, dated as of February 1, 1988, as supplemented by various
supplemental indentures thereto and as to be further supplemented by one or more
supplemental indentures relating to the New G&R Bonds (collectively referred to
as the "G&R Mortgage"), to Bank of Montreal Trust Company ("Trustee") and Mark
F. McLaughlin (successor to Z. George Klodnicki), as Trustees (collectively,
"Trustees"). All General and Refunding Mortgage Bonds issued or to be issued
under the G&R Mortgage are referred to herein as "G&R Bonds."
The statements herein concerning the G&R Bonds, the New G&R Bonds and the
G&R Mortgage are merely an outline. They are subject to the detailed provisions
of the G&R Mortgage, which are incorporated herein by reference.
TERMS OF SPECIFIC SERIES OF THE NEW G&R BONDS. A Prospectus Supplement will
include descriptions of the following terms of a series of the New G&R Bonds to
be issued: (1) the designation of such series of the New G&R Bonds; (2) the
aggregate principal amount of such series; (3) the date on which such series
will mature; (4) the rate at which such series will bear interest and the date
from which such interest accrues; (5) the dates on which interest will be
payable; (6) the prices and the other terms and conditions upon which the
particular series may be redeemed by the Company prior to maturity; (7) whether
the dividend covenant described below will be applicable to any such series; (8)
if an insurance policy will be provided for the payment of the principal of
and/or interest on the New G&R Bonds of such series, the terms thereof; and (9)
any other terms of the New G&R Bonds not inconsistent with the provisions of the
G&R Mortgage.
FORM AND EXCHANGES. Unless otherwise indicated in a Prospectus Supplement,
the New G&R Bonds will be delivered in definitive fully registered form in
denominations of $1,000 or any multiple thereof. No service charge will be made
for any transfer or exchange of the New G&R Bonds.
SECURITY. The New G&R Bonds, together with all other G&R Bonds now or
hereafter issued under the G&R Mortgage, will be secured by the G&R Mortgage,
which constitutes, in the opinion of General Counsel for the Company, a second
mortgage lien on all properties of the Company (except properties released under
the terms of the G&R Mortgage and except as stated below), subject to (1) the
first lien of the Company's Mortgage and Deed of Trust dated as of September 1,
1944, to Bank of New York (successor to Irving Trust Company) and W.T.
Cunningham (successor Co-Trustee), as Trustees, as supplemented ("First
Mortgage") and other excepted encumbrances, (2) minor defects and encumbrances
customarily found in properties of like size and character which do not
materially impair the use of the property affected thereby in the conduct of the
business of the Company, and (3) other liens, defects and encumbrances, if any,
existing or placed thereon at the time of acquisition thereof by the Company and
except as limited by bankruptcy law. There are excepted from the lien certain
property, including all cash and securities; all merchandise, equipment,
apparatus, materials or supplies held for sale or other disposition in the usual
course of business or consumable during use; automobiles, vehicles and aircraft;
timber, minerals, mineral rights and royalties; and receivables, contracts,
leases and operating agreements.
The G&R Mortgage contains provisions for subjecting after-acquired property
(subject to the First Mortgage and pre-existing liens) to the lien thereof,
subject to limitations in the case of consolidation, merger or sale of
substantially all of the Company's assets.
The G&R Mortgage is junior and subordinate to the lien of the First
Mortgage on substantially all of the Company's properties. At August 31, 1993,
approximately $214.9 million principal amount of bonds were outstanding under
the First Mortgage. Such bonds and all other bonds issued or to be issued under
the First Mortgage are hereinafter referred to as "First Mortgage Bonds." No
additional First Mortgage Bonds are permitted to be issued under the First
Mortgage (except such First Mortgage Bonds as may be issued from time to time to
the Trustees under the G&R Mortgage at the option of the Company to provide
additional security thereunder).
The G&R Mortgage provides that the Trustees shall have a lien upon the
mortgaged property, prior to the New G&R Bonds, for the payment of their
reasonable compensation, expenses and disbursements and for indemnity against
certain liabilities.
4
The G&R Mortgage contains restrictions on liens and on the issuance of
indebtedness, including bonds, so long as any G&R Bonds issued prior to January
1, 1993 are outstanding (see "Certain Other Covenants" below).
ISSUANCE OF ADDITIONAL G&R BONDS. The maximum principal amount of G&R Bonds
that may be issued under the G&R Mortgage is unlimited. G&R Bonds of any series
may be issued from time to time on the basis of (1) the aggregate uncollected
balance of certain rate deferrals, described below, recorded as assets on the
books of the Company (whether or not subject to the lien of the G&R Mortgage),
but the aggregate principal amount of outstanding G&R Bonds issued on this basis
shall not exceed the lesser of $400,000,000 or 50% of the uncollected balance of
such deferred costs, (2) 70% of property additions after adjustments to offset
retirements, (3) retirement of G&R Bonds or of First Mortgage Bonds, and (4)
deposit of cash. Deposited cash may be withdrawn upon the bases stated in (2) or
(3). Property additions generally include electric, gas, steam or hot water
property acquired after December 31, 1987, but may not include, among other
things, securities, automobiles, vehicles or aircraft, or property used
principally for the production or gathering of natural gas.
With certain exceptions in the case of (3) above, the issuance of G&R Bonds
is subject to adjusted net earnings for 12 out of the preceding 15 months,
before income taxes, being at least twice the annual interest requirements on
all First Mortgage Bonds and all G&R Bonds at the time outstanding, including
the additional issue, and all indebtedness, if any, of prior rank. The Company
has reserved the right, without the consent of the holders of any series of G&R
Bonds created after January 1, 1993, including the New G&R Bonds, to substitute
for the foregoing a requirement that adjusted net earnings for 12 out of the
preceding 18 months, before income taxes, be at least twice such annual interest
requirements. In general, interest on variable interest bonds, if any, is
calculated using the average rate in effect during such 12 months period.
Pursuant to an order of the Mississippi Public Service Commission, issued
on September 16, 1985 and modified on September 29, 1988 and September 7, 1989
("Rate Order"), the Company defers for future recovery a portion of its costs
related to its allocated share of capacity and energy from System Energy's
interest in Unit No. 1 of the Grand Gulf Nuclear Electric Generating Station
("Grand Gulf 1"). The Rate Order provides, among other things, for the recovery
by the Company, in equal annual installments over the ten year period beginning
October 1, 1988, of all Grand Gulf 1-related costs deferred through September
30, 1988. Additionally, the Rate Order permitted the Company to defer, in
decreasing amounts, a portion of its Grand Gulf 1-related costs over the four
annual periods commencing October 1, 1988. These deferrals will be recovered by
the Company over the succeeding six-year period ending September 30, 1998 in
accordance with the annual recovery schedule specified in the Rate Order. The
Rate Order further allows for the recovery by the Company of carrying charges on
all deferred amounts on a current basis. Reference is made to the Incorporated
Documents for further information with respect to these matters.
Net property additions available at June 30, 1993 were sufficient for the
issuance of approximately $72.1 million New G&R Bonds. Deferred Grand Gulf
1-related costs at June 30, 1993 were approximately $653.7 million, which was
sufficient, under the limitations described in (1) above, to support the
issuance of approximately $141.8 million of New G&R Bonds.
The G&R Mortgage contains restrictions on the issuance of G&R Bonds against
property subject to liens.
Other than the security afforded by the lien of the G&R Mortgage and
restrictions on the issuance of additional G&R Bonds described above (including
particularly those described in the first paragraph above), there are no
provisions of the G&R Mortgage which afford the holders of the New G&R Bonds
protection in the event of a highly leveraged transaction involving the Company.
However, such a transaction would require regulatory approval, and management of
the Company believes that such approval would be unlikely in a highly leveraged
context.
RELEASE AND SUBSTITUTION OF PROPERTY. Property may be released, without
applying any earnings test, upon the bases of: (1) the release of such property
from the lien of the First Mortgage, (2) the deposit of cash or, to a limited
extent, purchase money mortgages, (3) property additions, after adjustments in
certain cases to offset retirements and after making adjustments for certain
prior lien bonds, if any, outstanding against
5
property additions, and (4) waiver of the right to issue G&R Bonds. Cash may be
withdrawn upon the bases stated in (3) and (4) above. Property owned by the
Company on December 31, 1987 is released on the basis of its depreciated book
value; all other property is released on the basis of its cost, as defined in
the G&R Mortgage.
Unfunded property may also be released if after such release, outstanding
G&R Bonds will not exceed 70% of the aggregate fair value of the then funded
property of the Company. The Company has reserved the right, without the consent
of the holders of any series of G&R Bonds created after January 1, 1993,
including the New G&R Bonds, to add an additional provision for the release of
unfunded property. Under the new provisions, the Company will be able to release
unfunded property without meeting the 70% test if after such release, the
Company will have at least one dollar ($1) in unfunded property that remains
subject to the lien of the G&R Mortgage.
DIVIDEND COVENANT. The Company may covenant in substance that, so long as
any New G&R Bonds of a particular series remain outstanding, it 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 such series of New G&R Bonds
(other than certain dividends that may be declared by the Company prior to such
selected date) except from credits to retained earnings after such selected date
plus an amount not to exceed $250,000,000 and plus such additional amounts as
shall be approved by the SEC. The Prospectus Supplement relating to a particular
series of New G&R Bonds will state whether this covenant will apply to such
series.
CERTAIN OTHER COVENANTS. The Company has covenanted that, so long as any
G&R Bonds issued on the basis of Grand Gulf 1-related deferrals (described above
under "Issuance of Additional G&R Bonds") are outstanding, (1) it will not sell,
assign or grant any lien on its deferred Grand Gulf 1-related costs (except as
contemplated by the First Mortgage and except for the possible pledge thereof as
additional security under the G&R Mortgage for the equal and proportionate
benefit of all G&R Bondholders), and (2) it will take all reasonable actions to
maintain in full force and effect the Rate Order and to defend the Rate Order
against challenges, and it will not take any action to modify the Rate Order in
any manner that is materially adverse to the interests of the holders of the G&R
Bonds.
In connection with the issuance of G&R Bonds prior to January 1, 1993, the
Company has also made certain covenants related to, among other things,
limitations on outstanding indebtedness, guaranties, dispositions of assets
(including accounts receivable and unbilled revenues), liens, lines of business
and transactions with affiliates. The covenant limiting indebtedness provides
that the Company will not incur or permit to be outstanding any indebtedness for
borrowed money except (1) First Mortgage Bonds; (2) G&R Bonds; (3) indebtedness
in respect of industrial development or pollution control revenue bonds (subject
to certain conditions, including the Company's meeting the net earnings and
property additions issuance tests under the G&R Mortgage as if an equal
principal amount of G&R Bonds bearing an equal rate of interest were being
issued); (4) not more than $100,000,000 of indebtedness maturing in one year or
less and secured by an assignment of accounts receivable or unbilled revenues;
and (5) unsecured indebtedness maturing in one year or less in an amount not
exceeding the greater of 10% of capitalization, or 50% of cumulative deferred
and uncollected Grand Gulf 1-related costs (less the principal amount of
outstanding G&R Bonds issued on the basis of Grand Gulf 1-related deferrals and
less outstanding indebtedness permitted by (4)). The covenant limiting
guaranties provides that the Company will not guarantee any financial
obligations except (1) guaranties in the ordinary course of business in
connection with the leasing of equipment or financing of fuel purchases; (2)
guaranties of obligations of System Fuels, Inc. in connection with its fuel
supply business that are approved by the SEC under the Holding Company Act; and
(3) financial undertakings of the Company in connection with its obligations to
System Energy. When G&R Bonds issued prior to January 1, 1993 are no longer
outstanding (the latest scheduled maturity of such G&R Bonds being July 15,
1997), the Company will no longer be bound by these covenants.
MAINTENANCE AND REPLACEMENT FUND IN FIRST MORTGAGE. The New G&R Bonds will
not be subject to any maintenance or replacement provisions. However, the
Company has covenanted to comply with the provisions of Sections 38 and 39(I) of
the First Mortgage (which relate to maintenance and replacement of property),
but only so long as the First Mortgage remains outstanding. Such Section 39(I)
provides that in
6
addition to actual expenditures for maintenance and repairs, the Company is
required to expend or deposit for each year, for replacements and improvements
in respect of mortgaged electric, gas, steam and/or hot water utility property,
and certain automotive equipment, an amount equal to $600,000 plus 2 1/4% of net
additions to mortgaged utility property made after December 31, 1943 and prior
to the beginning of the year for which the calculation is made. Such requirement
may be met by depositing cash under the First Mortgage or certifying gross
property additions thereunder or expenditures for certain automotive equipment
or by taking credit for First Mortgage Bonds and qualified lien bonds retired.
Any excess in such credits may be applied against future requirements. Such cash
may be used to redeem or purchase First Mortgage Bonds or may be withdrawn
against gross property additions under the First Mortgage or waiver of the right
to issue First Mortgage Bonds.
DEFAULTS AND NOTICE THEREOF. Defaults are defined in the G&R Mortgage as:
default in payment of principal; default for 10 days in payment of interest;
certain events in bankruptcy, insolvency or reorganization; default in other
covenants for 30 days after notice (unless the Company has in good faith
commenced efforts to perform the covenant); default under a supplemental
indenture; and the occurrence of a "Default" under the First Mortgage (defined
as being default in payment of principal of First Mortgage Bonds, default for 60
days in payment of interest on or installments of funds for retirement of First
Mortgage Bonds, certain defaults with respect to qualified lien bonds, certain
events in bankruptcy, insolvency or reorganization, and default for 90 days
after notice in other covenants). The Company has reserved the right, without
the consent of the holders of any series of G&R Bonds created after January 1,
1993, including the New G&R Bonds, to modify this definition to provide that
default for 30 days (rather than 10 days) in payment of interest and default in
other covenants for 90 days (rather than 30 days) after notice constitute
defaults under the G&R Mortgage.
The Trustee or the holders of 25% of the G&R Bonds may declare the
principal and interest due and payable on default but a majority may annul such
declaration if such default has been cured. No holders of G&R Bonds may enforce
the lien of the G&R Mortgage without giving the Trustees written notice of a
default and unless the holders of 25% of the G&R Bonds have requested the
Trustees to act and offered them reasonable opportunity to act and indemnity
satisfactory to them against the cost, expenses and liabilities to be incurred
thereby and the Trustees shall have failed to act. The holders of a majority of
the G&R 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.
The supplemental indentures relating to certain G&R Bonds issued prior to
January 1, 1993 set forth additional events constituting "defaults" under the
G&R Mortgage, including certain defaults with respect to other indebtedness,
capital lease obligations and guaranties of the Company aggregating more than
$5,000,000. These additional defaults apply only so long as any G&R Bonds
created by such supplemental indentures are outstanding and may be waived by the
holders of such G&R Bonds, without the consent of the holders of any other G&R
Bonds, including the New G&R Bonds.
EVIDENCE TO BE FURNISHED TO THE TRUSTEE. Compliance with G&R Mortgage
provisions is evidenced by written statements of Company officers or persons
selected or paid by the Company. In certain cases, opinions of counsel and
certification of an engineer, accountant, appraiser or other expert (who in some
cases must be independent) must be furnished. The Company must give the Trustee
an annual statement as to whether or not the Company has fulfilled its
obligations under the G&R Mortgage throughout the preceding calendar year.
MODIFICATION. The rights of holders of G&R Bonds may be modified with the
consent of the holders of a majority of the G&R Bonds, or, if less than all
series of G&R Bonds are adversely affected, the consent of the holders of a
majority of the G&R Bonds adversely affected (except with respect to amendments
or waivers of the provisions of certain supplemental indentures dated prior to
January 1, 1993 which require the consent of the holders of a majority of the
series created in such supplemental indenture and not of any other series). In
general, no modification of the terms of payment of principal, premium, if any,
or interest and no modification affecting the lien of the G&R Mortgage or
reducing the percentage required for modification is effective against any
holder of G&R Bonds without his consent.
7
DESCRIPTION OF THE NEW PREFERRED STOCK
GENERAL. The Articles of Incorporation provide for a class of Preferred
Stock, Cumulative, $100 Par Value ("Preferred Stock"), which may be issued from
time to time in one or more series. Except in certain respects as to which there
may be variations between series, the shares of each series have the same rank
and are identical in all respects. The respects as to which there may be
variations as between series are (a) the number of shares constituting each
series and the distinguishing serial designation thereof, (b) the annual
dividend rate or rates, dividend payment dates and the date from which dividends
shall be cumulative, (c) the amounts payable on redemption, and (d) the sinking
fund provisions, if any, for the redemption or purchase of shares. When a new
series of Preferred Stock is issued, the number of shares constituting such
series, its distinguishing serial designation and its distinctive
characteristics (in those limited respects as to which there may be variations
between series) are stated and expressed in the articles of amendment to the
Articles of Incorporation providing for the issuance of such series. The New
Preferred Stock will constitute one or more additional series of the Preferred
Stock.
The statements herein concerning the Preferred Stock and the New Preferred
Stock are merely an outline and do not purport to be complete. Such statements
do not relate or give effect to the provisions of Mississippi statutory or
common law and are subject in all respects to the detailed provisions of the
Articles of Incorporation and the proposed forms of articles of amendment to be
adopted for each series of New Preferred Stock. The Articles of Incorporation
and the form of articles of amendment are filed as exhibits to the Registration
Statement.
TERMS OF SPECIFIC SERIES OF THE NEW PREFERRED STOCK. A Prospectus
Supplement will describe the following terms of New Preferred Stock to be
issued: (1) the designation of such series of New Preferred Stock; (2) the
number of shares of New Preferred Stock of such series; (3) the purchase price
and initial public offering price, if any, of the shares of such series; (4) the
dividend rate (or method of calculation thereof); (5) the dividend payment dates
and the date from which dividends will be cumulative; (6) the terms and
conditions pursuant to which, and the prices at which, the Company may redeem
shares of such series; (7) the terms and amount of any sinking fund requirements
applicable to such series and (8) any other terms of the New Preferred Stock not
inconsistent with the Articles of Incorporation.
DIVIDEND RIGHTS. Each series of the New Preferred Stock, pari passu with
each other series of the Preferred Stock, shall be entitled, when and as
declared by the Board of Directors, in preference to the common stock, to
dividends at the rate stated in the title thereof, payable quarterly on such
dates as are stated in the articles of amendment providing for the issuance of
such series.
VOTING RIGHTS. Except for those purposes for which the right to vote is
expressly conferred upon the Preferred Stock by the Articles of Incorporation or
applicable Mississippi law, no holder thereof is entitled to notice of or to
vote at any meeting of shareholders. For those purposes for which the Preferred
Stock has a right to vote, the holders are entitled to one vote for each share
held.
The Articles of Incorporation expressly provide that, during any periods
when dividends on the Preferred Stock are in default in an amount equal to four
full quarterly payments or more per share, the holders of the Preferred Stock,
voting separately as a class, are entitled to elect a majority of the Board of
Directors, and the holders of the common stock, voting separately as a class,
are entitled to elect the remaining directors of the Company.
RESTRICTIONS ON ISSUANCE OF PRIOR RANKING STOCK AND ON ALTERING RIGHTS OF
PREFERRED STOCK. The vote of the holders of two-thirds of the Preferred Stock,
voting separately as a class, is required prior to the issuance of any new stock
ranking prior thereto except to provide funds for the redemption of all of the
Preferred Stock then outstanding, and for the amendment or alteration of any of
the rights, preferences or powers of the Preferred Stock in a manner which would
affect adversely any of such rights, preferences or powers. If any such
amendment or alteration would affect adversely the rights, preferences or powers
of less than all of the Preferred Stock, only the consent of the holders of
two-thirds of the outstanding shares of all series so affected is required. The
increase or decrease in the authorized amount of the Preferred Stock, or the
creation, or
8
increase or decrease in the amount, of any class of stock ranking on a parity
with the Preferred Stock, shall not be deemed to affect adversely the rights,
preferences or powers of the holders of the Preferred Stock.
RESTRICTIONS ON MERGER, SALE OF ASSETS, ISSUANCE OF UNSECURED DEBT AND SALE
OF ADDITIONAL PREFERRED STOCK. The vote of the holders of a majority of the
Preferred Stock, voting separately as a class, is required prior to merger,
consolidation or the disposition by the Company of all or substantially all of
its assets, unless such merger, consolidation or disposition has been ordered,
approved or permitted under the Holding Company Act, and prior to the making of
certain unsecured borrowings. Such a vote is also required for the issue of
additional Preferred Stock or any equally ranking stock unless gross income (as
defined in the Articles of Incorporation) for a period of 12 consecutive
calendar months within the 15 calendar months immediately preceding the issue,
available for the payment of interest, is at least 1 1/2 times the sum of the
annual interest charges on all interest bearing indebtedness of the Company and
the annual dividend requirements on all outstanding Preferred Stock and any
other stock ranking prior thereto or on a parity therewith, including the shares
proposed to be issued, and unless the aggregate of the capital of the Company
applicable to its common stock and the surplus of the Company shall be not less
than the aggregate amount payable on involuntary liquidation on all shares of
the Preferred Stock, and any other stock ranking prior thereto or on a parity
therewith, outstanding after the issue of the shares proposed to be issued.
LIQUIDATION RIGHTS. Upon voluntary liquidation, each series of the New
Preferred Stock shall be entitled, on a parity with each other series of the
Preferred Stock and in preference to the common stock, to an amount equal to its
then current redemption price, plus any accumulated and unpaid dividends. Upon
involuntary liquidation, each series of the New Preferred Stock shall be
entitled, on a parity with each other series of the Preferred Stock and in
preference to the common stock, to $100 per share, plus any accumulated and
unpaid dividends.
OTHER RIGHTS. The New Preferred Stock will not have any preemptive or
conversion rights.
LIABILITY TO FURTHER CALLS AND ASSESSMENTS. All of the New Preferred Stock
will be validly issued and fully paid and non-assessable upon receipt by the
Company of the purchase price thereof.
CERTAIN LIMITATIONS ON COMMON STOCK DIVIDENDS. The Articles of
Incorporation in effect restrict the payment of dividends on common stock of the
Company to 75% of net income available therefor if the percentage of Common
Stock Equity to Total Capitalization, as defined, is between 20% and 25%, and to
50% of such net income if such percentage is less than 20%. At any time when
Common Stock Equity is 25% or more of Total Capitalization, the Company may not
declare dividends on the common stock that would reduce Common Stock Equity
below 25% of Total Capitalization, except as hereinbefore provided. Certain
other limitations on the payment of common stock dividends also exist in the
Articles of Incorporation. In addition, certain limitations on the payment of
common stock dividends exist in the Company's bond indentures.
CERTAIN TERMS APPLICABLE TO REDEMPTION. In general, at any time when
dividends payable on any Preferred Stock are in default, the Company may not (1)
make any payment, or set aside funds for payment, into any sinking find for the
purchase or redemption of any shares of the Preferred Stock, or (2) redeem,
purchase or otherwise acquire less than all of the shares of the Preferred
Stock, in either case unless approval is obtained under the Holding Company Act.
Any shares of the Preferred Stock which are redeemed, purchased or acquired
shall be retired and cancelled.
TRANSFER AGENT AND REGISTRAR. The transfer agent and registrar for the New
Preferred Stock is Mellon Securities Trust Company.
9
RATIOS OF EARNINGS TO FIXED CHARGES AND RATIOS OF EARNINGS
TO FIXED CHARGES AND PREFERRED DIVIDENDS
The Company has calculated ratios of earnings to fixed charges and ratios
of earnings to fixed charges and preferred dividends pursuant to Item 503 of SEC
Regulation S-K as follows:
TWELVE MONTHS ENDED
--------------------------------------------------------------------
DECEMBER 31,
-------------------------------------------------------- JUNE 30,
1988 1989 1990 1991 1992 1993
-------- -------- -------- -------- -------- --------
Ratios of Earnings to Fixed
Charges(a).......................... 2.22 1.04(c) 2.42 2.36 2.37 3.66(d)
Ratios of Earnings to Fixed Charges
and Preferred Dividends(a)(b)....... 1.72 1.00(c) 1.93 1.94 1.97 2.99(d)
- ------------
(a) "Earnings", as defined by SEC Regulation S-K, represent the aggregate of (1)
net income, (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 interest
applicable to rentals charged to operating expenses.
(b) "Preferred Dividends," as defined by SEC Regulation S-K, are computed by
dividing the preferred dividend requirement by one hundred percent (100%)
minus the effective income tax rate.
(c) Earnings for the twelve months ended December 31, 1989 include the impact of
the write-off of $60 million of deferred Grand Gulf 1-related costs,
pursuant to an agreement between the Company and the Mississippi Public
Service Commission.
(d) Earnings for the twelve months ended June 30, 1993 include the $52.2 million
pre-tax cumulative effect as of January 1, 1993 of a change in accounting
principle to provide for the accrual of estimated unbilled revenues.
EXPERTS AND LEGALITY
The financial statements and the related financial statement schedules
incorporated in this Prospectus by reference from the Company's Annual Report on
Form 10-K, have been audited by Deloitte & Touche, independent auditors, as
stated in their reports which are incorporated herein by reference, and have
been so incorporated in reliance upon the reports of such firm given upon their
authority as experts in auditing and accounting.
With respect to unaudited interim financial information which is
incorporated herein by reference, Deloitte & Touche have applied limited
procedures in accordance with professional standards for review of such
information. However, as stated in their reports included in the Company's
Quarterly Reports on Form 10-Q and incorporated by reference herein, they did
not audit and they do not express an opinion on that interim financial
information. Accordingly, the degree of reliance on their reports on such
information should be restricted in light of the limited nature of the review
procedures applied. Deloitte & Touche are not subject to the liability
provisions of Section 11 of the Securities Act of 1933 for their reports on the
unaudited interim financial information because those reports are not "reports"
or "parts" of the Registration Statement prepared or certified by an accountant
within the meaning of Sections 7 and 11 of that Act.
The statements as to matters of law and legal conclusions made under
"Description of the New G&R Bonds" and "Description of the New Preferred Stock"
have been reviewed by Wise Carter Child & Caraway, Professional Association,
General Counsel for the Company, and by Reid & Priest, counsel for the Company,
and are set forth herein in reliance upon the opinions of said firms,
respectively, and upon their authority as experts. The statements made herein or
in the Incorporated Documents as to matters of law and legal conclusions, based
on the belief or opinion of the Company or otherwise, pertaining to titles to
properties, franchises and other operating rights of the Company, regulations to
which the Company is subject and any legal proceedings to which the Company is a
party, are made on the authority of Wise Carter Child & Caraway, Professional
Association, and such statements are included in such documents and herein in
reliance upon their authority as experts.
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The legality of the New G&R Bonds and the New Preferred Stock will be
passed upon for the Company by Wise Carter Child & Caraway, Professional
Association, P.O. Box 651, Jackson, Mississippi, and Reid & Priest, 40 West 57th
Street, New York, New York, and for the underwriter(s), dealer(s), agent(s) or
purchaser(s) by Winthrop, Stimson, Putnam & Roberts, One Battery Park Plaza, New
York, New York. However, all legal matters pertaining to the organization of the
Company, titles to property, franchises and the lien of the G&R Mortgage, and
all matters of Mississippi law will be passed upon only by Wise Carter Child &
Caraway, Professional Association.
PLAN OF DISTRIBUTION
The Company may sell the New G&R Bonds and the New Preferred Stock in one
or more sales in any of three ways: (1) through one or more underwriters or
dealers; (2) directly to a limited number of purchasers or to a single
purchaser; or (3) through one or more agents. The Prospectus Supplement relating
to a series of the New G&R Bonds ("Offered G&R Bonds") or a series of the New
Preferred Stock ("Offered Stock") will set forth the terms of the offering, as
applicable, of the Offered G&R Bonds or the Offered Stock, including the name or
names of any underwriters, dealers or agents, the purchase price of such Offered
G&R Bonds or Offered Stock, and the proceeds to the Company from such sale, any
items constituting underwriters' compensation, any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers. Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
The underwriter or underwriters with respect to a particular underwritten
offering of the Offered G&R Bonds or Offered Stock will be named in the
Prospectus Supplement relating to such offering.
If underwriters are involved in the sale, the Offered G&R Bonds or Offered
Stock 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 the Offered G&R Bonds or Offered
Stock will be subject to certain conditions precedent, and the underwriters will
be obligated to purchase all such Offered G&R Bonds or Offered Stock if any are
purchased; provided that the agreement between the Company and the underwriter
or underwriters providing for the sale of the Offered G&R Bonds or Offered Stock
may provide that under certain circumstances involving a default of
underwriters, less than all of the Offered G&R Bonds or Offered Stock may be
purchased.
Offered G&R Bonds or Offered Stock may be sold directly by the Company or
through agents designated by the Company from time to time. The Prospectus
Supplement will set forth the name of any agent involved in the offer or sale of
the Offered G&R Bonds or Offered Stock in respect of which the Prospectus
Supplement is delivered as well as any commissions payable by the Company to
such agent. Unless otherwise indicated in the Prospectus Supplement, any such
agent will be acting on a best efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase Offered G&R Bonds or Offered Stock from the Company at
the public offering price set forth in the Prospectus Supplement pursuant to
delayed delivery contracts providing for payment and delivery on a specified
date in the future. Such contracts will be subject to those conditions set forth
in the Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Each Prospectus Supplement relating to a particular offering of Offered G&R
Bonds or Offered Stock will contain a statement (1) as to whether or not the
Company is able to predict the existence of a secondary market for such
securities and, if such existence is predicted, as to the extent of such
secondary market, and (2) if such securities are to be purchased by an
underwriter or underwriters, as to whether or not such underwriter or
underwriters intend to make a market in such securities.
Subject to certain conditions, the Company may agree to indemnify any
underwriters, dealers, agents or purchasers and their controlling persons
against certain civil liabilities, including liabilities under the Securities
Act of 1933.
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