As filed with the Securities and Exchange Commission on October 1, 2001
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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Sempra Energy California 33-0732627
Sempra Energy Global
Enterprises California 33-0783483
Sempra Energy Capital Trust
II Delaware 52-6988598
Sempra Energy Capital Trust
III Delaware 52-6988599
(State or other jurisdiction (I.R.S. Employer
(Exact name of registrant of Identification)
incorporation or
as specified in its charter) organization)
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101 Ash Street
San Diego, California 92101
(619) 696-2000
(Name, address, including zip code, and telephone number,
including area code, of each registrant's principal executive offices)
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Copies to:
John R. Light, Esq.
Executive Vice President and General Counsel
101 Ash Street
San Diego, California 92101
(619) 696-2034
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Approximate date of commencement of proposed sale to the public: From time
to time after the registration statement becomes effective, as determined by
market and other conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration for the same offering. [_]
If this Form is a post-effective amended filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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Proposed maximum
aggregate Amount of
Title of each class of securities Amount to be offering Registration
to be registered registered(1)(2)(3) price(3)(4) Fee
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Debt securities, common
stock, without par value,
and preferred stock,
without par value, warrants
to purchase debt
securities, common stock or
preferred stock, securities
purchase contracts,
securities purchase units
and depositary shares of
Sempra Energy.............
Class A junior participant
preferred stock purchase
rights, without par value,
of Sempra Energy(5).......
Debt securities and warrants
to purchase debt securities
of Sempra Energy Global
Enterprises(6)............
Guarantees of debt
securities of Sempra Energy
Global Enterprises by
Sempra Energy.............
Trust preferred securities
of Sempra Energy Capital
Trust II and Sempra Energy
Capital Trust III(7)......
Guarantees of trust
preferred securities of the
Trusts by Sempra
Energy(7).................
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Total................... $2,000,000,000 $2,000,000,000 $500,000
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(1) An indeterminate principal amount or number of debt securities, common
stock, preferred stock, guarantees, warrants to purchase common stock,
preferred stock and debt securities, stock purchase contracts, stock
purchase units and depositary shares as may be issued in the event Sempra
Energy elects to offer fractional interests in preferred stock and such
indeterminate principal amounts or number of debt securities, common stock
or preferred stock as may be issued upon conversion of, or in exchange for,
or upon exercise of, or pursuant to, warrants, or convertible or
exchangeable debt securities, stock purchase contracts or stock purchase
units or preferred stock that provides for exercise or conversion into or
purchase of such securities of Sempra Energy and an indeterminate principal
amount of debt securities and warrants to purchase debt securities of
Sempra Energy Global Enterprises and an indeterminate number of trust
preferred securities of the Sempra Energy Capital Trust II and Sempra
Energy Capital Trust III as may from time to time be issued at
indeterminate prices, with an aggregate offering price not to exceed
$2,000,000,000. Debt securities may be issued and sold to the Trusts, in
which event the debt securities may later be distributed to the holders of
trust preferred securities.
(2) In the United States dollars or the equivalent thereof in any other
currency, composite currency or currency unit as shall result in an
aggregate initial offering price for all securities of $2,000,000,000.
(3) This amount represents the principal amount of any debt securities issued
at their stated principal amount, the issue price of any debt securities
issued at a discount form the stated principal amount, the issue price of
any preferred stock, warrants to purchase common stock, preferred stock and
debt securities, stock purchase contracts, stock purchase units, depositary
shares and trust preferred securities and the amount computed pursuant to
Rule 457(c) for any common stock.
(4) Estimated solely for the purpose of calculating the registration fee, which
is calculated in accordance with Rule 457(o) of the rules and regulations
under the Securities Act of 1933. Rule 457(o) permits the registration fee
to be calculated on the basis of the maxim offering price of all the
securities listed and, therefore, the table does not specify by each class
information as to the amount to be registered, the proposed maximum
offering price per unit or the proposed maximum aggregate offering price.
(5) The rights are initially carried and traded with the common stock. The
value attributable to the rights, if any, is reflected in the value of the
common stock.
(6) Also includes an indeterminate number of securities that may be issued upon
exercise, conversion or exchange of or purchase pursuant to any securities
registered hereunder that provide for conversion or exchange.
(7) Includes the rights of holders of the trust preferred securities under the
guarantees of trust preferred securities and back-up undertakings,
consisting of obligations by Sempra Energy, as set forth in the declaration
of trust, the applicable indenture and any supplemental indenture thereto,
in each case, as further described in the registration statement. No
separate consideration will be received for any guarantees or any back-up.
----------------
The registrants hereby amend this registration statement on such date or
dates as maybe necessary to delay its effective date until the registrants
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Securities Exchange Commission, acting pursuant
to said Section 8(1), may determine.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this preliminary prospectus is not complete and may be +
+changed. We not sell these securities until the registration statement filed +
+with the Securities and Exchange Commission is effective. This preliminary +
+prospectus is not an offer to sell these securities and it is not soliciting +
+an offer to buy these securities in any state where the offer of sale is not +
+permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED OCTOBER 1, 2001
PRELIMINARY PROSPECTUS
$2,000,000,000
SEMPRA ENERGY
Debt Securities, Common Stock, Preferred Stock, Guarantees, Warrants to
Purchase Debt
Securities, Common Stock and Preferred Stock, Securities Purchase Contracts,
Securities
Purchase Units and Depositary Shares
SEMPRA ENERGY GLOBAL ENTERPRISES
Debt Securities Guaranteed by Sempra Energy and Warrants to Purchase Debt
Securities
SEMPRA ENERGY CAPITAL TRUST II
SEMPRA ENERGY CAPITAL TRUST III
Trust Preferred Securities Guaranteed by Sempra Energy
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We may offer and sell the securities from time to time in one or more
offerings. This prospectus provides you with a general description of the
securities we may offer.
Each time we sell securities we will provide a supplement to this prospectus
that contains specific information about the offering and the terms of the
securities. The supplement may also add, update or change information contained
in this prospectus. You should carefully read this prospectus and the
accompanying prospectus supplement before you invest in any of our securities.
Sempra Energy
Sempra Energy may offer and sell the following securities:
. debt securities
. common stock
. preferred stock
. guarantees of debt securities and trust preferred securities
. warrants to purchase debt securities, common stock and preferred stock
. securities purchase contracts and securities purchase units
. depositary shares
Sempra Energy Global Enterprises
Sempra Energy Global Enterprises may offer and sell debt securities
guaranteed by Sempra Energy and warrants to purchase debt securities.
The Sempra Energy Trusts
Sempra Energy Capital Trust II and Sempra Energy Capital Trust III may offer
and sell trust preferred securities guaranteed by Sempra Energy.
-----------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
The date of this prospectus is , 2001.
TABLE OF CONTENTS
Page
----
ABOUT THIS PROSPECTUS..................................................... 1
FORWARD-LOOKING STATEMENTS................................................ 2
WHERE YOU CAN FIND MORE INFORMATION....................................... 2
SEMPRA ENERGY............................................................. 4
SEMPRA ENERGY GLOBAL ENTERPRISES.......................................... 4
SEMPRA ENERGY CAPITAL TRUST II AND SEMPRA ENERGY CAPITAL TRUST III........ 5
USE OF PROCEEDS........................................................... 7
RATIO OF SEMPRA ENERGY EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED
STOCK DIVIDENDS.......................................................... 7
DESCRIPTION OF SECURITIES................................................. 8
DESCRIPTION OF DEBT SECURITIES............................................ 8
DESCRIPTION OF SEMPRA ENERGY'S COMMON STOCK AND PREFERRED STOCK........... 20
DESCRIPTION OF WARRANTS................................................... 24
DESCRIPTION OF SECURITIES PURCHASE CONTRACTS AND SECURITIES
PURCHASE UNITS........................................................... 27
DESCRIPTION OF DEPOSITARY SHARES.......................................... 28
DESCRIPTION OF TRUST PREFERRED SECURITIES................................. 31
DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES OF SEMPRA ENERGY PURCHASED
WITH PROCEEDS OF TRUST SECURITIES........................................ 42
DESCRIPTION OF TRUST PREFERRED SECURITIES GUARANTEES...................... 54
RELATIONSHIP AMONG TRUST PREFERRED SECURITIES, PREFERRED SECURITIES
GUARANTEES AND SUBORDINATED DEBT SECURITIES HELD BY EACH TRUST........... 56
GLOBAL SECURITIES......................................................... 56
EXPERTS................................................................... 59
VALIDITY OF THE SECURITIES AND THE GUARANTEES............................. 59
PLAN OF DISTRIBUTION...................................................... 60
ABOUT THIS PROSPECTUS
This prospectus is part of a "shelf" registration statement that we filed
with the United States Securities and Exchange Commission, or the "SEC." By
using a shelf registration statement, we may sell up to $2,000,000,000 offering
price of any combination of the securities described in this prospectus from
time to time and in one or more offerings. This prospectus only provides you
with a general description of the securities that we may offer. Each time we
sell securities, we will provide a supplement to this prospectus that contains
specific information about the terms of the securities. The supplement may also
add, update or change information contained in this prospectus. Before
purchasing any securities, you should carefully read both this prospectus and
the accompanying prospectus supplement, together with the additional
information described under the heading "Where You Can Find More Information."
This prospectus does not contain separate financial statements for Sempra
Energy Global Enterprises or Sempra Energy Capital Trust II or Sempra Energy
Capital Trust III, (collectively, the "trusts"). Sempra Energy files
consolidated financial information with the SEC that includes Sempra Energy
Global Enterprises and each of the trusts. The trusts have no historical
operations and do not have any independent function other than to issue
securities and to purchase subordinated debt securities from Sempra Energy. We
do not believe that additional financial information regarding Sempra Energy
Global Enterprises or the trusts would be useful to you.
You should rely only on the information contained or incorporated by
reference in this prospectus and in any supplement. We have not authorized any
other person to provide you with different information. If anyone provides you
with different or inconsistent information, you should not rely on it. You
should assume that the information appearing in this prospectus and the
accompanying prospectus supplement is accurate as of the date on their
respective covers. Our business, financial condition, results of operations and
prospects may have changed since that date.
1
FORWARD-LOOKING STATEMENTS
This prospectus, any accompanying prospectus supplement and the documents
they incorporate by reference may contain statements that are not historical
fact and constitute "forward-looking statements." When we use words like
"believes," "expects," "anticipates," "intends," "plans," "estimates," "may,"
"should" or similar expressions, or when we discuss our strategy or plans, we
are making forward-looking statements. Forward-looking statements are not
guarantees of performance. They involve risks, uncertainties and assumptions.
Our future results may differ materially from those expressed in these forward-
looking statements. These statements are necessarily based upon various
assumptions involving judgments with respect to the future and other risks,
including, among others:
. national, international, regional and local economic, competitive,
technological, political, legislative and regulatory conditions and
developments;
. actions by the California Public Utilities Commission, the California
State Legislature, the California Department of Water Resources and the
Federal Energy Regulatory Commission;
. capital market conditions, inflation rates, exchange rates and interest
rates;
. energy markets, including the timing and extent of changes in commodity
prices;
. weather conditions;
. business, regulatory and legal decisions;
. the pace of deregulation of retail natural gas and electricity delivery;
. the timing and success of business development efforts; and
. other uncertainties, all of which are difficult to predict and many of
which are beyond our control.
You are cautioned not to rely unduly on any forward-looking statements.
These risks and uncertainties are discussed in more detail under "Business" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in our Annual Report on Form 10-K for the year ended December 31,
2000, our Quarterly Reports on Form 10-Q for the three-month periods ended
March 31, 2001 and June 30, 2001, and other documents on file with the SEC. You
may obtain copies of these documents as described under "Where You Can Find
More Information" in this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
Available Information
Sempra Energy files reports, proxy statements and other information with the
SEC. Information filed with the SEC by Sempra Energy can be inspected and
copied at the Public Reference Room maintained by the SEC at 450 Fifth Street,
N.W., Room 1024, Washington D.C. 20549.
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates. Further information on the operation of the
SEC's Public Reference Room in Washington, D.C. can be obtained by calling the
SEC at 1-800-SEC-0330.
The SEC also maintains a web site that contains reports, proxy statements
and other information about issuers, such as Sempra Energy, who file
electronically with the SEC. The address of that site is http://www.sec.gov.
Sempra Energy's common stock is listed on the New York Stock Exchange (NYSE:
SRE), and reports, proxy statements and other information concerning Sempra
Energy can also be inspected at the offices of the New York Stock Exchange at
20 Broad Street, New York, New York 10005.
2
This prospectus is part of a registration statement that we filed with the
SEC. The full registration statement may be obtained from the SEC or Sempra
Energy, as indicated below. Forms of the indentures, the declarations of trust
and other documents establishing the terms of the offered securities and the
guarantees are filed as exhibits to the registration statement. Statements in
this prospectus about these documents are summaries. You should refer to the
actual documents for a more complete description of the relevant matters.
Incorporation by Reference
The rules of the SEC allow us to "incorporate by reference" information into
this prospectus, which means that we can disclose important information to you
by referring you to another document filed separately with the SEC. The
information incorporated by reference is deemed to be part of this prospectus,
and later information that we file with the SEC will automatically update and
supersede that information. The prospectus incorporates by reference the
documents set forth below that have been previously filed with the SEC. These
documents contain important information about Sempra Energy.
SEC Filings (File No. 1-14201) Period
------------------------------ ------
Annual Report on Form 10-K.......... Year ended December 31, 2000
Quarterly Reports on Form 10-Q...... Three-month periods ended March 31,
2001 and June 30, 2001
Current Reports on Form 8-K......... Filed January 24, 2001, January 30,
2001, February 16, 2001, April 27,
2001, June 19, 2001, June 29,
2001, July 16, 2001 and July 27,
2001
Registration Statement on Form 8-A.. Filed June 5, 1998
We are also incorporating by reference all additional documents that we file
with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, between the date of this prospectus and the
termination of the offering of securities described in this prospectus.
Sempra Energy will provide without charge to each person to whom a copy of
this prospectus has been delivered a copy of any and all of these filings. You
may request a copy of these filings by writing or telephoning us at:
Sempra Energy
101 Ash Street
San Diego, California 92101
Attention: Corporate Secretary
Telephone: (619) 696-2034
3
SEMPRA ENERGY
Sempra Energy, based in San Diego, is a Fortune 500 energy services company.
We were formed in connection with a business combination of Pacific Enterprises
and Enova Corporation in which the shareholders of the two companies became our
shareholders. The combination was completed and our shares began trading in
June 1998.
Through two regulated utility subsidiaries, Southern California Gas Company
and San Diego Gas & Electric Company, we serve over 21 million consumers, the
largest customer base of any gas, electric or combination gas and electric
utility in the United States. Natural gas service is provided throughout
Southern California and portions of Central California through over 5.7 million
active meters. Electric service is provided throughout San Diego County and
portions of Orange County, both in Southern California, through over 1.2
million active meters.
Through other subsidiaries, we also provide other energy-related products
and services. These subsidiaries include Sempra Energy Solutions, Sempra Energy
Trading, Sempra Energy Resources, Sempra Energy Services Company and Sempra
Energy International. Sempra Energy Solutions is a provider of energy-related
products and services to commercial, industrial, governmental, institutional
and consumer markets. Sempra Energy Trading is a wholesale trader of physical
and financial energy products, including natural gas, power, crude oil and
associated commodities. Sempra Energy Trading serves a broad range of customer,
including electric and gas utilities, industrial and large commercial end
users, and major energy markets while specializing in high-volume transactions.
Sempra Energy Resources acquires and develops power plants for the competitive
market and operates natural gas storage, production and transportation assets.
Sempra Energy Resources' power plants use state-of-the-art, combined-cycle
power generation technology and natural gas to generate electricity for the
wholesale market and retail electric providers, including utilities, marketers
and large energy users. Sempra Energy Services Company is a provider of energy-
efficiency engineering services for government and institutional customers.
Sempra Energy International engages in energy-infrastructure projects outside
the United States. It currently has interests in companies that provide natural
gas and electricity services in Argentina, Canada, Chile, Mexico, Peru and
Uruguay.
Our principal executive offices are located at 101 Ash Street, San Diego,
California 92101 and our telephone number is (619) 696-2034.
SEMPRA ENERGY GLOBAL ENTERPRISES
Sempra Energy Global Enterprises is a wholly owned subsidiary of Sempra
Energy. It is a holding company for many of the subsidiaries of Sempra Energy
that are not subject to California utility regulation. Its principal direct and
indirect subsidiaries currently are:
. Sempra Energy Solutions, a provider of energy-related products and
services to commercial, industrial, governmental, institutional and
consumer markets. Its principal subsidiaries are Sempra Energy Trading,
Sempra Energy Resources and Sempra Energy Services Company.
. Sempra Energy Trading, a wholesale trader of physical and financial
energy products, including natural gas, power, crude oil and associated
commodities. Sempra Energy Trading serves a broad range of customers,
including electric and gas utilities, industrial and large commercial end
users, and major energy marketers. It specializes in high-volume
transactions and provides its customers with customized energy delivery
and pricing programs.
. Sempra Energy Resources, a company that acquires and develops power
plants for the competitive market and operates natural gas storage,
production and transportation assets. Sempra Energy Resources' power
plants use state-of-the-art, combined-cycle power generation technology
and natural gas to generate electricity for the wholesale market and
retail electric providers, including utilities, marketers and large
energy users.
4
. Sempra Energy Services Company, a provider of energy-efficiency
engineering services for government and institutional customers.
. Sempra Energy International, a company that engages in energy-
infrastructure projects outside the United States. It currently has
interests in companies that provide natural gas and electricity services
in Argentina, Chile, Mexico and Peru.
Sempra Energy Global Enterprises may, in the future, engage in other
businesses.
Sempra Energy Global Enterprises' offices are located at 101 Ash Street,
San Diego, California 92101 and the telephone number is (619) 696-2034.
SEMPRA ENERGY CAPITAL TRUST II AND SEMPRA ENERGY CAPITAL TRUST III
Sempra Energy created Sempra Energy Capital Trust II and Sempra Energy
Capital Trust III. Sempra Energy will file an Amended and Restated Declaration
of Trust (a "Declaration") for each trust, which will state the terms and
conditions for each trust to issue and sell its trust preferred securities and
trust common securities. A form of Declaration is filed as an exhibit to the
registration statement of which this prospectus forms a part.
Each trust exists solely to:
. issue and sell its trust preferred securities (representing undivided
beneficial interests in the trust) to investors;
. issue and sell its trust common securities (representing undivided
beneficial interests in the trust) to Sempra Energy;
. use the proceeds from the sale of its trust preferred and common
securities to purchase a series of Sempra Energy's subordinated debt
securities;
. distribute the cash payments it receives on the subordinated debt
securities it owns to the holders of its trust preferred and common
securities;
. maintain its status as a grantor trust for federal income tax purposes;
and
. engage in other activities that are necessary or incidental to these
purposes.
Sempra Energy will purchase all of the trust common securities of each
trust. The trust common securities will represent an aggregate liquidation
amount equal to at least 3% of each trust's total capitalization. The trust
preferred securities will represent the remaining portion of the trust's total
capitalization. The trust common securities will have terms substantially
identical to, and will rank equal in priority of payment with, the trust
preferred securities. However, if Sempra Energy defaults on the related
subordinated debt securities, then cash distributions and liquidation,
redemption and other amounts payable on the trust common securities will be
subordinate to the trust preferred securities in priority of payment.
The trust preferred securities will be guaranteed by Sempra Energy as
described later in this prospectus.
Sempra Energy has appointed six trustees to conduct each trust's business
and affairs:
. The Bank of New York ("property trustee");
. The Bank of New York ("Delaware trustee");
. The Bank of New York ("securities trustee"); and
. Three Sempra Energy officers ("regular trustees").
5
Only Sempra Energy, as owner of the trust common securities, can remove or
replace the trustees. In addition, Sempra Energy can increase or decrease the
number of trustees.
Sempra Energy will pay all fees and expenses related to each trust and each
offering of the related trust preferred securities and will pay all ongoing
costs and expenses of each trust, except the respective trust's obligations
under the related trust preferred and common securities.
The trusts will not have separate financial statements. The statements would
not be material to holders of the trust preferred securities because no trust
will have any independent operations. Each trust exists solely for the reasons
summarized above.
6
USE OF PROCEEDS
Unless stated otherwise in the applicable prospectus supplement, the net
proceeds from the sale of the offered securities will be:
. used by Sempra Energy and/or its subsidiaries for general corporate
purposes, including investing in unregulated business activities and
reducing short-term debt incurred to provide interim financing for such
purposes; and
. used by the respective trusts to purchase subordinated debt securities of
Sempra Energy, which will in turn use the proceeds from the issuance of
subordinated debt securities for the purposes stated above.
RATIO OF SEMPRA ENERGY EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS
The following table sets forth the ratio of earnings to combined fixed
charges and preferred stock dividends for Sempra Energy for each of the five
years in the five-year period ended December 31, 2000 and for each of the six-
month periods ended June 30, 2000 and 2001:
Six
Months
Ended
Year Ended December 31, June 30,
------------------------ ---------
1996 1997 1998 1999 2000 2000 2001
---- ---- ---- ---- ---- ---- ----
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends.. 3.67 3.75 2.73 3.19 2.91 2.77 3.46
7
DESCRIPTION OF SECURITIES
The following is a general description of the terms and provisions of the
securities we may offer and sell by this prospectus. These summaries are not
meant to be a complete description of each security. This prospectus and any
accompanying prospectus supplement will contain the material terms and
conditions for each security. The accompanying prospectus supplement may add,
update or change the terms and conditions of the securities as described in
this prospectus. For more information about the securities offered by us,
please refer to:
. the indenture between Sempra Energy and U.S. Bank Trust National
Association, as trustee, relating to the issuance of each series of
senior debt securities by Sempra Energy (the "senior indenture");
. the indenture between Sempra Energy and The Bank of New York, as trustee,
relating to the issuance of each series of subordinated debt securities
by Sempra Energy (the "subordinated indenture");
. the indenture among Sempra Energy Global Enterprises, Sempra Energy, as
Guarantor, and U.S. Bank Trust National Association, as trustee, relating
to the issuance of each series of senior debt securities by Sempra Energy
Global Enterprises;
. the Declaration of each trust; and
. Sempra Energy's guarantee of the trust preferred securities issued by
each trust.
Forms of these documents are filed as exhibits to the registration
statement. The indentures listed above are sometimes collectively referred to
as the "indentures" and individually referred to as an "indenture." The
indentures are subject to and governed by the Trust Indenture Act of 1939, as
amended, and may be supplemented or amended from time to time following their
execution.
DESCRIPTION OF DEBT SECURITIES
Unless indicated differently in a prospectus supplement, the following
description sets forth the general terms and provisions of the debt securities
that Sempra Energy and Sempra Energy Global Enterprises may offer by this
prospectus. The debt securities may be issued as senior debt securities or
subordinated debt securities in the case of Sempra Energy and as senior debt
securities in the case of Sempra Energy Global Enterprises.
The senior debt securities will be governed by the senior indenture and the
subordinated debt securities will be governed by the subordinated indenture.
Each indenture gives the issuer broad authority to set the particular terms of
each series of debt securities, including the right to modify certain of the
terms contained in the indenture. The particular terms of a series of debt
securities and the extent, if any, to which the particular terms of the issue
modify the terms of the applicable indenture will be described in the
accompanying prospectus supplement relating to such series of debt securities.
Each indenture contains the full legal text of the matters described in this
section. Because this section is a summary, it does not describe every aspect
of the debt securities or the applicable indentures. This summary is subject to
and qualified in its entirety by reference to all the provisions of the
applicable indenture, including definitions of terms used in such indenture. We
also include references in parentheses to certain sections of the indentures.
Whenever we refer to particular sections or defined terms of the indentures in
this prospectus or in a prospectus supplement, these sections or defined terms
are incorporated by reference into this prospectus or into the prospectus
supplement. This summary also is subject to and qualified by reference to the
description of the particular terms of a particular series of debt securities
described in the applicable prospectus supplement or supplements.
8
General
Sempra Energy and Sempra Energy Global Enterprises may issue an unlimited
amount of debt securities under the indentures in one or more series. Neither
company is required to issue all debt securities of one series at the same time
and, unless otherwise provided in a prospectus supplement, either company may
reopen a series, without the consent of the holders of the debt securities of
that series, for issuances of additional debt securities of that series.
The debt securities of Sempra Energy and Sempra Energy Global Enterprises
will be unsecured obligations of the company issuing the security, and the debt
securities of Sempra Energy Global Enterprises will be unconditionally
guaranteed by Sempra Energy as to payment of principal, premium, if any, and
interest as described under the caption "--Guarantee of Sempra Energy; Holding
Company Structure" contained in this prospectus.
Prior to the issuance of each series of debt securities, the terms of the
particular securities will be specified in either a supplemental indenture
(including any pricing supplement) and a board resolution of the issuing
company or in one or more officers' certificates of the issuing company
pursuant to a supplemental indenture or a board resolution. We refer you to the
applicable prospectus supplement for a description of the following terms of
each series of debt securities:
(a) the title of the debt securities;
(b) any limit upon the principal amount of the debt securities;
(c) the date or dates on which principal will be payable or how to
determine the dates;
(d) the rate or rates or method of determination of interest; the date
from which interest will accrue; the dates on which interest will be
payable, which we refer to as the "interest payment dates"; and any record
dates for the interest payable on the interest payment dates;
(e) any obligation or option of the issuing company to redeem, purchase
or repay debt securities, or any option of the registered holder to require
the issuing company to redeem or repurchase debt securities, and the terms
and conditions upon which the debt securities will be redeemed, purchased
or repaid;
(f) the denominations in which the debt securities will be issuable (if
other than denominations of $1,000 and any integral multiple thereof);
(g) whether the debt securities are to be issued in whole or in part in
the form of one or more global debt securities and, if so, the identity of
the depositary for the global debt securities; and
(h) any other terms of the debt securities that may be different from
those described below.
(See Section 301.)
Ranking
The senior debt securities will be the unsecured and unsubordinated
obligations of the company issuing the security. The indebtedness represented
by the senior debt securities will rank equally with all other unsecured and
unsubordinated debt of the company issuing the senior debt security (either
Sempra Energy or Sempra Energy Global Enterprises). The indebtedness
represented by the subordinated debt securities will rank junior and
subordinate in right of payment to the prior payment in full of the senior debt
of Sempra Energy, to the extent and in the manner set forth under the caption
"--Subordination" below and as may be set forth in a prospectus supplement. The
debt securities are obligations of Sempra Energy and Sempra Energy Global
Enterprises exclusively, and are not the obligations of any of their respective
subsidiaries. Because each company conducts its operations primarily through
its respective subsidiaries and substantially all of its respective
consolidated assets are held by its respective subsidiaries, the debt
securities will be effectively subordinated to all existing and future
indebtedness and other liabilities of each issuing company's respective
subsidiaries.
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Guarantee of Sempra Energy; Holding Company Structure
Sempra Energy will unconditionally guarantee the payment of principal of and
any premium and interest on the debt securities issued by Sempra Energy Global
Enterprises, when due and payable, whether at the stated maturity date, by
declaration of acceleration, call for redemption or otherwise, in accordance
with the terms of the debt securities and the applicable indenture. These
guarantees are referred to as the "debt securities guarantees" in this
prospectus. The debt securities guarantees will remain in effect until the
entire principal of and any premium and interest on the debt securities has
been paid in full or otherwise discharged in accordance with the provisions of
the applicable indenture.
Sempra Energy conducts its operations primarily through its subsidiaries and
substantially all of its consolidated assets are held by its subsidiaries.
Accordingly, Sempra Energy's cash flow and its ability to meet its obligations
under its debt securities and the debt securities guarantees are largely
dependent upon the earnings of its subsidiaries and the distribution or other
payment of these earnings to Sempra Energy in the form of dividends or loans or
advances and repayment of loans and advances from Sempra Energy. Except for
Sempra Energy Global Enterprises with respect to repayment of their debt
securities, the subsidiaries are separate and distinct legal entities and have
no obligation to pay any amounts due on the Sempra Energy debt securities or to
make any funds available for payment of amounts due on these debt securities or
the debt securities guarantees.
Because Sempra Energy is a holding company, its obligations under the debt
securities and the debt securities guarantees will be structurally subordinated
to all existing and future liabilities of its subsidiaries. Therefore, Sempra
Energy's rights and the rights of its creditors, including the rights of the
holders of the debt securities issued by Sempra Energy and any debt securities
guarantees, to participate in the assets of any subsidiary upon the liquidation
or reorganization of the subsidiary will be subject to the prior claims of the
subsidiary's creditors. To the extent that Sempra Energy may itself be a
creditor with recognized claims against any of its subsidiaries, Sempra
Energy's claims would still be effectively subordinated to any security
interest in, or mortgages or other liens on, the assets of the subsidiary and
would be subordinated to any indebtedness or other liabilities of the
subsidiary that are senior to the claims held by Sempra Energy. Sempra Energy
expects to incur, and that each of its subsidiaries will incur, substantial
additional amounts of indebtedness.
Sempra Energy Global Enterprises also conducts its operations primarily
through its subsidiaries and substantially all of its consolidated assets are
held by its subsidiaries. Accordingly, the discussion above is equally
applicable to Sempra Energy Global Enterprises and the debt securities it
issues.
Payment of Debt Securities--Interest
Unless indicated differently in a prospectus supplement, the issuing company
will pay interest on the debt securities on each interest payment date by check
mailed to the person in whose name the debt securities are registered as of the
close of business on the regular record date relating to the interest payment
date.
However, if the issuing company defaults in paying interest on a debt
security, the issuing company will pay defaulted interest in either of the two
following ways:
(a) The issuing company will first propose to the trustee a payment date
for the defaulted interest. Next, the trustee will choose a special record
date for determining which registered holders are entitled to the payment.
The special record date will be between ten and 15 days before the proposed
payment date. Finally, the issuing company will pay the defaulted interest
on the payment date to the registered holder of the debt security as of the
close of business on the special record date.
(b) Alternatively, the issuing company can propose to the trustee any
other lawful manner of payment that is consistent with the requirements of
any securities exchange on which the debt securities are listed for
trading. If the trustee thinks the proposal is practicable, payment will be
made as proposed.
(See Section 307.)
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Payment of Debt Securities--Principal
The company issuing the debt securities will pay principal of and any
premium and interest on the debt securities at stated maturity, upon redemption
or otherwise, upon presentation of the debt securities at the office of the
paying agent, which initially will be the trustee or such other paying agent
designated in accordance with the applicable indenture. Any other paying agent
initially designated for the debt securities of a particular series will be
named in the applicable prospectus supplement.
If any interest payment date, redemption date or the maturity date of the
debt securities is not a business day at any place of payment, then payment of
the principal, premium, if any, and interest may be made on the next business
day at that place of payment. In that case, no interest will accrue on the
amount payable for the period from and after the applicable interest payment
date, redemption date or maturity date, as the case may be.
The issuing company will pay principal of and any premium on the debt
securities at stated maturity, upon redemption or otherwise, upon presentation
of the debt securities at the office of the paying agent. In the discretion of
the company issuing the debt securities, the issuing company may appoint one or
more additional paying agents and security registrars and designate one or more
additional places for payment and for registration of transfer, but must at all
times maintain a place of payment of the debt securities and a place for
registration of transfer of the debt securities in the Borough of Manhattan,
the City of New York. (See Section 1002.)
Form; Transfers; Exchanges
The debt securities will be issued
(a) only in fully registered form;
(b) without interest coupons; and
(c) on denominations that are even multiples of $1,000.
You may have your debt securities divided into debt securities of smaller
denominations (of at least $1,000) or combined into debt securities of larger
denominations, as long as the total principal amount is not changed. This is
called an "exchange." (See Section 305.)
You may exchange or transfer debt securities at the office of the trustee.
The trustee acts as our agent for registering debt securities in the names of
holders and transferring debt securities. The company issuing the debt
securities may appoint another agent or act as its own agent for this purpose.
The entity performing the role of maintaining the list of registered holders is
called the "security registrar." It will also perform transfers. (See Section
305.)
In the discretion of the company issuing the debt securities, the issuing
company may change the place for registration of transfer of the debt
securities and may remove and/or appoint one or more additional security
registrars. (See Sections 305 and 1002.)
There will be no service charge for any transfer or exchange of the debt
securities, but you may be required to pay a sum sufficient to cover any tax or
other governmental charge payable in connection with the transfer or exchange.
We may block the transfer or exchange of (a) debt securities during a period of
15 days prior to giving any notice of redemption or (b) any debt security
selected for redemption in whole or in part, except the unredeemed portion of
any debt security being redeemed in part. (See Section 305.)
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Optional Redemption
Unless indicated differently in a prospectus supplement, all or a portion of
the debt securities may be redeemed at the option of the issuing company at any
time or from time to time. The redemption price for the debt securities to be
redeemed on any redemption date will be equal to the greater of the following
amounts:
. 100% of the principal amount of the debt securities being redeemed on the
redemption date; or
. the sum of the present values of the remaining scheduled payments of
principal and interest on the debt securities being redeemed on that
redemption date (not including any portion of any payments of interest
accrued to the redemption date) discounted to the redemption date on a
semiannual basis at the Adjusted Treasury Rate (as defined below) plus a
number of basis points as set forth in any accompanying prospectus
supplement, as determined by the Reference Treasury Dealer (as defined
below),
plus, in each case, accrued and unpaid interest thereon to the redemption date.
Notwithstanding the foregoing, installments of interest on the debt securities
that are due and payable on interest payment dates falling on or prior to a
redemption date will be payable on the interest payment date to the registered
holders as of the close of business on the relevant record date according to
the debt securities and the indenture. The redemption price will be calculated
on the basis of a 360-day year consisting of twelve 30-day months.
The company issuing the debt securities will mail notice of any redemption
at least 30 days but not more than 60 days before the redemption date to each
registered holder of the debt securities to be redeemed. Once notice of
redemption is mailed, the debt securities called for redemption will become due
and payable on the redemption date and at the applicable redemption price, plus
accrued and unpaid interest to the redemption date. If the issuing company
elects to redeem all or a portion of the debt securities, that redemption will
not be conditional upon receipt by the paying agent or the trustee of monies
sufficient to pay the redemption price. (See Section 1104.)
Debt securities will cease to bear interest on the redemption date. The
issuer of the debt securities will pay the redemption price and any accrued
interest once you surrender the debt security for redemption. (See
Section 1105.) If only part of a debt security is redeemed, the trustee will
deliver to you a new debt security of the same series for the remaining portion
without charge. (Section 1106.)
Unless the company issuing the debt securities defaults in payment of the
redemption price, on and after the redemption date interest will cease to
accrue on the debt securities or portions thereof called for redemption.
"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.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Reference Treasury Dealer as having a maturity comparable to
the remaining term of the debt securities to be redeemed 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 such debt securities.
"Comparable Treasury Price" means, with respect to any redemption date, (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 receives fewer than three such Reference
Treasury Dealer Quotations, the average of all such Quotations, or (C) if the
trustee receives only one Reference Treasury Dealer Quotation, such Quotation.
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"Reference Treasury Dealer" means (A) the underwriters referenced in any
applicable prospectus supplement; 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 issuing the debt
securities will substitute therefor another Primary Treasury Dealer; and (B)
any other Primary Treasury Dealer(s) selected by the trustee after consultation
with the issuing company.
"Reference Treasury Dealer Quotation" 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. (New York
City time) on the third business day preceding such redemption date.
Events of Default
An "event of default" occurs with respect to the debt securities of any
series if:
(a) the issuing company does not pay any interest on any debt securities
of the applicable series within 30 days of the due date;
(b) the issuing company does not pay any principal of or premium on any
debt securities of the applicable series on the due date;
(c) the issuing company or, if applicable, the guarantor of the debt
securities remains in breach of a covenant or warranty (excluding covenants
and warranties solely applicable to another series of debt securities
issued under the applicable indenture) in the applicable indenture or the
debt securities of the applicable series for 60 days after it receives a
written notice of default stating it is in breach and requiring remedy of
the breach; the notice must be sent by either the trustee or registered
holders of at least 25% of the principal amount of the outstanding debt
securities of the affected series;
(d) default occurs under any bond, note, debenture or other instrument
evidencing any indebtedness for money borrowed by the issuing company or,
if applicable, the guarantor of the debt securities, excluding any of the
issuing company's subsidiaries (including a default with respect to any
other series of debt securities issued under the applicable indenture), or
under any mortgage, indenture or other instrument under which there may be
issued or by which there may be secured or evidenced any indebtedness for
money borrowed by the issuing company (or the payment of which is
guaranteed by the issuing company or, if applicable, the guarantor of the
debt securities), excluding any of the issuing company's subsidiaries,
whether such indebtedness or guarantee exists on the date of the applicable
indenture or is issued or entered into following the date of the applicable
indenture, if:
(1) either:
. such default results from the failure to pay any such indebtedness
when due; or
. as a result of such default the maturity of such indebtedness has
been accelerated prior to its expressed maturity; and
(2) the principal amount of such indebtedness, together with the
principal amount of any other such indebtedness in default for
failure to pay any such indebtedness when due or the maturity of
which has been so accelerated, aggregates at least $25 million;
(e) the issuing company or, if applicable, the guarantor of the debt
securities files for bankruptcy or other specified events in bankruptcy,
insolvency, receivership or reorganization occur; or
(f) any other event of default specified in the applicable prospectus
supplement for such series occurs.
(See Section 501.)
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No event of default with respect to a series of debt securities necessarily
constitutes an event of default with respect to the debt securities of any
other series issued under the applicable indenture.
Remedies
Acceleration
If an event of default occurs and is continuing with respect to any series
of debt securities, then either the trustee or the registered holders of at
least 25% in principal amount of the outstanding debt securities of that
series may declare the principal amount of all of the debt securities of that
series, together with accrued and unpaid interest thereon, to be due and
payable immediately. (See Section 502.)
Rescission of Acceleration
After the declaration of acceleration has been made with respect to any
series of debt securities and before the trustee has obtained a judgment or
decree for payment of the money due, the declaration and its consequences will
be rescinded and annulled, if:
(a) the company issuing the debt securities of that series pays or
deposits with the trustee a sum sufficient to pay:
(1) all overdue interest on the debt securities of that series, other
than interest which has become due by declaration of acceleration;
(2) the principal of and any premium on the debt securities of that
series which have become due, otherwise than by the declaration of
acceleration, and overdue interest on these amounts;
(3) interest on overdue interest, other than interest which has
become due by declaration of acceleration, on the debt securities of
that series to the extent lawful; and
(4) all amounts due to the trustee under the applicable indenture;
and
(b) all events of default with respect to the debt securities of that
series, other than the nonpayment of the principal and interest which has
become due solely by the declaration of acceleration, have been cured or
waived as provided in the applicable indenture.
(See Section 502.)
For more information as to waiver of defaults, see "--Waiver of Default and
of Compliance" below.
Control by Registered Holders; Limitations
If an event of default with respect to the debt securities of any series
occurs and is continuing, the registered holders of a majority in principal
amount of the outstanding debt securities of that series, voting as a single
class, without regard to the holders of outstanding debt securities of any
other series that may also be in default, will have the right to direct the
time, method and place of:
(a) conducting any proceeding for any remedy available to the trustee
with respect to the debt securities of that series; and
(b) exercising any trust or power conferred on the trustee with respect
to the debt securities of that series.
These rights of registered holders to give directions are subject to the
following limitations:
(a) the registered holders' directions do not conflict with any law or
the applicable indenture; and
(b) the direction is not unduly prejudicial to the rights of holders of
the debt securities of that series who do not join in that action.
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The trustee may also take any other action it deems proper which is
consistent with the registered holders' direction. (See Sections 512 and 603.)
In addition, each indenture provides that no registered holder of debt
securities of any series will have any right to institute any proceeding,
judicial or otherwise, with respect to the applicable indenture or for the
appointment of a receiver or for any other remedy thereunder unless:
(a) that registered holder has previously given the trustee written
notice of a continuing event of default;
(b) the registered holders of at least 25% in aggregate principal amount
of the outstanding debt securities of that series have made written request
to the trustee to institute proceedings in respect of that event of default
and have offered the trustee reasonable indemnity against costs and
liabilities incurred in complying with the request; and
(c) for 60 days after receipt of the notice, the trustee has failed to
institute a proceeding and no direction inconsistent with the request has
been given to the trustee during the 60-day period by the registered
holders of a majority in aggregate principal amount of outstanding debt
securities of that series.
Furthermore, no registered holder will be entitled to institute any action if
and to the extent that the action would disturb or prejudice the rights of
other registered holders of debt securities. (See Section 507.)
However, each registered holder has an absolute and unconditional right to
receive payment when due and to bring a suit to enforce that right. (See
Section 508.)
Notice of Default
The trustee is required to give the registered holders of debt securities of
the affected series notice of any default under the applicable indenture to the
extent required by the Trust Indenture Act, unless the default has been cured
or waived; except that in the case of an event of default of the character
specified above in clause (c) under "--Events of Default," no notice shall be
given to such registered holders until at least 30 days after the occurrence of
the default. The Trust Indenture Act currently permits the trustee to withhold
notices of default (except for certain payment defaults) if the trustee in good
faith determines the withholding of the notice to be in the interests of the
registered holders. (See Section 602.)
The company issuing the debt securities will furnish the trustee with an
annual statement as to its compliance with the conditions and covenants in the
applicable indenture.
Waiver of Default and of Compliance
The registered holders of a majority in aggregate principal amount of the
outstanding debt securities of any series, voting as a single class, without
regard to the holders of outstanding debt securities of any other series, may
waive, on behalf of all registered holders of the debt securities of that
series, any past default under the applicable indenture, except a default in
the payment of principal, premium or interest, or with respect to compliance
with certain provisions of the applicable indenture that cannot be amended
without the consent of the registered holder of each outstanding debt security
of that series. (See Section 513.)
Unless indicated differently in a prospectus supplement, compliance with
certain covenants in the applicable indenture or otherwise provided with
respect to debt securities of any series may be waived prior to the time
specified for compliance by the registered holders of a majority in aggregate
principal amount of the debt securities of such series. (See Section 1006.)
15
Consolidation, Merger and Conveyance of Assets as an Entirety; No Financial
Covenants
Sempra Energy and Sempra Energy Global Enterprises have each agreed not to
consolidate or merge with or into any other entity, or to sell, transfer,
lease or otherwise convey its properties and assets as an entirety or
substantially as an entirety to any entity, unless:
(a) it is the continuing entity (in the case of a merger) or the
successor entity formed by such consolidation or into which it is merged or
which acquires by sale, transfer, lease or other conveyance its properties
and assets, as an entirety or substantially as an entirety, is a
corporation organized and existing under the laws of the United States of
America or any State thereof or the District of Columbia, and expressly
assumes, by supplemental indenture, (i) the due and punctual payment of the
principal, premium and interest on all the debt securities and the
performance of all of the covenants under the indenture and (ii) in the
case of Sempra Energy, the due and punctual payment of all amounts under
the debt securities guarantees; and
(b) 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, has or will have occurred and be continuing.
Neither the applicable indenture nor the debt securities guarantee contains
any financial or other similar restrictive covenants.
(See Section 801.)
Modification of Indenture
Without Registered Holder Consent. Without the consent of any registered
holders of debt securities, the company issuing the debt securities and the
trustee may enter into one or more supplemental indentures for any of the
following purposes:
(a) to evidence the succession of another entity to the company issuing
the debt securities; or
(b) to add one or more covenants for the benefit of the holders of all
or any series of debt securities or to surrender any right or power
conferred upon the company issuing the debt securities; or
(c) to add any additional events of default for all or any series of
debt securities; or
(d) to change or eliminate any provision of the applicable indenture so
long as the change or elimination does not apply to any debt securities
entitled to the benefit of such provision or to add any new provision to
the applicable indenture (in addition to the provisions which may otherwise
be added to the applicable indenture pursuant to the other clauses of this
paragraph) so long as the addition does not apply to any outstanding debt
securities; or
(e) to provide security for the debt securities of any series; or
(f) to establish the form or terms of debt securities of any series, as
permitted by the applicable indenture; or
(g) to evidence and provide for the acceptance of appointment of a
separate or successor trustee; or
(h) to cure any ambiguity, defect or inconsistency or to make any other
changes with respect to any series of debt securities that does not
adversely affect the interests of the holders of debt securities of that
series in any material respect.
(See Section 901.)
With Registered Holder Consent. Subject to the following sentence, the
company issuing the debt securities and the trustee may, with some exceptions,
amend or modify the applicable indenture with the consent of the registered
holders of at least a majority in aggregate principal amount of the debt
securities of
16
each series affected by the amendment or modification. However, no amendment or
modification may, without the consent of the registered holder of each
outstanding debt security affected thereby:
(a) change the stated maturity of the principal or interest on any debt
security or reduce the principal amount, interest or premium payable or
change any place of payment where or the currency in which any debt
security is payable, or impair the right to bring suit to enforce any
payment;
(b) reduce the percentages of registered holders whose consent is
required for any supplemental indenture or waiver;
(c) modify or affect in any manner the terms and conditions of the
obligations of Sempra Energy in respect of the due and punctual payment of
the principal of, or premium, if any or interest on any debt securities
guarantees; or
(d) modify certain provisions in the applicable indenture relating to
supplemental indentures and waivers of certain covenants and past defaults.
A supplemental indenture which changes or eliminates any provision of the
applicable indenture expressly included solely for the benefit of holders of
debt securities of one or more particular series will be deemed not to affect
the interests under the applicable indenture of the holders of debt securities
of any other series.
(See Section 902.)
Defeasance
The indentures provide, unless the terms of the particular series of debt
securities provide otherwise, that the company issuing the debt securities or,
if applicable, the guarantor of the debt securities, may, upon satisfying
several conditions, cause it to be discharged from its respective obligations,
with some exceptions, with respect to any series of debt securities, which we
refer to as "defeasance."
One condition the issuing company or, if applicable, the guarantor of the
debt securities must satisfy is the irrevocable deposit with the trustee, in
trust, of money and/or government obligations which, through the scheduled
payment of principal and interest on those obligations, would provide
sufficient moneys to pay the principal of and any premium and interest on those
debt securities on the maturity dates of the payments or upon redemption.
In addition, the company issuing the debt securities or, if applicable, the
guarantor of the debt securities will be required to deliver an opinion of
counsel to the effect that a holder of debt securities will not recognize
income, gain or loss for federal income tax purposes as a result of the
defeasance and will be subject to federal income tax on the same amounts, at
the same times and in the same manner as if that defeasance had not occurred.
The opinion of counsel must be based upon a ruling of the Internal Revenue
Service or a change in law after the date of the applicable indenture.
(See Article XIII.)
Satisfaction and Discharge
The applicable indenture will cease to be of further effect with respect to
any series of debt securities, and we will be deemed to have satisfied and
discharged all of our obligations under the applicable indenture, except as
noted below, when:
. all outstanding debt securities of such series have become due or will
become due within one year at their stated maturity or on a redemption
date; and
. the issuing company deposits with the trustee, in trust, funds that are
sufficient to pay and discharge all remaining indebtedness on the
outstanding debt securities of such series.
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The company issuing the debt securities and, as applicable, guaranteeing the
debt securities, of such series will remain obligated to pay all other amounts
due under the applicable indenture and guarantee and to perform certain
ministerial tasks as described in the applicable indenture.
(See Section 401.)
Resignation and Removal of the Trustee; Deemed Resignation
The trustee with respect to any series of debt securities may resign at any
time by giving written notice to us. The trustee may also be removed with
respect to the debt securities of any series by act of the registered holders
of a majority in principal amount of the then outstanding debt securities of
such series. No resignation or removal of the trustee and no appointment of a
successor trustee will become effective until the acceptance of appointment by
a successor trustee in accordance with the requirements of the applicable
indenture. Under certain circumstances, the company issuing a series of debt
securities may appoint a successor trustee with respect to such series of debt
securities and if the successor trustee accepts, the trustee will be deemed to
have resigned. (See Section 610.)
Subordination
Unless indicated differently in a prospectus supplement, Sempra Energy's
subordinated debt securities will be subordinated in right of payment to the
prior payment in full of all its senior debt. This means that, upon:
(a) any distribution of the assets of Sempra Energy upon its
dissolution, winding-up, liquidation or reorganization in bankruptcy,
insolvency, receivership or other proceedings; or
(b) acceleration of the maturity of the subordinated debt securities; or
(c) a failure to pay any senior debt or interest thereon when due and
continuance of that default beyond any applicable grace period; or
(d) acceleration of the maturity of any senior debt as a result of a
default,
the holders of all of Sempra Energy's senior debt will be entitled to receive:
. in the case of clauses (a) and (b) above, payment of all amounts due or
to become due on all senior debt; and
. in the case of clauses (c) and (d) above, payment of all amounts due on
all senior debt,
before the holders of any of the subordinated debt securities are entitled to
receive any payment. So long as any of the events in clauses (a), (b), (c) or
(d) above has occurred and is continuing, any amounts payable on the
subordinated debt securities will instead by paid directly to the holders of
all senior debt to the extent necessary to pay the senior debt in full and, if
any payment is received by the subordinated indenture trustee under the
subordinated indenture or the holders of any of the subordinated debt
securities before all senior debt is paid in full, the payment or distribution
must be paid over to the holders of the unpaid senior debt. Subject to paying
the senior debt in full, the holders of the subordinated debt securities will
be subrogated to the rights of the holders of the senior debt to the extent
that payments are made to the holders of senior debt out of the distributive
share of the subordinated debt securities. (See Section 1401.)
"senior debt" means with respect to the subordinated debt securities, the
principal of, and premium, if any, and interest on and any other payment in
respect of indebtedness due pursuant to any of the following, whether
outstanding on the date the subordinated debt securities are issued or
thereafter incurred, created or assumed:
(a) all of the indebtedness of Sempra Energy evidenced by notes,
debentures, bonds or other securities sold by it for money or other
obligations for money borrowed;
18
(b) all indebtedness of others of the kinds described in the preceding
clause (a) assumed by or guaranteed in any manner by Sempra Energy or in
effect guaranteed by Sempra Energy through an agreement to purchase,
contingent or otherwise, as applicable; and
(c) all renewals, extensions or refundings of indebtedness of the kinds
described in either of the preceding clauses (a) and (b), unless, in the
case of any particular indebtedness, renewal, extension or refunding, the
instrument creating or evidencing the same or the assumption or guarantee
of the same by its terms provides that such indebtedness, renewal,
extension or refunding is not superior in right of payment to or is pari
passu with such securities. (See Section 101.)
Due to the subordination, if assets of Sempra Energy are distributed upon
insolvency, certain of its general creditors may recover more, ratably, than
holders of subordinated debt securities. The subordination provisions will not
apply to money and securities held in trust under the satisfaction and
discharge and the defeasance provisions of the applicable subordinated
indenture. (See Section 1410.)
The subordinated debt securities, the subordinated indenture and the trust
preferred securities guarantee do not limit Sempra Energy or any of its
subsidiaries' ability to incur additional indebtedness, including indebtedness
that will rank senior to subordinated debt securities and trust preferred
securities guarantees. Sempra Energy expects that it will incur, and that each
of its subsidiaries will incur, substantial additional amounts of indebtedness
in the future. (See Section 301.)
Conversion Rights
The terms and conditions of any series of debt securities being offered that
are convertible into common stock of Sempra Energy will be set forth in a
prospectus supplement. These terms will include the conversion price, the
conversion period, provisions as to whether conversion will be at the option of
the holder or the company issuing the debt securities, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event that such series of debt securities are redeemed.
Miscellaneous Provisions
Each indenture provides that certain debt securities, including those for
which payment or redemption money has been deposited or set aside in trust as
described under "--Satisfaction and Discharge" above, will not be deemed to be
"outstanding" in determining whether the registered holders of the requisite
principal amount of the outstanding debt securities have given or taken any
demand, direction, consent or other action under the indenture as of any date,
or are present at a meeting of registered holders for quorum purposes. (See
Section 101.)
The company issuing the debt securities will be entitled to set any day as a
record date for the purpose of determining the registered holders of
outstanding debt securities of any series entitled to give or take any demand,
direction, consent or other action under the applicable indenture, in the
manner and subject to the limitations provided in the applicable indenture. In
certain circumstances, the trustee also will be entitled to set a record date
for action by registered holders of any series of outstanding debt securities.
If a record date is set for any action to be taken by registered holders of
particular debt securities, the action may be taken only by persons who are
registered holders of the respective debt securities on the record date. (See
Section 104.)
Governing Law
Each indenture and the related debt securities will be governed by and
construed in accordance with the laws of the State of New York. (See Section
112.)
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DESCRIPTION OF SEMPRA ENERGY'S
COMMON STOCK AND PREFERRED STOCK
Unless indicated differently in a prospectus supplement, this section
describes the terms of Sempra Energy's common stock and preferred stock. The
following description of Sempra Energy's common stock and preferred stock is
only a summary and is qualified in its entirety by reference to the articles of
incorporation and bylaws of Sempra Energy. Therefore, you should read carefully
the more detailed provisions of Sempra Energy's Amended and Restated Articles
of Incorporation, Sempra Energy's Amended and Restated Bylaws, and Sempra
Energy's Rights Agreement, dated May 26, 1998, between Sempra Energy and
First Chicago Trust Company of New York, as rights agent, copies of which are
incorporated by reference as exhibits to the registration statement of which
this prospectus is a part.
General
The authorized capital stock of Sempra Energy consists of (1) 750,000,000
shares of Sempra Energy common stock, without par value, and (2) 50,000,000
shares of preferred stock, without par value. As of June 30, 2001, there were
206,836,453 issued and outstanding shares of Sempra Energy common stock and no
shares of Sempra Energy preferred stock. No other classes of capital stock are
authorized under the Sempra Energy articles of incorporation. The issued and
outstanding shares of Sempra Energy common stock are duly authorized, validly
issued, fully paid, nonassessable and free of preemptive rights.
Sempra Energy Common Stock
The holders of Sempra Energy common stock are entitled to receive such
dividends as the Sempra Energy board of directors may from time to time
declare, subject to any rights of holders of outstanding shares of Sempra
Energy preferred stock. Except as otherwise provided by law, each holder of
Sempra Energy common stock is entitled to one vote per share on each matter
submitted to a vote of a meeting of shareholders, subject to any class or
series voting rights of holders of Sempra Energy preferred stock. Under the
Sempra Energy articles of incorporation, the Sempra Energy board of directors
is classified into three classes each consisting of a number as nearly equal as
possible to one-third of the total number of directors constituting the entire
Sempra Energy board of directors. The holders of shares of Sempra Energy
common stock are not entitled to cumulate votes for the election of directors.
In the event of any liquidation, dissolution or winding up of Sempra Energy,
whether voluntary or involuntary, the holders of shares of Sempra Energy common
stock, subject to any rights of the holders of outstanding shares of Sempra
Energy preferred stock, are entitled to receive any remaining assets of
Sempra Energy after the discharge of its liabilities.
Holders of Sempra Energy common stock are not entitled to preemptive rights
to subscribe for or purchase any part of any new or additional issue of stock
or securities convertible into stock. Sempra Energy common stock does not
contain any redemption provisions or conversion rights and is not liable to
assessment or further call.
Each outstanding share of Sempra Energy common stock is accompanied by a
right to purchase one one-hundredth of a share of Class A Junior Participating
Preferred Stock, without par value, of Sempra Energy at a price of $80 per
right, subject to certain anti-dilution adjustments. The Sempra Energy board of
directors has reserved 7,500,000 shares of such Class A preferred stock for
issuance upon exercise of the rights, as more fully discussed below under the
caption "--Description of Preferred Share Purchase Rights."
The registrar and transfer agent for the Sempra Energy common stock is First
Chicago Trust Company of New York.
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Sempra Energy Preferred Stock
The Sempra Energy board of directors is authorized, pursuant to the Sempra
Energy articles of incorporation, to issue up to 50,000,000 shares of Sempra
Energy preferred stock in one or more series and to fix and determine the
number of shares of Sempra Energy preferred stock of any series, to determine
the designation of any such series, to increase or decrease the number of
shares of any such series subsequent to the issue of shares of that series,
and to determine or alter the rights, preferences, privileges and restrictions
granted to or imposed upon any such series. Currently there are no shares of
Sempra Energy preferred stock outstanding. However, the Sempra Energy board of
directors has reserved 7,500,000 shares of Class A preferred stock for
issuance in connection with rights issued under the Sempra Energy rights
agreement.
Prior to the issuance of shares of each series of Sempra Energy preferred
stock, the board of directors is required to adopt resolutions and file a
certificate of determination with the Secretary of State of the
State of California. The certificate of determination will fix for each series
the designation and number of shares and the rights, preferences, privileges
and restrictions of the shares including, but not limited to, the following:
(a) the title and stated value of the Sempra Energy preferred stock;
(b) voting rights, if any, of the Sempra Energy preferred stock;
(c) any rights and terms of redemption (including sinking fund
provisions);
(d) the dividend rate(s), period(s) and/or payment date(s) or method(s)
of calculation applicable to the Sempra Energy preferred stock;
(e) whether dividends are cumulative or non-cumulative and, if
cumulative, the date from which dividends on the Sempra Energy preferred
stock will accumulate;
(f) the relative ranking and preferences of the Sempra Energy preferred
stock as to dividend rights and rights upon the liquidation, dissolution or
winding up of Sempra Energy's affairs;
(g) the terms and conditions, if applicable, upon which the Sempra
Energy preferred stock will be convertible into Sempra Energy common stock,
including the conversion price (or manner of calculation) and conversion
period;
(h) the provision for redemption, if applicable, of the Sempra Energy
preferred stock;
(i) the provisions for a sinking fund, if any, for the Sempra Energy
preferred stock;
(j) liquidation preferences;
(k) any limitations on issuance of any class or series of Sempra Energy
preferred stock ranking senior to or on a parity with the class or series
of Sempra Energy preferred stock as to dividend rights and rights upon
liquidation, dissolution or winding up of Sempra Energy's affairs; and
(l) any other specific terms, preferences, rights, limitations or
restrictions of the Sempra Energy preferred stock.
All shares of Sempra Energy preferred stock will, when issued, be fully
paid and nonassessable and will not have any preemptive or similar rights.
In addition to the terms listed above, we will set forth in a prospectus
supplement the following terms relating to the class or series of Sempra
Energy preferred stock being offered:
(a) the number of shares of the Sempra Energy preferred stock offered,
the liquidation preference per share and the offering price of the Sempra
Energy preferred stock;
(b) the procedures for any auction and remarketing, if any, for the
Sempra Energy preferred stock;
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(c) any listing of the Sempra Energy preferred stock on any securities
exchange; and
(d) a discussion of any material and/or special United States federal
income tax considerations applicable to the Sempra Energy preferred stock.
Rank
The Sempra Energy preferred stock will rank, with respect to dividends and
upon our liquidation, dissolution or winding up:
(a) senior to all classes or series of Sempra Energy common stock and to
all of our equity securities ranking junior to the Sempra Energy preferred
stock;
(b) on a parity with all of Sempra Energy's equity securities the terms
of which specifically provide that the equity securities rank on a parity
with the Sempra Energy preferred stock; and
(c) junior to all of Sempra Energy's equity securities the terms of
which specifically provide that the equity securities rank senior to the
Sempra Energy preferred stock.
Description of Preferred Share Purchase Rights
On May 26, 1998, the Sempra Energy board of directors adopted a preferred
share purchase rights plan providing that one preferred share purchase right
will attach to each share of Sempra Energy common stock (each, a "purchase
right"). The description and terms of the rights are set forth in a rights
agreement, dated as of May 26, 1998, by and between Sempra Energy and First
Chicago Trust Company of New York, as rights agent. The purchase rights have an
anti-takeover effect that is intended to discourage coercive or unfair takeover
tactics and to encourage any potential acquirer to negotiate a fair price to
all Sempra Energy shareholders. The purchase rights may cause substantial
dilution to any party that may attempt to acquire Sempra Energy on terms not
approved by the Sempra Energy board of directors. However, the purchase rights
are structured in a way so as not to interfere with any negotiated merger or
other business combination. The purchase rights will expire on May 31, 2008.
Until a purchase right is exercised, the holder of the purchase right will have
no rights as a shareholder of Sempra Energy beyond those rights afforded to
existing shareholders, including the right to vote or to receive dividends.
The purchase rights are designed to assure that all of Sempra Energy's
shareholders receive fair and equal treatment in the event of any proposed
takeover of Sempra Energy and to guard against partial tender offers, open
market accumulations and other abusive tactics that may be deployed to gain
control of Sempra Energy without a control premium paid to all shareholders.
Any time prior to the first date that a person or group has become an
"acquiring person" as defined in the rights agreement, the purchase rights
should not interfere with any merger or other business combination as long as
it is approved by the Sempra Energy board of directors.
Anti-Takeover Provisions
The Sempra Energy articles of incorporation and bylaws contain provisions
that may have the effect of discouraging persons from acquiring large blocks of
Sempra Energy stock or delaying or preventing a change in control of Sempra
Energy. The material provisions that may have such an effect are:
(a) classification of the Sempra Energy board of directors into three
classes with the term of only one class expiring each year;
(b) a provision permitting the Sempra Energy board of directors to make,
amend or repeal the Sempra Energy bylaws;
(c) authorization for the Sempra Energy board of directors to issue
Sempra Energy preferred stock in series and to fix rights and preferences
of the series (including, among other things, whether, and to what extent,
the shares of any series will have voting rights and the extent of the
preferences of the shares of any series with respect to dividends and other
matters);
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(d) a provision that shareholders may take action only at annual or
special meetings or by unanimous written consent in lieu of a meeting;
(e) advance notice procedures with respect to nominations of directors
or proposals other than those adopted or recommended by the Sempra Energy
board of directors; and
(f) provisions permitting amendment of certain of these provisions only
by an affirmative vote of the holders of at least two-thirds of the
outstanding shares of Sempra Energy common stock entitled to vote.
Some acquisitions of Sempra Energy's outstanding voting shares would also
require approval of the SEC under the Public Utility Holding Company Act of
1935 and of various state and foreign regulatory authorities.
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DESCRIPTION OF WARRANTS
This section describes the general terms of the warrants that Sempra Energy
may offer and sell by this prospectus. This prospectus and any accompanying
prospectus supplement will contain the material terms and conditions for each
warrant. The accompanying prospectus supplement may add, update or change the
terms and conditions of the warrants as described in this prospectus. In this
section, references to "we," "our" and "us" mean Sempra Energy excluding,
unless otherwise expressly stated or the context otherwise requires, its
subsidiaries.
General
We, and/or Sempra Energy Global Enterprises, may issue warrants to purchase
debt securities, preferred stock or common stock. Warrants may be issued
independently or together with any securities and may be attached to or
separate from those securities. The warrants will be issued under warrant
agreements to be entered into between us and a bank or trust company, as
warrant agent, all of which will be described in the prospectus supplement
relating to the warrants we are offering. The warrant agent will act solely as
our agent in connection with the warrants and will not have any obligation or
relationship of agency or trust for or with any holders or beneficial owners of
warrants. A copy of the warrant agreement will be filed with the SEC in
connection with the offering of the warrants.
Debt Warrants
We, and/or Sempra Energy Global Enterprises, may issue warrants for the
purchase of our debt securities, or in the case of warrants issued by Sempra
Energy Global Enterprises, their debt securities. As explained below, each debt
warrant will entitle its holder to purchase debt securities at an exercise
price set forth in, or to be determinable as set forth in, the related
prospectus supplement. Debt warrants may be issued separately or together with
debt securities.
The debt warrants are to be issued under debt warrant agreements to be
entered into between us, or, if applicable, Sempra Energy Global Enterprises,
and one or more banks or trust companies, as debt warrant agent, as will be set
forth in the prospectus supplement relating to the debt warrants being offered
by the prospectus supplement and this prospectus. A copy of the debt warrant
agreement, including a form of debt warrant certificate representing the debt
warrants, will be filed with the SEC in connection with the offering of the
debt warrants.
The particular terms of each issue of debt warrants, the debt warrant
agreement relating to the debt warrants and the debt warrant certificates
representing debt warrants will be described in the applicable prospectus
supplement, including, as applicable:
(a) the title of the debt warrants;
(b) the initial offering price;
(c) the title, aggregate principal amount and terms of the debt
securities purchasable upon exercise of the debt warrants;
(d) the currency or currency units in which the offering price, if any,
and the exercise price are payable;
(e) the title and terms of any related debt securities with which the
debt warrants are issued and the number of the debt warrants issued with
each debt security;
(f) the date, if any, on and after which the debt warrants and the
related debt securities will be separately transferable;
(g) the principal amount of debt securities purchasable upon exercise of
each debt warrant and the price at which that principal amount of debt
securities may be purchased upon exercise of each debt warrant;
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(h) if applicable, the minimum or maximum number of warrants that may be
exercised at any one time;
(i) the date on which the right to exercise the debt warrants will
commence and the date on which the right will expire;
(j) if applicable, a discussion of United States federal income tax,
accounting or other considerations applicable to the debt warrants;
(k) whether the debt warrants represented by the debt warrant
certificates will be issued in registered or bearer form, and, if
registered, where they may be transferred and registered;
(l) anti-dilution provisions of the debt warrants, if any;
(m) redemption or call provisions, if any, applicable to the debt
warrants; and
(n) any additional terms of the debt warrants, including terms,
procedures and limitations relating to the exchange and exercise of the
debt warrants.
Debt warrant certificates will be exchangeable for new debt warrant
certificates of different denominations and, if in registered form, may be
presented for registration of transfer and debt warrants may be exercised at
the corporate trust office of the debt warrant agent or any other office
indicated in the related prospectus supplement. Before the exercise of debt
warrants, holders of debt warrants will not be entitled to payments of
principal, premium, if any, or interest, if any on the debt securities
purchasable upon exercise of the debt warrants, or to enforce any of the
covenants in the applicable indenture.
Equity Warrants
We may issue warrants for the purchase of our equity securities such as our
preferred stock or common stock. As explained below, each equity warrant will
entitle its holder to purchase equity securities at an exercise price set forth
in, or to be determinable as set forth in, the related prospectus supplement.
Equity warrants may be issued separately or together with equity securities.
The equity warrants are to be issued under equity warrant agreements to be
entered into between us and one or more banks or trust companies, as equity
warrant agent, as will be set forth in the prospectus supplement relating to
the equity warrants being offered by the prospectus supplement and this
prospectus. A copy of the equity warrant agreement, including a form of equity
warrant certificate representing the equity warranty, will be filed with the
SEC in connection with the offering of the equity warrants.
The particular terms of each issue of equity warrants, the equity warrant
agreement relating to the equity warrants and the equity warrant certificates
representing equity warrants will be described in the applicable prospectus
supplement, including, as applicable:
(a) the title of the equity warrants;
(b) the initial offering price;
(c) the aggregate number of equity warrants and the aggregate number of
shares of the equity security purchasable upon exercise of the equity
warrants;
(d) the currency or currency units in which the offering price, if any,
and the exercise price are payable;
(e) if applicable, the designation and terms of the equity securities
with which the equity warrants are issued, and the number of equity
warrants issued with each equity security;
(f) the date, if any, on and after which the equity warrants and the
related equity security will be separately transferable;
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(g) if applicable, the minimum or maximum number of the warrants that
may be exercised at any one time;
(h) the date on which the right to exercise the equity warrants will
commence and the date on which the right will expire;
(i) if applicable, a discussion of United States federal income tax,
accounting or other considerations applicable to the equity warrants;
(j) anti-dilution provisions of the equity warrants, if any;
(k) redemption or call provisions, if any, applicable to the equity
warrants; and
(l) any additional terms of the equity warrants, including terms,
procedures and limitations relating to the exchange and exercise of the
equity warrants.
Holders of equity warrants will not be entitled, solely by virtue of being
holders, to vote, to consent, to receive dividends, to receive notice as
shareholders with respect to any meeting of shareholders for the election of
directors or any other matter, or to exercise any rights whatsoever as a holder
of the equity securities purchasable upon exercise of the equity warrants.
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DESCRIPTION OF SECURITIES PURCHASE CONTRACTS AND SECURITIES PURCHASE UNITS
This section describes the general terms of the securities purchase
contracts and securities purchase units that Sempra Energy may offer and sell
by this prospectus. This prospectus and any accompanying prospectus supplement
will contain the material terms and conditions for each warrant. The
accompanying prospectus supplement may add, update or change the terms and
conditions of the securities purchase contracts and securities purchase units
as described in this prospectus. In this section, references to "we," "our" and
"us" mean Sempra Energy excluding, unless otherwise expressly stated or the
context otherwise requires, its subsidiaries.
Stock Purchase Contract and Stock Purchase Units
We may issue stock purchase contracts, representing contracts obligating
holders to purchase from us, and obligating us to sell to the holders, a
specified number of shares of common stock or preferred stock at a future date
or dates, or a variable number of shares of common stock or preferred stock for
a stated amount of consideration. The price per share and the number of shares
of common stock or preferred stock may be fixed at the time the stock purchase
contracts are issued or may be determined by reference to a specific formula
set forth in the stock purchase contracts. Any such formula may include anti-
dilution provisions to adjust the number of shares of common stock or preferred
stock issuable pursuant to the stock purchase contracts upon certain events.
The stock purchase contracts may be issued separately or as a part of units
consisting of a stock purchase contract and, as security for the holder's
obligations to purchase the shares under the stock purchase contracts, either
(a) our senior debt securities or subordinated debt securities, (b) our debt
obligations of third parties, including U.S. Treasury securities, or (c)
preferred securities of a trust. The stock purchase contracts may require us to
make periodic payments to the holders of the stock purchase units or vice
versa, and such payments may be unsecured or prefunded on some basis. The stock
purchase contracts may require holders to secure their obligations in a
specified manner and in certain circumstances we may deliver newly issued
prepaid stock purchase contracts upon release to a holder of any collateral
securing such holder's obligations under the original stock purchase contract.
Debt Purchase Contracts and Debt Purchase Units
We may issue debt purchase contracts, representing contracts obligating
holders to purchase from us, and obligating us to sell to the holders, a
specified principal amount of debt securities at a future date or dates. The
purchase price and the interest rate may be fixed at the time the debt purchase
contracts are issued or may be determined by reference to a specific formula
set forth in the debt purchase contracts.
The debt purchase contracts may be issued separately or as a part of units
consisting of a debt purchase contracts and, as security for the holder's
obligations to purchase the securities under the debt purchase contracts,
either (a) our senior debt securities or subordinated debt securities, (b) our
debt obligations of third parties, including U.S. Treasury securities, or (c)
preferred securities of a trust. The debt purchase contracts may require us to
make periodic payments to the holders of the debt purchase units or vice versa,
and such payments may be unsecured or prefunded on some basis. The debt
purchase contracts may require holders to secure their obligations in a
specified manner and in certain circumstances we may deliver newly issued
prepaid debt purchase contracts upon release to a holder of any collateral
securing such holder's obligations under the original debt purchase contract.
The applicable prospectus supplement will describe the general terms of any
purchase contracts or purchase units and, if applicable, prepaid purchase
contracts. The description in the prospectus supplement will not purport to be
complete and will be qualified in its entirety by reference to (a) the purchase
contracts, (b) the collateral arrangements and depositary arrangements, if
applicable, relating to such purchase contracts or purchase units and (c) if
applicable, the prepaid purchase contracts and the document pursuant to which
such prepaid purchase contracts will be issued. Material United States federal
income tax considerations applicable to the purchase contracts and the purchase
units will also be discussed in the applicable prospectus supplement.
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DESCRIPTION OF DEPOSITARY SHARES
This section describes the general terms of the depositary shares Sempra
Energy may offer and sell by this prospectus. This prospectus and any
accompanying prospectus supplement will contain the material terms and
conditions for the depositary shares. The accompanying prospectus supplement
may add, update, or change the terms and conditions of the depositary shares as
described in this prospectus. In this section, reference to "we," "our" and
"us" mean Sempra Energy excluding, unless otherwise expressly stated or the
context requires, its subsidiaries.
General
We may, at our option, elect to offer depositary shares, each representing a
fraction (to be set forth in the prospectus supplement relating to a particular
series of preferred stock) of a share of a particular class or series of
preferred stock as described below. In the event we elect to do so, depositary
receipts evidencing depositary shares will be issued to the public.
The shares of any class or series of preferred stock represented by
depositary shares will be deposited under a deposit agreement among us, a
depositary selected by us and the holders of the depositary receipts. The
depositary will be a bank or trust company having its principal office in the
United States and having a combined capital and surplus of at least
$50,000,000. Subject to the terms of the deposit agreement, each owner of a
depositary share will be entitled, in proportion to the applicable fraction of
a share of preferred stock represented by such depositary share, to all the
rights and preferences of the shares of preferred stock represented by the
depositary share, including dividend, voting, redemption and liquidation
rights.
The depositary shares will be evidenced by depositary receipts issued
pursuant to the deposit agreement. Depositary receipts will be distributed to
those persons purchasing the fractional shares of the related class or series
of preferred shares in accordance with the terms of the offering described in
the related prospectus supplement.
Pending the preparation of definitive depositary receipts the depositary
may, upon our written order, issue temporary depositary receipts substantially
identical to, and entitling the holders thereof to all the rights pertaining
to, the definitive depositary receipts but not in definitive form. Definitive
depositary receipts will be prepared without unreasonable delay, and temporary
depositary receipts will be exchangeable for definitive depositary receipts
without charge to the holder.
Dividends and Other Distributions
The depositary will distribute all cash dividends or other cash
distributions received for the preferred stock to the entitled record holders
of depositary shares in proportion to the number of depositary shares that the
holder owns on the relevant record date, provided, however, that if we or the
depositary is required by law to withhold an amount on account of taxes, then
the amount distributed to the holders of depositary shares shall be reduced
accordingly. The depositary will distribute only an amount that can be
distributed without attributing to any holder of depositary shares a fraction
of one cent. The depositary will add the undistributed balance to and treat it
as part of the next sum received by the depositary for distribution to holders
of the depositary shares.
If there is a non-cash distribution, the depositary will distribute property
received by it to the entitled record holders of depositary shares, in
proportion, insofar as possible, to the number of depositary shares owned by
the holders, unless the depositary determines, after consultation with us, that
it is not feasible to make such distribution. If this occurs, the depositary
may, with our approval, sell such property and distribute the net proceeds from
such sale to the holders. The deposit agreement also will contain provisions
relating to how any subscription or similar rights that we may offer to holders
of the preferred stock will be available to the holders of the depositary
shares.
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Withdrawal of Shares
Upon surrender of the depositary receipts at the corporate trust office of
the depositary unless the related depositary shares have previously been called
for redemption, converted or exchanged into our other securities, the holder of
the depositary shares evidenced thereby is entitled to delivery of the number
of whole shares of the related class or series of preferred stock and any money
or other property represented by such depositary shares. Holders of depositary
receipts will be entitled to receive whole shares of the related class or
series of preferred stock on the basis set forth in the prospectus supplement
for such class or series of preferred stock, but holders of such whole shares
of preferred stock will not thereafter be entitled to exchange them for
depositary shares. If the depositary receipts delivered by the holder evidence
a number of depositary shares in excess of the number of depositary shares
representing the number of whole shares of preferred stock to be withdrawn, the
depositary will deliver to such holder at the same time a new depositary
receipt evidencing such excess number of depositary shares. In no event will
fractional shares of preferred stock be delivered upon surrender of depositary
receipts to the depositary.
Conversion, Exchange and Redemption
If any class or series of preferred stock underlying the depositary shares
may be converted or exchanged, each record holder of depositary receipts
representing the shares of preferred stock being converted or exchanged will
have the right or obligation to convert or exchange the depositary shares
represented by the depositary receipts.
Whenever we redeem or convert shares of preferred stock held by the
depositary, the depositary will redeem or convert, at the same time, the number
of depositary shares representing the preferred stock to be redeemed or
converted. The depositary will redeem the depositary shares from the proceeds
it receives from the corresponding redemption of the applicable series of
preferred stock. The depositary will mail notice of redemption or conversion to
the record holders of the depositary shares that are to be redeemed between 30
and 60 days before the date fixed for redemption or conversion. The redemption
price per depositary share will be equal to the applicable fraction of the
redemption price per share on the applicable class or series of preferred
stock. If less than all the depositary shares are to be redeemed, the
depositary will select which shares are to be redeemed by lot on a pro rata
basis or by any other equitable method as the depositary may decide.
After the redemption or conversion date, the depositary shares called for
redemption or conversion will no longer be outstanding. When the depositary
shares are no longer outstanding, all rights of the holders will end, except
the right to receive money, securities or other property payable upon
redemption or conversion.
Voting the Preferred Stock
When the depositary receives notice of a meeting at which the holders of the
particular class or series of preferred stock are entitled to vote, the
depositary will mail the particulars of the meeting to the record holders of
the depositary shares. Each record holder of depositary shares on the record
date may instruct the depositary on how to vote the shares of preferred stock
underlying the holder's depositary shares. The depositary will try, if
practical, to vote the number of shares of preferred stock underlying the
depositary shares according to the instructions. We will agree to take all
reasonable action requested by the depositary to enable it to vote as
instructed.
Amendment and Termination of the Deposit Agreement
We and the depositary may agree at any time to amend the deposit agreement
and the depositary receipt evidencing the depositary shares. Any amendment that
(a) imposes or increases certain fees, taxes or other charges payable by the
holders of the depositary shares as described in the deposit agreement that (b)
otherwise materially adversely affects any substantial existing rights of
holders of depositary shares, will not take effect until such amendment is
approved by the holders of at least a majority of the depositary shares then
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outstanding. Any holder of depositary shares that continue to hold its shares
after such amendment has become effective will be deemed to have agreed to the
amendment.
We may direct the depositary to terminate the deposit agreement by mailing a
notice of termination of holders of depositary shares at least 30 days prior to
termination. The depositary may terminate the deposit agreement if 90 day have
elapsed after the depositary delivered written notice of its election to resign
and a successor depositary is not appointed. In addition, the deposit agreement
will automatically terminate if:
. the depositary has redeemed all related outstanding depositary shares;
. all outstanding shares of preferred stock have been converted into or
exchanged for common stock; or
. we have liquidated, terminated or wound up our business and the
depositary has distributed the preferred stock of the relevant series to
the holders of the related depositary shares.
Reports and Obligations
The depositary will forward to the holders of depositary shares all reports
and communications from us that are delivered to the depositary and that we are
required by law, the rules of an applicable securities exchange or our amended
and restated certificate of incorporation to furnish to the holders of the
preferred stock. Neither we nor the depositary will be liable if the depositary
is prevented or delayed by law or any circumstances beyond its control in
performing its obligations under the deposit agreement. The deposit agreement
limits our obligations to performance in good faith of the duties stated in the
deposit agreement. The depositary assumes no obligation and will not be subject
to liability under the deposit agreement except to perform such obligations as
are set forth in the deposit agreement without negligence or bad faith. Neither
we nor the depositary will be obligated to prosecute or defend any legal
proceeding connected with any depositary shares or class or series of preferred
stock unless the holders of depositary shares requesting us to do so furnish us
with a satisfactory indemnity. In performing our obligations, we and the
depositary may rely and act upon the advice of our counsel or accountants, on
any information provided to us by a person presenting shares for deposit, any
holder of a receipt, or any other document believed by us or the depositary to
be genuine and to have been signed or presented by the proper party or parties.
Payment of Fees and Expenses
We will pay all fees, charges and expenses of the depositary, including the
initial deposit of the preferred stock and any redemption of the preferred
stock. Holders of depositary shares will pay taxes and governmental charges and
any other charges as are stated in the deposit agreement for their accounts.
Resignation and Removal of Depositary
At any time, the depositary may resign by delivering notice to us, and we
may remove the depositary at any time. Resignations or removals will take
effect upon the appointment of a successor depositary and its acceptance of the
appointment. The successor depositary must be appointed within 90 days after
the delivery of the notice of resignation or removal and must be a bank or
trust company having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000.
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DESCRIPTION OF TRUST PREFERRED SECURITIES
This section describes the general terms of the trust preferred securities
that Sempra Energy may offer and sell by this prospectus. This prospectus and
any accompanying prospectus supplement will contain the material terms and
conditions for each trust preferred security. The accompanying prospectus
supplement may add, update or change the terms and conditions of the trust
preferred securities as described in this prospectus. In this section,
references to "we," "our" and "us" mean Sempra Energy excluding, unless
otherwise expressly stated or the context otherwise requires, its subsidiaries.
General
Each Declaration authorizes the regular trustees to issue on behalf of each
trust one series of trust preferred securities which will have the terms
described below and in a prospectus supplement. Each trust will use the net
proceeds from the sale of trust preferred securities and trust common
securities to purchase a series of subordinated debt securities from us. The
property trustee will hold legal title to such subordinated debt securities in
trust for the benefit of the holders of the applicable trust preferred
securities. We will guarantee the payment of distributions and other amounts
payable on the trust preferred securities, but only to the extent that the
trust has funds legally and immediately available to make those payments. The
trust preferred securities and trust common securities of a trust are referred
to herein as the "trust securities."
Each trust preferred securities guarantee, when taken together with our
obligation under the related series of subordinated debt securities, the
subordinated indenture and the related Declaration, will provide a full and
unconditional guarantee of amounts due on the trust preferred securities issued
by a trust.
Each Declaration will be qualified as an indenture under the Trust Indenture
Act. Each property trustee will act as indenture trustee for the trust
preferred securities, in order to comply with the provisions of the Trust
Indenture Act.
The trust preferred securities will be represented by a global security that
will be deposited with and registered in the name of The Depository Trust
Company ("DTC") or its nominee. Whenever we refer to a "holder" of trust
preferred securities in this prospectus, we mean the registered holder, which,
for any trust preferred securities in book-entry form, will be DTC or its
nominee. We discuss various matters relevant to global securities under "Global
Securities--Book-Entry, Delivery and Form" below.
Each series of trust preferred securities will have the terms, including
distributions, redemption, voting, liquidation rights and the other preferred,
deferred or other special rights or other restrictions as described in the
relevant Declaration or made part of the Declaration by the Trust Indenture Act
or the Delaware Business Trust Act. The terms of the trust preferred securities
will mirror the terms of the subordinated debt securities held by the trust.
The prospectus supplement relating to the trust preferred securities of a
trust will describe the specific terms of the trust preferred securities,
including:
(a) the name of the trust preferred securities;
(b) the dollar amount and number of trust preferred securities issued;
(c) any provision relating to deferral of distribution payments, if
different from those described in this prospectus;
(d) the annual distribution rate(s) (or method of determining the
rate(s)), the payment date(s) and the record dates used to determine the
holders who are to receive distributions;
(e) the date from which distributions shall be cumulative;
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(f) the optional redemption provisions, if any, including the prices,
time periods and other terms and conditions for which the trust preferred
securities shall be purchased or redeemed, in whole or in part;
(g) the terms and conditions, if any, upon which the applicable series
of subordinated debt securities may be distributed to holders of the trust
preferred securities, if different from those described in this prospectus;
(h) the voting rights, if any, of holders of the trust preferred
securities, if different from those described in this prospectus;
(i) any securities exchange on which the trust preferred securities will
be listed;
(j) whether the trust preferred securities are to be issued in book-
entry form and represented by one or more global certificates and, if so,
the depository for the global certificates and the specific terms of the
depositary arrangements, if different from those described in this
prospectus; and
(k) any other relevant rights, preferences, privileges, limitations or
restrictions of the trust preferred securities, if different from those
described in this prospectus.
Each prospectus supplement will describe certain United States federal
income tax considerations applicable to the purchase, holding and disposition
of the series of trust preferred securities covered by the prospectus
supplement, if different from those described in this prospectus.
Distributions
Distributions will accumulate on each series of trust preferred securities
from the date they are first issued. Unless deferred as described below,
distributions will be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year (each, a "distribution date").
Distributions not paid when due will accumulate additional distributions,
compounded quarterly, at the annual rate stated in the related prospectus
supplement, to the extent permitted by law. Whenever we use the term
"distributions" in this prospectus, we are including any of these
distributions. The amount of distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months.
The assets of a trust available for distribution to holders of trust
preferred securities will be limited to the interest payments the trust
receives from us with respect to the subordinated debt securities.
Consequently, if we defer or for any other reason fail to make interest
payments on the subordinated debt securities, the trust will not have funds to
pay distributions on the trust preferred securities.
As long as no Subordinated Indenture Event of Default (as defined in the
subordinated indenture for the subordinated debt securities held by a trust)
has occurred and has not been cured, we will have the right to defer interest
payments on the related subordinated debt securities at any time. We may defer
interest payments on the related subordinated debt securities in each case for
a period not exceeding 20 consecutive quarters (each, a "deferral period"). No
deferral period may extend beyond the stated maturity of the related
subordinated debt securities. Before a deferral period ends, we may extend it
further if that deferral period does not exceed 20 consecutive quarters or
extend beyond the stated maturity of the related subordinated debt securities.
When a deferral period ends and we have paid all accrued and unpaid interest on
the related subordinated debt securities, we may begin a new deferral period,
subject to the terms described above. There is no limit on the number of
deferral periods that we may begin.
If we defer interest payments on the related subordinated debt securities,
the trust also will defer the payment of distributions on the trust preferred
securities. During a deferral period, the holder of trust preferred securities
will still accumulate distributions at the annual rate specified in the related
prospectus supplement, plus the holder of trust preferred securities will
accumulate additional distributions on the deferred distributions at the same
rate, to the extent permitted by law. During a deferral period, the holder of
trust preferred securities will be required to accrue interest income for
United States federal income tax purposes as discussed under the
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caption "Certain United States Federal Income Tax Consequences--Trust Preferred
Securities--Interest Income and Original Issue Discount" below.
If we elect to begin a deferral period, we will be subject to specified
restrictions relating to paying dividends on or repurchasing our common stock
and making payments on certain of our debt securities. See "Description of the
Subordinated Debt Securities of Sempra Energy Purchased with Proceeds of Trust
Securities--Payments--Deferral Period Restrictions" below.
Redemption
Trust preferred securities will remain outstanding until the applicable
trust redeems them or distributes the subordinated debt securities in exchange
for the trust preferred securities. Any redemption of trust preferred
securities must occur as described below. Any exchange distribution must occur
as described below under the caption "--Exchange of Trust Preferred Securities
for Subordinated Debt Securities."
Redemption of Trust Preferred Securities
If we repay or redeem the related subordinated debt securities, whether at
their stated maturity, upon acceleration after a Subordinated Indenture Event
of Default or upon early redemption, the applicable property trustee will
redeem a Like Amount of trust preferred securities of the applicable trust on
the Redemption Date at the Redemption Price. In this context, "Like Amount"
means trust preferred securities having an aggregate liquidation amount equal
to the aggregate principal amount of the subordinated debt securities being
repaid or redeemed. "Redemption Date" means the date that the principal of the
subordinated debt securities being redeemed becomes due for payment under the
subordinated indenture. "Redemption Price" means the aggregate liquidation
amount of the trust preferred securities to be redeemed, plus any accumulated
and unpaid distributions on those securities to the Redemption Date.
Repayment and Redemption of Subordinated Debt Securities
We may redeem any series of subordinated debt securities, at our option,
before their stated maturity as follows:
. at any time on or after the date stated in an applicable prospectus
supplement, in whole or in part, provided that no partial redemption may
occur during a deferral period; and
. at any time in whole, but not in part, within 90 days after a Tax Event
or an Investment Company Act Event has occurred.
See "Description of the Subordinated Debt Securities of Sempra Energy
Purchased with Proceeds of Trust Securities--Optional Redemption" below for the
definitions of "Tax Event" and "Investment Company Act Event."
If a Tax Event is continuing and we do not elect to dissolve a trust or
redeem the related subordinated debt securities, we may be required to pay
additional sums on such subordinated debt securities. The provisions regarding
repayment and redemption of subordinated debt securities, as well as
information about the effect that possible tax law changes may have on the
subordinated debt securities and trust preferred securities, are discussed in
"Description of the Subordinated Debt Securities of Sempra Energy Purchased
with Proceeds of Trust Securities--Stated Maturity" and "--Optional
Redemption--Payment of Additional Sums" below.
Redemption Procedures
A property trustee will give at least 30 days, but not more than 60 days,
notice before the Redemption Date, unless the redemption results from
acceleration after a Subordinated Indenture Event of Default and the property
trustee is not able to give notice during this period. In that case, a property
trustee will give the notice
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as soon as practicable. A property trustee will give the notice of redemption
in the manner described below under the caption "--Notices."
The property trustee will irrevocably deposit with DTC (in the case of any
book-entry trust preferred securities) or the Paying Agent (as defined below)
(in the case of any non-book-entry trust preferred securities) funds sufficient
to pay the Redemption Price for all trust preferred securities being redeemed
on that date, to the extent that such funds are deposited with the property
trustee. The property trustee will deposit such funds by 2:00 p.m., New York
City time, on the Redemption Date provided that the property trustee has
received such funds by 10:00 a.m. New York City time on such Redemption Date.
DTC will pay the Redemption Price for trust preferred securities held in
book-entry form and called for redemption in accordance with the procedures of
DTC, to the extent the property trustee has deposited sufficient funds with
DTC. The Paying Agent will pay the Redemption Price for trust preferred
securities held in definitive form and called for redemption, to the extent the
property trustee has deposited sufficient funds with the Paying Agent, against
surrender of the certificates representing those trust preferred securities.
The trust preferred securities will be issued in definitive form only in the
special circumstances described under the caption "Book-Entry Issuance--Global
Securities" below. Any distributions that are due on a distribution date that
is on or before the Redemption Date will be payable to the holders of those
trust preferred securities on the record date for the related distribution
date.
Once the property trustee gives notice of redemption and deposits funds as
discussed above, all rights of the holders of the trust preferred securities
called for redemption will cease at the time of the deposit, except the right
of those holders to receive the Redemption Price, but without interest on that
amount. In addition, those trust preferred securities will no longer be
outstanding.
On the Redemption Date, distributions will stop accumulating on the
subordinated debt securities called for redemption. However, if payment of the
Redemption Price for any trust preferred securities is not made, distributions
on those trust preferred securities will continue to accumulate to the date the
Redemption Price is paid.
If a trust redeems less than all of its trust preferred securities, then the
liquidation amount of trust preferred securities to be redeemed will be
allocated pro rata between its outstanding trust preferred securities and its
outstanding trust common securities, based upon their respective aggregate
liquidation amounts. The applicable property trustee will select the trust
preferred securities to be redeemed from among the outstanding trust preferred
securities of such trust not previously called for redemption. A property
trustee may use any method of selection that it deems to be fair and
appropriate.
Other Purchases of Trust Preferred Securities
We or our subsidiaries may purchase outstanding trust preferred securities
by tender, in the open market or by private agreement, subject to applicable
laws, including United States federal securities laws.
Exchange of Trust Preferred Securities for Subordinated Debt Securities
We will have the right at any time, in our sole discretion, to dissolve a
trust. After a trust has satisfied all liabilities to its creditors, as
provided by law, the applicable property trustee will distribute a Like Amount
of subordinated debt securities to the holders of the related trust securities
in exchange for all such trust securities outstanding, in liquidation of the
trust. In this context, "Like Amount" means subordinated debt securities having
an aggregate principal amount equal to the aggregate liquidation amount of all
such trust securities outstanding.
If an exchange distribution with respect to a trust occurs, we must use our
best efforts to list the related subordinated debt securities on the New York
Stock Exchange or such other stock exchange or organization, if any, on which
the trust preferred securities of such trust are listed.
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Exchange Procedures
A property trustee will make the exchange distribution to holders of trust
preferred securities listed in a trust's records at the close of business on
the record date for the exchange distribution. If the trust preferred
securities are held in book-entry form, the record date will be one Business
Day (as defined below) before the date that we set as the exchange distribution
date (the "Exchange Date"). If the trust preferred securities are not held in
book-entry form, the record date will be the 15th day (whether or not a
Business Day) before the Exchange Date.
A property trustee will give holders at least 30 days, but not more than 60
days, notice before the Exchange Date. Property trustees will give the notice
of an Exchange Date in the manner described below under "--Notices."
On the Exchange Date with respect to a trust:
. the trust preferred securities of such trust will no longer be
outstanding;
. certificates representing a Like Amount of subordinated debt securities
will be issued to holders of trust preferred securities of such trust
upon their surrender to the property trustee or its agent for exchange;
. any certificates representing trust preferred securities of such trust
that are not surrendered for exchange will be deemed to represent a Like
Amount of subordinated debt securities (and until such certificates are
surrendered for exchange, no payments of interest or principal on such
subordinated debt securities will be made to the holders of those trust
preferred securities); and
. the holders of trust preferred securities of such trust will not have
any further rights with respect to such trust preferred securities,
except the right to receive certificates representing subordinated debt
securities upon surrender of their certificates as described above.
Certain Tax Consequences
Under current United States federal income tax law and interpretations and
assuming, as each trust expects, that it will not be classified as an
association taxable as a corporation, a holder of trust preferred securities
would not be taxed if a property trustee distributes subordinated debt
securities to it upon liquidation of the trust. However, if a Tax Event were to
occur and a trust were subject to taxation on income received or accrued on
subordinated debt securities, a holder of trust preferred securities and the
trust could be taxed on that distribution as described under the caption
"Certain United States Federal Income Tax Consequences-- Trust Preferred
Securities--Distribution of Subordinated Debt Securities to Holders of Trust
Preferred Securities Upon Liquidation of the Trust" below.
Ranking
The trust preferred securities of a trust will rank equally with the trust
common securities of that trust. A trust will make payments of distributions
and the Redemption Price on the trust preferred securities and the trust common
securities pro rata, based on the aggregate liquidation amounts of the trust
preferred securities and trust common securities, except as follows. If a
Subordinated Indenture Event of Default has occurred with respect to the series
of subordinated debt securities held by a trust and has not been cured, that
trust may not make any payments on its trust common securities until the trust
has paid in full or provided in full all unpaid amounts on its trust preferred
securities.
If a Subordinated Indenture Event of Default occurs with respect to the
series of subordinated debt securities held by a trust, the holders of the
trust common securities of that trust will be deemed to have waived all rights
to act with respect to the related Declaration Event of Default with respect to
that trust (as defined below) until all such Declaration Events of Default have
been cured, waived or eliminated. Until any such
35
Declaration Events of Default have been cured, waived or eliminated, the
property trustee of that trust will act solely on behalf of holders of the
trust preferred securities of that trust (and not on behalf of the holders of
the trust common securities of that trust), and only the holders of trust
preferred securities of that trust will have the right to direct the property
trustee to act on their behalf.
Status of Trust Preferred Securities Guarantees
Each trust preferred securities guarantee will constitute our unsecured
obligation and will rank:
(a) equal in rank with any other guarantee similar to the trust
preferred securities guarantees issued by us on behalf of the holders of
securities issued by any other trust established by us or our affiliates;
(b) subordinate and junior in right of payment to all of our other
liabilities, except those that rank equally or are subordinate by their
terms;
(c) equal with any guarantee now or hereafter issued by us in respect of
the most senior preferred or preference stock now or hereafter issued by
us, and with any guarantee now or hereafter issued by us in respect of any
preferred or preference stock of any of our affiliates; and
(d) senior to our common stock.
Each Declaration will require that the holders of the related trust
preferred securities accept the subordination provisions and other terms of the
related trust preferred securities guarantee. A trust preferred securities
guarantee will constitute a guarantee of payment and not of collection (in
other words the holder of a trust preferred securities guarantee may sue us, or
seek other remedies, to enforce its rights under the trust preferred securities
guarantee without first suing any other person or entity). A trust preferred
securities guarantee will not be discharged except by payment of the trust
preferred securities guarantee payments in full to the extent not previously
paid or upon distribution of subordinated debt securities to the holders of the
trust preferred securities pursuant to the related Declaration.
Liquidation Distribution Upon Dissolution
Each Declaration states that the related trust shall be dissolved:
(a) upon the expiration of the term of such trust;
(b) upon the bankruptcy of Sempra Energy;
(c) upon the filing of a certificate of dissolution or its equivalent
with respect to Sempra Energy;
(d) 90 days after the revocation of the articles of incorporation of
Sempra Energy (but only if the articles of incorporation are not reinstated
during that 90-day period);
(e) upon the written direction to the property trustee from Sempra
Energy at any time to dissolve such trust and distribute the related
subordinated debt securities to holders in exchange for the trust preferred
securities;
(f) upon the redemption of all of the trust securities of such trust; or
(g) upon entry of a court order for the dissolution of Sempra Energy or
such trust.
In the event of a dissolution, after a trust satisfies (whether by payment
or reasonable provision for payment) all amounts owed to creditors of the
trust, the holders of the trust securities of such trust will be entitled to
receive:
(a) cash equal to the aggregate liquidation amount of each trust
security, plus accumulated and unpaid distributions to the date of payment;
unless
(b) subordinated debt securities in an aggregate principal amount equal
to the aggregate liquidation amount of the trust securities are distributed
to the holders of the trust securities.
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If a trust cannot pay the full amount due on its trust securities because
insufficient assets are available for payment, then the amounts payable by the
trust on its trust securities shall be paid pro rata. However, if an event of
default under the related Declaration has occurred, the total amounts due on
the trust preferred securities will be paid before any distribution on the
trust common securities.
Declaration Events of Default
The term "Declaration Event of Default" with respect to a trust means any of
the following:
. Subordinated Indenture Event of Default occurs with respect to the
related series of subordinated debt securities (see "Description of the
Subordinated Debt Securities of Sempra Energy Purchased with Proceeds of
Trust Securities--Events of Default" below);
. such trust does not pay any distribution within 30 days of its due date,
provided that no deferral period is continuing;
. such trust does not pay any Redemption Price on its due date;
. the securities trustee of such trust remains in breach in a material
respect of any term of the related Declaration for 90 days after the
securities trustee receives notice of default stating the securities
trustee is in breach. The notice must be sent by the holders of at least
25% in liquidation amount of the outstanding trust preferred securities
of such trust; and
. the property trustee of such trust files for bankruptcy or certain other
events in bankruptcy or insolvency occur and a successor property
trustee of such trust is not appointed within 60 days.
If a Subordinated Indenture Event of Default occurs and the subordinated
indenture trustee and the holders of not less than 25% in principal amount of
the outstanding subordinated debt securities of the related series fail to
declare the principal of all of such subordinated debt securities to be
immediately due and payable, the holders of at least 25% in aggregate
liquidation amount of the outstanding trust preferred securities of the related
trust will have the right to declare such principal immediately due and
payable, by providing notice to us and the subordinated indenture trustee.
If we fail to pay principal, premium, if any, or interest on a series of
subordinated debt securities when payable, then a holder of the related trust
preferred securities may directly sue us or seek other remedies to collect its
pro rata share of payments owed.
Within 90 days after learning of a Declaration Event of Default with respect
to a trust, the related property trustee will notify the holders of the trust
securities of such trust, the regular trustees and us, unless the Declaration
Event of Default has been cured or waived.
We and a regular trustee of a trust must provide the property trustee of
such trust with an annual certificate stating whether they are in compliance
with all the conditions and covenants applicable to them under the related
Declaration.
If a Declaration Event of Default with respect to a trust has occurred and
has not been cured, the trust preferred securities of such trust will have a
preference in right of payment over the trust common securities of such trust
as discussed above. The holders of trust securities are not entitled to
accelerate the maturity of the trust preferred securities upon a Declaration
Event of Default.
Enforcement Rights
If a Subordinated Indenture Event of Default occurs with respect to a series
of subordinated debt securities, the holders of the related trust preferred
securities must rely on the applicable property trustee, as the
37
holder of such subordinated debt securities, to enforce its rights under such
subordinated debt securities and the applicable subordinated indenture against
us, subject to the following:
Right of Direct Action
If we do not make full and timely payments on such subordinated debt
securities, the related trust will not have funds available to make payments of
distributions or other amounts due on the related trust preferred securities.
In this event, a holder of such trust preferred securities may sue us directly
to collect its pro rata share of payments owed. We may not amend the applicable
subordinated indenture to remove the right of any holder of trust preferred
securities to bring a direct action against us without the prior written
consent of all of the holders of the related series of trust preferred
securities. We will be able to set-off any payment made to a holder of trust
preferred securities in connection with a direct action.
Other Rights under the Subordinated Indenture
The holders of 25% or more in liquidation amount of the outstanding trust
preferred securities of a trust may accelerate the maturity of the related
series of subordinated debt securities when a Subordinated Indenture Event of
Default with respect to such series has occurred and has not been cured and
neither the subordinated indenture trustee nor the holders of the related
series of subordinated debt securities have exercised such acceleration rights.
In addition, the holders of a majority in liquidation amount of the outstanding
trust preferred securities of a trust may cancel a declaration of acceleration
of the related series of subordinated debt securities and may waive specified
Subordinated Indenture Events of Default with respect to such series. See
"Description of the Subordinated Debt Securities of Sempra Energy Purchased
with Proceeds of Trust Securities--Events of Default" and "--Remedies" below.
Voting Rights; Amendment of the Declaration
The holders of the trust preferred securities of a trust will have no voting
rights except as discussed below and under "Description of the Subordinated
Debt Securities of Sempra Energy Purchased with Proceeds of Trust Securities--
Consolidation, Merger and Conveyance of Assets as an Entirety; No Financial
Covenants" and "Description of Trust Preferred Securities Guarantees--
Amendments and Assignment" below, and as otherwise required by law or the
applicable Declaration.
With respect to a trust, if any proposed amendment to the applicable
Declaration provides for, or the regular trustees of such trust otherwise
propose to effect:
(a) any action that would adversely affect the powers, preferences or
special rights of the trust preferred securities of such trust in any
material respect, whether by way of amendment to the applicable Declaration
or otherwise; or
(b) the dissolution, winding-up or termination of such trust other than
pursuant to the terms of the applicable Declaration,
then the holders of the trust preferred securities of such trust as a class
will be entitled to vote on the amendment or proposal. In that case, the
amendment or proposal will be effective only if approved by the holders of at
least a majority in aggregate liquidation amount of such trust preferred
securities.
A Declaration may be amended from time to time by us and the applicable
property trustee and the applicable regular trustees without the consent of the
holders of trust preferred securities of the related trust, to:
(a) cure any ambiguity, correct or supplement any provision which may be
inconsistent with any other provision, or make provisions not inconsistent
with any other provisions with respect to matters or questions arising
under the applicable Declaration, in each case to the extent that the
amendment does not adversely affect the interests of any holder of trust
preferred securities of the related trust in any material respect; or
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(b) modify, eliminate or add to any provisions to the extent necessary
to ensure that the related trust will not be classified as other than a
grantor trust for United States federal income tax purposes or to ensure
that such trust will not be required to register as an "investment company"
under the Investment Company Act.
Except as provided in the next paragraph, other amendments to a Declaration
may be made by us or the securities trustees of the related trust upon:
(a) approval of the holders of a majority in aggregate liquidation
amount of the outstanding trust preferred securities of such trust; and
(b) receipt by the securities trustee of such trust of an opinion of
counsel to the effect that such amendment will not affect the trust's
status as a grantor trust for United States federal income tax purposes or
the trust's exemption from the Investment Company Act.
Notwithstanding the foregoing, without the consent of each affected holder
of the trust securities of the related trust, a Declaration may not be amended
to:
(a) change the amount or timing of any distribution on the trust
securities of such trust or otherwise adversely affect the amount of any
distribution required to be made in respect of the trust securities of such
trust as of a specified date; or
(b) restrict the right of a holder of the trust securities of such trust
to institute suit for the enforcement of any such payment on or after such
date.
In addition, no amendment may be made to a Declaration if the amendment
would:
(a) cause the related trust to be characterized as other than a grantor
trust for United States federal income tax purposes;
(b) cause the related trust to be deemed to be an "investment company"
which is required to be registered under the Investment Company Act; or
(c) impose any additional obligation on us, the property trustee of the
related trust or the Delaware trustee of the related trust without its
consent.
Without obtaining the prior approval of the holders of a majority in
aggregate liquidation amount of the trust preferred securities of a trust, the
securities trustees of such trust may not:
(a) direct the time, method and place of conducting any proceeding for
any remedy available to the related subordinated indenture trustee or
executing any trust or power conferred on the related property trustee with
respect to the related series of subordinated debt securities;
(b) waive any default that is waivable under the subordinated indenture;
(c) cancel an acceleration of the principal of the related series of
subordinated debt securities; or
(d) consent to any amendment, modification or termination of the
subordinated indenture or the related series of subordinated debt
securities where such consent is required.
However, if a consent under the subordinated indenture requires the consent
of each affected holder of a series of subordinated debt securities, then the
applicable property trustee must obtain the prior consent of each holder of the
related trust preferred securities. In addition, before taking any of the
foregoing actions, the regular trustees of the related trust must obtain an
opinion of counsel stating that the action will not cause such trust to be
classified as other than a grantor trust for United States federal income tax
purposes.
The property trustee of a trust will notify all holders of the trust
preferred securities of such trust of any notice of default received from the
subordinated indenture trustee with respect to the subordinated debt securities
held by such trust.
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Notices
Notices to be given to holders of trust preferred securities held in book-
entry form will be given to DTC in accordance with its procedures. Notices to
be given to holders of trust preferred securities held in definitive form may
be given by mail to their addresses set forth in trust records.
Payment and Paying Agency
With respect to any trust preferred securities held in book-entry form,
distributions will be paid to DTC, which will credit the relevant accounts at
DTC on the applicable distribution dates in accordance with its procedures.
With respect to any trust preferred securities issued in definitive form,
distributions will be paid by check mailed to the address of the holder
entitled to such payments, as such address appears in trust records. The paying
agent of a trust (the "Paying Agent") will initially be the property trustee of
such trust. A Paying Agent of a trust may resign upon 30 days written notice to
the regular trustees and the property trustee of such trust. In such event, the
property trustee of such trust will appoint a successor acceptable to the
regular trustees of such trust to act as Paying Agent.
Persons holding their trust preferred securities in "street name" or
indirectly through DTC should consult their banks or brokers for information on
how they will receive payments. See "Global Securities--Book-Entry, Delivery
and Form" in this prospectus.
Any money paid to a property trustee or a Paying Agent for payments on trust
preferred securities that remains unclaimed at the end of two years after the
amount is due will be repaid to us. After that two-year period, you may look
only to us for payment of those amounts.
Business Day
If any payment is due on a day that is not a Business Day, the payment will
be made on the following Business Day (unless that Business Day is in a
different calendar year, in which case the payment will be made on the
preceding Business Day). Each payment made on the following or preceding
Business Day will have the same force and effect as if made on the original
payment due date. "Business Day" means any day other than a Saturday, a Sunday,
a day on which banking institutions in New York City are authorized or required
by law or executive order to remain closed or, with respect to such trust, a
day on which the corporate trust office of the property trustee of such trust
or the subordinated indenture trustee is closed for business.
Record Date
A trust will pay distributions to holders of trust preferred securities
listed in the trust's records on the record date for the payment. If trust
preferred securities are held in book-entry form, the record date will be one
Business Day before the relevant distribution date. If trust preferred
securities are issued in definitive form, the record date will be the 15th day,
whether or not a Business Day, before the relevant distribution date.
Registrar and Transfer Agent
The property trustee of a trust will initially act as such trust's agent for
registering trust preferred securities of such trust in the names of holders
and transferring such trust preferred securities. Such property trustee also
will perform the role of maintaining the list of registered holders of trust
preferred securities of such trust. Holders will not be required to pay a
service charge to transfer or exchange trust preferred securities, but may be
required to pay for any tax or other governmental charge associated with the
exchange or transfer.
Removal and Replacement of Trustees
Only the holder of trust common securities of a trust has the right to
remove, or replace the regular trustees and, prior to an event of default,
property and Delaware trustees of the trust. If an event of default
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occurs, only the holders of trust preferred securities of a trust have the
right to remove or replace the property and Delaware trustees. The resignation
or removal of any trustee and the appointment of a successor trustee shall be
effective only on the acceptance of appointment by the successor trustee in
accordance with the provisions of the Declaration for such trust.
Information Concerning the Property Trustees
For matters relating to compliance with the Trust Indenture Act, the
property trustee of each trust will have all of the duties and responsibilities
of an indenture trustee under the Trust Indenture Act. Each property trustee,
other than during the occurrence and continuance of a Declaration Event of
Default under the applicable trust, undertakes to perform only the duties as
are specifically set forth in the applicable Declaration and, upon a
Declaration event of default, must use the same degree of care and skill as a
prudent person would exercise or use in the conduct of his or her own affairs.
Subject to this provision, a property trustee is under no obligation to
exercise any of the powers given it by the applicable Declaration at the
request of any holder of trust preferred securities unless it is offered
reasonable security or indemnity against the costs, expenses and liabilities
that it might incur. However, the holders of the trust preferred securities
will not be required to offer an indemnity where the holders, by exercising
their voting rights, direct the property trustee to take any action following a
Declaration event of default.
Miscellaneous
The regular trustees of each trust are authorized and directed to conduct
the affairs of and to operate the trust in such a way that:
(a) it will not be deemed to be an "investment company" required to be
registered under the Investment Company Act;
(b) it will be classified as a grantor trust for United States federal
income tax purposes; and
(c) the subordinated debt securities held by it will be treated as
indebtedness of us for United States federal income tax purposes.
We and the regular trustees of a trust are authorized to take any action (so
long as it is consistent with applicable law or the applicable certificate of
trust or Declaration) that we and the regular trustees of the trust determine
to be necessary or desirable for such purposes.
Registered holders of trust preferred securities have no preemptive or
similar rights.
A trust may not borrow money, issue debt, execute mortgages or pledge any of
its assets.
Governing Law
Each Declaration and the related trust preferred securities will be governed
by and construed in accordance with the laws of the State of Delaware.
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DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES OF SEMPRA ENERGY
PURCHASED WITH PROCEEDS OF TRUST SECURITIES
This section describes the general terms of the subordinated debt securities
of Sempra Energy purchased with the proceeds of trust securities that may be
offered and sold by this prospectus. This prospectus and any accompanying
prospectus supplement will contain the material terms and conditions for each
subordinated debt security. The accompanying prospectus supplement may add,
update or change the terms and conditions of the subordinated debt securities
as described in this prospectus. In this section, references to "we," "our" and
"us" mean Sempra Energy excluding, unless otherwise expressly stated or the
context otherwise requires, its subsidiaries.
General
Following the issuance of trust securities by a trust, the trust will use
the proceeds of such issuance to purchase a series of subordinated debt
securities. The property trustee of such trust will hold legal title to such
series of subordinated debt securities in trust for the benefit of the holders
of the trust securities of such trust.
The subordinated indenture will be qualified as an indenture under the Trust
Indenture Act. The subordinated indenture trustee will act as indenture trustee
for the subordinated debt securities, in order to comply with the provisions of
the Trust Indenture Act.
The subordinated debt securities will not be secured by any of our property
or assets. The subordinated debt securities will rank junior in priority of
payment to specified existing and future debt and other liabilities of ours
which are described below under "--Subordination."
Payments
We will pay interest to the direct holders of subordinated debt securities
listed in our records at the close of business on the record date, as discussed
below, in advance of each interest payment date. If a series of subordinated
debt securities is distributed in exchange for the trust securities of a trust,
we will make payments on such subordinated debt securities in accordance with
procedures similar to those described under "Description of the Trust Preferred
Securities--Payment and Paying Agency" above.
Any money paid to the subordinated indenture trustee or any paying agent, or
held in trust by us, for payments on any subordinated debt securities, that
remains unclaimed at the end of two years after the amount is due will be
repaid to us. After that two-year period, a holder of subordinated debt
securities may look only to us for payment of those amounts.
Business Day
If any payment is due on a day that is not a Business Day, the payment will
be made on the following Business Day unless that Business Day is in a
different calendar year, in which case the payment will be made on the
preceding Business Day. Each payment made on the following or preceding
Business Day will have the same force and effect as if made on the original
payment due date.
Record Date
If subordinated debt securities are held in book-entry form, the record date
will be one Business Day before the relevant interest payment date. If
subordinated debt securities are held in certificated form, the record date
will be as provided in a prospectus supplement.
Deferral Periods
With respect to any series of subordinated debt securities, as long as no
Subordinated Indenture Event of Default with respect to such series has
occurred and has not been cured, we will have the right to defer the
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payment of interest on such series of subordinated debt securities as described
in "Description of the Trust Preferred Securities--Distributions" above. During
a deferral period, the holders of such series of subordinated debt securities
will continue to accrue interest at the stated annual rate of interest for such
series, plus will accrue additional interest on each deferred interest payment
at such stated annual rate, compounded quarterly, from the corresponding
interest payment date, to the extent permitted by law. Whenever we use the term
"interest" with respect to subordinated debt securities in this prospectus, we
are including any of this additional interest.
Deferral Period Restrictions
During a deferral period, we and our subsidiaries may not take any of the
following actions, except as described below:
. declare or pay any dividend or other distribution on, redeem, purchase or
acquire, or make a liquidation payment on any shares of our capital
stock;
. pay any amount on or repay, redeem or repurchase any debt securities
issued by us that rank equally with or junior to the subordinated debt
securities; or
. make any payments under any of our guarantees if such guarantee ranks
equally with or junior to the subordinated debt securities and guarantees
payments on any debt security of any of our subsidiaries.
Notwithstanding the foregoing, we may take any of the following actions
during a deferral period:
. declare dividends in, or make any payment in, shares of our common stock;
. redeem, purchase or acquire our common stock if related to the issuance
of common stock under any of our benefit plans for our directors,
officers or employees;
. declare or pay a dividend in connection with any shareholder's rights
plan, issue stock under such plan or redeem, repurchase or acquire any
rights distributed pursuant to the plan; or
. make payments under any trust preferred securities guarantee (as
described under "Description of the Trust Preferred Securities--Status of
Trust Preferred Securities Guarantees" above and under "Description of
Trust Preferred Securities Guarantees" below).
Deferral Period Procedures
We will give the property trustee and regular trustees of a trust and the
subordinated indenture trustee notice of our election to begin a deferral
period with respect to a series of subordinated debt securities held by such
trust at least one Business Day before the earlier of:
. the next distribution date for the trust preferred securities of such
trust; or
. the date the regular trustees of such trust are required to give notice
of the record date or the distribution date to (1) the New York Stock
Exchange or other applicable self-regulatory organization or (2) the
holders of the trust preferred securities of such trust.
The subordinated indenture trustee must notify the holders of a series of
subordinated debt securities in the manner described below in "--Notices" of
our election to begin a deferral period with respect to such series.
Stated Maturity
Each series of subordinated debt securities will have a stated maturity.
However, we may shorten such stated maturity to an earlier date stated in the
applicable prospectus supplement. You should expect that we will exercise this
option with respect to a series of subordinated debt securities if, for
example, a tax development occurs that prohibits us from deducting interest
payments on such series unless such series has a shorter maturity date.
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We also will have the option to extend the stated maturity of any series of
subordinated debt securities if:
. we are not in bankruptcy, insolvent or in liquidation;
. we are not in default on the payment of interest or principal on such
series of subordinated debt securities;
. the trust which holds such series of subordinated debt securities is not
in arrears on payments of distributions on its trust preferred
securities;
. no deferred distributions are accumulated on the trust preferred
securities of the trust which holds such series of subordinated debt
securities; and
. the trust preferred securities of the trust which holds such series of
subordinated debt securities are rated at least BBB- by Standard & Poor's
Ratings Services or Baa3 by Moody's Investors Services, Inc., or an
equivalent rating by a successor rating agency.
You should assume that we will exercise our option to extend the stated
maturity of a series of subordinated debt securities if we are unable to
refinance such subordinated debt securities at a lower interest rate or it is
otherwise in our interest to defer the stated maturity of such subordinated
debt securities.
Procedures
We will pay principal of and any premium on subordinated debt securities at
stated maturity, upon redemption or otherwise, upon presentation of
subordinated debt securities at the office of the subordinated indenture
trustee, as our paying agent. In our discretion, we may appoint one or more
additional paying agents and security registrars and designate one or more
additional places for payment and for registration of transfer, but we must at
all times maintain a place of payment of the subordinated debt securities and a
place for registration of transfer of the subordinated debt securities in the
Borough of Manhattan, The City of New York.
We will give notice to the subordinated indenture trustee of our selection
of a new stated maturity for any series of subordinated debt securities at
least 30 days, but not more than 60 days, prior to the effective date of the
change. The subordinated indenture trustee will give holders of such
subordinated debt securities notice of the new stated maturity promptly upon
its receipt of the notice from us. The subordinated indenture trustee will give
the notice in the manner described below under "--Notices."
Optional Redemption
We may redeem any series of subordinated debt securities, at our option,
before their stated maturity as follows:
. at any time on or after the date stated in an applicable prospectus
supplement, in whole or in part, provided that no partial redemption may
occur during a deferral period with respect to such series of
subordinated debt securities; and
. at any time in whole, but not in part, within 90 days after a Tax Event
or an Investment Company Act Event has occurred with respect to such
series of subordinated debt securities.
We will pay the Redemption Price on the Redemption Date to the holders of
subordinated debt securities to be redeemed. In this context, "Redemption
Price" means the aggregate principal amount of the subordinated debt securities
to be redeemed, plus any accrued and unpaid interest on those securities to the
Redemption Date. Notwithstanding the foregoing, installments of interest on
those securities that are due and payable on interest payment dates falling on
or prior to a Redemption Date will be payable on the interest payment date to
the registered holders as of the close of business on the relevant record date
according to those securities and the subordinated indenture. The Redemption
Price will be calculated on the basis of a 360-day year consisting of twelve
30-day months.
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We will mail notice of any redemption at least 30 days but not more than 60
days before the Redemption Date to each registered holder of the series of the
subordinated debt securities to be redeemed. Once notice of redemption is
mailed, the series of subordinated debt securities called for redemption will
become due and payable on the Redemption Date and at the applicable Redemption
Price, plus accrued and unpaid interest to the Redemption Date. If we elect to
redeem all or a portion of a series of subordinated debt securities, that
redemption will not be conditional upon receipt by the paying agent or the
subordinated indenture trustee of monies sufficient to pay the Redemption
Price. See "Description of Debt Securities--Optional Redemption" above.
Tax Event
"Tax Event" with respect to any trust means that we receive an opinion of
counsel, experienced in such matters, that as a result of any Tax Change (as
defined below), there is more than an insubstantial risk that:
. such trust is, or will be within 90 days after the date of the opinion of
counsel, subject to United States federal income tax with respect to
income received or accrued on the series of subordinated debt securities
held by such trust;
. interest payable by us or original issue discount accruing on such
subordinated debt securities is not, or within 90 days after the date of
the opinion, will not be, deductible by us, in whole or in part, for
United States federal income tax purposes; or
. such trust is, or will be within 90 days after the date of the opinion,
subject to more than a minimal amount of other taxes, duties or
governmental charges.
As used above, "Tax Change" means with respect to any trust any of the
following that are enacted, promulgated or announced on or after the date of
the prospectus supplement for the trust preferred securities of such trust:
. amendment to or change, including any announced prospective change, in
the laws or any regulations under the laws of the United States or of any
political subdivision or taxing authority of the United States; or
. official administrative pronouncement or judicial decision interpreting
or applying the laws or regulations stated above whether or not the
pronouncement or decision is issued to or in connection with a proceeding
involving us or such trust or subject to review or appeal.
Investment Company Act Event
"Investment Company Act Event" means with respect to any trust that we
receive an opinion of counsel, experienced in such matters, that as a result of
the occurrence of a change in law or regulation, or a written change in
interpretation or application of law or regulation, by any legislative body,
court, governmental agency or regulatory authority effective on or after the
date of the prospectus supplement for the trust preferred securities of such
trust, there is more than an insubstantial risk that such trust is or will be
considered an "investment company" that is required to be registered under the
Investment Company Act of 1940, as amended.
Payment of Additional Sums
If a Tax Event with respect to any trust is continuing and we do not elect
to redeem the series of subordinated debt securities held by such trust or
liquidate such trust, we will pay additional amounts, if any, to
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the holders of such subordinated debt securities so that, notwithstanding any
additional taxes, duties or charges imposed on such trust because of a Tax
Event, the trust will have sufficient funds to pay the full amount of
distributions due on the outstanding trust securities of such trust.
Redemption Procedures
We will give the holders of the series of subordinated debt securities to be
redeemed at least 30 days, but not more than 60 days, notice before the
Redemption Date, in the manner described below under "--Notices." Once notice
of redemption is mailed, the series of subordinated debt securities called for
redemption become due and payable on the Redemption Date and at the redemption
price, including accrued and unpaid interest and premium, if any, to the
Redemption Date. In all other respects, the procedures for redeeming
subordinated debt securities will be similar to those for redeeming trust
preferred securities. See "Description of the Trust Preferred Securities--
Redemption--Redemption Procedures" above.
On the Redemption Date, interest will stop accruing on the series of
subordinated debt securities called for redemption. However, if payment of the
Redemption Price for any such subordinated debt securities is not made,
interest on those subordinated debt securities will continue to accrue to the
date the Redemption Price is paid.
Exchange of Trust Preferred Securities for Subordinated Debt Securities
We will have the right at any time to dissolve a trust. In such event, the
applicable property trustee will distribute the series of subordinated debt
securities held by such trust to the holders of the trust preferred securities
of such trust in exchange for their securities. See "Description of Trust
Preferred Securities-- Exchange of Trust Preferred Securities for Subordinated
Debt Securities" above and procedures relating to such an exchange.
Restrictions on Payments
If any subordinated debt securities of a series are outstanding, we will be
prohibited from taking specified actions described below if:
(a) an event has occurred that constitutes a Subordinated Indenture
Event of Default for such series or, after notice or passage of time, or
both, would constitute a Subordinated Indenture Event of Default for such
series, and we have knowledge of such event but do not take reasonable
steps to cure the default;
(b) we do not pay any amount due under the trust preferred securities
guarantee relating to the trust preferred securities of such trust, if such
series of subordinated debt securities are held by such trust; or
(c) we have given notice of our election to begin a deferral period with
respect to such series and have not rescinded such notice, or any deferral
period with respect to such series is continuing.
In such event, we may not take any of the following actions, except as
described below:
(a) declare or pay any dividend or other distribution on, redeem,
purchase or acquire, or make a liquidation payment on any shares of our
capital stock;
(b) pay any amount on or repay, redeem or repurchase any debt securities
issued by us that rank equal with or junior to such series of subordinated
debt securities; or
(c) make any payments under any of our guarantees if such guarantee
ranks equal with or junior to such series of subordinated debt securities
and guarantees payments on any debt securities of any of our subsidiaries.
Notwithstanding the foregoing, we may:
(a) declare dividends in, or make any payment in, shares of our common
stock;
46
(b) redeem, purchase or acquire our common stock if related to the
issuance of common stock under any of our benefit plans for our directors,
officers or employees;
(c) declare or pay a dividend in connection with any shareholder's
rights plan, issue stock under such plan or redeem, repurchase or acquire
any rights distributed pursuant to the plan; or
(d) make payments under any trust preferred securities guarantee or any
other preferred securities guarantee (as described under "Description of
Trust Preferred Securities--Status of the Trust Preferred Securities
Guarantees" above and "Description of Trust Preferred Securities
Guarantees" below).
Events of Default
A "Subordinated Indenture Event of Default" occurs with respect to a series
of subordinated debt securities if:
(a) we do not pay any interest on any subordinated debt securities of
such series within 30 days of the due date, provided that, if we elect to
defer an interest payment, the date on which that payment is due will be
the date on which we are required to make payment following its deferral;
(b) we do not pay any principal of or premium on any subordinated debt
securities of such series on the due date;
(c) we remain in breach of a covenant or warranty (excluding covenants
and warranties solely applicable to another series of subordinated debt
securities issued under the subordinated indenture) in the subordinated
indenture or the subordinated debt securities of such series for 60 days
after we receive a written notice of default stating we are in breach and
requiring remedy of the breach; the notice must be sent by either the
subordinated indenture trustee or registered holders of at least 25% of the
principal amount of the outstanding subordinated debt securities of such
series; or
(d) we file for bankruptcy or other specified events in bankruptcy,
insolvency, receivership or reorganization occur.
Remedies
Acceleration
If a Subordinated Indenture Event of Default occurs and is continuing with
respect to the subordinated debt securities of a series, then either the
subordinated indenture trustee or the registered holders of at least 25% in
principal amount of the outstanding subordinated debt securities of such series
may declare the principal amount of all such subordinated debt securities,
together with accrued and unpaid interest thereon, to be due and payable
immediately.
Rescission of Acceleration
After the declaration of acceleration has been made with respect to a series
of subordinated debt securities and before the subordinated indenture trustee
has obtained a judgment or decree for payment of the money due, the declaration
and its consequences will be rescinded and annulled, if:
(a) we pay or deposit with the subordinated indenture trustee a sum
sufficient to pay:
(1) all overdue interest on the subordinated debt securities of such
series, other than interest which has become due by declaration of
acceleration;
(2) the principal of and any premium on the subordinated debt
securities of such series which have become due otherwise than by the
declaration of acceleration and overdue interest on these amounts;
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(3) interest on overdue interest, other than interest, which has become
due by declaration of acceleration, on the subordinated debt securities of
such series to the extent lawful;
(4) all amounts due to the subordinated indenture trustee under the
subordinated indenture; and
(b) all Subordinated Indenture Events of Default with respect to the
subordinated debt securities of such series, other than the nonpayment of
the principal and interest which has become due solely by the declaration
of acceleration, have been cured or waived as provided in the subordinated
indenture.
For more information as to waiver of defaults, see "--Waiver of Default and
of Compliance" below.
Control by Registered Holders; Limitations
If a Subordinated Indenture Event of Default with respect to a series of
subordinated debt securities occurs and is continuing, the registered holders
of a majority in principal amount of the outstanding subordinated debt
securities of such series, voting as a single class, without regard to the
holders of outstanding subordinated debt securities of any other series that
may also be in default, will have the right to direct the time, method and
place of:
(a) conducting any proceeding for any remedy available to the
subordinated indenture trustee with respect to the subordinated debt
securities of such series; and
(b) exercising any trust or power conferred on the subordinated
indenture trustee with respect to the subordinated debt securities of such
series.
These rights of registered holders to give directions are subject to the
following limitations:
(a) the registered holders' directions do not conflict with any law or
the subordinated indenture; and
(b) the direction is not unduly prejudicial to the rights of holders of
subordinated debt securities of such series who do not join in that action.
The subordinated indenture trustee may also take any other action it deems
proper which is consistent with the registered holders' direction.
In addition, the subordinated indenture provides that no registered holder
of subordinated debt securities of any series will have any right to institute
any proceeding, judicial or otherwise, with respect to the subordinated
indenture or for the appointment of a receiver or for any other remedy
thereunder unless:
(a) that registered holder has previously given the subordinated
indenture trustee written notice of a continuing Subordinated Indenture
Event of Default with respect to such series;
(b) the registered holders of at least 25% in aggregate principal amount
of the outstanding subordinated debt securities of such series have made
written request to the subordinated indenture trustee to institute
proceedings in respect of that Subordinated Indenture Event of Default and
have offered the subordinated indenture trustee reasonable indemnity
against costs and liabilities incurred in complying with the request; and
(c) for 60 days after receipt of the notice, the subordinated indenture
trustee has failed to institute a proceeding and no direction inconsistent
with the request has been given to the subordinated indenture trustee
during the 60-day period by the registered holders of a majority in
aggregate principal amount of outstanding subordinated debt securities of
such series.
Furthermore, no registered holder will be entitled to institute any action if
and to the extent that the action would disturb or prejudice the rights of
other registered holders of subordinated debt securities.
However, each registered holder has an absolute and unconditional right to
receive payment when due and to bring a suit to enforce that right.
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Notice of Default
The subordinated indenture trustee is required to give the registered
holders of subordinated debt securities notice of any default under the
subordinated indenture to the extent required by the Trust Indenture Act,
unless the default has been cured or waived; except that in the case of an
event of default of the character specified above in clause (c) under "--Events
of Default," no notice shall be given to the registered holders until at least
30 days after the occurrence of the default. The Trust Indenture Act currently
permits the subordinated indenture trustee to withhold notices of default
(except for certain payment defaults) if the subordinated indenture trustee in
good faith determines the withholding of the notice to be in the interests of
the registered holders.
We will furnish the subordinated indenture trustee with an annual statement
as to our compliance with the conditions and covenants in the subordinated
indenture.
Waiver of Default and of Compliance
The registered holders of a majority in aggregate principal amount of the
outstanding subordinated debt securities of any series, voting as a single
class, without regard to the holders of outstanding subordinated debt
securities of any other series, may waive, on behalf of all registered holders
of the subordinated debt securities of such series, any past default under the
subordinated indenture, except a default in the payment of principal, premium
or interest on any subordinated debt securities of such series, or with respect
to compliance with certain provisions of the subordinated indenture that cannot
be amended without the consent of the registered holder of each outstanding
trust preferred security of the trust which holds such series of subordinated
debt securities.
Unless indicated differently in a prospectus supplement, compliance with
certain covenants in the applicable indenture or otherwise provided with
respect to subordinated debt securities of any series may be waived prior to
the time specified for compliance by the registered holders of a majority in
aggregate principal amount of the subordinate debt securities of such series.
Consolidation, Merger and Conveyance of Assets as an Entirety; No Financial
Covenants
We have agreed not to consolidate or merge with or into any other entity, or
to sell, transfer, lease or otherwise convey our properties and assets as an
entirety or substantially as an entirety to any entity, unless:
(a) either we are the continuing entity (in the case of a merger) or the
successor entity formed by such consolidation or into which we are merged
or which acquires by sale, transfer, lease or other conveyance our
properties and assets, as an entirety or substantially as an entirety, is a
corporation is an entity organized and existing under the laws of the
United States of America or any State thereof or the District of Columbia,
and expressly assumes, by supplemental indenture, the due and punctual
payment of the principal, premium and interest on all the subordinated debt
securities and the performance of all of our covenants under the
subordinated indenture; and
(b) immediately after giving effect to the transaction, no Subordinated
Indenture Event of Default, and no event which after notice or lapse of
time or both would become a Subordinated Indenture Event of Default, has or
will have occurred and be continuing.
In addition to these conditions, the successor entity must assume all of our
obligations with respect to the trust preferred securities guarantees, and such
transaction must be permitted under, and not give rise to any violation of, any
Declaration or any trust preferred securities guarantee.
Neither the subordinated indenture nor the trust preferred securities
guarantees contain any financial or other similar restrictive covenants.
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Modification of Subordinated Indenture
Without Registered Holder Consent. Without the consent of any registered
holders of any subordinated debt securities which may in the future be issued
under the subordinated indenture, we, and the subordinated indenture trustee,
may enter into one or more supplemental indentures for any of the following
purposes:
(a) to evidence the succession of another entity to us; or
(b) to add one or more covenants for the benefit of the holders of all
or any series of subordinated debt securities, or to surrender any right or
power conferred upon us; or
(c) to add any additional events of default for all or any series of
subordinated debt securities; or
(d) to change or eliminate any provision of the subordinated indenture
so long as the change or elimination does not apply to any subordinated
debt securities entitled to the benefit of such provision or to add any new
provision to the subordinated indenture (in addition to the provisions
which may otherwise be added to the subordinated indenture pursuant to the
other clauses of this paragraph) so long as the addition does not apply to
any outstanding subordinated debt securities; or
(e) to provide security for the subordinated debt securities of any
series; or
(f) to establish the form or terms of subordinated debt securities of
any series as permitted by the subordinated indenture; or
(g) to evidence and provide for the acceptance of appointment of a
separate or successor subordinated indenture trustee; or
(h) to cure any ambiguity, defect or inconsistency or to make any other
changes with respect to any series of subordinated debt securities that do
not adversely affect the interests of the holders of that series of
subordinated debt securities in any material respect.
With Registered Holder Consent. Subject to the following sentence, we and
the subordinated indenture trustee may, with some exceptions, amend or modify
the subordinated indenture with the consent of the registered holders of at
least a majority in aggregate principal amount of the subordinated debt
securities of each series affected by the amendment or modification. However,
no amendment or modification may, without the consent of the registered holder
of each outstanding subordinated debt security affected thereby:
(a) change the stated maturity of the principal or interest on any
subordinated debt security or reduce the principal amount, interest or
premium payable, or change any place of payment where or the currency in
which any debt security is payable, or impair the right to bring suit to
enforce any payment;
(b) reduce the percentages of registered holders whose consent is
required for any supplemental indenture or waiver;
(c) modify certain of the provisions in the subordinated indenture
relating to supplemental indentures and waivers of certain covenants and
past defaults; or
(d) modify any provisions relating to subordination or the definition of
"senior debt" in a manner adverse to the holders of the subordinated debt
securities.
A supplemental indenture which changes or eliminates any provision of a
subordinated indenture expressly included solely for the benefit of holders of
subordinated debt securities of one or more particular series will be deemed
not to affect the interests under the subordinated indenture of the holders of
subordinated debt securities of any other series. However, any amendment that
adversely affects the holders of any series of trust preferred securities in
any material respect, as well as any termination of the subordinated indenture
and any waiver of a Subordinated Indenture Event of Default with respect to any
series of subordinated debt securities, will require the consent of the holders
of a majority in liquidation amount of each series of trust preferred
securities affected thereby.
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Subordination
The subordinated debt securities will be subordinated in right of payment to
the prior payment in full of all our senior debt. This means that, upon:
(a) any distribution of our assets upon our dissolution, winding-up,
liquidation or reorganization in bankruptcy, insolvency, receivership or
other proceedings; or
(b) acceleration of the maturity of any subordinated debt securities; or
(c) a failure to pay any senior debt or interest thereon when due and
continuance of that default beyond any applicable grace period; or
(d) acceleration of the maturity of any senior debt as a result of a
default, the holders of all of our senior debt will be entitled to receive:
(1) in the case of clauses (a) and (b) above, payment of all amounts due
or to become due on all senior debt; and
(2) in the case of clauses (c) and (d) above, payment of all amounts due
on all senior debt,
before the holders of any of the subordinated debt securities are entitled to
receive any payment. So long as any of the events in clauses (a), (b), (c) or
(d) above has occurred and is continuing, any amounts payable on the
subordinated debt securities will instead be paid directly to the holders of
all senior debt to the extent necessary to pay the senior debt in full and, if
any payment is received by the subordinated indenture trustee under the
subordinated indenture or the holders of any of the subordinated debt
securities before all senior debt is paid in full, the payment or distribution
must be paid over to the holders of the unpaid senior debt. Subject to paying
the senior debt in full, the holders of the subordinated debt securities will
be subrogated to the rights of the holders of the senior debt to the extent
that payments are made to the holders of senior debt out of the distributive
share of the subordinated debt securities.
"senior debt" means with respect to the subordinated debt securities, the
principal of, and premium, if any, and interest on any other payment in respect
of indebtedness due pursuant to any of the following, whether outstanding on
the date the subordinated debt securities are issued or thereafter incurred,
created or assumed:
(a) all of our indebtedness evidenced by notes, debentures, bonds or
other securities sold by us for money or other obligations for money
borrowed;
(b) all indebtedness of others of the kinds described in the preceding
clause (a) assumed by or guaranteed in any manner by us or in effect
guaranteed by us through an agreement to purchase, contingent or otherwise;
and
(c) all renewals, extensions or refundings of indebtedness of the kinds
described in either of the preceding clauses (a) and (b), unless, in the
case of any particular indebtedness, renewal, extension or refunding, the
instrument creating or evidencing the same or the assumption or guarantee
of the same by its terms provides that such indebtedness, renewal,
extension or refunding is not superior in right of payment to or is pari
passu with such securities.
Due to the subordination, if our assets are distributed upon insolvency,
certain of our general creditors may recover more, ratably, than holders of
subordinated debt securities. The subordination provisions will not apply to
money and securities held in trust under the satisfaction and discharge and the
defeasance provisions of the subordinated indenture.
The subordinated debt securities, the subordinated indenture and the trust
preferred securities guarantees do not limit our or any of our subsidiaries'
ability to incur additional indebtedness, including indebtedness that ranks
senior to the subordinated debt securities and the trust preferred securities
guarantees. We expect that we and our subsidiaries will incur substantial
additional amounts of indebtedness in the future.
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Defeasance
The subordinated indenture provides, unless the terms of the particular
series of debt securities provide otherwise, that we may, upon satisfying
several conditions, cause ourselves to be discharged from our obligations, with
some exceptions, with respect to any series of subordinated debt securities,
which we refer to as "defeasance."
One condition we must satisfy is the irrevocable deposit with the
subordinated trustee, in trust, of money and/or government obligations which,
through the scheduled payment of principal and interest on those obligations,
would provide sufficient moneys to pay the principal of and any premium and
interest on those subordinated debt securities on the maturity dates of the
payments or upon redemption.
In addition, we will be required to deliver an opinion of counsel to the
effect that a holder of subordinated debt securities will not recognize income,
gain or loss for federal income tax purposes as a result of the defeasance and
will be subject to federal income tax on the same amounts, at the same times
and in the same manner as if that defeasance had not occurred. The opinion of
counsel must be based upon a ruling of the Internal Revenue Service or a change
in law after the date of the subordinated indenture.
Satisfaction and Discharge
The subordinated indenture will cease to be of further effect with respect
to any series of subordinated debt securities, and we will be deemed to have
satisfied and discharged all of our obligations under the subordinated
indenture, except as noted below, when:
(a) all outstanding subordinated debt securities of such series have
become due or will become due within one year at their stated maturity or
on a Redemption Date; and
(b) we deposit with the subordinated indenture trustee, in trust, funds
that are sufficient to pay and discharge all remaining indebtedness on the
outstanding subordinated debt securities of such series.
We will remain obligated to pay all other amounts due under the subordinated
indenture and to perform certain ministerial tasks as described in the
subordinated indenture.
Resignation and Removal of the Trustee; Deemed Resignation
The subordinated indenture trustee with respect to any series of
subordinated debt securities may resign at any time by giving written notice to
us. The subordinated indenture trustee may also be removed with respect to the
subordinated debt securities of any series by act of the registered holders of
a majority in principal amount of the then outstanding subordinated debt
securities of such series. No resignation or removal of the subordinated
indenture trustee and no appointment of a successor trustee will become
effective until the acceptance of appointment by a successor trustee in
accordance with the requirements of the subordinated indenture. Under certain
circumstances, we may appoint a successor trustee with respect to any series of
subordinated debt securities and if the successor trustee accepts, the
subordinated indenture trustee will be deemed to have resigned.
Registration of Trust Preferred Subordinated Debt Securities
The trust preferred subordinated debt securities initially will be issued in
certificated form and registered in the name of the applicable property
trustee. If in the future any trust preferred subordinated debt securities are
distributed to holders of trust preferred securities in exchange for trust
preferred securities and at that time such trust preferred securities are
represented by a global security, the subordinated debt securities would also
be represented by a global security. In this event, we expect that the book-
entry arrangements applicable to such subordinated debt securities would be
similar to those applicable to the trust preferred securities.
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Notices
Notices to be given to holders of subordinated debt securities held in
certificated form may be given by mail to their addresses as set forth in our
records. Notices to be given to holders of subordinated debt securities held in
book-entry form will be given to DTC in accordance with its procedures.
Governing Law
The subordinated indenture and the subordinated debt securities will be
governed by and construed in accordance with the laws of the State of New York.
53
DESCRIPTION OF TRUST PREFERRED SECURITIES GUARANTEES
General
We will execute a trust preferred securities guarantee ("preferred
securities guarantee"), which benefits the holders of trust preferred
securities, at the time that a trust issues those trust preferred securities.
Each preferred securities guarantee will be qualified as an indenture under
the Trust Indenture Act. The Bank of New York will act as indenture trustee
("guarantee trustee") under each preferred securities guarantee for the
purposes of compliance with the Trust Indenture Act.
The guarantee trustee will hold each preferred securities guarantee for the
benefit of the trust preferred securities holders of the applicable trust.
We will irrevocably agree, as described in each preferred securities
guarantee, to pay in full, to the holders of the trust preferred securities
issued by the applicable trust, the preferred securities guarantee payments
(as defined below) (except to the extent previously paid), when and as due,
regardless of any defense, right of set-off or counterclaim which the trust
may have or assert. The following payments, to the extent not paid by a trust
("guarantee payments"), will be covered by the applicable preferred securities
guarantee:
(a) any accrued and unpaid distributions required to be paid on the
applicable trust preferred securities, to the extent that the trust has
funds available to make the payment;
(b) the redemption price, to the extent that the trust has funds
available to make the payment; and
(c) upon a voluntary or involuntary dissolution and liquidation of the
trust (other than in connection with a distribution of subordinated debt
securities to holders of the trust preferred securities or the redemption
of all the trust preferred securities), the lesser of:
(1) the aggregate of the liquidation amount specified in the
prospectus supplement for each trust preferred security plus all accrued
and unpaid distributions on the trust preferred security to the date of
payment, to the extent the trust has funds available to make the
payment; and
(2) the amount of assets of the trust remaining available for
distribution to holders of its trust preferred securities upon a
dissolution and liquidation of the trust.
Our obligation to make a guarantee payment may be satisfied by directly
paying the required amounts to the holders of the trust preferred securities
or by causing the trust to pay the amounts to the holders.
No single document executed by us relating to the issuance of trust
preferred securities will provide for its full, irrevocable and unconditional
guarantee of the trust preferred securities. It is only the combined operation
of our obligations under the subordinated indenture, the applicable series of
subordinated debt securities and the applicable preferred securities guarantee
and related Declaration that has the effect of providing a full, irrevocable
and unconditional guarantee of a trust's obligations under its trust preferred
securities.
Status of the Preferred Securities Guarantees
Each preferred securities guarantee will constitute our unsecured
obligation and will rank:
(a) subordinate and junior in right of payment to all of our other
liabilities, except any guarantee now or hereafter issued by us in respect
of any preferred or preference stock of any of our affiliates;
(b) equal with any guarantee now or hereafter issued by us in respect of
the most senior preferred or preference stock now or hereafter issued by
us, and with any guarantee now or hereafter issued by us in respect of any
preferred or preference stock of any of our affiliates; and
(c) senior to our common stock.
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Each Declaration will require that the holder of trust preferred securities
accept the subordination provisions and other terms of the preferred securities
guarantee. Each preferred securities guarantee will constitute a guarantee of
payment and not of collection. As a result, the holder of the guaranteed
security may sue us, or seek other remedies, to enforce its rights under the
preferred securities guarantee without first suing any other person or entity.
A preferred securities guarantee will not be discharged except by payment of
the preferred securities guarantee payments in full to the extent not
previously paid or upon distribution to the applicable trust preferred
securities holders of the corresponding series of subordinated debt securities
pursuant to the appropriate Declaration.
Amendments and Assignment
Except with respect to any changes which do not adversely affect the rights
of holders of a series of trust preferred securities in any material respect
(in which case no consent of the holders will be required), a preferred
securities guarantee may be amended only with the prior approval of the holders
of at least a majority in aggregate liquidation amount of the trust preferred
securities (excluding any trust preferred securities held by us or any of our
affiliates). A description of the way to obtain any approval is described under
"Description of Trust Preferred Securities--Voting Rights; Amendment of
Declaration." All guarantees and agreements contained in a preferred securities
guarantee will be binding on our successors, assigns, receivers, trustees and
representatives and are for the benefit of the holders of the applicable trust
preferred securities.
Preferred Securities Guarantee Events of Default
An event of default under a preferred securities guarantee occurs if we fail
to make any of our required payments or perform our obligations under the
preferred securities guarantee.
The holders of at least a majority in aggregate liquidation amount of the
trust preferred securities relating to each preferred securities guarantee,
excluding any trust preferred securities held by us or any of our affiliates,
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the guarantee trustee relating to the
preferred securities guarantee or to direct the exercise of any trust or power
given to the guarantee trustee under the preferred securities guarantee.
Information Concerning the Guarantee Trustees
The guarantee trustee under a preferred securities guarantee, other than
during the occurrence and continuance of a default under the preferred
securities guarantee, will perform only the duties that are specifically
described in the preferred securities guarantee. After such a default, the
guarantee trustee will exercise the same degree of care and skill as a prudent
person would exercise or use in the conduct of his or her own affairs. Subject
to this provision, a guarantee trustee is under no obligation to exercise any
of its powers as described in the applicable preferred securities guarantee at
the request of any holder of covered trust preferred securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
it might incur.
Termination of the Preferred Securities Guarantees
Each preferred securities guarantee will terminate once the applicable trust
preferred securities are paid in full or upon distribution of the corresponding
series of subordinated debt securities to the holders of the trust preferred
securities. Each preferred securities guarantee will continue to be effective
or will be reinstated if at any time any holder of trust preferred securities
issued by the applicable trust must restore payment of any sums paid under the
trust preferred securities or the preferred securities guarantee.
Governing Law
The preferred securities guarantees will be governed by and construed in
accordance with the laws of the State of New York.
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RELATIONSHIP AMONG TRUST PREFERRED SECURITIES, PREFERRED SECURITIES GUARANTEES
AND SUBORDINATED DEBT SECURITIES HELD BY EACH TRUST
Payments of distributions and redemption and liquidation payments due on
each series of trust preferred securities, to the extent the applicable trust
has funds available for the payments, will be guaranteed by us to the extent
described under "Description of Trust Preferred Securities Guarantees." No
single document executed by us in connection with the issuance of any series of
trust preferred securities will provide for our full, irrevocable and
unconditional guarantee of the trust preferred securities. It is only the
combined operation of our obligations under the applicable preferred securities
guarantee, Declaration, subordinated indenture and subordinated debt securities
that has the effect of providing a full, irrevocable and unconditional
guarantee of a trust's obligations under its trust preferred securities.
As long as we make payments of interest and other payments when due on the
subordinated debt securities held by a trust, the payments will be sufficient
to cover the payment of distributions and redemption and liquidation payments
due on the trust preferred securities issued by that trust, primarily because:
(a) the aggregate principal amount of the subordinated debt securities
will be equal to the sum of the aggregate liquidation amount of the trust
preferred and common securities;
(b) the interest rate and interest and other payment dates on the
subordinated debt securities will match the distribution rate and
distribution and other payment dates for the trust preferred securities;
(c) we shall pay for any and all costs, expenses and liabilities of each
trust except the trust's obligations under its trust preferred securities
(and we have agreed to guarantee such payment); and
(d) each Declaration provides that the related trust will not engage in
any activity that is not consistent with the limited purposes of such
trust.
If and to the extent that we do not make payments on the related
subordinated debt securities, a trust will not have funds available to make
payments of distributions or other amounts due on its trust preferred
securities. In those circumstances, holders of such trust preferred securities
will not be able to rely upon the preferred securities guarantee for payment of
these amounts. Instead, holders of such trust preferred securities may directly
sue us or seek other remedies to collect their pro rata share of payments owed.
If holders of such trust preferred securities sue us to collect payment, then
we will assume their rights as a holder of trust preferred securities under
such trust's Declaration to the extent we make a payment to them in any legal
action.
A holder of any trust preferred security may sue us, or seek other remedies,
to enforce its rights under the applicable preferred securities guarantee
without first suing the applicable guarantee trustee, the trust which issued
the trust preferred security or any other person or entity.
GLOBAL SECURITIES
Book-Entry, Delivery and Form
Unless the company issuing the debt securities, trust preferred securities,
warrants, common stock, preferred stock, stock purchase contracts, stock
purchase units or depositary shares (the "securities") indicates differently in
a supplemental prospectus, the securities initially will be issued in book-
entry form and represented by one or more global notes or global securities
(collectively, "global securities"). The global securities will be deposited
with, or on behalf of, The Depositary Trust Company, New York, New York, as
depositary ("DTC"), and registered in the name of Cede & Co., the nominee of
DTC. Unless and until it is exchanged for individual certificates evidencing
securities under the limited circumstances described below, a global security
may not be transferred except as a whole by the depositary to its nominee or by
the nominee to the depositary, or by the depositary or its nominee to a
successor depositary or to a nominee of the successor depositary.
56
DTC has advised each of the issuing companies that it 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 deposit with DTC. DTC also
facilitates the settlement among its participants of securities transactions,
including transfers and pledges, in deposited securities through electronic
computerized book-entry changes in participants' accounts, which eliminates the
need for physical movement of securities certificates. "Direct participants" in
DTC include securities brokers and dealers, including underwriters, banks,
trust companies, clearing corporations and other organizations. DTC is owned by
a number of its direct participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange LLC and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others, which we
sometimes refer to as "indirect participants," that clear transactions through
or maintain a custodial relationship with a direct participant either directly
or indirectly. 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 those securities on DTC's
records. The ownership interest of the actual purchaser of a security, which we
sometimes refer to as a "beneficial owner," is in turn recorded on the direct
and indirect participants' records. Beneficial owners of securities will not
receive written confirmation from DTC of their purchases. However, beneficial
owners are expected to receive written confirmations providing details of their
transactions, as well as periodic statements of their holdings, from the direct
or indirect participants through which they purchased securities. Transfers of
ownership interests in global 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 their ownership interests in
the global securities except under the limited circumstances described below.
To facilitate subsequent transfers, all global securities deposited with DTC
will be registered in the name of DTC's nominee, Cede & Co. The deposit of
securities with DTC and their registration in the name of Cede & Co. will not
change the beneficial ownership of the securities. DTC has no knowledge of the
actual beneficial owners 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 are
responsible for keeping account of their holdings on behalf of their customers.
So long as the securities are in book-entry form, you will receive payments
and may transfer securities only through the facilities of the depositary and
its direct and indirect participants. The company issuing the securities will
maintain an office or agency in the Borough of Manhattan, the City of New York
where notices and demands in respect of the securities and the applicable
indenture may be delivered to us and where certificated securities may be
surrendered for payment, registration of transfer or exchange. That office or
agency, with respect to the applicable indenture, will initially be the office
of the trustee which is currently located at 100 Wall Street, Suite 1600, New
York, New York 10005, in the case of U.S. Bank Trust National Association, and
101 Barclay Street, Floor 21, New York, New York 10286, in the case of The Bank
of New York.
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 legal requirements in effect from time
to time.
57
Redemption notices will be sent to DTC or its nominee. If less than all of
the securities of a particular series are being redeemed, DTC will determine
the amount of the interest of each direct participant in the securities of such
series to be redeemed in accordance with DTC's procedures.
In any case where a vote may be required with respect to securities of a
particular series, neither DTC nor Cede & Co. will give consents for or vote
the global securities. Under its usual procedures, DTC will mail an omnibus
proxy to us as soon as possible after the record date. The omnibus proxy
assigns the consenting or voting rights of Cede & Co. to those direct
participants to whose accounts the securities of such series are credited on
the record date identified in a listing attached to the omnibus proxy.
So long as securities are in book-entry form, the company issuing such
securities will make payments on those securities to the depositary or its
nominee, as the registered owner of such securities, by wire transfer of
immediately available funds. If securities are issued in definitive
certificated form under the limited circumstances described below, the company
issuing the securities will have the option of paying interest by check mailed
to the addresses of the persons entitled to payment or by wire transfer to bank
accounts in the United States designated in writing to the applicable trustee
at least 15 days before the applicable payment date by the persons entitled to
payment.
Principal and interest payments on the securities will be made to Cede &
Co., as nominee of DTC. DTC's practice is to credit direct participants'
accounts on the relevant payment date unless DTC has reason to believe that it
will not receive payment on the payment date. Payments by direct and indirect
participants to beneficial owners will be governed by standing instructions and
customary practices, as is the case with securities held for the account of
customers in bearer form or registered in "street name." Those payments will be
the responsibility of participants and not of DTC or us, subject to any legal
requirements in effect from time to time. Payment of principal and interest to
Cede & Co. is our responsibility, disbursement of payments to direct
participants is the responsibility of DTC and disbursement of payments to the
beneficial owners is the responsibility of direct and indirect participants.
Except under the limited circumstances described below, purchasers of
securities will not be entitled to have securities registered in their names
and will not receive physical delivery of securities. Accordingly, each
beneficial owner must rely on the procedures of DTC and its participants to
exercise any rights under the securities and the applicable indenture.
The laws of some jurisdictions may require that some purchasers of
securities take physical delivery of securities in definitive form. Those laws
may impair the ability to transfer or pledge beneficial interests in
securities.
DTC is under no obligation to provide its services as depositary for the
securities and may discontinue providing its services at any time. Neither the
company issuing the securities nor the applicable trustee will have any
responsibility for the performance by DTC or its direct participants or
indirect participants under the rules and procedures governing DTC.
As noted above, beneficial owners of a particular series of securities
generally will not receive certificates representing their ownership interests
in those securities. However, if:
. DTC notifies the company issuing such securities that it is unwilling or
unable to continue as a depositary for the global security or securities
representing such series of securities or if DTC ceases to be a clearing
agency registered under the Securities Exchange Act at a time when it is
required to be registered and a successor depositary is not appointed
within 90 days of the notification to us or of our becoming aware of
DTC's ceasing to be so registered, as the case may be;
. the company issuing such securities determines, in its sole discretion,
not to have such securities represented by one or more global securities;
or
. an Event of Default under the indenture has occurred and is continuing
with respect to such series of securities,
58
the company issuing such securities will prepare and deliver certificates for
such securities in exchange for beneficial interests in the global securities.
Any beneficial interest in a global security that is exchangeable under the
circumstances described in the preceding sentence will be exchangeable for
securities in definitive certificated form registered in the names that the
depositary directs. It is expected that these directions will be based upon
directions received by the depositary from its participants with respect to
ownership of beneficial interests in the global securities.
Each company has obtained the information in this section and elsewhere in
this prospectus concerning DTC and DTC's book-entry system from sources that
are believed to be reliable, but neither company takes responsibility for the
accuracy of this information.
EXPERTS
The consolidated financial statements and the related financial statement
schedule incorporated by reference in this prospectus from Sempra Energy's
Annual Report on Form 10-K for the year ended December 31, 2000 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports, which are incorporated herein by reference and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
VALIDITY OF THE SECURITIES AND THE GUARANTEES
Latham & Watkins, Los Angeles, California, will pass upon certain legal
matters relating to the issuance and sale of the securities and the guarantees
on behalf of Sempra Energy. Gary W. Kyle, Esq., Chief Corporate Counsel of
Sempra Energy, will pass upon the validity of the securities and the
guarantees. Richards, Layton & Finger, P.A., special Delaware counsel to Sempra
Energy and the trusts, will pass upon certain matters of Delaware law relating
to the validity of the preferred securities. Sidley Austin Brown & Wood LLP,
San Francisco, California, will pass upon the validity of the securities and
the guarantees for any underwriters or agents. Paul C. Pringle, a partner of
Sidley Austin Brown & Wood LLP, owns 2,162 shares of common stock of Sempra
Energy.
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PLAN OF DISTRIBUTION
We may sell the securities described in this prospectus from time to time in
one or more transactions
(a) to purchasers directly;
(b) to underwriters for public offering and sale by them;
(c) through agents;
(d) through dealers; or
(e) through a combination of any of the foregoing methods of sale.
We may distribute the securities from time to time in one or more
transactions at:
(a) a fixed price or prices, which may be changed;
(b) market prices prevailing at the time of sale;
(c) prices related to such prevailing market prices; or
(d) negotiated prices.
Direct Sales
We may sell the securities directly to institutional investors or others. A
prospectus supplement will describe the terms of any sale of securities we are
offering hereunder.
To Underwriters
The applicable prospectus supplement will name any underwriter involved in a
sale of securities. Underwriters may offer and sell securities at a fixed price
or prices, which may be changed, or from time to time at market prices or at
negotiated prices. Underwriters may be deemed to have received compensation
from us from sales of securities in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of securities for
whom they may act as agent.
Underwriters may sell securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters and/or commissions (which may be changed from time to time)
from the purchasers for whom they may act as agent.
Unless otherwise provided in a prospectus supplement, the obligations of any
underwriters to purchase securities or any series of securities will be subject
to certain conditions precedent, and the underwriters will be obligated to
purchase all such securities if any are purchased.
Through Agents and Dealers
We will name any agent involved in a sale of securities, as well as any
commissions payable by us to such agent, in a prospectus supplement. Unless we
indicate differently in the prospectus supplement, any such agent will be
acting on a reasonable efforts basis for the period of its appointment.
If we utilize a dealer in the sale of the securities being offered pursuant
to this prospectus, we will sell the securities to the dealer, as principal.
The dealer may then resell the securities to the public at varying prices to be
determined by the dealer at the time of resale.
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Delayed Delivery Contracts
If we so specify in the applicable prospectus supplement, we will authorize
underwriters, dealers and agents to solicit offers by certain institutions to
purchase securities pursuant to contracts providing for payment and delivery on
future dates. Such contracts will be subject to only those conditions set forth
in the applicable prospectus supplement.
The underwriters, dealers and agents will not be responsible for the
validity or performance of the contracts. We will set forth in the prospectus
supplement relating to the contracts the price to be paid for the securities,
the commissions payable for solicitation of the contracts and the date in the
future for delivery of the securities.
General Information
Underwriters, dealers and agents participating in a sale of the securities
may be deemed to be underwriters as defined in the Securities Act, and any
discounts and commissions received by them and any profit realized by them on
resale of the securities may be deemed to be underwriting discounts and
commissions, under the Securities Act. We may have agreements with
underwriters, dealers and agents to indemnify them against certain civil
liabilities, including liabilities under the Securities Act, and to reimburse
them for certain expenses.
Underwriters or agents and their associates may be customers of, engage in
transactions with or perform services for us or our affiliates in the ordinary
course of business.
Unless we indicate differently in a prospectus supplement, we will not list
the securities on any securities exchange, other than shares of our common
stock. The securities, except for our common stock, will be a new issue of
securities with no established trading market. Any underwriters that purchase
securities for public offering and sale may make a market in such securities,
but such underwriters will not be obligated to do so and may discontinue any
market making at any time without notice. We make no assurance as to the
liquidity of or the trading markets for any securities.
61
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Securities and Exchange Commission registration fee.............. $ 500,000
Printing expenses................................................ 150,000
Trustee fees and expenses........................................ 75,000
Legal fees and expenses.......................................... 100,000
Accounting fees and expenses..................................... 250,000
Blue Sky fees and expenses....................................... 50,000
Rating Agency fees............................................... 250,000
Miscellaneous.................................................... 75,000
----------
Total.......................................................... $1,450,000
==========
--------
All of the above except the Securities and Exchange Commission registration fee
are estimated.
Item 15. Indemnification of Officers and Directors.
Section 317 of the Corporations Code of the State of California permits a
corporation to provide indemnification to its directors and officers under
certain circumstances. The Sempra Energy Amended and Restated Articles of
Incorporation and the Amended and Restated Bylaws eliminate the liability of
directors for monetary damages to the fullest extent permissible under
California law and provide that indemnification for liability for monetary
damages incurred by directors, officers and other agents of Sempra Energy shall
be allowed, subject to certain limitations, in excess of the indemnification
otherwise permissible under California law. In addition, Sempra Energy and
Sempra Energy Global Enterprises have indemnification agreements with each of
their officers and directors that provide for indemnification for monetary
damages to the fullest extent permissible under California law. Sempra Energy
and Sempra Energy Global Enterprises maintain liability insurance and are also
insured against loss for which they may be required or permitted by law to
indemnify their directors and officers for their related acts.
The directors and officers of Sempra Energy and Sempra Energy Global
Enterprises are covered by insurance policies indemnifying them against certain
liabilities, including certain liabilities arising under the Securities Act,
which might be incurred by them in such capacities and against which they
cannot be indemnified by Sempra Energy or Sempra Energy Global Enterprises.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the registrant
pursuant to the foregoing provisions, the registrant has been informed that in
the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
Item 16. Exhibits.
1.1 Underwriting Agreement (Preferred Securities--Sempra Energy Capital Trust
II and Sempra Energy Capital Trust III).*
1.2 Underwriting Agreement (Debt Securities--Sempra Energy).*
1.3 Underwriting Agreement (Debt Securities--Sempra Energy Global
Enterprises).*
1.4 Underwriting Agreement (Equity Securities--Sempra Energy).*
3.1 Amended and Restated Articles of Incorporation of Sempra Energy
(Incorporated by reference from the Registration Statement on Form S-3
File No. 333-51309 dated April 29, 1998 (Exhibit 3.1)).
II-1
3.2 Amended and Restated Bylaws of Sempra Energy effective May 26, 1998
(Incorporated by reference from the Registration Statement on Form S-8
File No. 333-56161 dated June 5, 1998 (Exhibit 3.2)).
3.3 Articles of Incorporation of Sempra Energy Global Enterprises
(Incorporated by reference from the Registration Statement on Form S-3
File No. 333-52192 dated January 8, 2001 (Exhibit 3.3)).
3.4 Bylaws of Sempra Energy Global Enterprises (Incorporated by reference
from the Registration Statement on Form S-3 File No. 333-52192 dated
January 8, 2001 (Exhibit 3.4)).
3.5 Certificate of Trust of Sempra Energy Capital Trust II (Incorporated by
reference from the Registration Statement on Form S-3 File No. 333-
52192 dated January 8, 2001 (Exhibit 3.5)).
3.6 Certificate of Trust of Sempra Energy Capital Trust III (Incorporated
by reference from the Registration Statement on Form S-3 File No. 333-
52192 dated January 8, 2001 (Exhibit 3.6)).
4.1 Indenture for Senior Debt Securities (Sempra Energy) (Incorporated by
reference from the Current Report on Form 8-K filed February 22, 2000
(Exhibit 4.1)).
4.2 Indenture for Subordinated Debt Securities (Sempra Energy)
(Incorporated by reference from the Current Report on Form 8-K filed
February 18, 2000 (Exhibit 4.1)).
4.3 Indenture for Senior Debt Securities (Sempra Energy Global Enterprises)
(Incorporated by reference from the Registration Statement on Form S-3
File No. 52912 dated January 8, 2001 (Exhibit 4.3)).
4.4 Form of Senior Note--Sempra Energy (included in Exhibit 4.1).
4.5 Form of Subordinated Note--Sempra Energy (included in Exhibit 4.2).
4.6 Form of Senior Note--Sempra Energy Global Enterprises (included in
Exhibit 4.3).
4.7 Form of Trust Preferred Security (included in Exhibit 4.12).
4.8 Form of Trust Preferred Security Guarantee--Sempra Energy Capital Trust
II.
4.9 Form of Trust Preferred Security Guarantee--Sempra Energy Capital Trust
III.
4.10 Declaration of Trust of Sempra Energy Capital Trust II.
4.11 Declaration of Trust of Sempra Energy Capital Trust III.
4.12 Form of Amended and Restated Declaration of Trust for each of Sempra
Energy Capital Trust II and Sempra Energy Capital Trust III.
4.13 Rights Agreement dated May 26, 1998 between Sempra Energy and First
Chicago Trust Company of New York, as rights agent (Incorporated by
reference from the Registration Statement on Form 8-A File No. 001-
14201 filed June 5, 1998 (Exhibit 1)).
4.14 Form of Warrant Agreement--Sempra Energy.*
4.15 Form of Warrant Certificate--Sempra Energy (included in Exhibit 4.14).*
4.15 Form of Deposit Agreement--Sempra Energy.*
4.16 Form of Depositary Receipt--Sempra Energy (included in Exhibit 4.15).*
4.17 Form of Purchase Contract.*
4.18 Form of Purchase Unit.*
5.1 Opinion of Gary W. Kyle, Esq.*
5.2 Opinion of Richards, Layton & Finger, P.A. relating to Sempra Energy
Capital Trust II.
5.3 Opinion of Richards, Layton & Finger, P.A. relating to Sempra Energy
Capital Trust III.
5.4 Opinion of Latham & Watkins.*
II-2
12.1 Statement regarding the computation of ratio of earnings to combined
fixed charges and preferred stock dividends for the years ended December
31, 2000, 1999, 1998, 1997 and 1996 and six-month periods ended June 30,
2000 and June 30, 2001.
23.1 Consent of Gary W. Kyle, Esq. (included in Exhibit 5.1).
23.2 Consent of Richards, Layton & Finger, P.A. (included in Exhibits 5.2 and
5.3).
23.3 Consent of Independent Auditors (Deloitte & Touche LLP).
23.4 Consent of Latham & Watkins (included in Exhibit 5.4).
24.1 Powers of Attorney (included on pages II-6, 8, 9 and 10).
25.1 Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of U.S. Bank Trust Company, as Trustee under the
Indenture (Senior Debt Securities--Sempra Energy).
25.2 Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Trustee under the
Indenture (Subordinated Debt Securities--Sempra Energy).
25.3 Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of U.S. Bank Trust Company, as Trustee under the
Indenture (Senior Debt Securities--Sempra Energy Global Enterprises).
25.4 Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Property Trustee-- Sempra
Energy Capital Trust II.
25.5 Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Property Trustee-- Sempra
Energy Capital Trust III.
25.6 Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Preferred Securities
Guarantee Trustee-- Sempra Energy Capital Trust II.
25.7 Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Preferred Securities
Guarantee Trustee-- Sempra Energy Capital Trust III.
25.8 Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Debt Securities Guarantee
Trustee-- Sempra Energy Global Enterprises.
--------
* To be filed by amendment or as an exhibit to a report filed under the
Securities Exchange Act of 1934, as amended and incorporated herein by
reference.
Item 17. Undertakings.
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after
the effective dated of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Securities and Exchange Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than a 20% change in the
II-3
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
provided, however, that (i) and (ii) do not apply if the information required
to be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed with or furnished to the Securities and Exchange
Commission by the registrants pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of Sempra Energy's annual report pursuant to Section 13(a)
or Section 15(d) of the Exchange Act that is incorporated by reference in
this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(5) To file an application for the purpose of determining the
eligibility of the trustees to act under subsection (a) of Section 310 of
the Trust Indenture Act in accordance with the rules and regulations
prescribed by the Securities and Exchange Commission under Section
305(b)(2) of the Securities Act.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrants pursuant to the provisions described under Item 15 above, or
otherwise, the registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by a registrant of expenses incurred or paid by a director, officer
or controlling person in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, such registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Sempra Energy certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Diego, and State of California, on the 28th
day of September, 2001.
Sempra Energy
/s/ Stephen L. Baum
By: _________________________________
Stephen L. Baum
Chairman, Chief Executive Officer
and President
POWER OF ATTORNEY
Each director and/or officer of the registrant whose signature appears below
hereby appoints Stephen L. Baum, John R. Light and Neal E. Schmale, and each of
them severally, as his true and lawful attorney-in-fact and agent to sign in
his name and behalf, in any and all capacities stated below, and to file with
the Securities and Exchange Commission, any and all amendments, including post-
effective amendments and any registration statement for the same offering that
is to be effective under Rule 462(b) of the Securities Act, to this
registration statement, and the registrant hereby also appoints each such
person as its attorney-in-fact and agent with like authority to sign and file
any such amendments in its name and behalf.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons in the
capacities indicated on the 28th day of September, 2001.
Signature Title
--------- -----
/s/ Stephen L. Baum Principal Executive Officer;
______________________________________ Chairman, Chief Executive Officer,
Stephen L. Baum President and Director
/s/ Neal E. Schmale Principal Financial Officer;
______________________________________ Executive Vice President and Chief
Neal E. Schmale Financial Officer
/s/ Frank H. Ault Principal Accounting Officer;
______________________________________ Senior Vice President and
Frank H. Ault Controller
/s/ Hyla H. Bertea Director
______________________________________
Hyla H. Bertea
/s/ Herbert L. Carter Director
______________________________________
Herbert L. Carter
II-5
Signature Title
--------- -----
/s/ Richard A. Collato Director
______________________________________
Richard A. Collato
/s/ Daniel W. Derbes Director
______________________________________
Daniel W. Derbes
/s/ Wilford D. Godbold, Jr. Director
______________________________________
Wilford D. Godbold, Jr.
/s/ William D. Jones Director
______________________________________
William D. Jones
/s/ Ralph R. Ocampo Director
______________________________________
Ralph R. Ocampo
/s/ William G. Ouchi Director
______________________________________
William G. Ouchi
/s/ Thomas C. Stickel Director
______________________________________
Thomas C. Stickel
/s/ Diana L. Walker Director
______________________________________
Diana L. Walker
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Sempra Energy Global Enterprises certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Diego, and State of
California, on the 28th day of September, 2001.
Sempra Energy Global Enterprises
/s/ Donald E. Felsinger
By: _________________________________
Donald E. Felsinger
President
POWER OF ATTORNEY
Each director and/or officer of the registrant whose signature appears below
hereby appoints Stephen L. Baum, John R. Light and Neal E. Schmale, and each of
them severally, as his true and lawful attorney-in-fact and agent to sign in
his name and behalf, in any and all capacities stated below, and to file with
the Securities and Exchange Commission, any and all amendments, including post-
effective amendments and any registration statement for the same offering that
is to be effective under Rule 462(b) of the Securities Act, to this
registration statement, and the registrant hereby also appoints each such
person as its attorney-in-fact and agent with like authority to sign and file
any such amendments in its name and behalf.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons in the
capacities indicated on the 28th day of September, 2001.
Signature Title
--------- -----
/s/ Donald E. Felsinger President and Director
______________________________________
Donald E. Felsinger
/s/ John R. Light Director
______________________________________
John R. Light
/s/ Neal E. Schmale Director
______________________________________
Neal E. Schmale
/s/ Frank H. Ault Principal Accounting
______________________________________ Officer; Senior Vice
Frank H. Ault President and Controller
/s/ Charles A. McMonagle Principal Financial
______________________________________ Officer; Vice President
Charles A. McMonagle and Treasurer
II-7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Sempra Energy Capital Trust II certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Diego, and State of
California, on the 28th day of September, 2001.
Sempra Energy Capital Trust II
/s/ Neal E. Schmale
By: _________________________________
Neal E. Schmale
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints Stephen L. Baum,
John R. Light and Neal E. Schmale, and each of them severally, as his true and
lawful attorney-in-fact and agent to sign in his name and behalf, in any and
all capacities stated below, and to file with the Securities and Exchange
Commission, any and all amendments and any registration statement for the same
offering that is to be effective under Rule 462(b) of the Securities Act,
including post-effective amendments, to this registration statement, and the
registrant hereby also appoints each such person as its attorney-in-fact and
agent with like authority to sign and file any such amendments in its name and
behalf.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons in the
capacities indicated on the 28th day of September, 2001.
Signature Title
--------- -----
/s/ Neal E. Schmale Regular Trustee
______________________________________
Neal E. Schmale
/s/ Frank H. Ault Regular Trustee
______________________________________
Frank H. Ault
/s/ Charles A. McMonagle Regular Trustee
______________________________________
Charles A. McMonagle
II-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Sempra Energy Capital Trust III certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Diego, and State of
California, on the 28th day of September, 2001.
Sempra Energy Capital Trust III
/s/ Neal E. Schmale
By: _________________________________
Neal E. Schmale
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints Stephen L. Baum,
John R. Light and Neal E. Schmale, and each of them severally, as his true and
lawful attorney-in-fact and agent to sign in his name and behalf, in any and
all capacities stated below, and to file with the Securities and Exchange
Commission, any and all amendments and any registration statement for the same
offering that is to be effective under Rule 462(b) of the Securities Act,
including post-effective amendments, to this registration statement, and the
registrant hereby also appoints each such person as its attorney-in-fact and
agent with like authority to sign and file any such amendments in its name and
behalf.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons in the
capacities indicated on the 28th day of September, 2001.
Signature Title
--------- -----
/s/ Neal E. Schmale Regular Trustee
______________________________________
Neal E. Schmale
/s/ Frank H. Ault Regular Trustee
______________________________________
Frank H. Ault
/s/ Charles A. McMonagle Regular Trustee
______________________________________
Charles A. McMonagle
II-9
SEMPRA ENERGY
SEMPRA ENERGY GLOBAL ENTERPRISES
SEMPRA ENERGY CAPITAL TRUST II
SEMPRA ENERGY CAPITAL TRUST III
REGISTRATION STATEMENT ON FORM S-3
EXHIBIT INDEX
Exhibit
No. Description
------- -----------
1.1 Underwriting Agreement (Preferred Securities--Sempra Energy Capital
Trust II and Sempra Energy Capital Trust III).*
1.2 Underwriting Agreement (Debt Securities--Sempra Energy).*
1.3 Underwriting Agreement (Debt Securities--Sempra Energy Global
Enterprises).*
1.4 Underwriting Agreement (Equity Securities--Sempra Energy).*
3.1 Amended and Restated Articles of Incorporation of Sempra Energy
(Incorporated by reference from the Registration Statement on Form S-3
File No. 333-51309 dated April 29, 1998 (Exhibit 3.1)).
3.2 Amended and Restated Bylaws of Sempra Energy effective May 26, 1998
(Incorporated by reference from the Registration Statement on Form S-8
File No. 333-56161 dated June 5, 1998 (Exhibit 3.2)).
3.3 Articles of Incorporation of Sempra Energy Global Enterprises
(Incorporated by reference from the Registration Statement on Form S-3
File No. 333-52192 dated January 8, 2001 (Exhibit 3.3).
3.4 Bylaws of Sempra Energy Global Enterprises (Incorporated by reference
from the Registration Statement on Form S-3 File No. 333-52192 dated
January 8, 2001 (Exhibit 3.4).
3.5 Certificate of Trust of Sempra Energy Capital Trust II (Incorporated
by reference from the Registration Statement on Form S-3 File No. 333-
52192 dated January 8, 2001 (Exhibit 3.5).
3.6 Certificate of Trust of Sempra Energy Capital Trust III (Incorporated
by reference from the Registration Statement on Form S-3 File No. 333-
52192 dated January 8, 2001 (Exhibit 3.6).
4.1 Indenture for Senior Debt Securities (Sempra Energy) (Incorporated by
reference from the Current Report on Form 8-K filed February 22, 2000
(Exhibit 4.1)).
4.2 Indenture for Subordinated Debt Securities (Sempra Energy)
(Incorporated by reference from the Current Report on Form 8-K filed
February 18, 2000 (Exhibit 4.1)).
4.3 Indenture for Senior Debt Securities (Sempra Energy Global
Enterprises) (Incorporated by reference from the Registration
Statement on Form S-3 File No. 52912 dated January 8, 2001 (Exhibit
4.3)).
4.4 Form of Senior Note--Sempra Energy (included in Exhibit 4.1).
4.5 Form of Subordinated Note--Sempra Energy (included in Exhibit 4.2).
4.6 Form of Senior Note--Sempra Energy Global Enterprises (included in
Exhibit 4.3).
4.7 Form of Trust Preferred Security (included in Exhibit 4.12).
4.8 Form of Trust Preferred Security Guarantee--Sempra Energy Capital
Trust II.
4.9 Form of Trust Preferred Security Guarantee--Sempra Energy Capital
Trust III.
4.10 Declaration of Trust of Sempra Energy Capital Trust II.
Exhibit
No. Description
------- -----------
4.11 Declaration of Trust of Sempra Energy Capital Trust III.
4.12 Form of Amended and Restated Declaration of Trust for each of Sempra
Energy Capital Trust II and Sempra Energy Capital Trust III.
4.13 Rights Agreement dated May 26, 1998 between Sempra Energy and First
Chicago Trust Company of New York, as rights agent (Incorporated by
reference from the Registration Statement on Form 8-A File No. 001-
14201 filed June 5, 1998 (Exhibit 1)).
4.14 Form of Warrant Agreement--Sempra Energy.*
4.15 Form of Warrant Certificate--Sempra Energy (included in Exhibit
4.14).*
4.15 Form of Deposit Agreement--Sempra Energy.*
4.16 Form of Depositary Receipt--Sempra Energy (included in Exhibit 4.15).*
4.17 Form of Purchase Contract. *
4.18 Form of Purchase Unit.*
5.1 Opinion of Gary W. Kyle, Esq.*
5.2 Opinion of Richards, Layton & Finger, P.A. relating to Sempra Energy
Capital Trust II.
5.3 Opinion of Richards, Layton & Finger, P.A. relating to Sempra Energy
Capital Trust III.
5.4 Opinion of Latham & Watkins.*
12.1 Statement regarding the computation of ratio of earnings to combined
fixed charges and preferred stock dividends for the years ended
December 31, 2000, 1999, 1998, 1997 and 1996 and six-month periods
ended June 30, 2000 and June 30, 2001.
23.1 Consent of Gary W. Kyle, Esq. (included in Exhibit 5.1).
23.2 Consent of Richards, Layton & Finger, P.A. (included in Exhibits 5.2
and 5.3).
23.3 Consent of Independent Auditors (Deloitte & Touche LLP).
23.4 Consent of Latham & Watkins (included in Exhibit 5.4).
24.1 Powers of Attorney (included on pages II-6, 8, 9 and 10).
25.1 Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of U.S. Bank Trust Company, as Trustee under the
Indenture (Senior Debt Securities--Sempra Energy).
25.2 Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Trustee under the
Indenture (Subordinated Debt Securities--Sempra Energy).
25.3 Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of U.S. Bank Trust Company, as Trustee under the
Indenture (Senior Debt Securities--Sempra Energy Global Enterprises).
25.4 Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Property Trustee--Sempra
Energy Capital Trust II.
25.5 Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Property Trustee--Sempra
Energy Capital Trust III.
25.6 Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Preferred Securities
Guarantee Trustee--Sempra Energy Capital Trust II.
25.7 Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Preferred Securities
Guarantee Trustee--Sempra Energy Capital Trust III.
25.8 Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Debt Securities
Guarantee Trustee--Sempra Energy Global Enterprises.
--------
* To be filed by amendment or as an exhibit to a report filed under the
Securities Exchange Act of 1934, as amended and incorporated herein by
reference.