AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 20, 1995
REGISTRATION NO. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES EXCHANGE ACT OF 1933
PUBLIC SERVICE COMPANY
OF NORTH CAROLINA, INCORPORATED
(Exact name of Registrant as specified in its charter)
NORTH CAROLINA 56-0233140
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 COX ROAD
POST OFFICE BOX 1398
GASTONIA, NORTH CAROLINA 28053-1398
(704) 864-6731
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
JACK G. MASON
400 COX ROAD
POST OFFICE BOX 1398
GASTONIA, NORTH CAROLINA 28053-1398
(704) 834-6422
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:
JEFFREY S. HAY, ESQ. DAVID P. FALCK, ESQ.
FENNEBRESQUE, CLARK, SWINDELL & HAY WINTHROP, STIMSON, PUTNAM & ROBERTS
NATIONSBANK CORPORATE CENTER ONE BATTERY PARK PLAZA
100 NORTH TRYON STREET, SUITE 2900 NEW YORK, NEW YORK 10004-1490
CHARLOTTE, NORTH CAROLINA 28202 (212) 858-1000
(704) 347-3800
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of the Registration Statement as
determined by market 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 used to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act of 1933 registration statement number
of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, please check the following box and list the
Securities Act of 1933 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
[CAPTION]
TITLE OF EACH CLASS PROPOSED MAXIMUM
OF SECURITIES TO AGGREGATE OFFERING AMOUNT OF
BE REGISTERED PRICE (1) REGISTRATION FEE
Senior Unsecured Debt...................................................... $125,000,000.00 $43,103.45
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT 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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
PROSPECTUS (SUBJECT TO COMPLETION, ISSUED , 1995)
$125,000,000
PUBLIC SERVICE COMPANY OF NORTH CAROLINA,
INCORPORATED
SENIOR UNSECURED DEBT
PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED ("COMPANY") INTENDS
TO OFFER FROM TIME TO TIME ITS SENIOR UNSECURED DEBT SECURITIES ("DEBT
SECURITIES") UP TO AN AGGREGATE AMOUNT OF $125,000,000. THE DEBT SECURITIES MAY
BE OFFERED AS SEPARATE SERIES IN AMOUNTS, AT PRICES AND ON TERMS TO BE
DETERMINED IN LIGHT OF MARKET CONDITIONS AT THE TIME OF SALE AND SET FORTH IN A
PROSPECTUS SUPPLEMENT OR PROSPECTUS SUPPLEMENTS.
CERTAIN SPECIFIC TERMS OF EACH SERIES OF DEBT SECURITIES IN RESPECT OF
WHICH THIS PROSPECTUS IS DELIVERED ("OFFERED SECURITIES") WILL BE SET FORTH IN
AN ACCOMPANYING PROSPECTUS SUPPLEMENT ("PROSPECTUS SUPPLEMENT") WITH RESPECT TO
SUCH SERIES, INCLUDING, WHERE APPLICABLE, THE SPECIFIC DESIGNATION, AGGREGATE
PRINCIPAL AMOUNT, MATURITY, RATE OR RATES AND TIME OR TIMES OF PAYMENT OF ANY
INTEREST, ANY REDEMPTION PROVISIONS, ANY SINKING FUND PROVISIONS, DENOMINATIONS,
ANY CURRENCY FOR THE PAYMENT OF, OR ANY INDEX TO BE USED FOR DETERMINING THE
AMOUNT OF ANY PAYMENT OF, PRINCIPAL OR INTEREST, ANY MODIFICATIONS TO THE
ACCELERATION PROVISIONS, COVENANTS AND EVENTS OF DEFAULT DESCRIBED HEREIN,
WHETHER SUCH SERIES OF OFFERED SECURITIES IS ISSUABLE IN THE FORM OF ONE OR MORE
GLOBAL DEBT SECURITIES ("GLOBAL DEBT SECURITIES"), WHETHER THE OFFERED
SECURITIES ARE SUBJECT TO DEFEASANCE, THE IDENTITY OF THE REGISTRAR AND ANY
PAYING AGENT, THE IDENTITY OF THE TRUSTEE, ANY LISTING ON A SECURITIES EXCHANGE,
THE INITIAL PUBLIC OFFERING PRICE, METHODS OF DISTRIBUTION AND ANY OTHER
SPECIFIC TERMS IN CONNECTION WITH THE OFFERING AND SALE OF SUCH OFFERED
SECURITIES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE DEBT SECURITIES MAY BE SOLD TO OR THROUGH UNDERWRITERS, DEALERS OR
AGENTS, INCLUDING MORGAN STANLEY & CO. INCORPORATED, AS DESIGNATED FROM TIME TO
TIME, OR DIRECTLY TO OTHER PURCHASERS, OR THROUGH A COMBINATION OF SUCH METHODS.
IF ANY UNDERWRITERS, DEALERS OR AGENTS ARE INVOLVED IN THE SALE OF DEBT
SECURITIES IN RESPECT OF WHICH THIS PROSPECTUS IS BEING DELIVERED, THE NAMES OF
SUCH UNDERWRITERS, DEALERS OR AGENTS, THE AMOUNT PROPOSED TO BE PURCHASED BY
THEM, AND ANY COMPENSATION TO SUCH UNDERWRITERS, DEALERS OR AGENTS, WILL BE SET
FORTH IN, OR MAY BE CALCULATED FROM, THE APPLICABLE PROSPECTUS SUPPLEMENT. THE
NET PROCEEDS TO THE COMPANY WILL ALSO BE SET FORTH IN THE APPLICABLE PROSPECTUS
SUPPLEMENT. SEE "PLAN OF DISTRIBUTION."
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF DEBT SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
MORGAN STANLEY & CO.
INCORPORATED
DECEMBER , 1995
(A redherring appears on the left-hand side of this page, rotated 90
degrees. Text appears as follows:)
Information contained herein is subject to completion or amendment.
A registration statement relating to these securities has been
filed with the Securities and Exchange Commission. These securities
may not be sold nor may offers to buy be accepted prior to the
time the registration statement becomes effective. This prospectus
shall not constitute an offer to sell or the solicitation of an
offer to buy nor shall there be any sale of these securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such jurisdiction.
NO DEALER, SALESMAN, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED, OR INCORPORATED BY
REFERENCE, IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER OR DEALER. NEITHER THIS PROSPECTUS NOR THE ACCOMPANYING
PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO
WHOM SUCH AN OFFER CANNOT BE LAWFULLY MADE IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL CREATE, UNDER ANY CIRCUMSTANCES, ANY
IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF OR THE AFFAIRS OF THE COMPANY HAVE NOT CHANGED SINCE SUCH DATE.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended ("Exchange Act") and in accordance therewith
files reports, proxy statements, and other information with the Securities and
Exchange Commission ("Commission"). Such reports, proxy statements, and other
information can be inspected and copied at the public reference facilities of
the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549; and at the
Commission's following regional offices: Suite 1400, 500 West Madison Street,
CitiCorp Center, Chicago, Illinois 60661, and Seven World Trade Center, 13th
Floor, New York, New York 10048. Copies of this material can also be obtained at
prescribed rates from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549. The Company's Common Stock, par value
$1.00 per share ("Common Stock"), is listed on the New York Stock Exchange
("NYSE") under the symbol "PGS." Reports, proxy statements and other information
concerning the Company can be inspected at the offices of the NYSE, 20 Broad
Street, New York, New York 10005.
The Company has filed a registration statement (of which this Prospectus
forms a part) on Form S-3 (herein, together with all amendments and exhibits,
the "Registration Statement") under the Securities Act of 1933, as amended
("Securities Act"), with respect to the Debt Securities offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain portions of which are omitted in accordance with the rules
and regulations of the Commission. For further information with respect to the
Company and the Debt Securities, reference is made to the Registration Statement
and the exhibits filed as a part thereof. Statements contained herein concerning
any document filed as an exhibit are not necessarily complete and, in each
instance, reference is made to the copy of such document filed as an exhibit to
the Registration Statement. Each such statement is herein qualified in its
entirety by such reference. The Registration Statement, including the exhibits
thereto, may be inspected without charge at the office of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 and copies may be obtained from the
Commission at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1995 has been filed by the Company with the Commission pursuant to
the Exchange Act and is hereby incorporated by reference into this Prospectus.
In addition, all documents subsequently filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act
prior to termination of the offering of the securities covered by this
Prospectus shall be deemed to be incorporated by reference into this Prospectus
and to be a part hereof from the date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein, or in any
Prospectus Supplement (or in any other subsequently filed document which also is
incorporated or is deemed to be incorporated by reference herein) modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed to constitute a part hereof except as so modified or superseded.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY
BENEFICIAL OWNER, TO WHOM THIS PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL
REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO
ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED HEREIN BY REFERENCE (OTHER THAN
EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE
IN SUCH DOCUMENTS). SUCH A WRITTEN OR ORAL REQUEST SHOULD BE DIRECTED TO JACK G.
MASON, TREASURER, PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED, POST
OFFICE BOX 1398, GASTONIA, NORTH CAROLINA 28053-1398, TELEPHONE NUMBER (704)
834-6422.
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THE COMPANY
The Company is a public utility engaged primarily in transporting and
distributing natural gas to approximately 285,000 residential, commercial and
industrial customers in North Carolina. The Company's 26-county service area has
a population of over 2,300,000 and includes the fast-growing areas of Raleigh,
Durham, Chapel Hill; Concord and Gastonia near Charlotte; and Asheville and
Hendersonville. The Company's utility operations are subject to regulation by
the North Carolina Utilities Commission.
The Company was organized as a North Carolina corporation in 1938. The
Company's corporate offices are located at 400 Cox Road, Post Office Box 1398,
Gastonia, North Carolina 28053-1398, telephone (704) 864-6731.
USE OF PROCEEDS
Except as may be set forth in the Prospectus Supplement accompanying this
Prospectus, the Company intends to use the net proceeds from the sale of the
Debt Securities for repayment of short-term debt incurred primarily to finance
the Company's construction program and for other general corporate purposes.
Pending application of such net proceeds for specific purposes, such proceeds
may be invested in short-term or marketable securities. Specific allocations of
proceeds to a particular purpose that have been made at the date of any
Prospecuts Supplement will be described therein.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company for the fiscal year ended September 30 of the years indicated.
Earnings represent consolidated income from continuing operations before income
taxes and fixed charges. Fixed charges include interest, whether expensed or
capitalized, and the amortization of debt expense.
1995 1994 1993 1992 1991
3.64 3.14 2.56 2.98 2.20
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Debt Securities so offered will be described
in the Prospectus Supplement relating to such Debt Securities.
The Debt Securities will be issued under an Indenture dated as of
, 1996 (hereinafter referred to as of the "Indenture"), between
the Company and First Union National Bank of North Carolina, as Trustee
(hereinafter referred to as the "Trustee"). The following statements are subject
to the detailed provisions of the Indenture, a copy of which is filed as an
exhibit to the Registration Statement and which is also available for inspection
at the office of the Trustee. Section references are to the Indenture. The
following summaries of certain provisions of the Indenture do not purport to be
complete, and wherever particular provisions of the Indenture are referred to,
such provisions, including definitions of certain terms, are incorporated by
reference as part of such summaries or terms, which are qualified in their
entirety by such reference to the provisions of the Indenture.
GENERAL
The Debt Securities will rank as to priority of payment equally with all
other outstanding unsubordinated and unsecured indebtedness of the Company. The
Indenture does not limit the aggregate amount of Debt Securities which may be
issued thereunder, nor does it limit the incurrence or issuance by the Company
of other unsecured debt or of secured debt (except to the extent described under
"Certain Covenants -- LIMITATION ON LIENS"). On December 1, 1995, the Company
redeemed its remaining outstanding first mortgage bonds and commenced the
process of closing its first mortgage indenture and discharging the lien thereof
on its properties and assets. Agreements governing other outstanding funded debt
of the Company generally prohibit the Company from issuing additional funded
debt unless, after giving effect thereto, consolidated funded debt is equal to
or less than 70% of consolidated capitalization and earnings available for fixed
charges for a recent 12-month period are at least equal to 175% of fixed charges
for such period.
The Indenture provides that the Debt Securities may be issued from time to
time in one or more series. The Company may authorize the issuance and provide
for the terms of a series of Debt Securities pursuant to a supplemental
indenture or
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pursuant to a resolution (or action taken pursuant to a resolution) of its Board
of Directors, any duly authorized committee of the Board of Directors or any
committee of officers or other representatives of the Company duly authorized by
the Board of Directors for such purpose. The Indenture provides the Company with
the ability to "reopen" a previous issue of a series of Debt Securities and to
issue additional Debt Securities of such series, if permitted by the terms of
such series. (Section 3.1 of the Indenture.)
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities being offered thereby for the terms of such Debt
Securities, including, where applicable: (1) the specific designation of such
Debt Securities; (2) any limit upon the aggregate principal amount of such Debt
Securities; (3) the date or dates on which the principal of and premium, if any,
on such Debt Securities is payable or the method of determining such date or
dates; (4) the rate or rates (which may be fixed, variable, or zero) at which
such Debt Securities will bear interest, if any, or the method of calculating
such rate or rates; (5) the date or dates from which interest, if any, will
accrue or the method by which such date or dates will be determined; (6) the
date or dates on which interest, if any, will be payable and the record date or
dates therefor; (7) the place or places where principal of, premium, if any, and
interest, if any, on such Debt Securities will be payable; (8) the period or
periods within which, the price or prices at which, the currency in which, and
the other terms and conditions upon which, such Debt Securities may be redeemed,
in whole or in part, at the option of the Company; (9) the obligation, if any,
of the Company to redeem or purchase such Debt Securities pursuant to any
sinking fund or analogous provisions, or upon the happening of a specified
event, or at the option of a holder, and the period or periods within which, the
price or prices at which, and the other terms and conditions upon which, such
Debt Securities shall be redeemed or purchased, in whole or in part, pursuant to
such obligation; (10) the denominations in which such Debt Securities are
authorized to be issued; (11) if other than the currency of the United States
that as of the time of payment is legal tender for the payment of public and
private debts, the currency for which Debt Securities may be purchased, or in
which Debt Securities may be denominated, and/or in which such Debt Securities
are stated to be payable; (12) if the amount of payments of principal of and
premium, if any, or interest, if any, on such Debt Securities may be determined
with reference to an index, formula, or other method (which index, formula, or
other method may be based on a currency other than that in which such Debt
Securities are stated to be payable), the index, formula, or other method by
which such amount shall be determined; (13) if the amount of payments of
principal of and premium, if any, or interest, if any, on such Debt Securities
may be determined with reference to an index, formula, or other method based on
the prices of securities or commodities, with reference to changes in the prices
of particular securities or commodities, or otherwise by application of a
formula, the index, formula, or other method by which such amount shall be
determined; (14) if other than the entire principal amount thereof, the portion
of the principal amount of such Debt Securities which will be payable upon
declaration of the acceleration of the maturity thereof or the method by which
such portion shall be determined; (15) the person to whom any interest on any
such Debt Security shall be payable if other than the person in whose name such
Debt Security is registered on the applicable record date; (16) provisions, if
any, granting special rights to the holders of such Debt Securities upon the
occurrence of such events as may be specified; (17) any addition to, or
modification or deletion of, any Event of Default (as hereinafter defined) or
any covenant of the Company specified in the Indenture with respect to such Debt
Securities; (18) any additional amounts the Company will pay in respect of the
Debt Securities or any option of the Company to redeem the Debt Securities in
lieu of such payment; (19) whether the Debt Securities will be registered or
bearer Debt Securities; (20) the date any Debt Securities will be dated if other
than the date of issuance; (21) the forms of the Debt Securities, and coupons,
if any; (22) the application, if any, of the defeasance provisions described
below under "Defeasance," or such other means of defeasance as may be specified
for such Debt Securities; (23) the identity of the registrar and any paying
agent; (24) whether such Debt Securities are to be issued in whole or in part in
the form of one or more temporary or permanent global securities, and, if so,
the identity of the depository for such global security or securities and
whether interests in such Debt Securities in global form may be exchanged for
definitive certificated Debt Securities; and (25) any other special terms
pertaining to such Debt Securities. Unless otherwise specified in the applicable
Prospectus Supplement, the Debt Securities will not be listed on any securities
exchange. (Section 3.1 of the Indenture.)
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities will be issued only in fully registered, certificated form without
coupons or in the form of one or more Registered Global Securities as specified
below under "Global Debt Securities." (Section 2.1 of the Indenture.) Unless the
Prospectus Supplement relating thereto specifies otherwise, Debt Securities
denominated in U.S. dollars will be issued only in denominations of U.S. $1,000
and any integral multiple thereof. (Section 3.2 of the Indenture.)
If the amount of payments of principal of and premium, if any, or any
interest on Debt Securities of any series is determined with reference to any
type of index, or formula, or changes in prices of particular securities or
commodities, the
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federal income tax consequences, specific terms, and other information with
respect to such Debt Securities and such index or formula and securities or
commodities will be described in the applicable Prospectus Supplement.
PAYMENT, REGISTRATION, TRANSFER AND EXCHANGE
Unless otherwise provided in the applicable Prospectus Supplement, payments
in respect of the Debt Securities will be made in the designated currency at the
office or agency of the Company maintained for that purpose as the Company may
designate from time to time, except that, at the option of the Company, interest
payments, if any, on Debt Securities in registered, certificated form may be
made (i) by checks mailed to the holders of Debt Securities entitled thereto at
their registered addresses or (ii) by wire transfer to an account maintained by
the person entitled thereto as specified in the register. (Section 3.7(a) and
9.2 of the Indenture.) Unless otherwise indicated in an applicable Prospectus
Supplement, payment of any installment of interest on Debt Securities in
registered form will be made to the person in whose name such Debt Security is
registered at the close of business on the regular record date for such
interest. (Section 3.7(a) of the Indenture.)
The Company may at any time designate additional paying agents or rescind
the designation of any paying agents, except that, if Debt Securities of a
series are issuable as Registered Securities, the Company will be required to
maintain at least one paying agent in each Place of Payment for such series.
(Section 9.2 of the Indenture.)
Unless otherwise provided in the applicable Prospectus Supplement, Debt
Securities in registered form will be transferable or exchangeable at the agency
of the Company maintained for such purpose as designated by the Company from
time to time. (Sections 3.5 and 9.2 of the Indenture.) Debt Securities may be
transferred or exchanged without any service charge, other than any tax or other
governmental charge imposed in connection therewith. (Section 3.5 of the
Indenture.)
GLOBAL DEBT SECURITIES
Unless otherwise provided in the applicable Prospectus Supplement, the Debt
Securities of a series may be issued in whole or in part in the form of one or
more fully registered global securities ("Registered Global Security") that will
be deposited with a depository ("Depository") or with a nominee for the
Depository identified in the applicable Prospectus Supplement. In such a case,
one or more Registered Global Securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate principal amount
of outstanding Debt Securities of the series to be represented by such
Registered Global Security or Securities. Unless and until it is exchanged in
whole or in part for Debt Securities in definitive certificated form, a
Registered Global Security may not be registered for transfer or exchange except
as a whole by the Depository for such Registered Global Security to a nominee of
such Depository or by a nominee of such Depository to such Depository or another
nominee of such Depository or by such Depository or any such nominee to a
successor Depository for such series or a nominee of such successor Depository
and except in the circumstances described in the applicable Prospectus
Supplement. (Section 3.5 of the Indenture.)
The specific terms of the depository arrangement with respect to any
portion of a series of Debt Securities to be represented by a Registered Global
Security will be described in the applicable Prospectus Supplement. The Company
expects that the following provisions will apply to depository arrangements.
Upon the issuance of any Registered Global Security, and the deposit of
such Registered Global Security with or on behalf of the Depository for such
Registered Global Security, the Depository will credit, on its book-entry
registration and transfer system, the respective principal amounts of the Debt
Securities represented by such Registered Global Security to the accounts of
institutions ("Participants") that have accounts with the Depository or its
nominee. The accounts to be credited will be designated by the underwriters or
agents engaging in the distribution of such Debt Securities or by the Company,
if such Debt Securities are offered and sold directly by the Company. Ownership
of beneficial interests in a Registered Global Security will be limited to
Participants or persons that may hold interest through Participants. Ownership
of beneficial interests by Participants in such Registered Global Security will
be shown on, and the transfer of such beneficial interests will be effected only
through, records maintained by the Depository for such Registered Global
Security or by its nominee. Ownership of beneficial interests in such Registered
Global Security by persons that hold through Participants will be shown on, and
the transfer of such beneficial interests within such Participants will be
effected only through, records maintained by such Participants. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in certificated form. The foregoing limitations and
such laws may impair the ability to transfer beneficial interests in such
Registered Global Securities.
So long as the Depository for a Registered Global Security, or its nominee,
is the registered owner of such Registered Global Security, such Depository or
such nominee, as the case may be, will be considered the sole owner or holder of
the
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Debt Securities represented by such Registered Global Security for all purposes
under the Indenture. Unless otherwise specified in the applicable Prospectus
Supplement and except as specified below, owners of beneficial interests in such
Registered Global Security will not be entitled to have Debt Securities of the
series represented by such Registered Global Security registered in their names,
will not receive or be entitled to receive physical delivery of Debt Securities
of such series in certificated form and will not be considered the holders
thereof for any purposes under the Indenture. (Section 3.8 of the Indenture.)
Accordingly, each person owning a beneficial interest in such Registered Global
Security must rely on the procedures of the Depository and, if such person is
not a Participant, on the procedures of the Participant through which such
person owns its interest, to exercise any rights of a holder under the
Indenture. The Depository may grant proxies and otherwise authorize Participants
to give or take any request, demand, authorization, direction, notice, consent,
waiver, or other action which a holder is entitled to give or take under the
Indenture. The Company understands that, under existing industry practices, if
the Company requests any action of holders or any owner of a beneficial interest
in such Registered Global Security desires to give any notice or take any action
a holder is entitled to give or take under the Indenture, the Depository would
authorize the Participants to give such notice or take such action, and
Participants would authorize beneficial owners owning through such Participants
to give such notice or take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
Unless otherwise specified in the applicable Prospectus Supplement,
payments with respect to principal of, and premium, if any, and interest, if
any, on Debt Securities represented by a Registered Global Security registered
in the name of a Depository or its nominee will be made by the Company through a
paying agent to such Depository or its nominee, as the case may be, as the
registered owner of such Registered Global Security.
The Company expects that the Depository for any Debt Securities represented
by a Registered Global Security, upon receipt of any payment of principal,
premium or interest, will immediately credit Participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Registered Global Security as shown on the records
of such Depository. The Company also expects that payments by Participants to
owners of beneficial interests in such Registered Global Security held through
such Participants will be governed by standing instructions and customary
practices, as is now the case with the securities held for the accounts of
customers registered in "street names," and will be the responsibility of such
Participants. None of the Company, the Trustee, or any agent of the Company or
the Trustee shall have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial interests of a
Registered Global Security, or for maintaining, supervising, or reviewing any
records relating to such beneficial interests. (Section 3.8 of the Indenture.)
Unless otherwise specified in the applicable Prospectus Supplement, if the
Depository for any Debt Securities represented by a Registered Global Security
is at any time unwilling or unable to continue as Depository and a successor
Depository is not appointed by the Company within 90 days, the Company will
issue such Debt Securities in definitive certificated form in exchange for such
Registered Global Security. In addition, the Company may, at any time and in its
sole discretion, determine not to have any of the Debt Securities of a series
represented by one or more Registered Global Securities and, in such event, will
issue Debt Securities of such series in definitive certificated form in exchange
for all of the Registered Global Security or Securities representing such Debt
Securities. (Section 3.5 of the Indenture.) Debentures so issued in definitive
certificated form will be issued in denominations of $1,000 and integral
multiples thereof and will be issued in registered form only, without coupons.
CERTAIN DEFINITIONS
"Attributable Debt" means, as to a lease under which any Person is at the
time liable that is required to be classified and accounted for as a Capitalized
Lease Obligation on a Person's balance sheet under GAAP, at any date as of which
the amount thereof is to be determined, the total net amount of rent required to
be paid by such Person under such lease during the remaining primary term
thereof, discounted from the respective due dates thereof to such date at the
rate per annum equal to the interest rate implicit in such lease. The net amount
of rent required to be paid under any such lease for such period shall be the
aggregate amount of rent payable by lessee with respect to such period after
excluding amounts required to be paid on account of maintenance and repairs,
insurance, taxes, assessments, water rates, and similar expenses, or any amount
required to be paid by such lessee thereunder contingent upon the amount of
revenues (or other similar contingent amounts). In the case of any lease which
is terminable by the lessee upon the payment of a penalty, such net amount shall
also include the amount of such penalty, but no rent shall be considered as
required to be paid under such lease subsequent to the first date upon which it
may be so terminated. Notwithstanding the foregoing, the term Attributable Debt
excludes any amounts in respect of any Sale and Leaseback Transaction which the
Company or a Subsidiary is permitted to enter into in accordance
6
with the provisions described in the second and third sentences under the
caption "Limitation on Sale and Leaseback Transactions."
"Capitalized Lease Obligation" means, as applied to any Person, the rental
obligation, as aforesaid, under any lease of any Property (whether real,
personal, or mixed) the discounted present value of the rental obligations of
such Person as lessee under which, in conformity with GAAP, is required to be
capitalized on the balance sheet of that Person.
"Consolidated Net Tangible Assets" means, with respect to the Company as of
any date, the total assets of the Company as they appear on the most recently
prepared consolidated balance sheet of the Company as of the end of a fiscal
quarter, less (i) all liabilities shown on such consolidated balance sheet that
are classified and accounted for as current liabilities or that otherwise would
be considered current liabilities under GAAP; and (ii) all assets shown on such
consolidated balance sheet that are classified and accounted for as intangible
assets of the Company or that otherwise would be considered intangible assets
under GAAP, including, without limitation, franchises, licenses, patents and
patent applications, trademarks, brand names, and goodwill.
"Funded Debt" means all indebtedness for borrowed money owed or guaranteed
by the Company or any of its Subsidiaries and any other indebtedness which,
under GAAP, would appear as indebtedness on the most recent consolidated balance
sheet of the Company, which matures by its terms more than 12 months from the
date of such consolidated balance sheet or which matures by its terms in less
than 12 months but by its terms is renewable or extendible beyond 12 months from
the date of such consolidated balance sheet at the option of the borrower.
"GAAP" means generally accepted accounting principles in the United States
in effect on the date of application thereof.
"Government Obligations" means securities which are (i) direct obligations
of the United States for the payment of which its full faith and credit is
pledged or (ii) obligations of a Person controlled or supervised by, and acting
as an agency or instrumentality, of the United States the full and timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company subject to federal or state
supervision or examination with a combined capital and surplus of at least
$50,000,000 as custodian with respect to any such Government Obligation or a
specific payment of interest on or principal of any such Government Obligation
held by such custodian for the account of the holder of a depository receipt;
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the Government
Obligation or the specific payment of interest on or principal of the Government
Obligation evidenced by such depository receipt.
"Lien" means any mortgage, pledge, lien, charge, security interest, trust
arrangement, conditional sale, or other title retention agreement, or other
encumbrance of any nature whatsoever.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible, or intangible.
"Sale and Leaseback Transaction" means any direct or indirect arrangement
with any Person or to which any such Person is a party, providing for the
leasing to the Company or a Subsidiary of any Property, whether owned at the
date of the Indenture or thereafter acquired, which has been or is to be sold or
transferred by the Company or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such Property.
"Secured Debt" means any indebtedness for borrowed money incurred, assumed,
or guaranteed after the date of the Indenture by the Company or a Subsidiary
that is secured by a Lien.
"Subsidiary" of any Person means any Person of which at least a majority of
capital stock having ordinary voting power for the election of directors or
other governing body of such Person is owned, directly or indirectly, by such
Person directly or through one or more Subsidiaries of such Person.
CERTAIN COVENANTS
LIMITATION ON LIENS. The Company will not, and will not permit any
Subsidiary to, incur, assume, or guarantee any indebtedness for borrowed money
secured by a Lien on any Property, if the sum, without duplication, of (a) the
aggregate
7
principal amount of all Secured Debt and (b) all Attributable Debt in respect of
Sale and Leaseback Transactions (other than certain excluded Sale and Leaseback
Transactions) exceeds 15% of the Company's Consolidated Net Tangible Assets,
unless the Company provides that the Debt Securities shall be secured equally
and ratably with (or, at the option of the Company, prior to) such Secured Debt.
The provisions described in the foregoing sentence do not apply to, and there
shall be excluded in computing the aggregate amount of Secured Debt for purpose
of such restriction, indebtedness secured by the following Liens:
(i) (A) Liens existing as of the date of the Indenture or (B) Liens
relating to a contract that was entered into by the Company or any Subsidiary
prior to the date of the Indenture;
(ii) Liens on any Property existing at the time of acquisition thereof
(whether such acquisition is direct or by acquisition of stock, assets, or
otherwise) by the Company or any of its Subsidiaries, provided that, no such
Lien extends or shall extend to or cover any Property other than the Property
being acquired and fixed improvements then or thereafter erected thereon;
(iii) Liens upon or with respect to any Property (including any contract
rights relating thereto) acquired, constructed, refurbished, or improved by the
Company or any of its Subsidiaries (including, but not limited to, Liens to
secure all or any part of the cost of construction, alteration, or repair of any
building, equipment, facility or other improvement on, all or any part of such
property, including any pipeline financing) after the date of the Indenture
which are created, incurred or assumed contemporaneously with, or within 360
days after, the latest to occur of the acquisition (whether by acquisition of
stock, assets or otherwise), completion of construction, refurbishment, or
improvement, or the commencement of commercial operation, of such Property (or,
in the case of Liens on contract rights, the completion of construction, or the
commencement of commercial operation of the facility to which such contract
rights relate, regardless of the date when such contract was entered into) to
secure or provide for the payment of any part of the purchase price of such
Property or the cost of such construction, refurbishment, or improvement;
provided, however, that in the case of any such acquisition, construction,
refurbishment, or improvement, the Lien shall relate only to indebtedness
reasonably incurred to finance such acquisition, construction, refurbishment, or
improvement and shall not extend to cover any other Property other than fixed
improvements then or thereafter existing thereon;
(iv) Liens securing indebtedness owing by any Subsidiary to the Company or
to any other Subsidiary;
(v) Liens in connection with the sale or other transfer in the ordinary
course of business of (A) crude oil, natural gas, other petroleum hydrocarbons,
or other minerals in place for a period of time until, or in an amount such
that, the purchaser or other transferee will realize therefrom a specified
amount of money (however determined) or a specified amount of such minerals, or
(B) any other interest in property of the character commonly referred to as a
"production payment";
(vi) Liens on current assets to secure any indebtedness maturing (including
any extensions or renewals thereof) not more than one year from the date of the
creation of such Lien; and
(vii) Liens for the sole purpose of extending, renewing, or replacing in
whole or in part the indebtedness secured thereby referred to in the foregoing
clauses (i) to (vi), inclusive, or in this clause (vii); PROVIDED, HOWEVER, that
the Liens excluded pursuant to this clause (vii) shall be excluded only in an
amount not to exceed the principal amount of indebtedness so secured at the time
of such extension, renewal, or replacement, and that such extension, renewal, or
replacement shall be limited to all or part of the Property subject to the lien
so extended, renewed, or replaced (plus refurbishment of, or improvements on or
to, such Property).
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. Neither the Company nor any
of its Subsidiaries may enter into, assume, guarantee, or otherwise become
liable with respect to any Sale and Leaseback Transaction involving any
Property, if the latest to occur of the acquisition, the completion of
construction, or the commencement of commercial operation of such Property shall
have occurred more than 180 days prior thereto, unless after giving effect
thereto the sum, without duplication, of (a) the aggregate principal amount of
all Secured Debt (excluding indebtedness secured by the Liens described in
clauses (i) through (vii) under "Limitations on Liens" above) and (b) all
Attributable Debt in respect of Sale and Leaseback Transactions does not exceed
15% of the Company's Consolidated Net Tangible Assets. This restriction shall
not apply to any Sale and Leaseback Transaction if, within 180 days from the
effective date of such Sale and Leaseback Transaction, the Company or such
Subsidiary applies an amount not less than the greater of (i) the net proceeds
of the sale of such Property leased pursuant to such arrangement or (ii) the
fair value of such Property to retire its Funded Debt, including, for this
purpose, any currently maturing portion of such Funded Debt, or to purchase
other property having a fair value at least equal to the fair value of the
Property leased in such Sale and Leaseback Transaction. This restriction also
does not apply to any Sale and Leaseback Transaction (A) between the Company and
any Subsidiary or between any Subsidiaries, (B) entered into prior to
8
the date of the Indenture, or (C) for which, at the time the transaction is
entered into, the term of the related lease to the Company or such Subsidiary of
the Property sold pursuant to such transaction is three years or less.
CONSOLIDATION, MERGER OR SALE BY THE COMPANY
The Company shall not consolidate or merge with or into, or transfer or
lease all or substantially all of its assets to, any Person unless (i) the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or which acquires the Company's assets, is organized and existing
under the laws of the United States, any state thereof, or the District of
Columbia, (ii) the Person formed by or surviving any such consolidation or
merger (if other than the Company), or which acquires the Company's assets,
expressly assumes by supplemental indenture all of the obligations of the
Company under the Debt Securities and the Indenture, and (iii) immediately after
giving effect to the transaction, no Default or Event of Default shall have
occurred and be continuing. Upon any such consolidation, merger, or sale, the
successor Person formed by such consolidation, or into which the Company is
merged, or to which such sale is made, shall succeed to, and be substituted for,
the Company under the Indenture. (Section 7.1 of the Indenture.)
The Indenture contains no covenants or other specific provisions to afford
protection to holders of the Debt Securities in the event of a highly leveraged
transaction or a change in control of the Company, except to the limited extent
described above.
EVENTS OF DEFAULT, NOTICE AND CERTAIN RIGHTS ON DEFAULT
The Indenture provides that, if an Event of Default specified therein
occurs with respect to the Debt Securities of any series and is continuing, the
Trustee for such series or the holders of at least 33 1/3% in aggregate
principal amount of all of the outstanding Debt Securities of that series, by
written notice to the Company (and to the Trustee for such series, if notice is
given by such holders of Debt Securities), may declare the principal of (or, if
the Debt Securities of that series are Original Issue Discount Securities (as
defined in the Indenture), such portion of the principal amount specified in the
Prospectus Supplement) and accrued interest on all the Debt Securities of that
series to be immediately due and payable. (Section 5.2 of the Indenture.) At any
time after such a declaration and before a judgment or decree for payment for
money due has been obtained by the Trustee, the holders of a majority in
aggregate principal amount of such securities may rescind and annul such
declaration and its consequences, subject to certain limitations.
Events of Default with respect to Debt Securities of any series are defined
in the Indenture as being: (a) default for 30 days in payment of any interest on
any Debt Security of that series or any additional amount payable with respect
to Debt Securities of such series as specified in the applicable Prospectus
Supplement when due; (b) default in payment of principal, or premium, if any, at
maturity or on redemption or otherwise, or in the making of a mandatory sinking
fund payment of any Debt Securities of that series when and as due; (c) default
for 90 days after notice to the Company by the Trustee for such series, or by
the holders of 33 1/3% in aggregate principal amount of the Debt Securities of
such series then outstanding, in any material respect in the performance of any
other agreement in the Debt Securities of that series, in the Indenture (or in
any supplemental indenture or board resolution referred to therein) under which
the Debt Securities of that series may have been issued; (d) default
constitutuing failure to pay any portion of the principal of, premium, if any,
or interest on, or resulting in acceleration of, other indebtedness (in a
principal amount outstanding of $20,000,000 or more) for money borrowed of the
Company where such default under such other indebtedness is not cured or
remedied, and any acceleration is not rescinded or annulled within 30 days after
the written notice thereof to the Company by the Trustee or to the Company and
the Trustee by the holders of 33 1/3% in aggregate principal amount of the Debt
Securities of such series then outstanding; PROVIDED that, such Event of Default
will be cured or waived if (i) the payment default or default that resulted in
any acceleration of such other indebtedness for money borrowed is cured or
waived and (ii) any acceleration is rescinded or annulled; and (e) certain
events of bankruptcy, insolvency or reorganization of the Company. (Section 5.1
of the Indenture.) Events of Default with respect to a specified series of Debt
Securities may be added to the Indenture and, if so added, will be described in
the applicable Prospectus Supplement. (Sections 3.1 and 5.1(7) of the
Indenture.) No Event of Default with respect to any series of Debt Securities
necessarily constitutes an Event of Default with respect to the Debt Securities
of any other series issued under the Indenture.
The Indenture provides that the Trustee will, subject to certain
exceptions, within 90 days after the occurrence of a Default known to it with
respect to the Debt Securities of any series, give to the holders of the Debt
Securities of that series notice of all such Defaults unless such Default shall
have been cured or waived. "Default" means any event which is, or after notice
or passage of time or both, would be, an Event of Default. (Section 1.1 of the
Indenture.)
9
The Indenture provides (subject to certain limitations) that the holders of
a majority in aggregate principal amount of the outstanding Debt Securities of
each series affected (with each such series voting as a class) may direct the
time, method, and place of conducting any proceeding for any remedy available to
the Trustee for such series, or exercising any trust or power conferred on such
Trustee. (Section 5.8 of the Indenture.)
The Indenture includes a covenant that the Company will file annually with
the Trustee a certificate as to the Company's compliance with all conditions and
covenants of the Indenture. (Section 9.7 of the Indenture.)
The holders of a majority in aggregate principal amount of the outstanding
Debt Securities of any series by notice to the Trustee may waive, on behalf of
the holders of all Debt Securities of such series, any past Default or Event of
Default with respect to that series and its consequences except (i) a Default or
Event of Default in the payment of the principal of, premium, if any, or
interest, if any, on any Debt Security, or (ii) a covenant or provision of the
Indenture that cannot be modified or amended without the consent of each holder
of a Debt Security of such series. (Section 5.7 of the Indenture.)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee to
enter into one or more supplemental indentures without the consent of the
holders of any of the Debt Securities in order: (i) to evidence the succession
of another Person to the Company and the assumption of the covenants of the
Company in the Indenture and in the Debt Securities by a successor to the
Company; (ii) to add to the covenants of the Company or surrender any right or
power of the Company; (iii) to add additional Events of Default with respect to
all or any series of Debt Securities; (iv) to add or change any provisions to
such extent as necessary to permit or facilitate the issuance of Debt Securities
in bearer form or in global form; (v) to change or eliminate any provision
affecting Debt Securities not yet issued; (vi) to secure the Debt Securities;
(vii) to establish the form or terms of Debt Securities; (viii) to evidence and
provide for successor Trustees; (ix) if allowed without penalty under applicable
laws and regulations, to permit payment in respect of Debt Securities in bearer
form in the United States; (x) to correct or supplement any inconsistent
provisions or to make any other provisions with respect to matters or questions
arising under the Indenture; provided that such action does not adversely affect
the interests of any holder of Debt Securities of any series; or (xi) to cure
any ambiguity or correct any mistake, provided that such action does not
adversely affect the interests of any holder of Debt Securities of any series.
(Section 8.1 of the Indenture.)
The Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of a majority in aggregate principal
amount of the outstanding Debt Securities adversely affected by such
supplemental indenture (with the Debt Securities of all series voting as one
class), to execute supplemental indentures adding any provisions to or changing
or eliminating any of the provisions of the Indenture or any supplemental
indenture or modifying the rights of the holders of Debt Securities of such
series; PROVIDED, HOWEVER, that no such supplemental indenture may, without the
consent of the holder of each Debt Security so affected: (i) change the time for
payment of principal or premium, if any, or interest on any Debt Security; (ii)
reduce the principal of, or any installment of principal of, or premium, if any,
or the rate of interest on any Debt Security, or change the manner in which the
amount of any of the foregoing is determined; (iii) reduce the amount of
premium, if any, payable upon the redemption of any Debt Security; (iv) reduce
the amount of principal payable upon acceleration of the maturity of any
Original Issue Discount Security; (v) change the currency in which any Debt
Security or any premium or interest thereon is payable; (vi) change the index,
securities or commodities with reference to which or the formula by which the
amount of principal or any premium or interest thereon is determined; (vii)
impair the right to institute suit for the enforcement of any payment on or
after the maturity or redemption of any Debt Security; (viii) reduce the
percentage in principal amount of the outstanding Debt Securities affected
thereby the consent of whose holders is required for modification or amendment
of the Indenture or for waiver of compliance with certain provisions of the
Indenture or for waiver of certain defaults; (ix) change the obligation of the
Company to maintain an office or agency in the places and for the purposes
specified in the Indenture; or (x) modify the provisions relating to waiver of
certain defaults or any of the foregoing provisions except to increase any
percentage or to provide that certain other provisions of the Indenture cannot
be modified or waived without the consent of holders of each outstanding Debt
Security affected thereby. (Section 8.2 of the Indenture.)
DEFEASANCE
DEFEASANCE AND DISCHARGE. Unless the Prospectus Supplement relating to the
Debt Securities of a series provides otherwise, the Company, at its option, will
be deemed to have paid and will be discharged from any and all obligations in
respect of such Debt Securities (except for, among other matters, certain
obligations to register the transfer or exchange of the Debt Securities, to
replace stolen, lost, or mutilated Debt Securities, to maintain paying agencies,
and to hold certain monies for payment in trust) if, among other things, (a) the
Company has irrevocably deposited with the Trustee, in trust, Government
10
Obligations that through the payment of interest and principal in respect
thereof in accordance with their terms will provide money or a combination of
money and Government Obligations in an amount sufficient to pay in the currency
in which such Debt Securities are payable all the principal of, and interest on,
such Debt Securities on the dates such payments are due in accordance with the
terms of such Debt Securities; (b) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel to the effect that the holders
of such Debt Securities will not recognize income, gain or loss for U S. federal
income tax purposes as a result of the Company's exercise of its option under
this "Defeasance and Discharge" provision and will be subject to U.S. federal
income tax on the same amounts in the same manner and at the same times as would
have been the case if such deposit, defeasance, and discharge had not occurred,
and which Opinion of Counsel must be based upon (x) a ruling of the U.S.
Internal Revenue Service to the same effect or (y) a change in applicable U.S.
federal income tax law after the date of the Indenture such that a ruling is no
longer required; (c) no Default or Event of Default shall have occurred or be
continuing, and such deposit shall not result in a breach or violation of, or
constitute a default under, any other material agreement or instrument to which
the Company is a party or by which the Company is bound; and (d) the Company has
delivered to the trustee an Opinion of Counsel to the effect that the trust
resulting from the deposit referred to in clause (a) does not constitute an
investment company under the Investment Company Act of 1940. The Prospectus
Supplement will more fully describe the provisions relating to such discharge or
termination of obligations. (Sections 4.3 and 4.6 of the Indenture.)
DEFEASANCE OF CERTAIN COVENANTS. Unless the Prospectus Supplement relating
to the Debt Securities of a series provides otherwise, the Company, at its
option, need not comply with certain restrictive covenants of the Indenture
(including those described above under "Certain Covenants") upon, among other
things, the irrevocable deposit with the Trustee, in trust, of money and/or
Government Obligations that through the payment of interest and principal in
respect thereof in accordance with their terms will provide money or a
combination of money and Government Obligations in an amount sufficient to pay
in the currency in which such Debt Securities are payable all the principal of,
and interest on, such Debt Securities on the dates such payments are due in
accordance with the terms of such Debt Securities, the satisfaction of the
provisions described in clauses (c) and (d) of the preceding paragraph and the
delivery by the Company to the Trustee of an Opinion of Counsel to the effect
that, among other things, the holders of such Debt Securities will not recognize
income, gain or loss for U.S. federal income tax purposes as a result of such
deposit and defeasance of certain covenants and will be subject to U.S. federal
income tax on the same amounts and in the same manner and at the same times as
would have been the case if such deposit and defeasance had not occurred.
(Sections 4.5 and 4.6 of the Indenture.)
THE TRUSTEE
First Union National Bank of North Carolina is the Trustee under the
Indenture. The Company also maintains banking and other commercial relationships
with the Trustee and its affiliates in the ordinary course of business.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by and construed in
accordance with the laws of the State of New York.
PLAN OF DISTRIBUTION
The Company may, from time to time, sell Debt Securities (i) through
underwriters, dealers, or agents, including Morgan Stanley & Co. Incorporated,
(ii) directly in each case to the public, institutional investors and other
purchasers, or (iii) through a combination of any such methods. A Prospectus
Supplement will set forth the terms of the offering of the Debt Securities
offered thereby, including the name or names of any underwriters, dealers or
agents, the purchase price of the Debt Securities, the proceeds to the Company
from the sale, any underwriting discounts and other items constituting
underwriters compensation, any initial public offering price, any discounts or
concessions allowed or reallowed or paid to dealers, and any securities exchange
or market on which the Debt Securities may be listed. Only underwriters so named
in such Prospectus Supplement are deemed to be underwriters in connection with
the Debt Securities offered thereby.
If underwriters are used in the sale, the Debt Securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price, or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase the Debt Securities will be subject
to certain conditions precedent, and the underwriters will be obligated to
purchase all the Debt Securities of the series offered by the Prospectus
Supplement if any of the Debt Securities are purchased. Any initial public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
11
If dealers are used in the sale, unless otherwise indicated in the
Prospectus Supplement relating to the Debt Securities of any series, the Company
will sell the Debt Securities of such series to such dealers as principal. Such
dealers may then resell the Debt Securities of such series to the public at
varying prices to be determined by such dealers at the time of resale.
Debt Securities may also be sold directly, by the Company or through agents
designated by the Company from time to time. Any agent involved in the offering
and sale of Debt Securities in respect of which this Prospectus is delivered
will be named, and any commissions payable by the Company to such agent will be
set forth, in the Prospectus Supplement. Unless otherwise indicated in the
related Prospectus Supplement, any such agent will be acting on a best-efforts
basis for the period of its appointment.
Debt Securities offered may be a new issue of securities with no
established trading market. Any underwriters to whom such Debt Securities are
sold by the Company for public offering and sale may make a market in such Debt
Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of or the trading markets for any such Debt
Securities.
Agents, underwriters, and dealers may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which the agents or underwriters may be required to
make in respect thereof. Agents, underwriters, and dealers may be customers of,
engage in transactions with, or perform services for, the Company in the
ordinary course of business.
LEGAL MATTERS
The validity of the issuance of the Debt Securities offered hereby will be
passed upon for the Company by Fennebresque, Clark, Swindell & Hay, Charlotte,
North Carolina, counsel to the Company and J. Paul Douglas, Esq., Vice
President -- Corporate Counsel and Secretary. Certain legal matters will be
passed upon on behalf of any underwriters, dealers or agents by Winthrop,
Stimson, Putnam & Roberts, New York, New York.
EXPERTS
The consolidated financial statements and schedules incorporated by
reference in this Prospectus and elsewhere in the Registration Statement, to the
extent and for the periods indicated in their reports to opinion, have been
audited by Arthur Andersen LLP, independent public accountants, and are included
herein in reliance upon the authority of said firm as experts in giving such
reports.
12
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses payable by the Company in connection with the
issuance and distribution of the securities being offered hereby are:
Registration Fee.......................................................................... $ 43,103
Fees and Expenses of Indenture Trustee.................................................... 11,000
Printing.................................................................................. 60,000
Legal Fees and Expenses................................................................... 125,000
Rating Agency Fees and Expenses........................................................... 113,250
Accounting Fees and Expenses.............................................................. 75,000
Blue Sky Fees and Expenses................................................................ 7,500
North Carolina Utilities Commission....................................................... 500
Miscellaneous............................................................................. 4,647
Total................................................................................ $440,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The By-Laws of the Company contain provisions that require the Company to
indemnify current or former directors or officers to the fullest extent allowed
by law. Sections 55-8-50 through 55-8-58 of the North Carolina Business
Corporation Act provide for the indemnification of officers and directors under
certain circumstances against expenses incurred in successfully defending
against a claim and authorize North Carolina corporations to indemnify their
officers and directors under certain circumstances against expenses and
liabilities incurred in legal proceedings involving such persons because of
their being or having been an officer or director.
The Company maintains insurance to protect itself and its directors and
officers against expense or loss arising from any action, suit or proceeding
brought by reason of the fact that any person is a director or officer of the
Company. The policy provides for the payment on behalf of its directors and
officers of losses that arise from claims against the directors and officers for
a wrongful act while acting in that capacity. The policy also provides for
payment of losses that the Company may be required or permitted to pay as
indemnity due the directors or officers for claims against them for wrongful
acts.
ITEM 16. EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
1 Form of Underwriting Agreement
4(a) Form of Indenture
4(b) Form of Supplemental Indenture
5 Opinion of Fennebresque, Clark, Swindell & Hay
12 Ratio of Earnings to Fixed Charges
23(a) Consent of Arthur Andersen, LLP
23(b) Consent of Fennebresque, Clark, Swindell & Hay (is contained in the opinion included as Exhibit 5)
24 Powers of Attorney (included in signature page)
25 Statement of Eligibility of Indenture Trustee Under Trust Indenture Act of 1939
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
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 of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date 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;
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(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 the undertakings set forth in paragraphs
(a)(1)(i) and (a)(1)(ii) above do not apply if the information required to
be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this registration statement.
2. That, for the purpose of determining any liability under the Securities
Act of 1933, 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 a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration 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.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrants of expenses incurred or paid by a director,
officer or controlling person of the registrant 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, the 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 of 1933 and will be governed by the final adjudication of such
issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
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 Gastonia, and the state of North Carolina, on the
20th day of December, 1995.
PUBLIC SERVICE COMPANY OF
NORTH CAROLINA, INCORPORATED
By: /s/ Charles E. Zeigler, Jr.
CHARLES E. ZEIGLER, JR.
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Exchange Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
hereby appoints Charles E. Zeigler, Jr., Robert D. Voigt, Jack G. Mason and J.
Paul Douglas, and each of them singly, such person's true and lawful attorneys,
with full power to them and each of them to sign, for such person and in such
person's name and capacity indicated below, any and all amendments to this
registration statement, hereby ratifying and confiming such person's signature
as it may be signed by said attorney to any and all amendments.
SIGNATURE TITLE DATE
/s/ Charles E. Zeigler, Jr. Chairman, President, Chief Executive December 20, 1995
CHARLES E. ZEIGLER, JR. Officer, and Director (Principal
Executive Officer)
/s/ Robert D. Voigt Senior Vice-President -- Corporate December 20, 1995
ROBERT D. VOIGT Development and Chief Financial Officer
(Principal Financial and Accounting
Officer)
/s/ William C. Burkhardt Director December 20, 1995
WILLIAM C. BURKHARDT
/s/ William A.V. Cecil Director December 20, 1995
WILLIAM A.V. CECIL
/s/ Bert Collins Director December 20, 1995
BERT COLLINS
/s/ H. Max Craig, Jr. Director December 20, 1995
H. MAX CRAIG, JR.
Director December 20, 1995
VAN E. EURE
/s/ B. Frank Matthews, II Director December 20, 1995
B. FRANK MATTHEWS, II
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SIGNATURE TITLE DATE
/s/ William L. O'Brien, Jr. Director December 20, 1995
WILLIAM L. O'BRIEN, JR.
/s/ Plato P. Pearson, Jr. Director December 20, 1995
PLATO P. PEARSON, JR.
/s/ G. Smedes York Director December 20, 1995
G. SMEDES YORK
/s/ Charles E. Zeigler, Sr. Director December 20, 1995
CHARLES E. ZEIGLER, SR.
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
1 Form of Underwriting Agreement
4(a) Form of Indenture
4(b) Form of Supplemental Indenture
5 Opinion of Fennebresque, Clark, Swindell & Hay
12 Ratio of Earnings to Fixed Charges
23(a) Consent of Arthur Andersen, LLP
23(b) Consent of Fennebresque, Clark, Swindell & Hay (is contained in the opinion included as
Exhibit 5)
24 Powers of Attorney (included in signature page)
25 Statement of Eligibility of Indenture Trustee Under Trust Indenture Act of 1939