AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 2, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
Indiana 35-0672570
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 N.W. Fourth Street
Evansville, Indiana 47741-0001
(812) 465-5300
(address, including ZIP code, and telephone number, including area code, of
registrant's principal executive offices)
TIMOTHY L. BURKE, Secretary and Treasurer
Southern Indiana Gas and Electric Company
20 N.W. Fourth Street
Evansville, Indiana 47741-0001
(812) 465-4136
(name, address, including ZIP code, and telephone number, including
area code, of agent for service)
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Copies to:
John H. Byington, Esq. Vincent Pagano, Esq.
Winthrop, Stimson, Putnam & Roberts Simpson Thacher & Bartlett
One Battery Park Plaza 425 Lexington Avenue
New York, New York 10004-1490 New York, NY 10017-3954
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the Registration Statement becomes effective.
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, please check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective Registration Statement for the same offering. |_|
If this Form is post-effective amendment filed pursuant to Rule 462(e)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. |_|
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
maximum maximum
Amount to offering aggregate Amount of
Title of each class of be price per offering Registration
securities to be registered registered unit (1) price (1) Fee
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Senior Notes $80,000,000 $80,000,000 $22,240
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First Mortgage Bonds $80,000,000 (2) (2) (2)
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(1) Estimated solely for the purpose of calculating the registration fee.
(2) First Mortgage Bonds will not be issued other than in conjunction with and
as security for a like principal amount of Senior Notes. Consequently,
pursuant to Rule 457(n) under the Securities Act of 1933, no additional
fee is being paid
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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 this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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SUBJECT TO COMPLETION, DATED JULY 2, 1999
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Prospectus
$80,000,000
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
Senior Notes
Southern Indiana Gas and Electric Company
20 N.W. Fourth Street
Evansville, Indiana 47741-0001
(812) 465-5300
TERMS OF SALE
The terms for each Senior Note that are not specified in the Prospectus will be
included in a Prospectus Supplement. We may sell the Senior Notes at one or more
times. Initially, we will issue our First Mortgage Bonds to the Note Trustee to
secure payments due on the Senior Notes. When the aggregate principal amount of
our outstanding First Mortgage Bonds (other than Bonds securing these or similar
Notes) does not exceed the greater of five percent of our Net Tangible Assets or
five percent of our Capitalization, the Senior Notes will no longer be secured
by First Mortgage Bonds. The date that the Senior Notes are no longer secured by
First Mortgage Bonds is called the Release Date.
We urge you to carefully read this Prospectus and the Prospectus Supplement,
which will describe the specific terms of the offering, before you make your
investment decision.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is , 1999.
TABLE OF CONTENTS
WHERE YOU CAN FIND MORE INFORMATION ...........................................2
THE COMPANY ...................................................................2
RECENT DEVELOPMENTS ...........................................................2
PROSPECTUS SUPPLEMENT .........................................................3
USE OF PROCEEDS ...............................................................3
CERTAIN CONSOLIDATED FINANCIAL INFORMATION ....................................3
DESCRIPTION OF SENIOR NOTES ...................................................4
GENERAL .....................................................................4
SECURITY ....................................................................6
RELEASE DATE ................................................................6
LIMITATION OF LIENS .........................................................7
LIMITATIONS ON SALE AND LEASE-BACK TRANSACTIONS .............................9
FORM, EXCHANGE AND TRANSFER ................................................10
PAYMENT AND PAYING AGENTS ..................................................10
REDEMPTION .................................................................11
CONSOLIDATION, MERGER AND SALE OF ASSETS ...................................11
EVENTS OF DEFAULT ..........................................................12
MODIFICATIONS AND WAIVER ...................................................14
DEFEASANCE .................................................................17
RESIGNATION OF SENIOR NOTE TRUSTEE .........................................17
MISCELLANEOUS ..............................................................17
GLOBAL SECURITIES ............................................................18
DESCRIPTION OF FIRST MORTGAGE BONDS ..........................................19
GENERAL ....................................................................19
INTEREST, MATURITY, REDEMPTION AND PAYMENT .................................19
IMPROVEMENT AND SINKING FUND REQUIREMENT ...................................19
MAINTENANCE AND REPLACEMENT REQUIREMENTS ...................................19
PRIORITY AND SECURITY ......................................................20
ISSUANCE OF ADDITIONAL BONDS ...............................................20
LIMITATION ON DIVIDENDS ....................................................21
MODIFICATION OF THE MORTGAGE ...............................................21
REGARDING DEFAULT ..........................................................22
REGARDING THE TRUSTEE ......................................................22
RELEASE AND SUBSTITUTION OF PROPERTY .......................................22
EVIDENCE TO BE FURNISHED TO THE TRUSTEE UNDER THE MORTGAGE .................23
PLAN OF DISTRIBUTION .........................................................23
EXPERTS ......................................................................24
LEGAL OPINIONS ...............................................................24
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements, and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms at the following locations: Room 1024, 450 Fifth
Street, NW, Washington, D.C. 20549; Northwest Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and Seven World Trade Center, Suite
1300, New York, N.Y. 10048. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available to
the public from the SEC web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus, and later information that we file with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until we sell all the Senior Notes. This Prospectus is part of a registration
statement we filed with the SEC.
o The Company's Annual Report on Form 10-K for the year ended December 31,
1998.
o The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1999.
You should rely only on the information incorporated by reference or provided in
this Prospectus or any supplement. We have not authorized anyone else to provide
you with different information. We are not making an offer of these Senior Notes
in any state where the offer is not permitted. You should not assume that the
information in this Prospectus or any supplement is accurate as of any date
other than the date on the front of those documents.
THE COMPANY
The company is a public utility serving ten counties in southwestern Indiana.
Retail electric service is supplied to Evansville and 74 other cities, towns and
communities, and adjacent rural areas. Wholesale electric service is supplied to
an additional eight communities. Gas service is supplied to Evansville and 64
other nearby communities and their environs. At December 31, 1998, the company
had 124,340 electric customers and 108,335 gas customers.
RECENT DEVELOPMENTS
On June 14, 1999, our parent holding company, SIGCORP, Inc., and Indiana Energy,
Inc. announced that they had signed a definitive merger agreement. Indiana
Energy, Inc. is a holding company whose chief subsidiary is a regulated Indiana
gas utility, Indiana Gas Company, Inc. Subject to the receipt of approval from
their respective shareholders and to necessary regulatory approvals, the two
holding companies will combine into a new holding company to be named Vectren
Corporation. If and when the merger is consummated, Indiana Gas Company, Inc.
and we will become separate subsidiaries of Vectren Corporation. Our obligations
with respect to the Senior Notes and our First Mortgage Bonds will not change.
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PROSPECTUS SUPPLEMENT
The Prospectus Supplement for each offering of Senior Notes will contain the
specific information and terms for that offering. The Prospectus Supplement may
also add, update, or change information contained in this Prospectus. It is
important for you to consider the information contained in this Prospectus and
the Prospectus Supplement in making your investment decision.
USE OF PROCEEDS
We expect to use the net proceeds from the sale of the Senior Notes for the
retirement of short-term debt.
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
CERTAIN CONSOLIDATED FINANCIAL INFORMATION
(Thousands, except ratios and percentages)
Twelve Months
Year Ended December 31,(1) Ended March 31,
---------------------------------------------------- ---------------
1994 1995 1996 1997 1998 1999
-------- -------- -------- -------- -------- ---------------
Income Summary: (Unaudited)
Operating Revenues .. $330,035 $338,698 $372,730 $358,106 $364,666 $370,205
Operating Income .... $ 52,367 $ 53,873 $ 60,429 $ 62,456 $ 62,002 $ 61,369
Net Income .......... $ 41,025 $ 45,918 $ 42,841 $ 45,363 $ 43,542 $ 43,012
Net Income Applicable
to Common Stock ..... $ 39,920 $ 44,819 $ 41,744 $ 44,266 $ 42,447 $ 41,922
Ratio of Earnings to
Fixed Charges(2) .... 3.57 3.52 4.03 4.43 4.17 4.27
At March 31, 1999(3)
------------------------------------------------
Actual As Adjusted(4)
--------------------- ----------------------
Capitalization Summary:
Common Stockholder's Equity $324,593 53.0% $324,593 50.1%
Preferred Stock ........... 11,090 1.8 11,090 1.7
Redeemable Preferred Stock 7,500 1.2 7,500 1.2
Special Preferred Stock of
Subsidiary ................ 692 0.2 692 0.1
Long-Term Debt ............ 169,782 27.7 249,782 38.6
Current Maturities
of Long-Term Debt.......... 45,000 7.3 0 0.0
Bonds Subject to Tender.... 53,700 8.8 53,700 8.3
-------- ---- -------- ----
Total Capitalization .... $612,357 100.0% $647,357 100.0%
===================== ======================
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(1) Derived from audited financial information.
(2) "Earnings" for purposes of these calculations have been computed by adding
to "income before extraordinary items" all taxes based on income or
profits, total interest charges and the estimated interest element of
rentals charged to income. "Fixed charges" include total interest charges
and the estimated interest element of rentals.
(3) Reference is made to the Balance Sheets, the Statements of Capitalization
and the Notes to Financial Statements that are contained in the documents
incorporated by reference herein for additional details concerning our
common stock, preferred stock, redeemable preferred stock and long-term
indebtedness, including maturities and interest rates payable on such
long-term indebtedness.
(4) As adjusted figures include our indebtedness represented by the Senior
Notes and the underlying Senior Note First Mortgage Bonds.
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DESCRIPTION OF SENIOR NOTES
GENERAL
We will issue one or more new series of Senior Notes under a Senior Note
Indenture between us and a Senior Note Trustee whom we will name. The
information we are providing you in this Prospectus concerning the Senior Note
Indenture and related documents is only a summary of the information provided in
those documents. You should consult the Senior Notes themselves, the Senior Note
Indenture, any Supplemental Senior Note Indentures and other documents for more
complete information on the Senior Notes. These documents appear as exhibits to
the Registration Statement, or will appear as exhibits to a Current Report on
Form 8-K, which we will file later, and which will be incorporated by reference
into this Prospectus.
Until the Release Date, all of the Senior Notes will be secured by one or more
series of First Mortgage Bonds, which we will issue and deliver to the Senior
Note Trustee. For more information, see "Security" and "Release Date" below.
On the Release Date, the Senior Notes
o will cease to be secured by First Mortgage Bonds;
o will become our unsecured obligations; and
o will rank as equal with our other unsecured indebtedness.
The Senior Note Indenture provides that, in addition to the Senior Notes offered
under this shelf registration process, additional Senior Notes may be issued
later, without limitation as to aggregate principal amount. Before the Release
Date, however, the amount of Senior Notes that we may issue cannot exceed the
amount of First Mortgage Bonds that we are able to issue under the Mortgage. For
more information, see "Description of First Mortgage Bonds --Issuance of
Additional Bonds" below.
You should consult the Prospectus Supplement relating to any particular issue of
Senior Notes for the following information:
o the title of the Senior Notes;
o any limit on aggregate principal amount of the Senior Notes or the series
of which they are a part;
o the date on which the principal of the Senior Notes will be payable;
o the rate, including the method of determination if applicable, at which
the Senior Notes will bear interest, if any; and
-- the date from which any interest will accrue;
-- the dates on which we will pay interest; and
-- the record date for any interest payable on any interest payment
date;
o the place where
-- the principal of, premium, if any, and interest on the Senior Notes
will be payable;
-- you may register transfer of the Senior Notes;
-- you may exchange the Senior Notes;
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-- you may serve notices and demands upon us regarding the Senior
Notes;
o the Security Registrar for the Senior Notes and whether the principal of
the Senior Notes is payable without presentment or surrender of them;
o the terms and conditions upon which we may elect to redeem any Senior
Notes;
o the terms and conditions upon which the Senior Notes must be redeemed or
purchased due to our obligations pursuant to any sinking fund or other
mandatory redemption provisions, or at the holder's option, including any
applicable exceptions to notice requirements;
o the denominations in which we may issue Senior Notes;
o the manner in which we will determine any amounts payable on the Senior
Notes which are to be determined with reference to an index or other fact
or event ascertainable outside the Senior Note Indenture;
o the currency, if other than United States currency, in which payments on
the Senior Notes will be payable;
o terms according to which elections can be made by us or the holder
regarding payments on the Senior Notes in currency other than the currency
in which the notes are stated to be payable;
o the portion of the principal amount of the Senior Notes payable upon
declaration of acceleration of their maturity;
o if payments are to be made on the Senior Notes in securities or other
property, the type and amount of the securities and other property or the
method by which the amount shall be determined;
o the terms applicable to any rights to convert Senior Notes into or
exchange them for our securities or those of any other entity;
o if we issue Senior Notes as Global Securities,
-- any limitations on transfer or exchange rights or the right to
obtain the registration of transfer;
-- any limitations on the right to obtain definitive certificates for
the Senior Notes; and
-- any other matters incidental to the Senior Notes;
o whether we are issuing the Senior Notes as bearer securities;
o any limitations on transfer or exchange of Senior Notes or the right to
obtain registration of their transfer, and the terms and amount of any
service charge required for registration of transfer or exchange;
o any exceptions to the provisions governing payments due on legal holidays,
or any variations in the definition of Business Day, with respect to the
Senior Notes;
o any additions to the Events of Default applicable to any Senior Notes and
any additions to our covenants for the benefit of the holders of the
Senior Notes;
o if we are issuing any Senior Notes prior to the Release Date, the
designation of the series of Senior Note First Mortgage Bonds to be
delivered to the Senior Note Trustee as security for the Senior Notes;
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o any other terms of the Senior Notes not in conflict with the provisions of
the Senior Note Indenture; and
o any other collateral security, assurance or guarantee for the Senior
Notes.
For more information, see Section 301 of the Senior Note Indenture.
Senior Notes may be sold at a substantial discount below their principal amount.
You should consult the applicable Prospectus Supplement for a description of
certain special United States federal income tax considerations which may apply
to Senior Notes sold at an original issue discount or denominated in a currency
other than dollars.
Unless the applicable Prospectus Supplement states otherwise, the covenants
contained in the Senior Note Indenture will not afford holders of Senior Notes
protection in the event we have a change in control or are involved after the
Release Date in a highly-leveraged transaction.
SECURITY
Until the Release Date, described in the following section, all of the Senior
Notes will be secured by one or more series of First Mortgage Bonds, which we
will issue and deliver to the Senior Note Trustee. For more information on the
First Mortgage Bonds, see "Description of First Mortgage Bonds" below. When we
issue a series of Senior Notes prior to the Release Date, we will simultaneously
issue and deliver to the Senior Note Trustee, as security for all of the Senior
Notes, a series of Senior Note First Mortgage Bonds. These First Mortgage Bonds
will have the same stated interest rate (or interest calculated in the same
manner), interest payment dates, stated maturity and redemption provisions, and
will be in the same aggregate principal amount, as the series of Senior Notes we
are issuing. For more information, see Sections 401, 402 and 403 of the Senior
Note Indenture. Payments we make to the Senior Note Trustee on a series of
Senior Notes will satisfy our obligations with respect to the corresponding
payments due on the related series of Senior Note First Mortgage Bonds.
Each series of Senior Note First Mortgage Bonds will be a series of First
Mortgage Bonds, all of which are secured by a lien on certain property we own.
For more discussion on the lien, see "Description of First Mortgage Bonds -
Priority and Security" below. In certain circumstances prior to the Release
Date, we may reduce the aggregate principal amount of Senior Note First Mortgage
Bonds held by the Senior Note Trustee. In no event, however, may we reduce that
amount to an amount lower than the aggregate outstanding principal amount of the
Senior Notes then outstanding. For more information, see Section 409 of the
Senior Note Indenture. Following the Release Date, we will close the Mortgage
and not issue any additional First Mortgage Bonds under the Mortgage. For more
information, see Section 403 of the Senior Note Indenture.
RELEASE DATE
On the Release Date, the Senior Note First Mortgage Bonds will no longer secure
the Senior Notes, and the Senior Notes will become our unsecured general
obligations. For more information, see Section 403 of the Senior Note Indenture.
The Release Date means the date that we have repaid, redeemed or otherwise
retired all of our First Mortgage Bonds, excluding Senior Note First Mortgage
Bonds securing the Senior Notes and other First Mortgage Bonds which do not in
aggregate principal amount exceed the greater of 5% of our Net
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Tangible Assets or 5% of our Capitalization (each as defined in the following
section on "Limitation of Liens"). Excluding this issuance, we currently have
$224,615,000 aggregate principal amount of First Mortgage Bonds outstanding. If
an event of default under either the Senior Note Indenture or the First Mortgage
Indenture has occurred and is continuing on the date that the Release Date would
otherwise occur, the Release Date will be postponed until the event of default
has been cured.
The Senior Note Trustee will give the Senior Note holders notice when the
Release Date occurs. See "Description of Senior Notes--Defeasance" below for a
discussion of another situation in which outstanding Senior Notes would not be
secured by Senior Note First Mortgage Bonds.
LIMITATION OF LIENS
In this section and in the following section on "Limitation on Sale and
Lease-Back Transactions," the following terms have the meanings indicated:
"Capitalization" means the total of all the following items appearing on, or
included in, our consolidated balance sheet: (i) liabilities for indebtedness
maturing more than 12 months from the date of determination; and (ii) common
stock, preferred stock, premium on capital stock, capital surplus, capital in
excess of par value, and retained earnings (however the foregoing may be
designated), less, to the extent not otherwise deducted, the cost of shares of
our capital stock held in our treasury. Capitalization shall be determined in
accordance with generally accepted accounting principles and practices
applicable to the type of business in which we are engaged and approved by
independent accountants regularly retained by us, and may be determined as of a
date not more than 60 days prior to the happening of the event for which the
determination is being made.
"Debt" means any outstanding debt for money borrowed evidenced by notes,
debentures, bonds or other securities, or guarantees of any debt.
"Net Tangible Assets" means the amount shown as total assets on our consolidated
balance sheet, less (i) intangible assets including, but without limitation,
such items as goodwill, trademarks, trade names, patents, unamortized debt
discount and expense and certain regulatory assets, and (ii) appropriate
adjustments, if any, on account of minority interests. Net Tangible Assets shall
be determined in accordance with generally accepted accounting principles and
practices applicable to the type of business in which we are engaged and
approved by the independent accountants regularly retained by us, and may be
determined as of a date not more than 60 days prior to the happening of the
event for which such determination is being made.
"Operating Property" means (i) any interest in real property we own and (ii) any
asset we own that is depreciable in accordance with generally accepted
accounting principles, excluding, in either case, any interest of ours as lessee
under any lease (except for a lease that results from a Sale and Lease-Back
Transaction) which has been or would be capitalized on the books of the lessee
in accordance with generally accepted accounting principles.
"Sale and Lease-Back Transaction" means any arrangement with any person
providing for the leasing to us of any Operating Property (except for temporary
leases for a term, including any renewal or potential renewal, of not more than
48 months),
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which Operating Property has been or is to be sold or transferred by us to the
person; PROVIDED, HOWEVER, Sale and Lease-Back Transaction shall not include
[any arrangement first entered into prior to the date of the Senior Note
Indenture and shall not include] any transaction pursuant to which we sell
Operating Property to, and thereafter purchase energy or services from, any
entity, which transaction is ordered or authorized by any regulatory authority
having jurisdiction over us or our operations or is entered into pursuant to any
plan or program of industry restructuring ordered or authorized by any such
regulatory authority.
"Value" means, with respect to a Sale and Lease-Back Transaction, as of any
particular time, the amount equal to the greater of (i) our net proceeds from
the sale or transfer of the property leased pursuant to the Sale and Lease-Back
Transaction or (ii) the net book value of the property, as determined by us in
accordance with generally accepted accounting principles at the time of entering
into the Sale and Lease-Back Transaction, in either case multiplied by a
fraction, the numerator of which shall be equal to the number of full years of
the term of the lease that is part of the Sale and Lease-Back Transaction
remaining at the time of determination and the denominator of which shall be
equal to the number of full years of the term, without regard, in any case, to
any renewal or extension options contained in the lease.
The Senior Note Indenture provides that, from and after the Release Date, so
long as any Senior Notes are outstanding, we may not issue, assume, guarantee
(including any contingent obligation to purchase) or permit to exist any Debt
that is secured by any mortgage, security interest, pledge or lien ("Lien") of
or upon any Operating Property owned by us, whether owned at the date of the
Senior Note Indenture or subsequently acquired, without effectively securing the
Senior Notes (together with, if we shall so determine, any other indebtedness of
ours ranking equally with the Senior Notes) equally and ratably with the Debt
(but only so long as the Debt is so secured).
The foregoing restriction will not apply to:
o Liens on any Operating Property existing at the time of its acquisition
and not created in contemplation of the acquisition;
o Liens on Operating Property of a corporation existing at the time the
corporation is merged into or consolidated with us, or at the time the
corporation disposes of substantially all of its properties (or those of a
division) to us provided that the Lien is not extended to property owned
by us immediately prior to the merger, consolidation, or other disposition
and is not created in contemplation of the merger, consolidation or other
disposition;
o Liens on Operating Property to secure the cost of acquisition,
construction, development or substantial repair, alteration or improvement
of that property or to secure indebtedness incurred to provide funds for
any of these purposes or for reimbursement of funds previously expended
for any of these purposes, provided the Liens are created or assumed
contemporaneously with, or within 18 months after, the acquisition or the
completion of substantial repair or alteration, construction, development
or substantial improvement or within 6 months thereafter pursuant to a
commitment for financing arranged with a lender or investor within that
18-month period;
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o Liens in favor of the United States or any state or any department, agency
or instrumentality or political subdivision of the United States or any
state, or for the benefit of holders of securities issued by any of these
entities, to secure any Debt incurred for the purpose of financing all or
any part of the purchase price or the cost of substantially repairing or
altering, constructing, developing or substantially improving our
Operating Property; or
o Any extension, renewal or replacement (or successive extensions, renewals
or replacements), in whole or part, of any Lien referred to in the
exceptions listed above, provided, however, that the principal amount of
Debt secured thereby and not otherwise authorized by those exceptions
listed above, shall not exceed the principal amount of Debt, plus any
premium or fee payable in connection with any such extension, renewal or
replacement, so secured at the time of such extension, renewal or
replacement.
In addition, notwithstanding the foregoing restrictions, from and after the
Release Date we may issue, assume or guarantee Debt secured by a Lien which
would otherwise be subject to the foregoing restrictions up to an aggregate
amount which, together with all other of our secured Debt (not including secured
Debt permitted under any of the foregoing exceptions) and the Value of all Sale
and Lease-Back Transactions existing at such time (other than Sale and
Lease-Back Transactions the proceeds of which have been applied to the
retirement of certain indebtedness, Sale and Lease-Back Transactions in which
the property involved would have been permitted to be subjected to a Lien under
any of the foregoing exceptions and Sale and Lease-Back Transactions that are
permitted by the first sentence of "Limitations on Sale and Lease-Back
Transactions" below), does not exceed the greater of 10% of our Net Tangible
Assets or 10% of our Capitalization. The foregoing restrictions do not limit our
ability to place Liens on (i) the capital stock of any of our subsidiaries or
(ii) the assets of any of our subsidiaries.
LIMITATIONS ON SALE AND LEASE-BACK TRANSACTIONS
The Senior Note Indenture provides that so long as the Senior Notes are
outstanding from and after the Release Date, we may not enter into or permit to
exist any Sale and Lease-Back Transaction with respect to any Operating Property
(except for temporary leases for a term, including any renewal or potential
renewal, of not more than 48 months), if the purchaser's commitment is obtained
more than 18 months after the later of the completion of the acquisition,
construction or development of the Operating Property or the placing in
operation of the Operating Property or of the Operating Property as constructed
or developed or substantially repaired, altered or improved. This restriction
will not apply if (a) we would be entitled pursuant to any of the provisions
listed as exceptions to the restriction applicable to "Limitation on Liens"
above to issue, assume, guarantee or permit to exist Debt secured by a Lien on
the Operating Property without equally and ratably securing the Senior Notes,
(b) after giving effect to the Sale and Lease-Back Transaction, we could incur
pursuant to the provisions described in the last paragraph under "Limitation on
Liens," at least $1.00 of additional Debt secured by Liens (other than Liens
permitted by clause (a)), or (c) we apply within 180 days an amount equal to, in
the case of a sale or transfer for cash, the net proceeds (not less than the
fair value of the Operating Property so leased) and, otherwise, an amount equal
to the fair value
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(as determined by our Board of Directors) of the Operating Property so leased,
to the retirement of Senior Notes or other Debt of the Company ranking equally
with the Senior Notes, subject to reduction for Senior Notes delivered and the
Debt retired during the 180-day period otherwise than pursuant to mandatory
sinking fund or prepayment provisions and payments at stated maturity.
FORM, EXCHANGE AND TRANSFER
Unless the applicable Prospectus Supplement states otherwise, we will issue
Senior Notes only in fully registered form without coupons and in denominations
of $1,000 and integral multiples of that amount. For more information, see
Sections 201 and 302 of the Senior Note Indenture.
Holders may present Senior Notes for exchange or for registration of transfer,
duly endorsed or accompanied by a duly executed instrument of transfer, at the
office of the Security Registrar or at the office of any Transfer Agent we may
designate. Exchanges and transfers are subject to the terms of the Senior Note
Indenture and applicable limitations for global securities. We may designate
ourselves the Security Registrar. No charge will be made for any registration of
transfer or exchange of Senior Notes, but we may require payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
with the transaction. Any transfer or exchange will become effective upon the
Security Registrar or Transfer Agent, as the case may be, being satisfied with
the documents of title and identity of the person making the request. For more
information, see Section 305 of the Senior Note Indenture.
The applicable Prospectus Supplement will state the name of any Transfer Agent,
in addition to the Security Registrar initially designated by the Company for
any Senior Notes. We may at any time designate additional Transfer Agents or
withdraw the designation of any Transfer Agent or make a change in the office
through which any Transfer Agent acts. We must, however, maintain a Transfer
Agent in each place of payment for the Senior Notes of each series. For more
information, see Section 702 of the Senior Note Indenture.
We will not be required to
o issue, register the transfer of, or exchange any Senior Note or any
Tranche of any Senior Note during a period beginning at the opening of
business 15 days before the day of mailing of a notice of redemption of
any Senior Note or any Tranche of any Senior Note called for redemption
and ending at the close of business on the day of mailing; or
o register the transfer of, or exchange any Senior Note selected for
redemption except the unredeemed portion of any Senior Note being
partially redeemed.
For more information, see Section 305 of the Senior Note Indenture.
PAYMENT AND PAYING AGENTS
Unless the applicable Prospectus Supplement states otherwise, we will pay
interest on a Senior Note on any interest payment date to the person in whose
name the Senior Note is registered at the close of business on the regular
record date for the interest payment. For more information, see Section 307 of
the Senior Note Indenture.
Unless the applicable Prospectus Supplement provides otherwise, we will pay
principal and any premium and interest on Senior Notes at the office of the
Paying Agent whom we will designate for this
10
purpose. Unless the applicable Prospectus Supplement states otherwise, the
corporate trust office of the Senior Note Trustee in New York City will be
designated as our sole Paying Agent for payments with respect to Senior Notes of
each series. Any other Paying Agents initially designated by us for the Senior
Notes of a particular series will be named in the applicable Prospectus
Supplement. We may at any time add or delete Paying Agents or change the office
through which any Paying Agent acts. We must, however, maintain a Paying Agent
in each place of payment for the Senior Notes of a particular series. For more
information, see Section 702 of the Senior Note Indenture.
All money we pay to a Paying Agent for the payment of the principal and any
premium or interest on any Senior Note which remains unclaimed at the end of two
years after payment is due will be repaid to us. After that date, the holder of
that Senior Note may look to us for these payments. For more information, see
Section 703 of the Senior Note Indenture.
REDEMPTION
You should consult the applicable Prospectus Supplement for any terms regarding
optional or mandatory redemption of Senior Notes. Except for the provisions in
the applicable Prospectus Supplement regarding Senior Notes redeemable at the
holder's option, Senior Notes may be redeemed only upon notice by mail not less
than 30 nor more than 60 days prior to the redemption date. Further, if less
than all the Senior Notes of a series, or any Tranche of a series, are to be
redeemed, the Senior Notes to be redeemed will be selected by the method
provided for the particular series. In the absence of a selection provision, the
Senior Note Trustee will select a fair and appropriate method of random
selection. For more information, see Sections 503 and 504 of the Senior Note
Indenture.
A notice of redemption we provide may state:
o that redemption is conditioned upon receipt by the Paying Agent on or
before the redemption date of money sufficient to pay the principal and
any premium and interest on the Senior Notes; and
o that if the money has not been received, the notice will be ineffective
and we will not be required to redeem the Senior Notes.
For more information, see Section 504 of the Senior Note Indenture.
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may not consolidate with or merge into any other person, nor may we transfer
or lease substantially all of our assets and property to any person, unless:
o the corporation formed by the consolidation or into which we are merged,
or the person which acquires by conveyance or transfer, or which leases,
substantially all of our property and assets:
-- is organized and validly existing under the laws of any domestic
jurisdiction;
-- expressly assumes our obligations on the Senior Notes and under the
Senior Note Indenture; and
-- prior to the Release Date, expressly assumes our obligations under
the Senior Note First Mortgage Bonds and under the Mortgage;
11
o immediately after the transaction becomes effective, no Event of Default,
and no event which would become an Event of Default, shall have occurred
and be continuing; and
o we will have delivered to the Senior Note Trustee an Officer's Certificate
and Opinion of Counsel as provided in the Senior Note Indenture.
For more information, see Section 1201 of the Senior Note Indenture.
EVENTS OF DEFAULT
"Event of Default" under the Senior Note Indenture with respect to Senior Notes
of any series means any one of the following:
o failure to pay any interest due on the Senior Notes within 30 days;
o failure to pay principal or premium when due on a Senior Note;
o breach of or failure to perform any covenant or warranty of ours in the
Senior Note Indenture with respect to the particular series of Senior
Notes for 60 days (subject to extension under certain circumstances for
another 120 days) after we receive notice from the Senior Note Trustee, or
we and the Senior Note Trustee receive notice from the holders of at least
33% in principal amount of the Senior Notes of that series outstanding
under the Senior Note Indenture according to the provisions of the Senior
Note Indenture;
o prior to the Release Date, the occurrence of a Default under the Mortgage
(see "Description of the First Mortgage Bonds - Events of Default" below);
o certain events of bankruptcy, insolvency or reorganization; and
o any other Event of Default set forth in the applicable Prospectus
Supplement.
For more information, see Section 901 of the Senior Note Indenture.
An Event of Default with respect to a particular series of Senior Notes does not
necessarily constitute an Event of Default with respect to the Senior Notes of
any other series issued under the Senior Note Indenture.
If an Event of Default with respect to a particular series of Senior Notes
occurs and is continuing, either the Senior Note Trustee or the holders of at
least 33% in principal amount of the outstanding Senior Notes of that series may
declare the principal amount of all of the Senior Notes of that series to be due
and payable immediately. If the Senior Notes of that series are discount notes
or similar Senior Notes, only the portion of the principal amount as specified
in the applicable Prospectus Supplement may be immediately due and payable. If
an Event of Default occurs and is continuing with respect to all series of
Senior Notes (including all Events of Default relating to bankruptcy, insolvency
or reorganization), the Senior Note Trustee or the holders of at least 33% in
principal amount of the outstanding Senior Notes of all series, considered
together, may declare an acceleration of the principal amount of all Senior
Notes. In the event of an acceleration prior to the Release Date with respect to
all Senior Notes, the Senior Note Trustee will make a demand for acceleration of
all amounts due under all of the Senior Note First Mortgage Bonds, but this
demand will only result in such an acceleration if allowed by the acceleration
provisions of the First Mortgage.
At any time after a declaration of acceleration with respect to the Senior Notes
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of a particular series, and before a judgment or decree for payment of the money
due has been obtained, and before the acceleration of the Senior Note First
Mortgage Bonds, the Event or Events of Default giving rise to the declaration of
acceleration will, without further action, be deemed to have been waived, and
the declaration and its consequences will be deemed to have been rescinded and
annulled, if
o we have paid or deposited with the Senior Note Trustee a sum sufficient to
pay
-- all overdue interest on all Senior Notes of the particular series;
-- the principal of and any premium on any Senior Notes of that series
which have become due otherwise than by the declaration of
acceleration and any interest at the rate prescribed in the Senior
Notes;
-- interest upon overdue interest at the rate prescribed in the Senior
Notes, to the extend payment is lawful;
-- all amounts due to the Senior Note Trustee under the Senior Note
Indenture; and
o any other Event of Default with respect to the Senior Notes of the
particular series, other than the failure to pay the principal of the
Senior Notes of that series which has become due solely by the declaration
of acceleration, has been cured or waived as provided in the Senior Note
Indenture.
For more information, see Section 902 of the Senior Note Indenture.
The Senior Note Indenture includes provisions as to the duties of the Senior
Note Trustee in case an Event of Default occurs and is continuing. Consistent
with these provisions, the Senior Note Trustee will be under no obligation to
exercise any of its rights or powers at the request or direction of any of the
holders, unless those holders have offered to the Senior Note Trustee reasonable
indemnity. For more information, see Section 1003 of the Senior Note Indenture.
Subject to these provisions of indemnification, the holders of a majority in
principal amount of the outstanding Senior Notes of any series may direct the
time, method and place of conducting any proceeding for any remedy available to
the Senior Note Trustee, or exercising any trust or power conferred on the
Senior Note Trustee, with respect to the Senior Notes of that series. For more
information, see Section 912 of the Senior Note Indenture.
No Senior Note holder may institute any proceeding regarding the Senior Note
Indenture, or for the appointment of a receiver or a trustee, or for any other
remedy under the Senior Note Indenture unless
o the holder has previously given to the Senior Note Trustee written notice
of a continuing Event of Default with respect to Senior Notes of that
particular series,
o the holders of a majority in aggregate principal amount of the outstanding
Senior Notes of all series with respect to which an Event of Default is
continuing have made a written request to the Senior Note Trustee, and
have offered reasonable indemnity to the Senior Note Trustee to institute
the proceeding as trustee, and
o the Senior Note Trustee has failed to institute the proceeding, and has
not received from the holders of a majority in principal amount of the
outstanding Senior Notes of that series a direction inconsistent with the
request, within 60
13
days after notice, request and offer of reasonable indemnity.
For more information, see Section 907 of the Senior Note Indenture.
The preceding limitations do not apply, however, to a suit instituted by a
Senior Note holder for the enforcement of payment of the principal of or any
premium or interest on the Senior Note on or after the applicable due date
stated in the Senior Note. For more information, see Section 908 of the Senior
Note Indenture.
We must furnish annually to the Senior Note Trustee a statement by an
appropriate officer as to that officer's knowledge of our compliance with all
conditions and covenants under the Senior Note Indenture. Our compliance is to
be determined without regard to any grace period or notice requirement under the
Senior Note Indenture. For more information, see Section 706 of the Senior Note
Indenture.
MODIFICATIONS AND WAIVER
The Company and the Senior Note Trustee, without the consent of the holders of
the Senior Notes, may enter into one or more supplemental Senior Note Indentures
for any of the following purposes:
o to evidence the assumptions by an permitted successor of our covenants in
the Senior Note Indenture and the Senior Notes:
o to add one or more covenants or other provisions for the benefit of the
holders of outstanding Senior Notes or to surrender any right or power
conferred upon us by the Senior Note Indenture;
o to add any additional Events of Default;
o to change or eliminate any provision of the Senior Note Indenture or add
any new provision to it (but if this action will adversely affect the
interests of the holders of any particular series of Senior Notes in any
material respect, the action will become effective with respect to that
series only when there is no Senior Note of that series remaining
outstanding under the Senior Note Indenture);
o to provide collateral security for the Senior Notes;
o to establish the form or terms of Senior Notes according to the provisions
of the Senior Note Indenture;
o to evidence the acceptance of appointment of a successor Senior Note
Trustee under the Senior Note Indenture with respect to one or more series
of the Senior Notes and to add to or change any of the provisions of the
Senior Note Indenture as necessary to provide for the administration of
the trusts under the Senior Note Indenture by more than one trustee;
o to provide for the procedures required to permit us to use a
non-certificated system of registration for any Senior Notes series;
o to change any place where
-- the principal of and any premium and interest on any Senior Notes is
payable,
-- any Senior Notes may be surrendered for registration of transfer or
exchange, or
-- notices and demands to or upon us regarding Senior Notes and the
14
Senior Note Indenture may be served; or
o to cure any ambiguity or inconsistency (but any of these changes or
additions will not adversely affect the interests of the holders of Senior
Notes of any series in any material respect).
For more information see Section 1301 of the Senior Note Indenture.
The holders of at least a majority in aggregate principal amount of the
outstanding Senior Notes of any series may waive
o compliance by us with certain provisions of the Senior Note Indenture (see
Section 707 of the Senior Note Indenture); and
o any past default under the Senior Note Indenture, except a default in the
payment of principal, premium, or interest, and certain covenants and
provisions of the Senior Note Indenture that cannot be modified or amended
without consent of the holder of each outstanding Senior Note of the
series affected (see Section 913 of the Senior Note Indenture).
The Trust Indenture Act of 1939 may be amended after the date of the Senior Note
Indenture to require changes to the Senior Note Indenture. In this event, the
Senior Note Indenture will be deemed to have been amended so as to effect the
changes, and we and the Senior Note Trustee may, without the consent of any
holders, enter into one or more Supplemental Senior Note Indentures to evidence
or effect the amendment. For more information, see Section 1301 of the Senior
Note Indenture.
Except as provided in this section, the consent of the holders of a majority in
aggregate principal amount of the outstanding Senior Notes, considered as one
class, is required to change in any manner the Senior Note Indenture pursuant to
one or more supplemental Senior Note Indentures. If less than all of the series
of Senior Notes outstanding are directly affected by a proposed supplemental
Senior Note Indenture, however, only the consent of the holders of a majority in
aggregate principal amount of the outstanding Senior Notes of all series
directly affected, considered as one class, will be required. Furthermore, if
the Senior Notes of any series have been issued in more than one Tranche and if
the proposed supplemental Senior Note Indenture directly affects the rights of
the holders of one or more, but not all Tranches, only the consent of the
holders of a majority in aggregate principal amount of the outstanding Senior
Notes of all Tranches directly affected, considered as one class, will be
required. In addition, an amendment or modification
o may not, without the consent of the holder of the Senior Note
-- change the maturity of the principal of, or any installment of
principal of or interest on, any Senior Note,
-- reduce the principal amount or the rate of interest, or the amount
of any installment of interest, or change the method of calculating
the rate of interest,
-- reduce any premium payable upon the redemption of the Senior Note,
-- reduce the amount of the principal of any Senior Note originally
issued at a discount from the stated principal amount that would be
due and
15
payable upon a declaration of acceleration of maturity,
-- change the currency or other property in which a Senior Note or
premium or interest on a Senior Note is payable,
-- impair the right to institute suit for the enforcement of any
payment on or after the stated maturity (or, in the case of
redemption, on or after the redemption date) of any Senior Note;
o may not reduce the percentage of principal amount requirement for consent
of the holders for any supplemental Senior Note Indenture, or for any
waiver of compliance with any provision of or any default under the Senior
Note Indenture, or reduce the requirements for quorum or voting, without
the consent of the holder of each outstanding Senior Note of each series
or Tranche effected;
o may not prior to the Release Date
-- impair the interest of the Senior Note Trustee in the Senior Note
First Mortgage Bonds,
-- reduce the principal amount of any series of Senior Note First
Mortgage Bonds to an amount less than that of the related series of
Senior Notes, or
-- alter the payment provisions of the Senior Note First Mortgage Bonds
in a manner adverse to the holders of the Senior Notes; and
o may not modify provisions of the Senior Note Indenture relating to
supplemental Senior Note Indentures, waivers of certain covenants and
waivers of past defaults with respect to the Senior Notes of any series,
or any Tranche of a series, without the consent of the holder of each
outstanding Senior Note affected.
A supplemental Senior Note Indenture will be deemed not to affect the rights
under the Senior Note Indenture of the holders of any series or Tranche of the
Senior Notes if the supplemental Senior Note Indenture
o changes or eliminates any covenant or other provision of the Senior Note
Indenture expressly included solely for the benefit of one or more other
particular series of Senior Notes or Tranches thereof; or
o modifies the rights of the holders of Senior Notes of any other series or
Tranches with respect to any covenant or other provision.
For more information, see Section 1302 of the Senior Note Indenture.
If we solicit from holders of the Senior Notes any type of action, we may at our
option fix in advance a record date for the determination of the holders
entitled to vote on the action. We shall have no obligation, however, to do so.
If we fix a record date, the action may be taken before or after the record
date, but only the holders of record at the close of business on the record date
shall be deemed to be holders for the purpose of determining whether holders of
the requisite proportion of the outstanding Senior Notes have authorized the
action. For that purpose, the outstanding Senior Notes shall be computed as of
the record date. Any holder action shall bind every future holder of the same
security and the holder of every security issued upon the registration of
transfer of or in exchange for or in lieu of the security in respect of anything
done or permitted by the Senior Note Trustee or us in reliance on that action,
whether or not notation of the action is made upon the
16
security. For more information, see Section 104 of the Senior Note Indenture.
DEFEASANCE
Unless the applicable Prospectus Supplement provides otherwise, any Senior Note,
or portion of the principal amount of a Senior Note, will be deemed to have been
paid for purposes of the Senior Note Indenture, and, at our election, our entire
indebtedness in respect to the Senior Note (or portion thereof) will be deemed
to have been satisfied and discharged, if we have irrevocably deposited with the
Senior Note Trustee or any Paying Agent other than us, in trust, money, certain
Eligible Obligations, or a combination of the two, sufficient to pay principal
of any premium and interest due and to become due on the Senior Note or portions
thereof. For more information , see Section 801 of the Senior Note Indenture.
For this purpose, unless the applicable Prospectus Supplement provides
otherwise, "Eligible Obligations" include direct obligations of, or obligations
unconditionally guaranteed by, the United States, entitled to the benefit of
full faith and credit of the United States, and certificates, depositary
receipts or other instruments which evidence a direct ownership interest in
these obligations or in any specific interest or principal payments due in
respect to those obligations.
RESIGNATION OF SENIOR NOTE TRUSTEE
The Senior Note Trustee may resign at any time by giving written notice to us or
may be removed at any time by an action of the holders of a majority in
principal amount of outstanding Senior Notes delivered to the Senior Note
Trustee and us. No resignation or removal of the Senior Note Trustee and no
appointment of a successor trustee will become effective until a successor
trustee accepts appointment in accordance with the requirements of the Senior
Note Indenture. So long as no Event of Default or event which would become an
Event of Default has occurred and is continuing, and except with respect to a
Senior Note Trustee appointed by an action of the holders, if we have delivered
to the Senior Note Trustee a resolution of our Board of Directors appointing a
successor trustee and the successor trustee has accepted the appointment in
accordance with the terms of the Senior Note Indenture, the Senior Note Trustee
will be deemed to have resigned and the successor trustee will be deemed to have
been appointed as trustee in accordance with the Senior Note Indenture. For more
information, see Section 1010 of the Senior Note Indenture.
MISCELLANEOUS
NOTICES
We will give notices to holders of Senior Notes by mail to their address as they
appear in the Security Register. For more information, see Section 106 of the
Senior Note Indenture.
TITLE
The Senior Note Trustee and its agents, and we and our agents, may treat the
person in whose name a Senior Note is registered as the absolute owner of that
Senior Note, whether or not that Senior Note may be overdue, for the purpose of
making payment and for all other purposes. For more information, see Section 308
of the Senior Note Indenture.
GOVERNING LAW
The Senior Note Indenture and the Senior Notes will be governed by, and
construed in accordance with, the laws of the State of New York. For more
information, see Section 112 of the Senior Note Indenture.
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GLOBAL SECURITIES
We may issue some or all of the Senior Notes of any series as Global Securities.
We will register each Global Security in the name of a depositary identified in
the applicable Prospectus Supplement. The Global Securities will be deposited
with a depositary or nominee or custodian for the depositary and will bear a
legend regarding restrictions on exchanges and registration of transfer as
discussed below and any other matters to be provided pursuant to the Senior Note
Indenture.
As long as the depositary or its nominee is the registered holder of a Global
Security, that person will be considered the sole owner and holder of the Global
Security and the Senior Notes represented by it for all purposes under the
Senior Notes and the Senior Note Indenture. Except in limited circumstances,
owners of a beneficial interest in a Global Security
o will not be entitled to have the Global Security or any Senior Notes
represented by it registered in their names;
o will not receive or be entitled to receive physical delivery of
certificated Senior Notes in exchange for the Global Security; and
o will not be considered to be the owners or holders of the Global Security
or any Senior Notes represented by it for any purposes under the Senior
Notes or the Senior Note Indenture.
We will make all payments of principal and any premium and interest on a Global
Security to the depositary or its nominee as the holder of the Global Security.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. These laws may impair
the ability to transfer beneficial interests in a Global Security.
Ownership of beneficial interests in a Global Security will be limited to
institutions having accounts with the depositary or its nominee, called
"participants" for purposes of this discussion, and to persons that hold
beneficial interests through participants. When a Global Security is issued, the
depositary will credit on its book entry, registration and transfer system the
principal amounts of Senior Notes represented by the Global Security to the
accounts of its participants. Ownership of beneficial interests in a Global
Security will be shown only on, and the transfer of those ownership interests
will be effected only through, records maintained by
o the depositary, with respect to participant's interests or;
o any participant, with respect to interests of persons held by the
participants on their behalf.
Payments by participants to owners of beneficial interests held through such
participants will be the responsibility of such participants. The depositary may
from time to time adopt various policies and procedures governing payments,
transfers, exchanges, and other matters relating to beneficial interests in a
Global Security. None of the following will have any responsibility or liability
for any aspect of the depositary or any participant's records relating to, or
for payments made on account of, beneficial interest in a Global Security, or
for maintaining, supervising or reviewing any records relating to these
beneficial interests:
o the Southern Indiana Gas and Electric Company;
18
o the Trustee under the First Mortgage Indenture;
o the Trustee under the Senior Note Indenture; or
o any agent of each of the above.
DESCRIPTION OF FIRST MORTGAGE BONDS
GENERAL
First Mortgage Bonds will be issued to the Senior Note Trustee to secure each
issuance of Senior Notes. See "Description of Senior Notes -- Security" above.
We will issue the First Mortgage Bonds under a Mortgage and Deed of Trust, dated
as of April 1, 1932 with Bankers Trust Company, New York, N.Y., as Trustee (the
"Trustee") pursuant to an indenture or indentures which will supplement the
Mortgage and Deed of Trust. In the following discussion, we will refer to the
Mortgage and Deed of Trust and all indentures that supplement it as the
"Mortgage".
We will refer to all of our First Mortgage Bonds, including those already issued
and those to be issued as "First Mortgage Bonds." The information we are
providing you in this Prospectus concerning the First Mortgage Bonds and the
Mortgage is only a summary of the information provided in those documents. You
should consult the Mortgage and other documents for more complete information.
These documents appear as exhibits to the Registration Statement, or will appear
as exhibits to a Current Report on Form 8-K, which we will file, and which will
be incorporated by reference into this Prospectus.
INTEREST, MATURITY, REDEMPTION AND PAYMENT
These terms will be correlated to the terms of the related Senior Notes that the
particular First Mortgage Bonds secure. See the accompanying Prospectus
Supplement.
IMPROVEMENT AND SINKING FUND REQUIREMENT
The Mortgage (Section 36A) requires the annual deposit with the Trustee of cash
equal to 1% of the maximum principal amount of all First Mortgage Bonds
outstanding at any one time subsequent to July 1, 1948 (less First Mortgage
Bonds retired directly or indirectly as a result of the sale of property or
cancelled pursuant to the provisions of Section 36B described below). We may
withdraw the cash upon certification of the amount of unfunded property
additions which would support the issuance of a principal amount of First
Mortgage Bonds equal to 100% of the amount of cash withdrawn or the cash may be
applied to the purchase or redemption of First Mortgage Bonds.
MAINTENANCE AND REPLACEMENT REQUIREMENTS
The Mortgage (Section 36B) requires the annual deposit with the Trustee of an
amount in cash or in principal amount of First Mortgage Bonds or of outstanding
prior lien bonds (or in lieu thereof the certification of unfunded property
additions) equal to the amount, if any, by which 15% of the gross earnings
during the preceding calendar year exceeds the aggregate amounts expended during
that period for repairs, maintenance and replacements. Gross earnings are
computed after deducting the costs of electric energy and gas purchased for
resale. A credit balance established in any year may be utilized to meet the
requirements during a later period
19
or to effect the withdrawal of deposited cash or First Mortgage Bonds or to
unfund property previously certified to the Trustee.
The Mortgage provides that, effective at such times as all First Mortgage Bonds
issued prior to January 1, 1977 are no longer outstanding, the Mortgage may be
amended to change the above requirement, insofar as it is based upon a
comparison with 15% of the gross earnings during the preceding calendar year, to
a comparison with 2.25% of our depreciable property, as defined, on December 31
of the preceding calendar year (Section 3 of the Supplemental Indenture dated as
of January 15, 1977).
PRIORITY AND SECURITY
Each First Mortgage Bond ranks pari passu as to security with all other First
Mortgage Bonds outstanding under the Mortgage, which, in the opinion of our
legal counsel, Messrs. Bamberger, Foreman, Oswald and Hahn, is a first lien on
substantially of our physical property, permits and franchises, subject only to
excepted encumbrances, as defined in the Mortgage (Section 2). The Mortgage
permits the acquisition of property subject to prior liens existing at the time
of acquisition and the use of such property additions as a basis for the
issuance of additional bonds in an amount which, together with certain other
items, does not exceed 15% of the aggregate principal amount of First Mortgage
Bonds to be outstanding under the Mortgage (Section 24).
ISSUANCE OF ADDITIONAL BONDS
The Mortgage permits the issuance of additional First Mortgage Bonds (a) to the
extent of 60% of the cost or then fair value to us, whichever is less, of
unfunded property additions (as defined in the Mortgage, Sections 4 and 5)
(Section 23); (b) to refund unfunded prior lien bonds (as defined in the
Mortgage, Section 6) (Section 24); (c) to refund First Mortgage Bonds (Section
27); or (d) upon the deposit of cash equal to the principal amount of First
Mortgage Bonds requested to be issued (Section 28). Deposited cash may be
withdrawn in lieu of the authentication of First Mortgage Bonds to which we
would otherwise be entitled or against 60% of unfunded property additions
certified to the Trustee or against the deposit of First Mortgage Bonds or the
deposit or reduction of prior lien bonds or may be applied to the purchase or
redemption of First Mortgage Bonds (Sections 29 and 30).
Additional First Mortgage Bonds may not be issued under (a) or (d) above (or
under certain circumstances under (c) above) unless net earnings (as defined in
the Mortgage, Section 7) for twelve consecutive months within the fifteen
preceding calendar months shall have been at least equal to twice the annual
interest requirements on, and at least 10% of, the principal amount of all First
Mortgage Bonds outstanding, including those proposed to be issued and all
outstanding prior lien indebtedness (Section 25). At December 31, 1998, such
coverages were at least 2.4 times and 16%, respectively. Net earnings are
computed before charges for renewals, replacements and depreciation, but after
deducting the greater of (i) 10% of gross operating revenues for such period, or
(ii) the amount by which 15% of gross operating revenues for such period exceeds
the amount expended for current repairs and maintenance. Gross operating
revenues are computed after deducting the cost of electric energy and gas
purchased for resale.
The First Mortgage Bonds issued to the Senior Note Trustee are expected to be
issued against unfunded property additions or retired bonds. Unfunded property
20
additions at March 31, 1999 amounted to $310,288,123.
LIMITATION ON DIVIDENDS
The Mortgage in effect restricts our payment of cash dividends on our Common
Stock to the accumulated surplus available for distribution to the Common Stock
earned subsequent to December 31, 1947, subject to reduction if amounts deducted
from earnings for current repairs and maintenance and provisions for renewals,
replacements and depreciation of all of our property are less than amounts
specified in the Mortgage (Section 1.02 of the Supplemental Indenture dated as
of July 1, 1948, as supplemented). No amount was restricted against cash
dividends on Common Stock at March 31, 1999 under this provision.
The Amended Articles of Incorporation in effect restricts our payment of cash
dividends on Common Stock to accumulated surplus available for distribution to
the Common Stock earned subsequent to December 31, 1935, and requires that,
immediately after such dividends, there shall remain to the credit of earned
surplus an amount at least equal to two times the annual dividend requirements
on all then outstanding Preferred Stock and Preferred Stock, No Par Value. See
Art. VI, Terms of Capital Stock, General Provisions (B). The amount restricted
against cash dividends on Common Stock at March 31, 1999 under this restriction
was $2,154,682, leaving $244,181,106 unrestricted for the payment of dividends.
In addition, the Amended Articles of Incorporation provides that surplus
otherwise available for the payment of dividends on Common Stock shall be
restricted to the extent that such surplus is included in a calculation required
to permit us to issue, sell or dispose of preferred stock or other stock senior
to the Common Stock. See Art. VI, Terms of Capital Stock, General Provisions
(E)(4).
An order of the Securities and Exchange Commission dated October 12, 1944 under
the Public Utility Holding Company Act of 1935 in effect restricts our payment
of cash dividends on Common Stock to 75% of net income available for
distribution to the Common Stock, earned subsequent to December 31, 1943, if the
percentage of Common Stock equity to total capitalization and surplus, as
defined, is less than 25%. At March 31, 1999, the ratio of Common Stock equity
to total capitalization and surplus amounted to approximately 53%.
MODIFICATION OF THE MORTGAGE
The Mortgage may be modified or amended by us with the consent of the holders of
all the outstanding First Mortgage Bonds issued prior to January 15, 1977 and
the consent of the holders of 66 2/3% of the principal amount of all outstanding
First Mortgage Bonds. No amendment without the consent of the holder of a First
Mortgage Bond would (1) extend the maturity of, or reduce the rate of interest
on, or otherwise modify the terms of payment of principal or interest on, or
impair the right of such holder to institute suit on or after the due date for
the enforcement of the payment of principal or interest on, that First Mortgage
Bond or (2) deprive the holder of the lien of the Mortgage or permit the
creation of any lien ranking prior to or equal with the lien of the Mortgage on
any of the mortgaged property or (3) reduce the percentage of bondholders whose
consent is required with respect to the matters specified in (1) and (2) above
(Section 4 of the Supplemental Indenture dated as of January 15, 1977).
The Mortgage permits an amendment to the Mortgage which authorizes us, effective
at such time as all First Mortgage Bonds issued
21
on or prior to May 31, 1986 are no longer outstanding, to designate First
Mortgage Bonds of any series (rather than the First Mortgage Bonds of the
earliest maturing series that are redeemable) as the First Mortgage Bonds to be
redeemed pursuant to Section 36B of the Mortgage and to do so at any time
(rather than only after three years) that cash for such purpose is on deposit
with the Trustee pursuant to the provisions of that Section. (Section 5 of the
Supplemental Indenture dated as of June 1, 1986). The Senior Note First Mortgage
Bonds will not be redeemable except in conjunction with the retirement of the
Senior Notes that they secure.
REGARDING DEFAULT
Under the Mortgage, the following are defined as "completed defaults":
o failure to pay principal of any First Mortgage Bond or prior lien bond
when due;
o failure for 90 days to pay interest due upon any First Mortgage Bonds;
o failure to pay interest due upon any prior lien bonds, continued for the
period of grace, if any (not exceeding 90 days) specified in the
instrument securing such prior lien bond;
o the institution of voluntary proceedings involving bankruptcy or
insolvency or appointment of a receiver for us or our property or general
assignment for the benefit of creditors or the pendency of similar
proceedings for 90 days if brought by others; and
o failure for 90 days, after notice from the Trustee, to perform any other
covenant, agreement or condition with respect to the Mortgage (Section
66). A failure by us to deposit or direct the application of money for the
redemption of First Mortgage Bonds called for redemption also constitutes
a completed default (Section 52).
Upon the occurrence and continuation of a completed default, the Trustee of the
holders of not less than 20% of the First Mortgage Bonds then outstanding may
accelerate the maturity of all First Mortgage Bonds, subject to the right of the
holders of a majority of the First Mortgage Bonds to annul the acceleration if
the default has been cured and no foreclosure sale has occurred (Section 66).
REGARDING THE TRUSTEE
Bankers Trust Company, Trustee under the Mortgage, is a depositary of the
Company.
The Trustee is required to take action at the request of the holders of First
Mortgage Bonds only when requested to do so by the holders of a majority in
principal amount of the First Mortgage Bonds then outstanding. Before proceeding
to enforce the lien of the Mortgage, the Trustee may require that it be properly
indemnified to its satisfaction (Section 93).
RELEASE AND SUBSTITUTION OF PROPERTY
The Mortgage (Section 58) provides that, subject to various limitations,
property may be released from the lien thereof, whether or not sold or otherwise
disposed of by us, upon the basis of cash deposited with the Trustee, purchase
money obligations or First Mortgage Bonds delivered to the Trustee, prior lien
bonds delivered to the Trustee or reduced or assumed, or unfunded property
additions certified to the Trustee.
The Mortgage (Section 60) permits the cash proceeds of released property to be
withdrawn against unfunded property
22
additions certified to the Trustee or against the deposit of First Mortgage
Bonds or the deposit or reduction of prior lien bonds or to be applied to the
purchase or redemption of First Mortgage Bonds.
EVIDENCE TO BE FURNISHED TO THE TRUSTEE UNDER THE MORTGAGE
Compliance with Mortgage provisions is evidenced by written statements of our
officers or persons selected or paid by us (such as an engineer with respect to
the value of property being certified or released, an accountant with respect to
a net earnings certificate and counsel with respect property titles and
compliance with the Mortgage generally). In certain major matters (as required
by Section 314(d) of the Trust Indenture Act of 1939, as amended) the accountant
or engineer must be independent. We are required to file a treasurer's
certificate with the Trustee on or before May 1 of each year indicating that we
have complied with all the provisions of the Mortgage and are not in default
with respect to any of the covenants contained in the Mortgage (Section 3.06 of
the Supplemental Indenture dated as of July 1, 1948). Various other certificates
and papers are required to be filed annually and upon the happening of various
events.
PLAN OF DISTRIBUTION
We intend to sell the Senior Notes in a public offering through the underwriters
or dealers named on the cover of the applicable Prospectus Supplement.
The applicable Prospectus Supplement will set forth the terms under which the
Senior Notes are offered, including
o the purchase price and the net proceeds to us from the sale;
o any underwriting discounts and other items constituting underwriters
compensation;
o the initial public offering price; and
o any discounts or concessions allowed, re-allowed or paid to dealers.
We or any underwriters or dealers may change from time to time any initial
public offering price and any discounts or concessions allowed or re-allowed or
paid to dealers.
The Senior Notes will be acquired by the underwriters for their own account and
may be resold in one or more transactions, including negotiated transactions, at
a fixed public offering price or at varying prices determined at the time of the
sale. Unless the applicable Prospectus Supplement states otherwise, the
obligations of any underwriter to purchase the Senior Notes will be subject to
certain conditions, and the underwriter will be obligated to purchase the Senior
Notes, except that in certain cases involving a default by an underwriter, less
than all of the Senior Notes may be purchased.
The applicable Prospectus Supplement will state whether we will authorize
underwriters or dealers to solicit offers by certain specified institutions to
purchase Senior Notes at the public offering price set forth in the Prospectus
Supplement pursuant to delayed delivery contracts providing for payment and
delivery on a specified future date. These contracts will be subject to the
conditions set forth in the Prospectus Supplement. Additionally, the Prospectus
Supplement will set forth the commission payable for solicitation of those
contracts.
The underwriters may be entitled under agreements entered into with the Company
to indemnification by the Company against
23
certain civil liabilities, including liabilities under the Securities Act of
1933.
EXPERTS
The financial statements and schedules incorporated in this prospectus and
elsewhere in the Registration Statement by reference from the Company's Annual
Report on Form 10-K for the year ended December 31, 1998 have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, which is incorporated herein by reference, and have
been so incorporated in reliance upon the authority of that firm as experts in
accounting and auditing in giving that report.
LEGAL OPINIONS
Winthrop, Stimson, Putnam & Roberts of New York, New York, our outside counsel,
will issue opinions about the legality of the offered securities for us. The
underwriters will be advised about legal matters relating to any offering by
their own legal counsel, Simpson Thacher & Bartlett of New York, New York.
24
Part II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Filing fees--Securities and Exchange Commission...................... $ 22,240
Rating agencies' fees ............................................... 90,000
Trustee's fees....................................................... 28,675
Auditors' fees....................................................... 25,000
Printing of registration statement, prospectus,
exhibits, securities, etc. .......................................... 20,000
Legal and Blue Sky fees and expenses................................. 55,000
Miscellaneous ....................................................... 9,085
--------
$250,000
========
All of the above amounts, other than the filing fees, are estimates.
Item 15. Indemnification of Directors and Officers.
The following resolution was adopted by the Executive Committee of the Board of
Directors of the Company on May 12, 1999:
RESOLVED: that with respect to the preparation and filing of a
Registration Statement and Prospectus with the Securities and
Exchange Commission in connection with the proposed issuance and
sale from time to time of Securities of the Company at an aggregate
initial offering price not to exceed $90,000,000, this Company
indemnify and save harmless each and every officer of the Company
executing and preparing the Registration Statement and Prospectus in
its original or amended or supplemented form, and every director of
the Company who was a director thereof at the time of the filing of
the Registration Statement and Prospectus in their original or
amended or supplemented form, against any and all costs reasonably
incurred by them or any of them in connection with any action, suit
or proceeding arising out of the preparation, filing or use of the
said Registration Statement or Prospectus relating to such issue
whether brought under the Securities Act of 1933, as amended, or
under any other applicable law, where such action, suit or
proceeding is finally adjudicated in favor of such director, officer
or employee and the time to appeal has expired.
Similar indemnity resolutions have been adopted which are applicable to other
issues of securities presently outstanding, and similar general indemnity
provisions are contained in The Indiana General Corporation Act and in the
Company's By-Laws.
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The Company has an insurance policy covering its liabilities and expenses that
might arise in connection with its lawful indemnification of its directors and
officers for certain of their liabilities and expenses. Officers and directors
of the Company are covered under this policy for certain other liabilities and
expenses.
Item 16. Exhibits.
1 Form of Underwriting Agreement.
*4(a) Mortgage and Deed of Trust dated as of April 1, 1932 between the
Company and Bankers Trust Company, as Trustee, and Supplemental
Indentures thereto dated August 31, 1936, October 1, 1937, July 1,
1948, June 1, 1949, October 1, 1949, January 1, 1951, April 1, 1954,
March 1, 1957, October 1, 1965, September 1, 1966, August 1, 1968,
May 1, 1970, August 1, 1971, April 1, 1972, October 1, 1973, April
1, 1975, January 15, 1977, April 1, 1978, June 4, 1981, January 20,
1983, November 1, 1983, March 1, 1984, June 1, 1984, November 1,
1984, July 1, 1985, November 1, 1985, June 3, 1986. (Physically
filed and designated in Registration No. 2-2536 as Exhibits B-1 and
B-2; in Post-effective Amendment No. 1 to Registration No. 2-62032
as Exhibit (b)(4)(ii), in Registration No. 2-88923 as Exhibit
4(b)(2), in Form 8-K, File No. 1-3553, dated June 1, 1984 as Exhibit
(4), File No. 1-3553, dated March 24, 1986 as Exhibit 4-A, in Form
8-K, File No. 1-3553, dated June 3, 1986 as Exhibit (4).) July 1,
1985 and November 1, 1985. (Physically filed and designated in Form
10-K for the fiscal year 1985, File No. 1-3553, as Exhibit 4-A.)
November 15, 1986 and January 15, 1987. (Physically filed and
designated in Form 10-K, for the fiscal year 1986, File No. 1-3553,
as Exhibit 4-A.) December 15, 1987. (Physically filed and designated
in Form 10-K, for the fiscal year 1987, File No. 1-3553, as Exhibit
4-A.) December 13, 1990. (Physically filed and designated in Form
10-K, for the fiscal year 1990, File No. 1-3553, as Exhibit 4-A.)
April 1, 1993. (Physically filed and designated in Form 8-K, dated
April 13, 1993, File No. 1-3553, as Exhibit 4.) May 1, 1993.
(Physically filed and designated in Form 10-K, for the fiscal year
1993, File No. 1-3553, as Exhibit 4(a).) June 1, 1993. (Physically
filed and designated in Form 8-K, dated June 14, 1993, File No.
1-3553, as Exhibit 4.)
4(b) Form of Supplemental Indenture (for First Mortgage Bonds) between
the Company and Bankers Trust Company, as Trustee.
4(c) Form of Indenture (for Senior Notes) between the Company and Bankers
Trust Company, as Trustee.
4(d) Form of Supplemental Indenture (for Senior Notes) between the
Company and Bankers Trust Company, as Trustee.
4(e) Form of Certificate of Senior Note is contained in the Form of
Supplemental
- ----------
* Incorporated herein by reference as indicated.
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Indenture filed as Exhibit 4(d).
5 Opinion of Messrs. Bamberger, Foreman, Oswald and Hahn.
*12(a) Ratio of Earnings to Fixed Charges for the five years ended
December 31, 1998. (Physically filed and designated in Form 10-K,
for the fiscal year 1998, File No. 1-3553, as Exhibit 12).
12(b) Ratio of Earnings to Fixed Charges for the twelve months ended March
31, 1999.
23(a) Consent of Arthur Andersen LLP.
23(b) Consent of Messrs. Bamberger, Foreman, Oswald and Hahn is contained
in their opinion filed as Exhibit 5.
25(a) Form T-1 of Bankers Trust Company (as Trustee under Senior Note
Indenture).
25(b) Form T-1 of Bankers Trust Company (as Trustee under Mortgage).
- ----------
* Incorporated herein by reference as indicated.
Item 17. Undertakings.
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 (notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement); or (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
registrant need not file a post-effective amendment to include the
information required to be included by subsection (i) or (ii) if such
information is contained in periodic reports filed with or furnished to
the Commission by the registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference
in the 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
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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 that remain unsold at the
termination of the offering.
(4) 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 this Registration Statement
shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant 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 Act 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 New York, State of New York on the 1st day of July,
1999.
SOUTHERN INDIANA GAS AND ELECTRIC
COMPANY
By: Ronald G. Reherman
Chairman
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Title Date
--------- ----- ----
/s/ Ronald G. Reherman
- ----------------------- Chairman of the Board
and Director July 1, 1999
RONALD G. REHERMAN
/s/ Andrew E. Goebel
- ----------------------- President, Chief
Executive Officer and
ANDREW E. GOEBEL Director July 1, 1999
/s/ Timothy L. Burke
- ----------------------- Secretary and
Treasurer (Chief
TIMOTHY L. BURKE Financial Officer) July 1, 1999
/s/ S. Mark Kerney
- ----------------------- Controller (Chief
S. MARK KERNEY Accounting Officer) July 1, 1999
/s/ John M. Dunn
- ----------------------- Director July 1, 1999
JOHN M. DUNN
- ----------------------- Director
JOHN D. ENGELBRECHT
/s/ Robert L. Koch Ii
- ----------------------- Director July 1, 1999
ROBERT L. KOCH II
/s/ Donald A. Rausch
- ----------------------- Director July 1, 1999
DONALD A. RAUSCH
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/s/ Richard W. Shymanski
- ----------------------- Director July 1, 1999
RICHARD W. SHYMANSKI
- ----------------------- Director
DONALD E. SMITH
/s/ James S. Vinson
- ----------------------- Director July 1, 1999
JAMES S. VINSON
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