EXHIBIT 4(d)
AMERICAN ELECTRIC POWER COMPANY, INC.
AND
THE BANK OF NEW YORK,
as Trustee
-----------------------
THIRD SUPPLEMENTAL INDENTURE
Dated as of June 11, 2002
TO
INDENTURE
Dated as of May 1, 2001
5.75% Senior Notes Due August 16, 2007
-----------------------
TABLE OF CONTENTS*
ARTICLE ONE
GENERAL TERMS AND CONDITIONS OF THE SENIOR NOTES
Section 1.1. Definitions................................................1
Section 1.2. Establishment, Designation and Principal Amount............3
Section 1.3. Payment of Principal and Interest..........................4
Section 1.4. Denominations..............................................6
Section 1.5. Global Securities..........................................6
Section 1.6. Remarketing................................................7
Section 1.7. Optional Remarketing.......................................13
Section 1.8. Sinking Fund...............................................14
Section 1.9. Redemption and Repurchase..................................14
Section 1.10. Covenants..................................................14
Section 1.11. Defeasance.................................................14
Section 1.12. Tax Event Redemption.......................................15
Section 1.13. Tax Treatment..............................................16
ARTICLE II
MISCELLANEOUS PROVISIONS
Section 2.1. Recitals by Company........................................16
Section 2.2. Ratification and Incorporation of Original Indenture.......16
Section 2.3. Executed in Counterparts...................................16
Section 2.4. Separability...............................................16
Section 2.5. Governing Law..............................................17
Exhibit A Form of Senior Note........................................A-1
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* This Table of Contents does not constitute part of the Indenture or have
any bearing upon the interpretation of any of its terms and provisions.
THIRD SUPPLEMENTAL INDENTURE, dated as of June 11, 2002 (the "Third
Supplemental Indenture"), between AMERICAN ELECTRIC POWER COMPANY, INC., a
corporation duly organized and existing under the laws of the State of New York
(hereinafter sometimes referred to as the "Company"), and THE BANK OF NEW YORK,
a New York banking corporation, as trustee (hereinafter sometimes referred to as
the "Trustee"), under the Indenture dated as of May 1, 2001 between the Company
and the Trustee (the "Original Indenture"). The Original Indenture, as
previously supplemented from time to time, including by this Third Supplemental
Indenture, is hereafter referred to as the "Indenture."
WITNESSETH:
WHEREAS, the Company has executed and delivered the Original Indenture to
the Trustee to provide for the issuance of unsecured promissory notes or other
evidences of indebtedness (the "Securities") in an unlimited aggregate principal
amount, to be issued from time to time in one or more series as provided in the
Original Indenture; and
WHEREAS, pursuant to the terms of the Original Indenture, the Company
desires to provide for the establishment of a new series of its Securities (said
series being hereinafter referred to as the "Senior Notes"), the form and
substance of such Senior Notes and the terms, provisions and conditions thereof
to be set forth as provided in the Original Indenture and this Third
Supplemental Indenture; and
WHEREAS, the Company desires and has requested the Trustee to join with it
in the execution and delivery of this Third Supplemental Indenture, and all
requirements necessary to make this Third Supplemental Indenture a valid
instrument, in accordance with its terms, and to make the Senior Notes, when
executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed and fulfilled, and the
execution and delivery hereof have been in all respects duly authorized;
NOW THEREFORE, in consideration of the purchase and acceptance of the
Senior Notes by the holders thereof, and for the purpose of setting forth, as
provided in the Original Indenture, the form and substance of the Senior Notes
and the terms, provisions and conditions thereof, the Company covenants and
agrees with the Trustee as follows:
Page 2
ARTICLE ONE
GENERAL TERMS AND CONDITIONS OF THE SENIOR NOTES
SECTION 1.1. Definitions.
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Except as otherwise expressly provided in or pursuant to this Third
Supplemental Indenture or unless the context otherwise requires:
(1) a term defined in the Original Indenture has the same meaning when
used in this Third Supplemental Indenture;
(2) a term defined anywhere in this Third Supplemental Indenture has
the same meaning throughout;
(3) the singular includes the plural and vice versa;
(4) headings are for convenience of reference only and do not affect
interpretation;
(5) capitalized terms used herein for which no definition is provided
herein shall have the meanings set forth in the Original Indenture, the
Forward Purchase Contract Agreement, the Remarketing Agreement or the
Pledge Agreement, as the case may be and as the context may require; and
(6) the following terms have the meanings given to them in this
Section 1.1(6):
"Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions and trust companies the
State of New York or at a place of payment are authorized or
required by law, regulation or executive order to be closed.
"Company" has the meaning set forth in the preamble.
"Contingent Payment Regulations" has the meaning set forth in
Section 1.13.
"Forward Purchase Contract Agent" means The Bank of New York.
"Forward Purchase Contract Agreement" means the agreement, dated
as of June 11, 2002, between the Company and the Forward Purchase
Contract Agent.
"Global Securities" has the meaning set forth in Section 1.5.
"Interest Payment Date" has the meaning set forth in Section 1.3.
"Pledge Agreement" means the Pledge Agreement, dated as of June
11, 2002, between the Company and The Bank of New York, as
Forward Purchase Contract Agent, Collateral Agent, Custodial
Agent and Securities Intermediary.
"Regular Record Date" means, with respect to each Interest
Payment Date, the close of business on the Business Day preceding
such Interest Payment Date; provided, that with respect to
Separate Notes that are not in book-entry only form, the Regular
Record Date shall be the close of business on the 15th Business
Day preceding such Interest Payment Date.
"Remarketing" means any remarketing conducted pursuant to and in
accordance with the Remarketing Agreement.
"Remarketing Agreement" means the Remarketing Agreement, dated as
of June 11, 2002, by and among the Company, the Remarketing Agent
and the Forward Purchase Contract Agent.
"Remarketing Value" means
(i) the value at the Remarketing Date or any Subsequent
Remarketing Date, as the case may be, of either (a) U.S.
Treasury securities that will pay, on or prior to the
Payment Date falling on the Stock Purchase Date, an amount
of cash equal to the aggregate interest payment that is
scheduled to be payable on that Payment Date, on (x) the
Notes which are included in Equity Units and are
participating in the remarketing and (y) the Separate Notes
which are to be remarketed pursuant to Section 4.5(d) of the
Pledge Agreement, assuming for that purpose that the
interest rate on the Notes is equal to the Coupon Rate, if
the Remarketing occurs prior to the fourth Business Day
preceding the Stock Purchase Date, or (b) an amount of cash
equal to the aggregate interest payment that is scheduled to
be payable on that Payment Date, on (x) the Notes which are
included in Equity Units and are participating in the
remarketing and (y) the Separate Notes which are to be
remarketed pursuant to Section 4.5(d) of the Pledge
Agreement and Section 1.6 of this Third Supplemental
Indenture, assuming for that purpose that the interest rate
on the Notes is equal to the Coupon Rate, if the Remarketing
occurs on or after the fourth Business Day preceding the
Stock Purchase Date; and
(ii) the value at the Remarketing Date or any Subsequent
Remarketing Date, as the case may be, of either (a) U.S.
Treasury securities that will pay, on or prior to the Stock
Purchase Date, an amount of cash equal to the Stated Amount
of (x) such Notes which are included in Equity Units and are
participating in the remarketing and (y) the Separate Notes
which are to be remarketed pursuant to Section 4.5(d) of the
Pledge Agreement, if the Remarketing occurs prior to the
fourth Business Day preceding the Stock Purchase Date, or
(b) an amount of cash equal to the Stated Amount of (x) such
Notes which are included in Equity Units and are
participating in the remarketing and (y) the Separate Notes
which are to be remarketed pursuant to Section 4.5(d) of the
Pledge Agreement and Section 1.6 of this Third Supplemental
Indenture, if the Remarketing occurs on or after the fourth
Business Day preceding the Stock Purchase Date
provided that for purposes of clauses (1) and (2) above, the
Remarketing Value shall be calculated on the assumptions that (x)
the U.S. Treasury securities are highly liquid and mature on or
within 35 days prior to the Stock Purchase Date, as determined in
good faith by the Remarketing Agent in a manner intended to
minimize the cash value of the U.S. Treasury securities, and (y)
the U.S. Treasury securities are valued based on the ask-side
price of the U.S. Treasury securities at a time between 9:00 a.m.
and 11:00 a.m., New York City time, selected by the Remarketing
Agent, on the Remarketing Date or any Subsequent Remarketing
Date, as the case may be, as determined on a third-day settlement
basis by reasonable and customary means selected in good faith by
the Remarketing Agent, plus accrued interest to that date.
"Reset Rate" means the interest rate per annum with respect to
the Senior Notes that is determined by the Remarketing Agent
pursuant to the Remarketing Agreement as follows:
(i) in connection with a successful Remarketing, the rate of
interest that, in the opinion of the Remarketing Agent,
will, when applied to the Outstanding Senior Notes, enable
the then current aggregate market value of the Senior Notes
to have a value equal to approximately, but not less than,
100.25% of the Remarketing Value as of the Remarketing Date
or as of any Subsequent Remarketing Date, as the case may
be; or
(ii) upon the occurrence of a Failed Remarketing, the rate of
interest applicable to the Senior Notes initially until (A)
the Senior Notes are successfully remarketed pursuant to the
Forward Purchase Contract Agreement and the Remarketing
Agreement or (B) if the Last Failed Remarketing shall have
occurred, a market rate of interest as determined in
accordance with Section 1.6 of this Supplemental Indenture.
"Senior Notes" has the meaning set forth in the recitals.
"Stated Maturity" means August 16, 2007.
"Telerate" means the Dow Jones Telerate Service.
"Tax Event Redemption Date" has the meaning set forth in Section
1.11.
SECTION 1.2. Establishment, Designation and Principal Amount.
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(a) There shall be and is hereby authorized a series of Securities under
the Original Indenture designated the "5.75% Senior Notes Due August 16, 2007,"
in the initial aggregate principal amount of $300,000,000, which amount shall be
as set forth in the Company Order for the authentication and delivery of the
Senior Notes pursuant to Section 2.04 of the Original Indenture. Such aggregate
principal amount of the 5.75% Senior Notes Due August 16, 2007 may be increased
from time to time in accordance with Section 2.01 of the Original Indenture.
(b) The Senior Notes shall mature and the principal shall be due and
payable together with all accrued and unpaid interest thereon on August 16,
2007.
(c) The Senior Notes that are part of the Equity Units shall be issued in
definitive fully registered form (the "Registered Securities"), without coupons,
in substantially the form set out in Exhibit A hereto. The entire principal
amount of the Senior Notes shall initially be evidenced by one or more
certificates issued to The Bank of New York, as the Forward Purchase Contract
Agent under the Forward Purchase Contract Agreement (as defined below).
(d) The Senior Notes that, in accordance with the Forward Purchase Contract
Agreement, are no longer part of Equity Units shall be represented initially by
Global Securities (as defined below). Each such Registered Security and Global
Security shall represent such aggregate principal amount of the Outstanding
Senior Notes as shall be from time to time endorsed thereon, which principal
amounts may be increased or decreased, as applicable, to reflect Transfers from
Pledged Notes to Separate Notes and Transfers from Separate Notes to Pledged
Notes. Any such increase or decrease in the aggregate principal amount of (i)
Registered Securities shall be made by the Collateral Agent and (ii) Global
Securities representing Senior Notes shall be made by the Trustee, as custodian
of the Global Securities, in each case upon the instructions of the Collateral
Agent given pursuant to Article IV of the Pledge Agreement.
SECTION 1.3. Payment of Principal and Interest.
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(a) The unpaid principal amount of the Senior Notes shall initially bear
interest at the rate of 5.75% per annum, payable on each February 16, May 16,
August 16 and November 16 (each, with respect to the Senior Notes, an "Interest
Payment Date"), from the original date of issuance, to, but excluding, the
earlier of (i) the settlement date of a successful Remarketing under the Forward
Purchase Contract Agreement or (ii) the Stock Purchase Date, and, thereafter, at
the Reset Rate to, but excluding, the Stated Maturity of the Senior Notes.
(b) Interest shall be payable quarterly in arrears on each Interest Payment
Date to the Person in whose name the Senior Notes are registered on the Regular
Record Date for such Interest Payment Date; provided that interest payable on
the Stated Maturity of principal as provided herein shall be paid to the person
to whom principal is payable. Any such interest not punctually paid or duly
provided for with respect to any Interest Payment Date falling after the Stock
Purchase Date shall forthwith cease to be payable to the registered holders on
such regular record date, and may be paid to the person or persons in whose name
the Senior Notes are registered at the close of business on a special record
date to be fixed by the Trustee for the payment of such defaulted interest,
notice whereof shall be given to the registered holders of the Senior Notes not
less than ten (10) days prior to such special record date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange, if any, on which the Senior Notes may be listed, and upon
such notice as may be required by such exchange, all as more fully provided in
Section 2.03 of the Original Indenture.
(c) The amount of interest payable for any period will be computed (1) for
any quarterly period, on the basis of a 360-day year of twelve 30-day months,
(2) for any period shorter than a full quarterly period, on the basis of a
30-day month and (3) for periods of less than a month, on the basis of the
actual number of days elapsed per 30-day month. If any date on which principal
or interest is payable is not a Business Day, then payment of principal or
interest payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.
(d) Payment of the principal of and interest on the Senior Notes shall be
made at an Office or Agency of the Company or at the Office of the Agent in The
City of New York in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts,
with any such payment that is due on the Stated Maturity of any Senior Notes
being made upon surrender of such Senior Notes to the Office or Agency of the
Company or at the Office of the Agent in The City of New York. Payments of
interest will be made, subject to such surrender where applicable, at the option
of the Company, (i) by check mailed to the address of the person entitled
thereto as such address shall appear in the Security Register or (ii) by wire
transfer at such place and to such account at a banking institution in the
United States as may be designated in writing to the Trustee at least sixteen
(16) days prior to the date for payment by the Person entitled hereto.
SECTION 1.4. Denominations.
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The Senior Notes shall be issued in denominations of $50 and integral
multiples of $50.
SECTION 1.5. Global Securities.
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(a) The Senior Notes that, in accordance with the Forward Purchase Contract
Agreement, are no longer part of the Equity Units will be issued initially in
the form of one or more global securities (the "Global Securities") registered
in the name of DTC or its nominee. Except under the limited circumstances
described below or in Section 1.3 above, Senior Notes represented by such Global
Securities will not be exchangeable for, and will not otherwise be issuable as,
Senior Notes in definitive form. The Global Securities described above may not
be transferred except by DTC to a nominee of DTC or by a nominee of DTC to DTC
or another nominee of DTC or to a successor Depository or its nominee.
(b) Owners of beneficial interests in such a Global Security will not be
considered the Holders thereof for any purpose under the Indenture, and no
Global Security representing a Senior Note shall be exchangeable, except for
another Global Security of like denomination and tenor to be registered in the
name of DTC or its nominee or to a successor Depository or its nominee or except
as described below. The rights of owners of beneficial interests in such a
Global Security shall be exercised only through DTC.
(c) A Global Security shall be exchangeable for Senior Notes registered in
the names of persons other than DTC or its nominee only if (i) DTC notifies the
Company that it is unwilling or unable to continue as a Depository for such
Global Security and no successor Depository shall have been appointed by the
Company within 90 days of receipt by the Company of such notification, or if at
any time DTC ceases to be a clearing agency registered under the Securities
Exchange Act of 1934 at a time when DTC is required to be so registered to act
as such Depository and no successor Depository shall have been appointed by the
Company within 90 days after it becomes aware of such cessation, or (ii) the
Company in its sole discretion determines that it no longer has any senior debt
securities represented by global securities or that it will permit a Global
Security to be exchangeable or an Event of Default under the Indenture has
occurred and is continuing. Any Global Security that is exchangeable pursuant to
the preceding sentence shall be exchangeable for Senior Notes registered in such
names as DTC shall direct.
SECTION 1.6. Remarketing.
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(a) The Pledged Notes comprising part of Equity Units and the Separate
Notes of holders of Separate Notes that have elected to participate in the
Remarketing shall be remarketed by the Remarketing Agent on the Remarketing
Date. A Holder of Equity Units may elect not to participate in a Remarketing and
retain the Senior Notes underlying such Equity Units by notifying the Forward
Purchase Contract Agent of such election and delivering the Opt-out Treasury
Consideration to the Forward Purchase Contract Agent not later than 10:00 a.m.
on the fourth Business Day prior to the Remarketing Date, as applicable (or, in
the case of a Failed Remarketing, not later than 10:00 a.m. on the fourth
Business Day immediately prior to the subsequent Remarketing Period). Upon
receipt thereof by the Forward Purchase Contract Agent, the Forward Purchase
Contract Agent shall deliver such Opt-out Treasury Consideration to the
Collateral Agent, which will, for the benefit of the Company, thereupon apply
such Opt-out Treasury Consideration to secure such Holder's obligations under
the Forward Purchase Contracts. On the first Business Day immediately preceding
the Remarketing Date (or, in the case of a Failed Remarketing, the subsequent
Remarketing Period), the Collateral Agent, pursuant to the terms of the Pledge
Agreement, will deliver the Pledged Notes to the Forward Purchase Contract
Agent. Within three Business Days following any Remarketing Period (A) if the
Remarketing was successful, the Forward Purchase Contract Agent shall distribute
such Notes to the new Holders thereof and (B) if there was a Failed Remarketing,
the Forward Purchase Contract Agent will deliver such Notes to the Collateral
Agent, which will, for the benefit of the Company, thereupon apply such Notes
that are a component of Equity Units to secure such Holders' obligations under
the Forward Purchase Contracts, return any Opt-out Treasury Consideration
delivered by such Holders to such Holders and return the Separate Notes to the
holders thereof. A Holder that does not so deliver the Opt-out Treasury
Consideration or has not settled the related Purchase Contract through a Cash
Settlement or an Early Settlement pursuant to Sections 5.4 and 5.9 of the
Forward Purchase Contract Agreement shall be deemed to have elected to
participate in the Remarketing.
(b) On the seventh Business Day prior to the Remarketing Date or the first
day of any subsequent Remarketing Period, the Company shall give Holders of
Equity Units and Holders of Separate Notes notice of the Remarketing in an
Authorized Newspaper, including the specific U.S. Treasury security or
securities (including the CUSIP number and/or the principal terms of such
Treasury security or securities) that must be delivered by Holders of Equity
Units that elect not to participate in the Remarketing pursuant to Section
5.4(g) of the Forward Purchase Contract Agreement, no later than 10:00 a.m. (New
York City time) on the seventh Business Day preceding the Remarketing Date. Not
later than seven nor more than 15 calendar days prior to any Remarketing Period,
the Company shall request DTC (or any successor Clearing Agency) to notify,
directly or indirectly, each Beneficial Owner or Clearing Agency Participant
holding Equity Units or Stripped Units and each Beneficial Owner of a Separate
Note of the Remarketing and of the procedures that must be followed in
connection with the Remarketing.
(c) The Forward Purchase Contract Agent shall notify, by 10:00 a.m., New
York City time, on the third Business Date preceding the Remarketing Date or the
first day of any subsequent Remarketing Period, as applicable, the Remarketing
Agent and the Collateral Agent of the aggregate number of Senior Notes of Equity
Units Holders to be remarketed. On the third Business Day immediately preceding
the Remarketing Date or the first day of any subsequent Remarketing Period, as
applicable, no later than by 10:00 a.m. New York City time, pursuant to the
terms of the Pledge Agreement, the Custodial Agent will notify the Remarketing
Agent of the aggregate number of Separate Notes to be remarketed. On the third
Business Day immediately preceding the Remarketing Date or the first day of any
subsequent Remarketing Period, as applicable, the Collateral Agent and the
Custodial Agent, pursuant to the terms of the Pledge Agreement, will deliver for
Remarketing to the Remarketing Agent all Notes to be remarketed. Upon receipt of
such notice from the Forward Purchase Contract Agent and the Custodial Agent and
such Notes from the Collateral Agent and the Custodial Agent, the Remarketing
Agent will, on the Remarketing Date, use its commercially reasonable best
efforts to establish a Reset Rate pursuant to clause (i) of the definition of
Reset Rate and remarket such Senior Notes pursuant to the Remarketing procedures
in the Remarketing Agreement.
(d) The right of each Holder of Senior Notes to have its Senior Notes
tendered for purchase will be limited to the extent that (i) the Remarketing
Agent conducts a Remarketing pursuant to the terms of the Remarketing Agreement,
(ii) the Remarketing Agent is able to find a purchaser or purchasers for the
tendered Senior Notes and (iii) such purchaser or purchasers deliver the
purchase price therefor to the Remarketing Agent.
(e) Upon receipt of the notice provided above in paragraph (c) from the
Forward Purchase Contract Agent and the Custodial Agent and such Notes from the
Collateral Agent and the Custodial Agent, the Remarketing Agent will, on the
Remarketing Date, use its commercially reasonable best efforts to (i) establish
a rate of interest that, in the opinion of the Remarketing Agent, will, when
applied to the outstanding Notes, enable the then current aggregate market value
of the Notes to have a value equal to approximately, but not less than, 100.25%
of the Remarketing Value as of the Remarketing Date or as of any Subsequent
Remarketing Date, as the case may be (the "Reset Rate") and (ii) sell such Notes
on such date at a price equal to approximately, but not less than, 100.25% of
the Remarketing Value.
(f) If, in spite of using its commercially reasonable best efforts, the
Remarketing Agent cannot establish the Reset Rate and remarket the Notes
included in the remarketing at a price equal to approximately, but not less
than, 100.25% of the Remarketing Value, the Remarketing Agent will again attempt
to establish the Reset Rate and remarket the Notes included in the remarketing
at a price equal to approximately, but not less than, 100.25% of the Remarketing
Value on each of the two immediately following Business Days. If the Remarketing
Agent cannot remarket the Notes included in the remarketing at a price equal to
approximately, but not less than, 100.25% of the Remarketing Value on any of
those days, it will attempt to establish the Reset Rate and remarket the Notes
included in the remarketing at a price equal to approximately, but not less
than, 100.25% of the Remarketing Value on each of the three Business Days
immediately preceding June 16, 2005. If the Remarketing Agent cannot remarket
the Notes included in the remarketing at a price equal to approximately, but not
less than, 100.25% of the Remarketing Value on any of those days, it will
attempt to establish the Reset Rate and remarket the Notes included in the
remarketing at a price equal to approximately, but not less than, 100.25% of the
Remarketing Value on each of the three Business Days immediately preceding July
16, 2005. If the Remarketing Agent cannot establish the Reset Rate and remarket
the Notes included in the remarketing at a price equal to approximately, but not
less than, 100.25% of the Remarketing Value either on any of the two Business
Days immediately following the Remarketing Date or on any of the three Business
Days immediately preceding June 16, 2005 or on any of the three Business Days
immediately preceding July 16, 2005, the remarketing in each period will be
deemed to have failed (each, a "Failed Remarketing"). If the Remarketing Agent
cannot establish the Reset Rate and remarket the Notes included in the
remarketing at a price equal to approximately, but not less than, 100.25% of the
Remarketing Value on any of the three Business Days immediately preceding July
16, 2005, the Remarketing Agent will further attempt to establish the Reset Rate
and remarket the Notes included in the remarketing at a price equal to
approximately, but not less than, 100.25% of the Remarketing Value on each of
the three Business Days immediately preceding August 12, 2005. If, in spite of
using its commercially reasonable best efforts, the Remarketing Agent fails to
remarket the Notes underlying the Equity Units at a price equal to
approximately, but not less than, 100.25% of the Remarketing Value in accordance
with the terms of the Pledge Agreement by 4:00 p.m., New York City time, on the
third Business Day immediately preceding the Stock Purchase Date, a "Last Failed
Remarketing" will be deemed to have occurred.
(g) If a successful Remarketing shall have occurred prior to the fourth
Business Day preceding the Stock Purchase Date, the Remarketing Agent will, in
accordance with the Forward Purchase Contract Agreement and the Remarketing
Agreement:
(i) deduct and retain for itself the Remarketing Fee;
(ii) use the proceeds from such successful Remarketing to purchase the
Agent-purchased Treasury Consideration with the CUSIP numbers, if
any, selected by the Remarketing Agent, described in clauses (1)
and (2) of the definition of Remarketing Value related to the
Senior Notes of Holders of Equity Units that were remarketed;
(iii)if any Separate Notes were remarketed, remit to the Collateral
Agent for payment to the Holders of such Separate Notes sold in
the Remarketing the remaining proceeds from such successful
Remarketing attributable to the Separate Notes; and
(iv) if there remain any proceeds from such successful Remarketing,
after the application of such proceeds as set forth in clauses
(i) through (iii) of this sentence, then remit such remaining
proceeds to the Forward Purchase Contract Agent for payment to
the Holders of the Equity Units that were remarketed, on a pro
rata basis, in accordance with the Remarketing Agreement.
(h) In the case of a successful Remarketing occurring prior to the fourth
Business Day preceding the Stock Purchase Date, on or prior to the third
Business Day following the Remarketing Date or any Subsequent Remarketing Date,
the Remarketing Agent shall deliver such Agent-purchased Treasury Consideration
to the Forward Purchase Contract Agent, which shall thereupon deliver such
Agent-purchased Treasury Consideration to the Collateral Agent. The Collateral
Agent, for the benefit of the Company, will thereupon apply such Agent-purchased
Treasury Consideration, in accordance with the Pledge Agreement, to secure such
Holders' obligations under the Forward Purchase Contracts.
(i) If a successful Remarketing shall have occurred on or after the fourth
Business Day preceding the Stock Purchase Date, the Remarketing Agent will, in
accordance with the Forward Purchase Contract Agreement and the Remarketing
Agreement:
(i) deduct and retain for itself the Remarketing Fee;
(ii) pay the proceeds from such successful Remarketing to the Forward
Purchase Contract Agent, which shall thereupon deliver such
proceeds to the Collateral Agent which, for the benefit of the
Company, will thereupon apply such proceeds, in accordance with
the Pledge Agreement in direct settlement of the Holders'
obligations under the Forward Purchase Contracts;
(iii)if any Separate Notes were remarketed, remit to the Collateral
Agent for payment to the Holders of such Separate Notes sold in
the Remarketing the remaining proceeds from such successful
Remarketing attributable to the Separate Notes; and
(iv) if there remain any proceeds from such successful Remarketing,
after the application of such proceeds as set forth in clauses
(i) through (iii) of this sentence, then remit such remaining
proceeds to the Forward Purchase Contract Agent for payment to
the Holders of the Equity Units that were remarketed, on a pro
rata basis, in accordance with the Remarketing Agreement.
(j) If a successful Remarketing occurs, by approximately 4:30 p.m. (New
York City time) on the Remarketing Date, the Remarketing Agent shall advise, by
telephone (promptly confirmed in writing in the case of clause (i)):
(i) the Company, the Forward Purchase Contract Agent, the Collateral
Agent, the Securities Intermediary, DTC and the Trustee of the
Reset Rate determined in the Remarketing;
(ii) each purchaser (or the Depository Participant thereof) of Senior
Notes in the Remarketing of the Reset Rate and the number of
Senior Notes such purchaser is to purchase; and
(iii)each purchaser to give instructions to its Depository
Participant to pay the purchase price on the date of settlement
for such Remarketing in same day funds against delivery of the
remarketed Senior Notes purchased through the facilities of DTC.
(k) Any distribution to Holders of excess funds and interest described in
this Section 1.6 shall be payable at the Office of the Agent in The City of New
York maintained for that purpose or, at the option of the Holder or the holder
of Separate Notes, as applicable, by check mailed to the address of the Person
entitled thereto at such address as it appears on the relevant Register or by
wire transfer to an account specified by the Holder or the holder of Separate
Notes, as applicable.
(l) If a Failed Remarketing occurs, the Remarketing Agent and the Company,
as applicable, shall take the following actions:
(i) the Remarketing Agent shall notify by telephone the Company, the
Forward Purchase Contract Agent, the Collateral Agent and the
Trustee, that a Failed Remarketing has occurred, whereupon the
Company shall notify the Clearing Agency, by telephone, that a
Failed Remarketing has occurred;
(ii) with respect to any Remarketing Period during which no successful
Remarketing occurred, the Company shall publish notice by means
of Bloomberg and Reuters newswires, such notice to be published
no later than the fourth Business Day following the end of such
Remarketing Period;
(iii)the Remarketing Agent shall determine the Reset Rate in
accordance with clause (ii) of the Reset Rate definition; and
(iv) the Remarketing Agent shall remit, within three Business Days
following the end of a Remarketing Period which constituted a
Failed Remarketing, the Pledged Notes that were to be remarketed
to the Collateral Agent and the Separate Notes that were to be
remarketed to the Custodial Agent.
(m) If upon a Last Failed Remarketing, the Collateral Agent delivers any
Senior Notes to the Company in full satisfaction of the Holder's obligation
under the related Forward Purchase Contracts, any accumulated and unpaid
interest on such Notes will become payable by the Company to the Forward
Purchase Contract Agent for payment to the Holder of the Equity Units to which
such Notes relate. Such payment will be made by the Company on or prior to 11:00
a.m., New York City time, on the Stock Purchase Date in lawful money of the
United States by certified or cashier's check or wire transfer in immediately
available funds payable to or upon the order of the Forward Purchase Contract
Agent. Upon the occurrence of a Last Failed Remarketing, the Company will retain
and dispose of the Pledged Notes of all Holders in satisfaction of the Holders'
obligations under the related Forward Purchase Contracts. The Company will
publish notice by means of Bloomberg and Reuters newswires of any Remarketing
Period during which no successful Remarketing occurred, such notice to be
published not later than the fourth Business Day following the end of such
Remarketing Period. The Company will cause a notice of the Last Failed
Remarketing to be published on the fourth Business Day following the date of the
Last Failed Remarketing in an Authorized Newspaper.
(n) In the event of a Last Failed Remarketing, the Remarketing Agent shall
determine the Reset Rate that shall apply to the Senior Notes held by the
Holders of Equity Units that elected not to participate in the remarketing and
Holders of Separate Notes according to the following method, provided that in no
event shall the Reset Rate exceed the maximum rate permitted by state usury laws
and other applicable laws. After the Last Failed Remarketing, the Remarketing
Agent will take the average of the interest rates quoted to it by three
nationally recognized investment banks selected by the Company, which are
underwriters or dealers in debt securities similar to the Senior Notes, that in
their judgment reflects an accurate market rate of interest applicable to the
Senior Notes at that time. Following receipt of these quotes, the Remarketing
Agent will have the right, in its sole judgment, to either recalculate the
average based on only two of the quoted interest rates if one of the three
quotes, in the Remarketing Agent's sole discretion, did not reflect market
conditions or, alternatively, determine a consensus among the investment banks
rather than a strict mathematical average by taking into account all relevant
qualitative and quantitative factors. These factors may include, but shall not
limited to, maturity of the Senior Notes, the credit rating and credit risk of
the Company and companies of similar industries, the then yield to maturity of
the Senior Notes and the state of the markets for primary and secondary sales of
similar debt securities.
(o) In accordance with DTC's normal procedures, on the date of settlement
of such Remarketing or the Stock Purchase Date, as applicable, the transactions
described above with respect to each Senior Notes remarketed in the Remarketing
shall be executed through DTC, and the accounts of the respective Depository
Participants shall be debited and credited and such remarketed Senior Notes
delivered by book entry as necessary to effect purchases and sales of such
remarketed Senior Notes. DTC shall make payment in accordance with its normal
procedures.
(p) If any Holder of Senior Notes selling Senior Notes in the Remarketing
fails to deliver such Senior Notes, the direct or indirect Depository
Participant of such selling Holder and of any other Person who was to have
purchased Senior Notes in the Remarketing may deliver to any such other Person
an aggregate principal amount of Senior Notes that is less than the aggregate
principal amount of Senior Notes that otherwise was to be purchased by such
Person. In such event, the aggregate principal amount of Senior Notes to be so
delivered shall be determined by such direct or indirect Depository Participant,
and delivery of such lesser aggregate principal amount of Senior Notes shall
constitute good delivery.
(q) The Remarketing Agent is not obligated to purchase any Senior Notes
that otherwise would remain unsold in the Remarketing. Neither the Company nor
the Remarketing Agent shall be obligated in any case to provide funds to make
payment upon tender of the Senior Notes for Remarketing.
(r) Under the Remarketing Agreement, the Company, in its capacity as issuer
of the Senior Notes, shall be liable for, and shall pay, any and all costs and
expenses incurred in connection with the Remarketing, other than the Remarketing
Fee.
(s) The settlement procedures set forth herein, including provisions for
payment by purchasers of the remarketed Senior Notes in the Remarketing, shall
be subject to modification to the extent required by DTC or if the book-entry
system is no longer available for the remarketed Senior Notes at the time of the
Remarketing, to facilitate the Remarketing of the remarketed Senior Notes in
certificated form, and shall provide for the authentication and delivery of
Senior Notes in a principal amount equal to the unremarketed portion of such
Senior Notes. In addition, the Remarketing Agent may modify the settlement
procedures set forth herein in order to facilitate the settlement process.
SECTION 1.7. Optional Remarketing.
- ----------------------------------
(a) On or prior to the fourth Business Day immediately preceding either the
Remarketing Date or if applicable, the first day of any subsequent Remarketing
Period, but no earlier than the Interest Payment Date immediately preceding the
last Interest Payment Date before the Stock Purchase Date, holders of Separate
Notes may elect to have their Separate Notes remarketed by Transferring their
Separate Notes and delivering a notice of such election, substantially in the
form of Exhibit C to the Pledge Agreement, to the Collateral Agent. On the third
Business Day immediately prior to the Remarketing Date or the first day of any
subsequent Remarketing Period, by 10:00 a.m., New York City time, the Collateral
Agent shall notify the Remarketing Agent of the number of such Separate Notes to
be remarketed. The Collateral Agent will hold such Separate Notes in an account
separate from the Collateral Account. A holder of Separate Notes electing to
have its Separate Notes remarketed will also have the right to withdraw such
election by written notice to the Collateral Agent, substantially in the form of
Exhibit D to the Pledge Agreement, on or prior to the fourth Business Day
immediately preceding the applicable Remarketing Date or the first day of a
subsequent Remarketing Period, upon which notice the Collateral Agent will
return such Separate Notes to such holder.
(b) On the third Business Day immediately preceding the Remarketing Date or
the first day of any subsequent Remarketing Period, the Collateral Agent at the
written direction of the Remarketing Agent will deliver to the Remarketing Agent
for Remarketing all Separate Notes delivered to the Collateral Agent pursuant to
Section 4.5(d) of the Pledge Agreement and not withdrawn pursuant to the terms
thereof prior to such date. If the holder of the Separate Notes delivers only
such notice but not the Separate Notes subject to such notice, then none of such
holder's Separate Notes shall be included in the Remarketing. Once the holder of
Separate Notes elects to participate in the Remarketing, such Separate Notes
will be remarketed in the Remarketing, unless such notice is properly withdrawn.
In accordance with Section 4.5(d) of the Pledge Agreement, upon the occurrence
of a Failed Remarketing, the Remarketing Agent will promptly return such
Separate Notes to the Collateral Agent for redelivery to such holders of such
Separate Notes.
SECTION 1.8. Sinking Fund.
- --------------------------
The Senior Notes shall not be entitled to any sinking fund.
SECTION 1.9. Redemption and Repurchase.
- ---------------------------------------
Except as provided in Section 1.12, the Senior Notes shall not be
redeemable prior to their Stated Maturity.
SECTION 1.10. Covenants.
- ------------------------
(a) For so long as any Senior Notes of this series remain outstanding, the
Company will not create or incur or allow any of its subsidiaries to create or
incur any pledge or security interest on any of the capital stock of a Public
Utility Subsidiary held by the Company or one of its subsidiaries or a
Significant Subsidiary.
For purposes of this covenant:
(i) Public Utility Subsidiary means, at any particular time, a direct or
indirect subsidiary of the Company that, as a substantial part of its
business, distributes or transmits electric energy to retail or
wholesale customers at rates or tariffs that are regulated by either a
state or Federal regulatory authority.
(ii) Significant Subsidiary means, at any particular time, any direct
subsidiary of the Company whose consolidated gross assets or
consolidated gross revenues (having regard to the Company's direct
beneficial interest in the shares, or the like, of that subsidiary)
represent at least 25% of the Company's consolidated gross assets or
consolidated gross revenues appearing in the most recent audited
financial statements of the Company as of the date of determination.
(b) The provisions of Article Ten of the Original Indenture shall be
applicable to the Senior Notes.
SECTION 1.11. Defeasance.
- -------------------------
The provisions of Section 11.01 of the Original Indenture shall not apply
to the Senior Notes.
SECTION 1.12. Tax Event Redemption.
- -----------------------------------
(a) If a Tax Event shall occur, the Company may, at its option, redeem the
Senior Notes in whole (but not in part) at any time at a price per Senior Note
equal to the Redemption Price. Installments of interest on the Senior Notes that
are due and payable on or prior to the date of redemption (the "Tax Event
Redemption Date") will be payable to the Holders of the Senior Notes registered
as such on the Record Date next preceding such Tax Event Redemption Date. If,
following the settlement of the Forward Purchase Contracts and following the
occurrence of a Tax Event, the Company, at its option, redeems the Senior Notes,
the proceeds of the redemption will be payable in cash to the Holders of the
Senior Notes.
(b) If the Company exercises its option to redeem the Senior Notes
following the occurrence of a Tax Event prior to the Remarketing Date, or if
there has not been a successful Remarketing prior to the Stock Purchase Date,
the Company shall in the notice to the Trustee pursuant to Section 3.02 of the
Original Indenture specify the Redemption Price. Upon the specification of the
Redemption Price by the Company, the Company shall appoint the Collateral Agent
to acquire the Treasury Portfolio in consultation with the Company and in
accordance with the Forward Purchase Contract Agreement. The Collateral Agent
shall then apply, out of the aggregate Redemption Price for the Senior Notes
that are components of Equity Units, an amount equal to the aggregate Redemption
Amount for the Senior Notes that are components of Equity Units to purchase on
behalf of the Holders of Equity Units the Treasury Portfolio and promptly remit
the remaining portion, if any, of such aggregate Redemption Price to the Forward
Purchase Contract Agent for payment to the Holders of such Equity Units. The
Treasury Portfolio will be substituted for the Pledged Notes, and will be
pledged to the Collateral Agent in accordance with the terms of the Pledge
Agreement to secure the obligation of each Holder of an Equity Unit to purchase
the Common Stock under the Forward Purchase Contract constituting a part of such
Equity Units. Payment of the Redemption Price to Holders of Separate Notes shall
be made in cash on the Tax Event Redemption Date.
(c) If a Tax Event Redemption occurs after the earlier of a successful
Remarketing or the Stock Purchase Date, payment of the Redemption Price to each
Holder of Senior Notes shall be made by the Trustee (subject to its receipt of
funds), no later than 12:00 noon, New York City time, on the Tax Event
Redemption Date, by check or wire transfer in immediately available funds
(provided the necessary wire instructions have been provided to the Trustee at
least 15 days prior to the Tax Event Redemption Date) at such place and to such
account as may be designated by each such Holder of Senior Notes, including the
Collateral Agent. If the Trustee holds immediately available funds sufficient to
pay the Redemption Price of the Senior Notes, then, on such Tax Event Redemption
Date, such Senior Notes will cease to be Outstanding.
(d) The Trustee shall have no duty or liability to determine or verify the
Redemption Price. Notice of any redemption will be mailed at least 30 days but
not more than 60 days before the Tax Event Redemption Date to each registered
Holder of the Senior Notes to be repaid at its registered address. Unless the
Company defaults in payment of the Redemption Price, on and after the Tax Event
Redemption Date interest shall cease to accrue on the Senior Notes, whether or
not such Senior Notes have been received by the Company, and all other rights of
the Holders in respect of the Senior Notes shall terminate and lapse (other than
the right to receive the Redemption Price upon delivery of such Senior Notes but
without interest on such Redemption Price).
SECTION 1.13. Tax Treatment.
- ----------------------------
The Company agrees, and by acceptance of a beneficial ownership interest in
the Senior Notes, each beneficial holder of Senior Notes will be deemed to have
agreed (1) to treat the acquisition of an Equity Unit as the acquisition of the
Senior Note and the Forward Purchase Contract constituting the Equity Unit and
to allocate the purchase price of the Equity Unit between the Senior Note and
the Forward Purchase Contract as $50 and $0, respectively, (2) to treat the
Senior Notes as indebtedness that is subject to Treas. Reg. Sec. 1.1275-4 (the
"Contingent Payment Regulations") for United States federal income tax purposes
and (3) to be bound by the Company's determination of the "comparable yield" and
"projected payment schedule," within the meaning of the Contingent Payment
Regulations, with respect to the Senior Notes for United States federal income
tax purposes. A Holder of Senior Notes may obtain the amount of original issue
discount, issue date, yield to maturity, comparable yield and projected payment
schedule by submitting a written request for it to the Company at the following
address: American Electric Power, Investor Relations, One Riverside Plaza,
Columbus, Ohio 43215.
ARTICLE TWO
MISCELLANEOUS PROVISIONS
SECTION 2.1. Recitals by Company.
- ---------------------------------
The recitals in this Third Supplemental Indenture are made by the Company
only and not by the Trustee, and all of the provisions contained in the Original
Indenture in respect of the rights, privileges, immunities, powers and duties of
the Trustee shall be applicable in respect of the Senior Notes and of this Third
Supplemental Indenture as fully and with like effect as if set forth herein in
full.
SECTION 2.2. Ratification and Incorporation of Original Indenture.
- ------------------------------------------------------------------
As supplemented hereby, the Original Indenture is in all respects ratified
and confirmed, and the Original Indenture and this Third Supplemental Indenture
shall be read, taken and construed as one and the same instrument.
SECTION 2.3. .Executed in Counterparts.
- ---------------------------------------
This Third Supplemental Indenture may be executed in several counterparts,
each of which shall be deemed to be an original, and such counterparts shall
together constitute but one and the same instrument.
SECTION 2.4. Separability.
- -------------------------------
In case any provisions contained in this Third Supplemental Indenture or in
any Senior Note shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 2.5. Governing Law.
- ---------------------------
THIS THIRD SUPPLEMENTAL INDENTURE AND EACH SENIOR NOTE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE OR INSTRUMENTS ENTERED INTO AND, IN EACH CASE, PERFORMED IN SAID
STATE.
IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed, all as of the day and year first above written.
AMERICAN ELECTRIC POWER COMPANY, INC.
By: /s/ A. A. Pena
Name: A. A. Pena
Title: Treasurer
THE BANK OF NEW YORK, as Trustee
By: /s/ Terence Rawlins
Name: Terence Rawlins
Title: Vice President
EXHIBIT A
FORM OF SENIOR NOTE
[Face of Note]
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL
SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY OR ANY SUCCESSOR DEPOSITARY
APPOINTED AS SUCH PURSUANT TO THE INDENTURE (THE "DEPOSITARY") TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO SUCH A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OR TRANSFER, EXCHANGE OR PAYMENT,
AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF THE DEPOSITARY OR ITS
NOMINEE OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY AND ANY PAYMENT IS MADE TO THE DEPOSITARY OR ITS NOMINEE, ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF HAS AN INTEREST HEREIN.]*
CUSIP No.
ISIN No.
No. ___ $_______________
AMERICAN ELECTRIC POWER COMPANY, INC.
5.75% Senior Notes Due August 16, 2007
American Electric Power Company, Inc., a corporation duly organized and
existing under the laws of New York (the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to [Cede & Co.]* or registered assigns, the
principal sum of _______________________ United States Dollars [, or such other
principal amount as shall be set forth in the Schedule of Increases or Decreases
attached hereto,]** at the Company's Office or Agency or Office of the Agent in
The City of New York for said purpose, on August 16, 2007 in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, and to pay interest
thereon from June 11, 2002 or from the next most recent date to which interest
has been paid or duly provided for, quarterly in arrears on each February 16,
May 16, August 16 and November 16 of each year (each such date, an "Interest
Payment Date"), commencing on August 16, 2002, at the rate of 5.75% per annum
to, but excluding, the earlier of (i) the settlement date of a successful
Remarketing under the Forward Purchase Contract Agreement or (ii) the Stock
Purchase Date, and, thereafter, at the Reset Rate to, but excluding, the Stated
Maturity.
- -----------------------------
* Insert in Global Securities.
** Insert in Global Securities and Pledged Notes.
The amount of interest so payable for any period shall be computed (i) for
any full quarterly period on the basis of a 360-day year of twelve 30-day months
and (ii) for any period shorter than a full quarterly period, on the basis of a
30-day month and, for periods of less than a month, on the basis of the actual
number of days elapsed per 30-day month. In the event that any Interest Payment
Date is not a Business Day, then payment of the interest or principal payable on
such date will be made on the next succeeding day which is a Business Day and no
interest shall accrue in respect of the amounts which payment is so delayed for
the period from and after such interest payment date or other payment date,
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date.
Payments of the principal of and interest on the Senior Notes shall be made
at said Office or Agency of the Company or at the Office of the Agent in The
City of New York to which interest on the Senior Notes has been paid or duly
provided for, until payment of said principal sum has been made or duly provided
for; provided that, unless this Senior Note is a Senior Note issued in global
form ("Global Security"), interest may be paid, at the option of the Company,
(i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) by wire transfer at such
place and to such account at a banking institution in the United States as may
be designated in writing to the Trustee at least sixteen (16) days prior to the
date for payment by the Person entitled thereto. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date, as provided
in the Indenture, as hereinafter defined, shall be paid to the Person in whose
name this Note (or one or more Predecessor Securities) shall have been
registered at the close of business on the Regular Record Date with respect to
such Interest Payment Date, provided that interest payable on the Stated
Maturity or any redemption date shall be paid to the Person to whom principal is
paid. Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date and
shall be paid as provided in said Indenture.
Reference is hereby made to the further provisions of this Senior Note set
forth herein, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to herein by manual signature, this Senior Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
Dated: ___________________
AMERICAN ELECTRIC POWER COMPANY, INC.
By: _________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated in accordance with,
and referred to in, the within-mentioned Indenture.
Dated: ___________________
THE BANK OF NEW YORK, as Trustee
By: __________________________
Authorized Signatory
[Reverse of Note]
American Electric Power Company, Inc.
5.75% Senior Notes Due August 16, 2007
This Senior Note is one of a duly authorized issue of securities of the
Company (the "Securities"), issued and to be issued in one or more series under
an Indenture, dated as of May 1, 2001 (the "Original Indenture"), as previously
supplemented and as to be supplemented by a third supplemental indenture, dated
as of June 11, 2002 (the "Third Supplemental Indenture" and the Original
Indenture, as so supplemented, the "Indenture"), between the Company and The
Bank of New York, a New York banking corporation, as trustee (the "Trustee,"
which term includes any successor trustee under the Indenture), and reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders and of the terms upon which the Securities are, and are
to be, authenticated and delivered. This Senior Note is one of a series
designated as 5.75% Senior Notes Due August 16, 2007 of the Company (hereinafter
called the "Senior Notes"), issued under the Original Indenture, which is
limited in aggregate principal amount to $300,000,000.
Neither the Original Indenture nor the Senior Notes limit or otherwise
restrict the amount of indebtedness which may be incurred or other securities
which may be issued by the Company. The Senior Notes issued under the Indenture
are direct, unsecured obligations of the Company and will mature on August 16,
2007. The Senior Notes rank on parity with all other unsecured, unsubordinated
indebtedness of the Company.
The Senior Notes will bear interest as set forth on the face hereof and in
the Third Supplemental Indenture. The Reset Rate will be the interest rate per
annum that is determined by the Remarketing Agent pursuant to the Remarketing
Agreement as follows: (i) in connection with a successful Remarketing, the rate
of interest that will, when applied to the Outstanding Notes, enable the then
current aggregate market value of the Notes to have a value equal to
approximately, but not less than, 100.25% of the Remarketing Value as of the
Remarketing Date or as of any Subsequent Remarketing Date, as the case may be,
or (ii) upon the occurrence of a Failed Remarketing the rate of interest
applicable to the Senior Notes initially until (A) the Senior Notes are
successfully remarketed pursuant to the Forward Purchase Contract Agreement and
the Remarketing Agreement or (B) if the Last Failed Remarketing shall have
occurred, in accordance with the method as described below.
Notwithstanding anything herein to the contrary, the Reset Rate shall in no
event exceed the maximum rate, if any, permitted by applicable law.
In the event of a Last Failed Remarketing, the Remarketing Agent shall
determine the Reset Rate that shall apply to the Senior Notes held by the
Holders of Equity Units that elected not to participate in the remarketing and
Holders of Separate Notes according to the following method. After the Last
Failed Remarketing, the Remarketing Agent will take the average of the interest
rates quoted to it by three nationally recognized investment banks selected by
the Company, which are underwriters or dealers in debt securities similar to the
Senior Notes, that in their judgment reflects an accurate market rate of
interest applicable to the Senior Notes at that time. Following receipt of these
quotes, the Remarketing Agent will have the right, in its sole judgment, to
either recalculate the average based on only two of the quoted interest rates if
one of the three quotes, in the Remarketing Agent's sole discretion, did not
reflect market conditions or, alternatively, determine a consensus among the
investment banks rather than a strict mathematical average by taking into
account all relevant qualitative and quantitative factors. These factors may
include, but shall not limited to, maturity of the Senior Notes, the credit
rating and credit risk of the Company and companies of similar industries, the
then yield to maturity of the Senior Notes and the state of the markets for
primary and secondary sales of similar debt securities.
The Senior Notes are not redeemable prior to maturity except pursuant to a
Tax Event in accordance with the Third Supplemental Indenture. If a Tax Event
shall occur, the Company may, at its option, redeem the Senior Notes in whole
(but not in part) at any time at a price per Senior Note equal to the Redemption
Price. Installments of interest on the Senior Notes that are due and payable on
or prior to the date of redemption will be payable to the Holders of the Senior
Notes registered as such at the close of business on the Record Date next
preceding such Tax Event Redemption Date. If, following the settlement of the
Forward Purchase Contracts and following the occurrence of a Tax Event, the
Company, at its option, redeems the Senior Notes, the proceeds of the redemption
will be payable in cash to the Holders of the Senior Notes.
The Company agrees, and by acceptance of a beneficial ownership interest in
the Senior Notes, each beneficial holder of Senior Notes will be deemed to have
agreed (1) for United States federal, state and local income and franchise tax
purposes to treat the acquisition of an Equity Unit as the acquisition of the
Senior Note and the Forward Purchase Contract constituting the Equity Unit, (2)
to treat the Senior Notes as indebtedness that is subject to Treas. Reg. Sec.
1.1275-4 (the "Contingent Payment Regulations") for United States federal income
tax purposes and (3) to be bound by the Company's determination of the
"comparable yield" and "projected payment schedule," within the meaning of the
Contingent Payment Regulations, with respect to the Senior Notes for United
States federal income tax purposes. A Holder of Senior Notes may obtain the
amount of original issue discount, issue date, yield to maturity, comparable
yield and projected payment schedule by submitting a written request for it to
the Company at the following address: American Electric Power, Investor
Relations, One Riverside Plaza, Columbus, Ohio 43215.
The Senior Notes are not entitled to any sinking fund.
The Senior Notes that are a component of Equity Units or that so elect
under Section 1.7 of the Supplemental Indenture will be subject to Remarketing
and, in the case of a Failed Remarketing, the Collateral Agent for the benefit
of the Company reserves all of its rights as a secured party of the Pledged
Notes with respect thereto and, subject to applicable law and Section 5.4 of the
Forward Purchase Contract Agreement, may, among other things, permit the Company
to cause the Senior Notes to be sold or to retain and cancel such Senior Notes,
in either case, in full satisfaction of the Holders' obligations under the
Forward Purchase Contracts.
If an Event of Default with respect to the Senior Notes shall occur and be
continuing, the principal of the Senior Notes may be declared due and payable in
the manner and with the effect provided in the Indenture. The Senior Indenture
provides that in certain circumstances such declaration and its consequences may
be waived by the Holders of a majority in aggregate principal amount of the
Senior Notes then Outstanding. However, any such consent or waiver by the Holder
shall not affect any subsequent default or impair any right consequent thereon.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Securities of all series affected by such supplemental
indenture or indentures at the time outstanding voting as one class, as defined
in the Indenture, to execute supplemental indentures for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Holders of the Securities; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of any Securities of
any series, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any premium payable upon the
redemption thereof, or reduce the amount of the principal of a Discount Security
that would be due and payable upon a declaration of acceleration of the maturity
thereof pursuant to the Indenture, without the consent of the holder of each
Senior Note then outstanding and affected; (ii) reduce the aforesaid percentage
of Senior Notes, the holders of which are required to consent to any such
supplemental indenture, or reduce the percentage of Senior Notes, the holders of
which are required to waive any default and its consequences, without the
consent of the holder of each Senior Note then outstanding and affected thereby;
or (iii) modify any provision of Section 6.01(c) of the Indenture (except to
increase the percentage of principal amount of securities required to rescind
and annul any declaration of amounts due and payable under the Senior Notes),
without the consent of the holder of each Senior Note then outstanding and
affected thereby. The Indenture also contains provisions permitting the Holders
of a majority in aggregate principal amount of the Senior Notes of any series at
the time outstanding affected thereby, on behalf of the Holders of the Senior
Notes of such series, to waive any past default in the performance of any of the
covenants contained in the Indenture, or established pursuant to the Indenture
with respect to such series, and its consequences, except a default in the
payment of the principal of or premium, if any, or interest on any of the Notes
of such series. Any such consent or waiver by the registered Holder of this Note
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such Holder and upon all future Holders and owners of this Note and of any
Note issued in exchange herefor or in place hereof (whether by registration of
transfer or otherwise), irrespective of whether or not any notation of such
consent or waiver is made upon this Note.
Restrictive Covenants
- ---------------------
Limitation upon Liens of Certain Subsidiaries
For so long as any Senior Notes of this series remain outstanding, the
Company will not create or incur or allow any of its subsidiaries to create or
incur any pledge or security interest on any of the capital stock of a Public
Utility Subsidiary held by the Company or one of its subsidiaries or a
Significant Subsidiary.
For purposes of this covenant:
(i) Public Utility Subsidiary means, at any particular time, a direct or
indirect subsidiary of the Company that, as a substantial part of its
business, distributes or transmits electric energy to retail or
wholesale customers at rates or tariffs that are regulated by either a
state or Federal regulatory authority.
(ii) Significant Subsidiary means, at any particular time, any direct
subsidiary of ours whose consolidated gross assets or consolidated
gross revenues (having regard to the Company's direct beneficial
interest in the shares, or the like, of that subsidiary) represent at
least 25% of the Company's consolidated gross assets or consolidated
gross revenues appearing in the most recent audited financial
statements of the Company as of the date of determination.
Limitation upon Mergers, Consolidations and Sale of Assets
The provisions of Article Ten of the Indenture shall be applicable to the
Senior Notes of this series.
The Indenture contains provisions for defeasance of (a) the entire
indebtedness evidenced by this Senior Note and (b) certain restrictive covenants
upon compliance by the Company with certain conditions set forth therein;
provided, however, Section 11.01 of the Original Indenture shall not apply to
the Senior Notes.
No reference herein to the Indenture and no provision of this Senior Note
or of the Indenture shall alter or impair the obligation of the Company, which
are absolute and unconditional, to pay the principal of (and premium, if any)
and interest, if any, on this Senior Note at the times, places and rates, and in
the coin or currency, herein prescribed.
The Senior Notes of this series are issuable only in registered form
without coupons in minimum denominations of $50 or any integral multiple of $50
over such minimum denomination. At the Office or Agency of the Company or at the
Office of the Agent in The City of New York referred to on the face hereof and
as provided in the Indenture and subject to certain limitations therein set
forth, the Senior Notes are exchangeable for a like aggregate principal amount
of Senior Notes and of like tenor of a difference authorized denomination, as
requested by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations therein set
forth, this Senior Note is transferable by the registered holder hereof on the
Security Register of the Company, upon surrender of this Senior Note for
registration of transfer at the office or agency of the Company as may be
designated by the Company accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly executed by the
registered Holder hereof or his or her attorney duly authorized in writing, and
thereupon one or more new Senior Notes of authorized denominations and for the
same aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such transfer,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.
Prior to due presentment of this Senior Note for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Senior Note is registered as the owner hereof for
all purposes, whether or not this Senior Note be overdue and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Senior Note, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, or any indenture
supplement thereto, against any incorporator, stockholder, officer or director,
past, present or future, as such, of the Company or of any predecessor or
successor corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
THIS SENIOR NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF
THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF SAID STATE.
All terms used in this Senior Note (and not otherwise defined in this
Senior Note) that are defined in the Indenture, the Forward Purchase Contract
Agreement, the Remarketing Agreement or the Pledge Agreement, as the case may
be, shall have the meanings assigned to them in the Indenture, the Forward
Purchase Contract Agreement, the Remarketing Agreement or the Pledge Agreement,
as the case may be and as the context may require.
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
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(please insert Social Security or other identifying number of assignee)
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PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
the within Senior Note and all rights thereunder, hereby irrevocably
constituting and appointing
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agent to transfer said Senior Note on the books of the Company, with full power
of substitution in the premises.
Dated:_______________ __, ______
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NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular without
alteration or enlargement, or any change whatever.
[TO BE ATTACHED TO GLOBAL CERTIFICATES AND PLEDGED NOTES]
SCHEDULE OF INCREASES OR DECREASES
The following increases or decreases in this [Global Certificate] [Pledged
Note] have been made:
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Principal amount of
Amount of decrease Amount of increase in Senior Notes
in principal amount principal amount of evidenced by the
of Senior Notes Senior Notes [Global Certificate] Signature of
evidenced by the evidenced by the [Pledged Note] authorized signatory
[Global Certificate] [Global Certificate] following such of Trustee or
Date [Pledged Note] [Pledged Note] decrease or increase Collateral Agent
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