AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 5, 2001.
SUBJECT TO AMENDMENT. REGISTRATION NOS.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
ALABAMA POWER COMPANY ALABAMA 63-0004250
ALABAMA POWER CAPITAL TRUST IV DELAWARE 51-6507054
ALABAMA POWER CAPITAL TRUST V DELAWARE 63-6205832
(Exact name of registrant as specified in its (State or other jurisdiction of (I.R.S. Employer Identification
charter) incorporation or organization) No.)
600 NORTH 18TH STREET
BIRMINGHAM, ALABAMA 35203
(205) 257-1000
(Address, including zip code, and telephone number, including area
code, of each registrant's principal executive offices)
---------------------
WILLIAM E. ZALES, JR.
VICE PRESIDENT AND CORPORATE SECRETARY
ALABAMA POWER COMPANY
600 NORTH 18TH STREET
BIRMINGHAM, ALABAMA 35203
(205) 257-2714
(Name, address, including zip code, and telephone number, including
area code, of agent for service of each registrant)
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THE COMMISSION IS REQUESTED TO MAIL SIGNED COPIES OF
ALL ORDERS, NOTICES AND COMMUNICATIONS TO:
GALE E. KLAPPA WALTER M. BEALE, JR., ESQ. JOHN D. MCLANAHAN, ESQ.
FINANCIAL VICE PRESIDENT BALCH & BINGHAM LLP TROUTMAN SANDERS LLP
THE SOUTHERN COMPANY 1901 SIXTH AVENUE NORTH 600 PEACHTREE STREET, N.E.
270 PEACHTREE STREET, N.W. SUITE 2600 SUITE 5200
ATLANTA, GEORGIA 30303 BIRMINGHAM, ALABAMA 35203 ATLANTA, GEORGIA 30308-2216
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] __________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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TITLE OF AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
EACH CLASS OF SECURITIES TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) PER UNIT(1)(2)(3) PRICE(1)(2)(3) FEE(1)
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Alabama Power Company Class A Preferred Stock.........
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Alabama Power Company First Mortgage Bonds............
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Alabama Power Capital Trust IV Preferred Securities...
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Alabama Power Capital Trust V Preferred Securities....
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Alabama Power Company Senior Notes....................
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Alabama Power Company Junior Subordinated Notes.......
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Alabama Power Company Guarantees with respect to
Preferred Securities of Alabama Power Capital Trust IV
and Alabama Power Capital Trust V(4)(5)...............
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Total................................................. $900,000,000 100% $900,000,000 $225,000
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(1) There are being registered hereunder such presently indeterminate number of
Preferred Securities of Alabama Power Capital Trust IV and Alabama Power
Capital Trust V, such presently indeterminate number of Class A Preferred
Stock and such presently indeterminate principal amount of First Mortgage
Bonds, Senior Notes and Junior Subordinated Notes of Alabama Power Company
with an aggregate initial offering price not to exceed $900,000,000. Junior
Subordinated Notes also may be issued to Alabama Power Capital Trust IV or
Alabama Power Capital Trust V and later distributed upon dissolution and
distribution of the assets thereof, which would include such Junior
Subordinated Notes for which no separate consideration will be received.
Pursuant to Rule 457(o) under the Securities Act of 1933, which permits the
registration fee to be calculated on the basis of the maximum offering price
of all the securities listed, the table does not specify by each class
information as to the amount to be registered, proposed maximum offering
price per unit or proposed maximum aggregate offering price.
(2) Estimated solely for the purpose of determining the registration fee.
(3) Exclusive of accrued interest and distributions, if any.
(4) No separate consideration will be received for the Alabama Power Company
Guarantees. Pursuant to Rule 457(n) no separate fee is payable in respect of
the Alabama Power Company Guarantees.
(5) Includes the obligations of Alabama Power Company under the respective Trust
Agreements, the Subordinated Note Indenture, the related series of Junior
Subordinated Notes, the respective Guarantees and the respective Agreements
as to Expenses and Liabilities, which include the Company's covenant to pay
any indebtedness, expenses or liabilities of the Trusts (other than
obligations pursuant to the terms of the Preferred Securities or other
similar interests), all as described in this registration statement.
---------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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This 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.
SUBJECT TO COMPLETION, DATED NOVEMBER 5, 2001
PROSPECTUS
ALABAMA POWER COMPANY
FIRST MORTGAGE BONDS
CLASS A PREFERRED STOCK
CUMULATIVE, PAR VALUE $1 PER SHARE
SENIOR NOTES
JUNIOR SUBORDINATED NOTES
ALABAMA POWER CAPITAL TRUST IV
ALABAMA POWER CAPITAL TRUST V
TRUST PREFERRED SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED, AS SET FORTH HEREIN, BY
ALABAMA POWER COMPANY
A SUBSIDIARY OF THE SOUTHERN COMPANY
We will provide the specific terms of these securities in supplements to this
Prospectus. You should read this Prospectus and the applicable prospectus
supplement carefully before you invest.
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.
This Prospectus is dated , 2001
ABOUT THIS PROSPECTUS
This Prospectus is part of a registration statement filed with the
Securities and Exchange Commission (the "Commission") using a "shelf"
registration process under the Securities Act of 1933, as amended (the "1933
Act"). Under the shelf process, Alabama Power Company (the "Company") may sell,
in one or more transactions,
- first mortgage bonds (the "new Bonds")
- class A preferred stock (the "new Stock")
- senior notes (the "Senior Notes")
- junior subordinated notes (the "Junior Subordinated Notes")
and Alabama Power Capital Trust IV and Alabama Power Capital Trust V
(individually, a "Trust" and collectively, the "Trusts") may sell,
- trust preferred securities (the "Preferred Securities")
in one or more offerings up to a total dollar amount of $900,000,000. This
Prospectus provides a general description of those securities. Each time we sell
securities, we will provide a prospectus supplement that will contain specific
information about the terms of that offering ("Prospectus Supplement"). The
Prospectus Supplement may also add, update or change information contained in
this Prospectus. You should read this Prospectus and the applicable Prospectus
Supplement together with additional information under the heading "Available
Information."
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports and other information with the Commission. Such reports and other
information can be inspected and copied at the public reference facilities of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and 233 Broadway, New York, New York 10279. Copies of such
material can also be obtained at prescribed rates by writing to the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. The Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants including the
Company that file electronically at http://www.sec.gov. In addition, reports and
other material concerning the Company can be inspected at the offices of the New
York Stock Exchange, 20 Broad Street, New York, New York 10005, on which
Exchange certain of the Company's securities are listed.
No separate financial statements of any Trust are included herein. The
Company considers that such statements would not be material to holders of the
Preferred Securities because each Trust has no independent operations and exists
for the sole purpose of investing the proceeds of the sale of its Trust
Securities in Junior Subordinated Notes (each as herein defined).
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission pursuant to the
1934 Act and are incorporated herein by reference and made a part of this
Prospectus:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000;
(b) the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 2001 and June 30, 2001; and
(c) the Company's Current Reports on Form 8-K dated February 28, 2001
and August 22, 2001.
2
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent to the date of this
Prospectus and prior to the termination of this offering shall be deemed to be
incorporated herein by reference and made a part of this Prospectus from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A
COPY OF ANY OR ALL DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER THAN THE
EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE). SUCH REQUESTS SHOULD BE DIRECTED TO WILLIAM E. ZALES, JR., VICE
PRESIDENT AND CORPORATE SECRETARY, ALABAMA POWER COMPANY, 600 NORTH 18TH STREET,
BIRMINGHAM, ALABAMA 35203, TELEPHONE: (205) 257-2714.
3
SELECTED INFORMATION
The following material, which is presented herein solely to furnish limited
introductory information regarding the Company, has been selected from, or is
based upon, the detailed information and financial statements appearing in the
documents incorporated herein by reference or elsewhere in this Prospectus, is
qualified in its entirety by reference thereto and, therefore, should be read
together therewith.
ALABAMA POWER COMPANY
Business......................... Generation, transmission, distribution and
sale of electric energy
Service Area..................... Approximately 44,500 square miles
comprising most of the State of Alabama
Service Area Population (1990
Census).......................... Approximately 3,224,000
Customers at December 31, 2000... 1,331,080
Generating Capacity at December
31, 2000 (kilowatts)............. 12,122,000
Sources of Generation during 2000
(kilowatt-hours)............... Coal (72%), Nuclear (19%), Hydro (3%), Oil
and Gas (6%)
Sources of Generation Estimated
for 2001 (kilowatt-hours)........ Coal (70%), Nuclear (16%), Hydro (5%), Oil
and Gas (9%)
ALABAMA POWER COMPANY
The Company is a corporation organized under the laws of the State of
Alabama on November 10, 1927, by the consolidation of the predecessor Alabama
Power Company, Gulf Electric Company and Houston Power Company. The predecessor
Alabama Power Company had a continuous existence since its incorporation in
1906. The principal executive offices of the Company are located at 600 North
18th Street, Birmingham, Alabama 35203, and the telephone number is (205)
257-1000.
The Company is a wholly owned subsidiary of The Southern Company, a holding
company registered under the Public Utility Holding Company Act of 1935, as
amended (the "1935 Act"). The Company is engaged, within the State of Alabama,
in the generation and purchase of electricity and the distribution and sale of
such electricity at retail in over 1,000 communities (including Anniston,
Birmingham, Gadsden, Mobile, Montgomery and Tuscaloosa), and at wholesale to 15
municipally owned electric distribution systems, 11 of which are served
indirectly through sales to the Alabama Municipal Electric Authority, and two
rural distributing cooperative associations. The Company also supplies steam
service in downtown Birmingham. The Company owns coal reserves near its Gorgas
Steam Electric Generating Plant and uses the output of coal from the reserves in
its generating plants. It also sells, and cooperates with dealers in promoting
the sale of, electric appliances.
The Company and one of its affiliates, Georgia Power Company ("GEORGIA"),
each own 50% of the common stock of Southern Electric Generating Company
("SEGCO"). SEGCO owns generating units with an aggregate capacity of 1,019,680
kilowatts at the Ernest C. Gaston Steam Plant ("Plant Gaston") on the Coosa
River near Wilsonville, Alabama. The Company and GEORGIA are each entitled to
one-half of the capacity and energy of these units. The Company acts as SEGCO's
agent in the operation of SEGCO's units and furnishes coal to SEGCO as fuel for
its units. SEGCO also owns three 230,000 volt transmission lines extending from
Plant Gaston to the Georgia state line.
4
THE TRUSTS
Each Trust is a statutory business trust created under Delaware law
pursuant to the filing of a certificate of trust with the Delaware Secretary of
State on November 27, 1996, with respect to Alabama Power Capital Trust IV, and
November 18, 1997, with respect to Alabama Power Capital Trust V. Each Trust's
business is defined in a trust agreement, executed by the Company, as Depositor,
and the Delaware Trustee thereunder. This trust agreement of each Trust will be
amended and restated in its entirety substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus forms a part (the
"Trust Agreement"). Each Trust Agreement will be qualified as an indenture under
the Trust Indenture Act of 1939, as amended (the "1939 Act"). The Company will
own all the common securities (the "Common Securities" and, together with the
Preferred Securities, the "Trust Securities"). The Trust Securities represent
undivided beneficial interests in the assets of the respective Trusts. Each
Trust exists for the exclusive purposes of (i) issuing its Trust Securities
representing undivided beneficial interests in the assets of such Trust, (ii)
investing the gross proceeds of its Trust Securities in a related series of
Junior Subordinated Notes, and (iii) engaging in only those other activities
necessary, appropriate, convenient or incidental thereto. The payment of
periodic cash distributions on the Preferred Securities of each Trust and
payments on liquidation and redemption with respect to the Preferred Securities
of each Trust, in each case to the extent each Trust has funds legally and
immediately available therefor, will be guaranteed by the Company (individually,
a "Guarantee" and collectively, the "Guarantees"). See "Description of
Guarantees."
Each Trust's business and affairs will be conducted by its trustees, which
shall be appointed by the Company as the holder of the Common Securities: two
employees of the Company as Administrative Trustees; The Chase Manhattan Bank as
Property Trustee; and Chase Manhattan Bank USA, National Association as Delaware
Trustee (collectively, the "Securities Trustees"). The Property Trustee of each
Trust will act as the indenture trustee with respect to such Trust for purposes
of compliance with the provisions of the 1939 Act.
The principal place of business of each Trust shall be c/o the Company, 600
North 18th Street, Birmingham, Alabama 35203, telephone (205) 257-2714, Attn:
Corporate Secretary.
Reference is made to the Prospectus Supplement relating to the Preferred
Securities of each Trust for further information concerning such Trust.
ACCOUNTING TREATMENT OF TRUSTS
For financial reporting purposes, the Trusts will be treated as
subsidiaries of the Company and, accordingly, the accounts of the Trusts will be
included in the consolidated financial statements of the Company. The Preferred
Securities will be presented as a separate line item in the consolidated balance
sheet of the Company, and appropriate disclosures concerning the Preferred
Securities, the Guarantees and the Junior Subordinated Notes will be included in
the notes to the consolidated financial statements. For financial reporting
purposes, the Company will record distributions payable on the Preferred
Securities as an expense.
5
CERTAIN RATIOS
The following table sets forth the Ratios of Earnings to Fixed Charges and
Earnings to Fixed Charges Plus Preferred Dividend Requirements (Pre-Income Tax
Basis) for the periods indicated.
TWELVE
MONTHS
YEAR ENDED DECEMBER 31, ENDED
-------------------------------- SEPTEMBER 30,
1996 1997 1998 1999 2000 2001
---- ---- ---- ---- ---- -------------
Ratio of Earnings to Fixed Charges(1)............... 3.57 3.31 2.94 3.33 3.33 3.18
Ratio of Earnings to Fixed Charges Plus
Preferred Dividend Requirements
(Pre-Income Tax Basis)(2)......................... 3.05 3.06 2.75 3.06 3.07 2.92
---------------
(1) This ratio is computed as follows: (i) "Earnings" have been calculated by
adding to "Income Before Interest Charges" all income taxes deducted
therefrom and the debt portion of allowance for funds used during
construction; and (ii) "Fixed Charges" consist of "Net Interest Charges"
plus the debt portion of allowance for funds used during construction.
(2) In computing this ratio, "Preferred Dividend Requirements" represent the
before-tax earnings necessary to pay such dividends, computed at the
effective tax rates for the applicable periods.
USE OF PROCEEDS
Each Trust will invest the proceeds received from the sale of its Preferred
Securities in Junior Subordinated Notes. Except as may be otherwise described in
an applicable Prospectus Supplement, the net proceeds received by the Company
from such investment and any proceeds received from the sale of its new Bonds,
new Stock or Senior Notes or other sales of its Junior Subordinated Notes will
be used in connection with its ongoing construction program, to pay scheduled
maturities and/or refundings of its securities, to repay short-term indebtedness
to the extent outstanding and for other general corporate purposes.
DESCRIPTION OF THE NEW BONDS
Set forth below is a description of the general terms of the Company's new
Bonds. The following description does not purport to be complete and is subject
to, and is qualified by reference to, the Indenture, dated as of January 1,
1942, between the Company and The Chase Manhattan Bank, as trustee (the "First
Mortgage Bond Trustee"), as to be supplemented by a supplemental indenture (the
"Supplemental Indenture") thereto establishing the new Bonds of each series (the
Indenture, as so supplemented, is hereinafter referred to as the "First Mortgage
Bond Indenture"), the forms of which are filed as exhibits to the Registration
Statement of which this Prospectus forms a part. The terms of such new Bonds
will include those stated in the First Mortgage Bond Indenture and those made a
part of the First Mortgage Bond Indenture by reference to the 1939 Act. Certain
capitalized terms used herein are defined in the First Mortgage Bond Indenture.
The new Bonds will mature on the date shown in their title as set forth in
the Prospectus Supplement.
The new Bonds in definitive form will be issued only as registered bonds
without coupons in denominations of $1,000 or authorized multiples thereof or in
such other denominations as set forth in the Prospectus Supplement. New Bonds
will be exchangeable for a like aggregate principal amount of new Bonds of other
authorized denominations, and are transferable, at the principal corporate trust
office of the First Mortgage Bond Trustee in New York City, or at such other
office or agency of the Company as the Company may from time to time designate,
without payment of any charge other than for any tax or taxes or other
governmental charge.
Any proposed listing of the new Bonds on a securities exchange will be
described in the Prospectus Supplement.
6
Except as otherwise may be indicated in the Prospectus Supplement, there
are no provisions of the First Mortgage Bond Indenture which are specifically
intended to afford holders of the new Bonds protection in the event of a highly
leveraged transaction involving the Company.
Interest Rate Provisions: The Prospectus Supplement will set forth the
interest rate provisions of the new Bonds, including payment dates, the record
dates and the rate or rates, or the method of determining the rate or rates
(which may involve periodic interest rate settings through remarketing or
auction procedures or pursuant to one or more formulae, as described in the
Prospectus Supplement).
Redemption Provisions: The redemption provisions applicable to the new
Bonds will be described in the Prospectus Supplement.
Priority and Security: The new Bonds will rank equally as to security with
the bonds of other series presently outstanding under the First Mortgage Bond
Indenture, which is a direct first lien on substantially all of the Company's
fixed property and franchises, used or useful in its public utility business,
subject only to excepted encumbrances, as defined in the First Mortgage Bond
Indenture (Section 1.02).
The First Mortgage Bond Indenture permits, within certain limitations
specified in Section 7.05, the acquisition of property subject to prior liens.
Under certain conditions specified in Section 7.14, additional indebtedness
secured by such prior liens may be issued to the extent of 60% of the cost to
the Company or the fair value at date of acquisition, whichever is less, of the
net property additions made by the Company to the property subject to such prior
lien.
Improvement Fund Requirement: Pursuant to the Supplemental Indenture and
similar provisions of the supplemental indentures creating other series of bonds
currently outstanding under the First Mortgage Bond Indenture (other than bonds
aggregating $152,300,000 in principal amount issued and outstanding as of
September 30, 2001 as collateral security for certain obligations), the annual
improvement fund requirement applicable to the new Bonds and the bonds of each
such other series, which must be satisfied on or before June 1 in each year, is
equal to 1% of the principal amount of bonds authenticated of each such series
prior to January 1 of that year (less bonds of such series retired directly or
indirectly as a result of the release of property). The improvement fund
requirements may be satisfied in cash or in principal amount of bonds
authenticated under the First Mortgage Bond Indenture or to the extent of 60% of
the cost or fair value, whichever is less, of unfunded net property additions.
Any cash so deposited is to be used by the First Mortgage Bond Trustee for the
redemption at their then special redemption prices or other retirement of bonds
of such series as may be designated by the Company (subject to such limitation,
if any, as to the new Bonds as set forth in the Prospectus Supplement and except
as to limitations which have been or may be established in the supplemental
indentures creating other series of bonds) or may be withdrawn by the Company
against the deposit of bonds or to the extent of 60% of unfunded net property
additions.
Replacement Requirement: By Section 4 of the Supplemental Indenture dated
as of October 1, 1981, the Company is required to certify to the First Mortgage
Bond Trustee unfunded net property additions or to deposit with the First
Mortgage Bond Trustee cash or bonds in an amount equal to the amount by which
annual expenditures for renewals and replacements are less than 2.25% of the
average annual amount of depreciable mortgaged property or such revised
percentage as shall be authorized or approved by the Commission, or any
successor commission, under the 1935 Act. Any available replacement credit may
be carried forward and deposited cash or bonds may be withdrawn, used or applied
in accordance with the provisions of said section.
Any limitation on the right of the Company to redeem new Bonds through the
operation of the replacement provisions of the First Mortgage Bond Indenture
will be described in the Prospectus Supplement.
The First Mortgage Bond Indenture (Section 7.16) provides for an
examination of the mortgaged property by an independent engineer at least once
every five years. The Company covenants to make good any maintenance deficiency
shown by the certificate of such engineer and to record retirements as called
for thereby.
7
Issuance of Additional Bonds: Additional bonds may be issued under the
First Mortgage Bond Indenture (a) under Article IV to the extent of 60% of the
cost or fair value at date of acquisition, whichever is less, of unfunded net
property additions, as defined in the First Mortgage Bond Indenture (Sections
1.08 through 1.11, as amended), or (b) under Article V against the retirement of
other bonds theretofore outstanding under the First Mortgage Bond Indenture, or
(c) under Article VI against the deposit of cash equal to the principal amount
of bonds to be issued. Such additional bonds, however, may be issued, except in
certain cases when issued under Article V, only if, for a period of twelve
consecutive calendar months within the fifteen preceding calendar months, the
net earnings of the Company, as defined in the First Mortgage Bond Indenture
(Section 1.03, as amended), shall have been at least twice the interest
requirements for one year on all bonds outstanding, including the additional
bonds applied for and all outstanding prior lien bonds and other indebtedness of
the character described in the First Mortgage Bond Indenture. Such net earnings
are computed, in effect, after making certain deductions including (i) all
operating expenses other than income and excess profits taxes and (ii) the
amount, if any, by which the aggregate charges to expense or income to provide
for depreciation are less than 2.25% of the average amount of depreciable
mortgaged property. Under this provision, no amount is included in interest
requirements on account of $38,100,000 principal amount of first mortgage bonds
(out of a total of $152,300,000 principal amount) issued and outstanding as of
September 30, 2001, as collateral for certain obligations for which such bonds
are pledged as security. No interest is payable on any such bonds unless and
until default occurs on such obligations.
Cash deposited as the basis for the issuance of bonds may be applied to the
retirement of bonds or be withdrawn against the deposit of bonds or be withdrawn
to the extent of 60% of the cost or fair value, whichever is less, of unfunded
net property additions (Article VI).
Release and Substitution of Property: The First Mortgage Bond Indenture
(Article X) provides that, subject to various limitations, property may be
released from the lien thereof when sold or exchanged, upon the basis of cash
deposited with the First Mortgage Bond Trustee, bonds or purchase money
obligations delivered to the First Mortgage Bond Trustee, prior lien bonds
delivered to the First Mortgage Bond Trustee or reduced or assumed, property
additions acquired in exchange for the property released or unfunded net
property additions certified to the First Mortgage Bond Trustee.
The First Mortgage Bond Indenture (Section 10.05) permits the cash proceeds
of released property and other funds to be withdrawn either upon a showing that
unfunded net property additions exist or against the deposit of bonds and also
permits such proceeds and other funds to be applied to the retirement of bonds.
Restrictions on Common Stock Dividends: There are various restrictions on
Common Stock dividends in the First Mortgage Bond Indenture (which are to remain
in effect so long as certain series of bonds are outstanding). Any restrictions
on dividends and distributions on Common Stock in the Supplemental Indenture
will be set forth in the Prospectus Supplement.
Amendments to the First Mortgage Bond Indenture: By Section 6(g) of the
Supplemental Indenture dated as of October 1, 1981, the First Mortgage Bond
Indenture may be modified with the consent of the holders of not less than a
majority in principal amount of the bonds at the time outstanding which would be
affected by the action proposed to be taken. However, the bondholders shall have
no power (i) to extend the fixed maturity of any bonds, or reduce the rate or
extend the time of payment of interest thereon, or reduce the principal amount
thereof, without the express consent of the holder of each bond which would be
so affected, or (ii) to reduce the aforesaid percentage of bonds, the holders of
which are required to consent to any such modification, without the consent of
the holders of all bonds outstanding, or (iii) to permit the creation by the
Company of any mortgage or pledge or lien in the nature thereof, not otherwise
permitted under the First Mortgage Bond Indenture, ranking prior to or equal
with the lien of the First Mortgage Bond Indenture on any of the mortgaged and
pledged property, or (iv) to deprive the holder of any bond outstanding under
the First Mortgage Bond Indenture of the lien thereof on any of the mortgaged
and pledged property. The First Mortgage Bond Trustee shall not be obligated to
enter into a supplemental indenture which would affect its own rights, duties or
immunities under the First Mortgage Bond Indenture or otherwise.
Regarding the First Mortgage Bond Trustee: The Chase Manhattan Bank, the
First Mortgage Bond Trustee, also serves as Senior Note Indenture Trustee, as
Subordinated Note Indenture Trustee, as
8
Property Trustee and as Guarantee Trustee. The Company and certain of its
affiliates maintain deposit accounts and banking relationships with The Chase
Manhattan Bank. The Chase Manhattan Bank also serves as trustee under other
indentures pursuant to which securities of the Company and affiliates of the
Company are outstanding.
Enforcement Provisions: The First Mortgage Bond Indenture (Section 11.05)
provides that, upon the occurrence of certain events of default, the First
Mortgage Bond Trustee or the holders of not less than 20% in principal amount of
outstanding bonds may declare the principal of all outstanding bonds immediately
due and payable, but that, upon the curing of any such default, the holders of a
majority in principal amount of outstanding bonds may waive such default and its
consequences.
The holders of a majority in principal amount of outstanding bonds may
direct the time, method and place of conducting any proceeding for the
enforcement of the First Mortgage Bond Indenture (Sections 11.01 and 11.12). No
holder of any bond has any right to institute any proceedings to enforce the
First Mortgage Bond Indenture or any remedy thereunder, unless such holder shall
previously have given to the First Mortgage Bond Trustee written notice of a
default, and unless such holder or holders shall have tendered to the First
Mortgage Bond Trustee indemnity against costs, expenses and liabilities, and
unless the holders of not less than 20% in principal amount of outstanding bonds
shall have tendered such indemnity and requested the First Mortgage Bond Trustee
to take action and the First Mortgage Bond Trustee shall have failed to take
action within 60 days (Section 11.14).
Defaults: By Section 11.01 of the First Mortgage Bond Indenture, the
following events are defined as "defaults": failure to pay principal; failure
for 60 days to pay interest; failure for 90 days to pay any sinking or other
purchase fund installment; certain events in bankruptcy, insolvency or
reorganization; and failure for 90 days after notice to perform other covenants.
By Section 9.03 of the First Mortgage Bond Indenture, a failure by the Company
to deposit or direct the application of money for the redemption of bonds called
for redemption also constitutes a default.
Evidence as to Compliance with Conditions and Covenants: The First Mortgage
Bond Indenture requires the Company to furnish to the First Mortgage Bond
Trustee, among other things, a certificate of officers and an opinion of counsel
as evidence of compliance with conditions precedent provided for therein; a
certificate of an engineer (who, in certain instances, must be an independent
engineer) with respect to the fair value of property certified or released; and
a certificate of an accountant (who, in certain instances, must be an
independent public accountant) as to compliance with the earnings, improvement
fund and replacement requirements. Various certificates and other documents are
required to be filed periodically or upon the happening of certain events;
however, no general periodic evidence is required by the First Mortgage Bond
Indenture to be furnished as to the absence of default or as to compliance with
the terms of the First Mortgage Bond Indenture in general.
DESCRIPTION OF THE NEW STOCK
Set forth below is a description of the general terms of the new Stock.
The statements herein concerning the new Stock are an outline and do not
purport to be complete. Such statements make use of defined terms and are
qualified in their entirety by express reference to the cited provisions of the
charter of the Company, as amended (the "charter"), a copy of which is filed as
an exhibit to the Registration Statement of which this Prospectus forms a part.
The general provisions which apply to the preferred stock of the Company of all
classes, which are now or may hereafter be authorized or created, are set forth
in the charter.
General: The new Stock is to be established by resolutions of the Board of
Directors of the Company (the "Resolutions"), a copy of which is an exhibit to
the Registration Statement (or incorporated by reference therein) to which
reference is hereby made. The Resolutions shall include a provision fixing the
stated capital of the new Stock.
9
At September 30, 2001, there were outstanding 8,000,000 shares of Class A
Preferred Stock with a stated capital of $25 per share, 500,000 shares of Class
A Preferred Stock with a stated capital of $100 per share and 200 shares of
Class A Preferred Stock with a stated capital of $100,000 per share.
Additionally, at September 30, 2001, the Company had outstanding 475,115 shares
of Preferred Stock which have a par value of $100 per share. The Class A
Preferred Stock ranks on a parity as to dividends and assets with the
outstanding Preferred Stock and has the same rights and preferences as the
outstanding Preferred Stock. On all matters submitted to a vote of the holders
of the Preferred Stock and the Class A Preferred Stock (other than a change in
the rights and preferences of only one, but not the other, such kind of stock),
both kinds of stock vote together as a single class, and each share of Preferred
Stock and Class A Preferred Stock shall have the relative voting rights
described in "Voting Rights" herein.
The new Stock will not be subject to further calls or to assessment by the
Company.
Any proposed listing of the new Stock on a securities exchange will be
described in the Prospectus Supplement.
Transfer Agent and Registrar: Unless otherwise indicated in the applicable
Prospectus Supplement, the new Stock will be transferable at the office of
Southern Company Services, Inc., 270 Peachtree Street, N.W., Atlanta, Georgia
30303, which will also serve as the Registrar.
Dividend Rights: The holders of the Preferred Stock and Class A Preferred
Stock of each class are entitled to receive cumulative dividends, payable when
and as declared by the Board of Directors, at the rates determined for the
respective classes, before any dividends may be declared or paid on the Common
Stock. Dividends on the Preferred Stock and Class A Preferred Stock must have
been or be contemporaneously declared and set apart for payment, or paid, on the
Preferred Stock and Class A Preferred Stock of all classes for all dividend
periods terminating on the same or an earlier date (Charter -- A. Preferred
Stock -- 2. General Provisions -- a and b).
The Prospectus Supplement will set forth the dividend rate provisions of
the new Stock, including the payment dates and the rate or rates, or the method
of determining the rate or rates (which may involve periodic dividend rate
settings through remarketing or auction procedures or pursuant to one or more
formulae, as described in the Prospectus Supplement). Dividends payable on the
new Stock will be cumulative from the date of original issue.
Redemption Provisions: The redemption provisions applicable to the new
Stock will be described in the Prospectus Supplement.
The charter provides that the Company shall not redeem, purchase or
otherwise acquire any shares of Preferred Stock or Class A Preferred Stock if,
at the time of such redemption, purchase or other acquisition, dividends payable
on the Preferred Stock or Class A Preferred Stock of any class shall be in
default in whole or in part unless, prior to or concurrently with such
redemption, purchase or other acquisition, all such defaults shall be cured or
unless such action has been ordered, approved or permitted under the 1935 Act by
the Commission or any successor commission or regulatory authority of the United
States of America (Charter -- A. Preferred Stock -- 2. General Provisions -- d).
Voting Rights: At the election of directors at each annual meeting of the
shareholders, the holders of the Preferred Stock and Class A Preferred Stock
shall have full voting rights with the holders of the Common Stock, all voting
together as a single class. Each share of Preferred Stock and Class A Preferred
Stock with a stated capital of $100 will have two-fifths vote, each share of
Preferred Stock and Class A Preferred Stock with a stated capital of $25 will
have one-tenth vote, each share of Preferred Stock and Class A Preferred Stock
with a stated capital of $100,000 will have 400 votes and each share of Common
Stock will have one vote. On all other matters, except as otherwise provided by
law or in the charter, the right to vote is vested in the holders of the Common
Stock; provided, however, that, if and so long as four quarterly dividends
payable on the Preferred Stock or Class A Preferred Stock of any class shall be
in default, the holders of the Preferred Stock and Class A Preferred Stock of
all classes shall have the exclusive right, voting separately and as a single
class, to elect the smallest number of directors which shall constitute a
majority of the then authorized number of directors and, on all other matters,
the right to vote together with the holders of the Common Stock. In
10
each instance in which the holders of the Preferred Stock and the Class A
Preferred Stock are entitled to vote separately and as a single class or to vote
together with the holders of the Common Stock, the relative voting power of the
various classes of stock shall be computed as hereinafter provided. Stockholders
are entitled to cumulative voting at elections of directors (Charter -- C.
Voting Powers).
The affirmative vote of at least two-thirds of the total voting power of
the outstanding shares of Preferred Stock and Class A Preferred Stock will be
required for
(a) the authorization or creation of any kind of stock preferred as to
dividends or assets over the Preferred Stock or Class A Preferred Stock or
the issue (such issuance to be within twelve months after such vote) of any
shares of any kind of stock preferred as to dividends or assets over the
Preferred Stock or Class A Preferred Stock or any security convertible into
such kind of stock or a change in any of the rights and preferences of the
then outstanding Preferred Stock or Class A Preferred Stock in any manner
so as to affect adversely the holders thereof; provided, however, that, if
any such change would adversely affect the holders of only one, but not the
other, such kind of stock, only the vote of the holders of at least
two-thirds of the total voting power of the outstanding shares of the kind
so affected will be required; or
(b) the issue, sale or other disposition of any shares of Preferred
Stock if the total number of shares thereof to be outstanding would exceed
300,000, or the issue, sale or other disposition of any shares of Class A
Preferred Stock, or the issue, sale or other disposition of any senior or
equally ranking stock, or the reissue, sale or other disposition of any
shares of Preferred Stock or Class A Preferred Stock or senior or equally
ranking stock which have been redeemed, purchased or otherwise acquired by
the Company, unless, in any such case, (i) net income available for
dividends for a period of twelve consecutive calendar months within the 15
preceding calendar months is at least equal to two times the annual
dividend requirements on all outstanding shares of Preferred Stock and
Class A Preferred Stock and on senior or equally ranking stock to be
outstanding; (ii) gross income available for interest for a period of
twelve consecutive calendar months within the 15 preceding calendar months
is at least equal to one and one-half times the aggregate of annual
interest requirements and annual dividend requirements on all outstanding
shares of Preferred Stock and Class A Preferred Stock and on senior or
equally ranking stock to be outstanding; and (iii) the aggregate of common
stock capital and surplus is not less than the aggregate amount payable
upon involuntary liquidation on all shares of Preferred Stock and Class A
Preferred Stock and on senior or equally ranking stock to be outstanding
(Charter -- A. Preferred Stock -- 2. General Provisions -- e.).
The charter provides that relative voting power of each share of Preferred
Stock and Class A Preferred Stock shall be in the same proportion to all the
outstanding shares of Preferred Stock and Class A Preferred Stock as the ratio
of (i) the stated capital of such share to (ii) the aggregate stated capital of
all then outstanding shares of Preferred Stock and Class A Preferred Stock.
Thus, a share of Class A Preferred Stock having a stated capital of $25 per
share will have one-fourth the voting power of a share of Preferred Stock or
Class A Preferred Stock having a stated capital of $100 per share. In voting by
holders of Preferred Stock and Class A Preferred Stock together with the holders
of the Common Stock, each share of Common Stock will have one vote, each share
of Preferred Stock will have one vote and each share of Class A Preferred Stock
having a stated capital of other than $100 per share will have that number of
votes which is proportionate to such one vote as determined above in this
paragraph (Charter -- C. Voting Powers).
Liquidation Rights: Upon voluntary or involuntary liquidation, the holders
of the Preferred Stock and Class A Preferred Stock of each class, without
preference between classes, will be entitled to receive the amounts specified to
be payable on the shares of such class (which, in the case of the new Stock, is
an amount equal to the stated capital per share on involuntary liquidation, or
an amount equal to the then current regular redemption price per share on
voluntary liquidation, plus accrued dividends in each case) before any
distribution of assets may be made to the holders of the Common Stock. Available
assets, if insufficient to pay such amounts to the holders of the Preferred
Stock and Class A Preferred Stock, are to be distributed pro rata to the
payment, first, of the amount per share payable in the event of involuntary
liquidation, second, of accrued dividends, and third, of any premium (Charter --
A. Preferred Stock -- 2. General Provisions -- c.).
Sinking Fund: The terms and conditions of a sinking fund or purchase fund,
if any, for the benefit of the holders of the new Stock will be set forth in the
Prospectus Supplement.
11
Other Rights: The holders of the new Stock do not have any preemptive or
conversion rights unless otherwise indicated in the Prospectus Supplement.
DESCRIPTION OF THE SENIOR NOTES
Set forth below is a description of the general terms of the Senior Notes.
The following description does not purport to be complete and is subject to, and
is qualified in its entirety by reference to, the Senior Note Indenture, dated
as of December 1, 1997, between the Company and The Chase Manhattan Bank, as
trustee (the "Senior Note Indenture Trustee"), as to be supplemented by a
supplemental indenture thereto establishing the Senior Notes of each series (the
Senior Note Indenture, as so supplemented, is hereinafter referred to as the
"Senior Note Indenture"), the forms of which are filed as exhibits to the
Registration Statement of which this Prospectus forms a part. The terms of the
Senior Notes will include those stated in the Senior Note Indenture and those
made a part of the Senior Note Indenture by reference to the 1939 Act. Certain
capitalized terms used herein are defined in the Senior Note Indenture.
GENERAL
The Senior Notes will be issued as unsecured senior debt securities under
the Senior Note Indenture and will rank pari passu with all other unsecured and
unsubordinated debt of the Company. The Senior Notes will be effectively
subordinated to all secured debt of the Company, including its first mortgage
bonds, aggregating approximately $659,000,000 outstanding at September 30, 2001.
The Senior Note Indenture does not limit the aggregate principal amount of
Senior Notes that may be issued thereunder and provides that Senior Notes may be
issued from time to time in one or more series pursuant to an indenture
supplemental to the Senior Note Indenture. The Senior Note Indenture gives the
Company the ability to reopen a previous issue of Senior Notes and issue
additional Senior Notes of such series, unless otherwise provided.
Reference is made to the Prospectus Supplement that will accompany this
Prospectus for the following terms of the series of Senior Notes being offered
thereby: (i) the title of such Senior Notes; (ii) any limit on the aggregate
principal amount of such Senior Notes; (iii) the date or dates on which the
principal of such Senior Notes is payable; (iv) the rate or rates at which such
Senior Notes shall bear interest, if any, or any method by which such rate or
rates will be determined, the date or dates from which such interest will
accrue, the interest payment dates on which such interest shall be payable, and
the regular record date for the interest payable on any interest payment date;
(v) the place or places where the principal of (and premium, if any) and
interest, if any, on such Senior Notes shall be payable; (vi) the period or
periods within which, the price or prices at which and the terms and conditions
on which such Senior Notes may be redeemed, in whole or in part, at the option
of the Company; (vii) the obligation, if any, of the Company to redeem or
purchase such Senior Notes; (viii) the denominations in which such Senior Notes
shall be issuable; (ix) if other than the principal amount thereof, the portion
of the principal amount of such Senior Notes which shall be payable upon
declaration of acceleration of the maturity thereof; (x) any deletions from,
modifications of or additions to the Events of Default or covenants of the
Company as provided in the Senior Note Indenture pertaining to such Senior
Notes; (xi) whether such Senior Notes shall be issued in whole or in part in the
form of a Global Security; and (xii) any other terms of such Senior Notes.
The Senior Note Indenture does not contain provisions that afford holders
of Senior Notes protection in the event of a highly leveraged transaction
involving the Company.
EVENTS OF DEFAULT
The Senior Note Indenture provides that any one or more of the following
described events with respect to the Senior Notes of any series, which has
occurred and is continuing, constitutes an "Event of Default" with respect to
the Senior Notes of such series:
(a) failure for 10 days to pay interest on the Senior Notes of such
series, when due on an interest payment date other than at maturity or upon
earlier redemption; or
(b) failure to pay principal or premium, if any, or interest on the
Senior Notes of such series when due at maturity or upon earlier
redemption; or
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(c) failure for three Business Days to deposit any sinking fund
payment when due by the terms of a Senior Note of such series; or
(d) failure to observe or perform any other covenant or warranty of
the Company in the Senior Note Indenture (other than a covenant or warranty
which has expressly been included therein solely for the benefit of one or
more series of Senior Notes other than such series) for 90 days after
written notice to the Company from the Senior Note Indenture Trustee or the
holders of at least 25% in principal amount of the outstanding Senior Notes
of such series; or
(e) certain events of bankruptcy, insolvency or reorganization of the
Company.
The holders of not less than a majority in aggregate outstanding principal
amount of the Senior Notes of any series have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Senior Note Indenture Trustee with respect to the Senior Notes of such series.
If a Senior Note Indenture Event of Default occurs and is continuing with
respect to the Senior Notes of any series, then the Senior Note Indenture
Trustee or the holders of not less than 25% in aggregate outstanding principal
amount of the Senior Notes of such series may declare the principal amount
thereof due and payable immediately by notice in writing to the Company (and to
the Senior Note Indenture Trustee if given by the holders), and upon any such
declaration such principal amount shall become immediately due and payable. At
any time after such a declaration of acceleration with respect to the Senior
Notes of any series has been made and before a judgment or decree for payment of
the money due has been obtained as provided in Article Five of the Senior Note
Indenture, the holders of not less than a majority in aggregate outstanding
principal amount of the Senior Notes of such series may rescind and annul such
declaration and its consequences if the default has been cured or waived and the
Company has paid or deposited with the Senior Note Indenture Trustee a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration and all sums paid or advanced by the Senior Note
Indenture Trustee, including reasonable compensation and expenses of the Senior
Note Indenture Trustee.
The holders of not less than a majority in aggregate outstanding principal
amount of the Senior Notes of any series may, on behalf of the holders of all
the Senior Notes of such series, waive any past default with respect to such
series, except (i) a default in the payment of principal or interest or (ii) a
default in respect of a covenant or provision which under Article Nine of the
Senior Note Indenture cannot be modified or amended thereunder without the
consent of the holder of each outstanding Senior Note of such series affected
thereby.
REGISTRATION AND TRANSFER
The Company shall not be required to (i) issue, register the transfer of or
exchange Senior Notes of any series during a period of 15 days immediately
preceding the date notice is given identifying the Senior Notes of such series
called for redemption, or (ii) register the transfer of or exchange any Senior
Notes so selected for redemption, in whole or in part, except the unredeemed
portion of any Senior Note being redeemed in part.
PAYMENT AND PAYING AGENT
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of any Senior Notes will be made only against surrender to the
Paying Agent of such Senior Notes. Principal of and interest on Senior Notes
will be payable, subject to any applicable laws and regulations, at the office
of such Paying Agent or Paying Agents as the Company may designate from time to
time, except that, at the option of the Company, payment of any interest may be
made by wire transfer or by check mailed to the address of the person entitled
thereto as such address shall appear in the Security Register with respect to
the Senior Notes. Payment of interest on Senior Notes on any interest payment
date will be made to the person in whose name the Senior Notes (or predecessor
security) are registered at the close of business on the record date for such
interest payment.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Senior Note Indenture Trustee will act as Paying Agent with respect to the
Senior Notes. The Company may at any time designate additional
13
Paying Agents or rescind the designation of any Paying Agents or approve a
change in the office through which any Paying Agent acts.
All moneys paid by the Company to a Paying Agent for the payment of the
principal of or interest on the Senior Notes of any series which remain
unclaimed at the end of two years after such principal or interest shall have
become due and payable will be repaid to the Company, and the holder of such
Senior Notes will thereafter look only to the Company for payment thereof.
MODIFICATION
The Senior Note Indenture contains provisions permitting the Company and
the Senior Note Indenture Trustee, with the consent of the holders of not less
than a majority in principal amount of the outstanding Senior Notes of each
series affected thereby, to modify the Senior Note Indenture or the rights of
the holders of the Senior Notes of such series; provided, that no such
modification may, without the consent of the holder of each outstanding Senior
Note affected thereby, (i) change the stated maturity of the principal of, or
any installment of principal of or interest on, any Senior Note, or reduce the
principal amount thereof or the rate of interest thereon or any premium payable
upon the redemption thereof, or change the method of calculating the rate of
interest thereon, or impair the right to institute suit for the enforcement of
any such payment on or after the stated maturity thereof (or, in the case of
redemption, on or after the redemption date), or (ii) reduce the percentage of
principal amount of the outstanding Senior Notes of any series, the consent of
whose holders is required for any such supplemental indenture, or the consent of
whose holders is required for any waiver (of compliance with certain provisions
of the Senior Note Indenture or certain defaults thereunder and their
consequences) provided for in the Senior Note Indenture, or (iii) modify any of
the provisions of the Senior Note Indenture relating to supplemental indentures,
waiver of past defaults, or waiver of certain covenants, except to increase any
such percentage or to provide that certain other provisions of the Senior Note
Indenture cannot be modified or waived without the consent of the holder of each
outstanding Senior Note affected thereby.
In addition, the Company and the Senior Note Indenture Trustee may execute,
without the consent of any holders of Senior Notes, any supplemental indenture
for certain other usual purposes, including the creation of any new series of
senior notes.
CONSOLIDATION, MERGER AND SALE
The Company shall not consolidate with or merge into any other corporation
or convey, transfer or lease its properties and assets substantially as an
entirety to any person, unless (1) such other corporation or person is a
corporation organized and existing under the laws of the United States, any
state thereof or the District of Columbia and such other corporation or person
expressly assumes, by supplemental indenture executed and delivered to the
Senior Note Indenture Trustee, the payment of the principal of (and premium, if
any) and interest on all the Senior Notes and the performance of every covenant
of the Senior Note Indenture on the part of the Company to be performed or
observed; (2) immediately after giving effect to such transactions, no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing; and (3) the Company
has delivered to the Senior Note Indenture Trustee an officers' certificate and
an opinion of counsel, each stating that such transaction complies with the
provisions of the Senior Note Indenture governing consolidation, merger,
conveyance, transfer or lease and that all conditions precedent thereto have
been complied with.
INFORMATION CONCERNING THE SENIOR NOTE INDENTURE TRUSTEE
The Senior Note Indenture Trustee, prior to an Event of Default with
respect to Senior Notes of any series, undertakes to perform, with respect to
Senior Notes of such series, only such duties as are specifically set forth in
the Senior Note Indenture and, in case an Event of Default with respect to
Senior Notes of any series has occurred and is continuing, shall exercise, with
respect to Senior Notes of such series, the same degree of care as a prudent
individual would exercise in the conduct of his or her own affairs. Subject to
such provision, the Senior Note Indenture Trustee is under no obligation to
exercise any of the powers vested in it by the Senior Note Indenture at the
request of any holder of Senior Notes of any series, unless offered
14
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Senior Note Indenture Trustee is not
required to expend or risk its own funds or otherwise incur any financial
liability in the performance of its duties if the Senior Note Indenture Trustee
reasonably believes that repayment or adequate indemnity is not reasonably
assured to it.
The Chase Manhattan Bank, the Senior Note Indenture Trustee, also serves as
First Mortgage Bond Trustee, as Subordinated Note Indenture Trustee, as Property
Trustee and as Guarantee Trustee. The Company and certain of its affiliates
maintain deposit accounts and banking relationships with The Chase Manhattan
Bank. The Chase Manhattan Bank also serves as trustee under other indentures
pursuant to which securities of the Company and affiliates of the Company are
outstanding.
GOVERNING LAW
The Senior Note Indenture and the Senior Notes will be governed by, and
construed in accordance with, the internal laws of the State of New York.
MISCELLANEOUS
The Company will have the right at all times to assign any of its rights or
obligations under the Senior Note Indenture to a direct or indirect wholly-owned
subsidiary of the Company; provided, that, in the event of any such assignment,
the Company will remain primarily liable for all such obligations. Subject to
the foregoing, the Senior Note Indenture will be binding upon and inure to the
benefit of the parties thereto and their respective successors and assigns.
DESCRIPTION OF THE JUNIOR SUBORDINATED NOTES
Set forth below is a description of the general terms of the Junior
Subordinated Notes. The following description does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, the
Subordinated Note Indenture, dated as of January 1, 1997, between the Company
and The Chase Manhattan Bank, as trustee (the "Subordinated Note Indenture
Trustee"), as to be supplemented by a supplemental indenture thereto
establishing the Junior Subordinated Notes of each series (the Subordinated Note
Indenture, as so supplemented, is hereinafter referred to as the "Subordinated
Note Indenture"), the forms of which are filed as exhibits to the Registration
Statement of which this Prospectus forms a part. The terms of the Junior
Subordinated Notes will include those stated in the Subordinated Note Indenture
and those made a part of the Subordinated Note Indenture by reference to the
1939 Act. Certain capitalized terms used herein are defined in the Subordinated
Note Indenture.
GENERAL
The Junior Subordinated Notes will be issued as unsecured junior
subordinated debt securities under the Subordinated Note Indenture. The
Subordinated Note Indenture does not limit the aggregate principal amount of
Junior Subordinated Notes that may be issued thereunder and provides that Junior
Subordinated Notes may be issued from time to time in one or more series
pursuant to an indenture supplemental to the Subordinated Note Indenture. The
Subordinated Note Indenture gives the Company the ability to reopen a previous
issue of Junior Subordinated Notes and issue additional Junior Subordinated
Notes of such series, unless otherwise indicated in an applicable Prospectus
Supplement.
Reference is made to the Prospectus Supplement that will accompany this
Prospectus for the following terms of the series of Junior Subordinated Notes
being offered thereby: (i) the title of such Junior Subordinated Notes; (ii) any
limit on the aggregate principal amount of such Junior Subordinated Notes; (iii)
the date or dates on which the principal of such Junior Subordinated Notes is
payable; (iv) the rate or rates at which such Junior Subordinated Notes shall
bear interest, if any, or any method by which such rate or rates will be
determined, the date or dates from which such interest will accrue, the interest
payment dates on which such interest shall be payable, and the regular record
date for the interest payable on any interest payment date; (v) the place or
places where the principal of (and premium, if any) and interest, if any, on
15
such Junior Subordinated Notes shall be payable; (vi) the period or periods
within which, the price or prices at which and the terms and conditions on which
such Junior Subordinated Notes may be redeemed, in whole or in part, at the
option of the Company; (vii) the obligation, if any, of the Company to redeem or
purchase such Junior Subordinated Notes; (viii) the denominations in which such
Junior Subordinated Notes shall be issuable; (ix) if other than the principal
amount thereof, the portion of the principal amount of such Junior Subordinated
Notes which shall be payable upon declaration of acceleration of the maturity
thereof; (x) any deletions from, modifications of or additions to the Events of
Default or covenants of the Company as provided in the Subordinated Note
Indenture pertaining to such Junior Subordinated Notes; (xi) whether such Junior
Subordinated Notes shall be issued in whole or in part in the form of a Global
Security; (xii) the right, if any, of the Company to extend the interest payment
periods of such Junior Subordinated Notes; and (xiii) any other terms of such
Junior Subordinated Notes. The terms of each series of Junior Subordinated Notes
issued to a Trust will correspond to those of the related Preferred Securities
of such Trust as described in the Prospectus Supplement relating to such
Preferred Securities.
The Subordinated Note Indenture does not contain provisions that afford
holders of Junior Subordinated Notes protection in the event of a highly
leveraged transaction involving the Company.
SUBORDINATION
The Junior Subordinated Notes are subordinated and junior in right of
payment to all Senior Indebtedness (as defined below) of the Company. No payment
of principal of (including redemption payments, if any), or premium, if any, or
interest on (including Additional Interest (as defined below)) the Junior
Subordinated Notes may be made if (a) any Senior Indebtedness is not paid when
due and any applicable grace period with respect to such default has ended with
such default not being cured or waived or otherwise ceasing to exist, or (b) the
maturity of any Senior Indebtedness has been accelerated because of a default,
or (c) notice has been given of the exercise of an option to require repayment,
mandatory payment or prepayment or otherwise. Upon any payment or distribution
of assets of the Company to creditors upon any liquidation, dissolution,
winding-up, reorganization, assignment for the benefit of creditors, marshalling
of assets or liabilities, or any bankruptcy, insolvency or similar proceedings
of the Company, the holders of Senior Indebtedness shall be entitled to receive
payment in full of all amounts due or to become due on or in respect of all
Senior Indebtedness before the holders of the Junior Subordinated Notes are
entitled to receive or retain any payment or distribution. Subject to the prior
payment of all Senior Indebtedness, the rights of the holders of the Junior
Subordinated Notes will be subrogated to the rights of the holders of Senior
Indebtedness to receive payments and distributions applicable to such Senior
Indebtedness until all amounts owing on the Junior Subordinated Notes are paid
in full.
The term "Senior Indebtedness" means, with respect to the Company, (i) any
payment due in respect of indebtedness of the Company, whether outstanding at
the date of execution of the Subordinated Note Indenture or thereafter incurred,
created or assumed, (a) in respect of money borrowed (including any financial
derivative, hedging or futures contract or similar instrument) and (b) evidenced
by securities, debentures, bonds, notes or other similar instruments issued by
the Company that, by their terms, are senior or senior subordinated debt
securities including, without limitation, all obligations under its indentures
with various trustees; (ii) all capital lease obligations; (iii) all obligations
issued or assumed as the deferred purchase price of property, all conditional
sale obligations and all obligations of the Company under any title retention
agreement (but excluding trade accounts payable arising in the ordinary course
of business and long-term purchase obligations); (iv) all obligations for the
reimbursement of any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction; (v) all obligations of the type referred
to in clauses (i) through (iv) above of other persons the payment of which the
Company is responsible or liable as obligor, guarantor or otherwise; and (vi)
all obligations of the type referred to in clauses (i) through (v) above of
other persons secured by any lien on any property or asset of the Company
(whether or not such obligation is assumed by the Company), except for (1) any
such indebtedness that is by its terms subordinated to or pari passu with the
Junior Subordinated Notes and (2) any unsecured indebtedness between or among
the Company or its affiliates. Such Senior Indebtedness shall continue to be
Senior Indebtedness and be entitled
16
to the benefits of the subordination provisions contained in the Subordinated
Note Indenture irrespective of any amendment, modification or waiver of any term
of such Senior Indebtedness.
The Subordinated Note Indenture does not limit the aggregate amount of
Senior Indebtedness that may be issued by the Company. As of September 30, 2001,
Senior Indebtedness of the Company aggregated approximately $3,889,000,000.
ADDITIONAL INTEREST
"Additional Interest" is defined in the Subordinated Note Indenture as (i)
such additional amounts as may be required so that the net amounts received and
retained by a holder of Junior Subordinated Notes (if the holder is a Trust)
after paying taxes, duties, assessments or governmental charges of whatever
nature (other than withholding taxes) imposed by the United States or any other
taxing authority will not be less than the amounts the holder would have
received had no such taxes, duties, assessments, or other governmental charges
been imposed; and (ii) any interest due and not paid on an interest payment
date, together with interest thereon from such interest payment date to the date
of payment, compounded quarterly, on each interest payment date.
CERTAIN COVENANTS
The Company covenants in the Subordinated Note Indenture, for the benefit
of the holders of each series of Junior Subordinated Notes, that, (i) if at such
time the Company shall have given notice of its election to extend an interest
payment period for such series of Junior Subordinated Notes and such extension
shall be continuing, (ii) if at such time the Company shall be in default with
respect to its payment or other obligations under the Guarantee with respect to
the Trust Securities, if any, related to such series of Junior Subordinated
Notes, or (iii) if at such time an Event of Default thereunder with respect to
such series of Junior Subordinated Notes shall have occurred and be continuing,
(a) the Company shall not declare or pay any dividend or make any distributions
with respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock, and (b) the Company shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities (including guarantees other than the Guarantees)
issued by the Company which rank pari passu with or junior to the Junior
Subordinated Notes. None of the foregoing, however, shall restrict (i) any of
the actions described in the preceding sentence resulting from any
reclassification of the Company's capital stock or the exchange or conversion of
one class or series of the Company's capital stock for another class or series
of the Company's capital stock, or (ii) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged.
The Subordinated Note Indenture further provides that, for so long as the
Trust Securities of any Trust remain outstanding, the Company covenants (i) to
directly or indirectly maintain 100% ownership of the Common Securities of such
Trust; provided, however, that any permitted successor of the Company under the
Subordinated Note Indenture may succeed to the Company's ownership of such
Common Securities, and (ii) to use its reasonable efforts to cause such Trust
(a) to remain a statutory business trust, except in connection with the
distribution of Junior Subordinated Notes to the holders of Trust Securities in
liquidation of such Trust, the redemption of all of the Trust Securities of such
Trust, or certain mergers, consolidations or amalgamations, each as permitted by
the related Trust Agreement, and (b) to otherwise continue to be classified as a
grantor trust for United States federal income tax purposes.
EVENTS OF DEFAULT
The Subordinated Note Indenture provides that any one or more of the
following described events with respect to the Junior Subordinated Notes of any
series, which has occurred and is continuing, constitutes an "Event of Default"
with respect to the Junior Subordinated Notes of such series:
(a) failure for 10 days to pay interest on the Junior Subordinated
Notes of such series, including any Additional Interest (as defined in
clause (ii) of the definition thereof in the Subordinated Note Indenture)
in respect thereof, when due on an interest payment date other than at
maturity or upon
17
earlier redemption; provided, however, that a valid extension of the
interest payment period by the Company shall not constitute a default in
the payment of interest for this purpose; or
(b) failure for 10 days to pay Additional Interest (as defined in
clause (i) of the definition thereof in the Subordinated Note Indenture);
or
(c) failure to pay principal or premium, if any, or interest,
including Additional Interest (as defined in clause (ii) of the definition
thereof in the Subordinated Note Indenture), on the Junior Subordinated
Notes of such series when due at maturity or upon earlier redemption; or
(d) failure for three Business Days to deposit any sinking fund
payment when due by the terms of a Junior Subordinated Note of such series;
or
(e) failure to observe or perform any other covenant or warranty of
the Company in the Subordinated Note Indenture (other than a covenant or
warranty which has expressly been included therein solely for the benefit
of one or more series of Junior Subordinated Notes other than such series)
for 90 days after written notice to the Company from the Subordinated Note
Indenture Trustee or the holders of at least 25% in principal amount of the
outstanding Junior Subordinated Notes of such series; or
(f) certain events of bankruptcy, insolvency or reorganization of the
Company.
The holders of not less than a majority in aggregate outstanding principal
amount of the Junior Subordinated Notes of any series have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Subordinated Note Indenture Trustee with respect to the Junior
Subordinated Notes of such series. If a Subordinated Note Indenture Event of
Default occurs and is continuing with respect to the Junior Subordinated Notes
of any series, then the Subordinated Note Indenture Trustee or the holders of
not less than 25% in aggregate outstanding principal amount of the Junior
Subordinated Notes of such series may declare the principal amount thereof due
and payable immediately by notice in writing to the Company (and to the
Subordinated Note Indenture Trustee if given by the holders), and upon any such
declaration such principal amount shall become immediately due and payable. At
any time after such a declaration of acceleration with respect to the Junior
Subordinated Notes of any series has been made and before a judgment or decree
for payment of the money due has been obtained as provided in Article Five of
the Subordinated Note Indenture, the holders of not less than a majority in
aggregate outstanding principal amount of the Junior Subordinated Notes of such
series may rescind and annul such declaration and its consequences if the
default has been cured or waived and the Company has paid or deposited with the
Subordinated Note Indenture Trustee a sum sufficient to pay all matured
installments of interest (including any Additional Interest) and principal due
otherwise than by acceleration and all sums paid or advanced by the Subordinated
Note Indenture Trustee, including reasonable compensation and expenses of the
Subordinated Note Indenture Trustee.
A holder of Preferred Securities may institute a legal proceeding directly
against the Company, without first instituting a legal proceeding against the
Property Trustee or any other person or entity, for enforcement of payment to
such holder of principal of or interest on the Junior Subordinated Notes of the
related series having a principal amount equal to the aggregate stated
liquidation amount of the Preferred Securities of such holder on or after the
due dates specified in the Junior Subordinated Notes of such series.
The holders of not less than a majority in aggregate outstanding principal
amount of the Junior Subordinated Notes of any series may, on behalf of the
holders of all the Junior Subordinated Notes of such series, waive any past
default with respect to such series, except (i) a default in the payment of
principal or interest or (ii) a default in respect of a covenant or provision
which under Article Nine of the Subordinated Note Indenture cannot be modified
or amended thereunder without the consent of the holder of each outstanding
Junior Subordinated Note of such series affected thereby.
18
REGISTRATION AND TRANSFER
The Company shall not be required to (i) issue, register the transfer of or
exchange Junior Subordinated Notes of any series during a period of 15 days
immediately preceding the date notice is given identifying the Junior
Subordinated Notes of such series called for redemption, or (ii) register the
transfer of or exchange any Junior Subordinated Notes so selected for
redemption, in whole or in part, except the unredeemed portion of any Junior
Subordinated Note being redeemed in part.
PAYMENT AND PAYING AGENT
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of any Junior Subordinated Notes will be made only against
surrender to the Paying Agent of such Junior Subordinated Notes. Principal of
and interest on Junior Subordinated Notes will be payable, subject to any
applicable laws and regulations, at the office of such Paying Agent or Paying
Agents as the Company may designate from time to time, except that, at the
option of the Company, payment of any interest may be made by wire transfer or
by check mailed to the address of the person entitled thereto as such address
shall appear in the Security Register with respect to the Junior Subordinated
Notes. Payment of interest on Junior Subordinated Notes on any interest payment
date will be made to the person in whose name the Junior Subordinated Notes (or
predecessor security) are registered at the close of business on the record date
for such interest payment.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Subordinated Note Indenture Trustee will act as Paying Agent with respect to the
Junior Subordinated Notes. The Company may at any time designate additional
Paying Agents or rescind the designation of any Paying Agents or approve a
change in the office through which any Paying Agent acts.
All moneys paid by the Company to a Paying Agent for the payment of the
principal of or interest on the Junior Subordinated Notes of any series which
remain unclaimed at the end of two years after such principal or interest shall
have become due and payable will be repaid to the Company, and the holder of
such Junior Subordinated Notes will thereafter look only to the Company for
payment thereof.
MODIFICATION
The Subordinated Note Indenture contains provisions permitting the Company
and the Subordinated Note Indenture Trustee, with the consent of the holders of
not less than a majority in principal amount of the outstanding Junior
Subordinated Notes of each series affected thereby, to modify the Subordinated
Note Indenture or the rights of the holders of the Junior Subordinated Notes of
such series; provided, that no such modification may, without the consent of the
holder of each outstanding Junior Subordinated Note affected thereby, (i) change
the stated maturity of the principal of, or any installment of principal of or
interest on, any Junior Subordinated Note, or reduce the principal amount
thereof or the rate of interest (including Additional Interest) thereon or any
premium payable upon the redemption thereof, or change the method of calculating
the rate of interest thereon, or impair the right to institute suit for the
enforcement of any such payment on or after the stated maturity thereof (or, in
the case of redemption, on or after the redemption date), or (ii) reduce the
percentage of principal amount of the outstanding Junior Subordinated Notes of
any series, the consent of whose holders is required for any such supplemental
indenture, or the consent of whose holders is required for any waiver (of
compliance with certain provisions of the Subordinated Note Indenture or certain
defaults thereunder and their consequences) provided for in the Subordinated
Note Indenture, or (iii) modify any of the provisions of the Subordinated Note
Indenture relating to supplemental indentures, waiver of past defaults, or
waiver of certain covenants, except to increase any such percentage or to
provide that certain other provisions of the Subordinated Note Indenture cannot
be modified or waived without the consent of the holder of each outstanding
Junior Subordinated Note affected thereby, or (iv) modify the provisions of the
Subordinated Note Indenture with respect to the subordination of the Junior
Subordinated Notes in a manner adverse to such holder.
In addition, the Company and the Subordinated Note Indenture Trustee may
execute, without the consent of any holders of Junior Subordinated Notes, any
supplemental indenture for certain other usual purposes, including the creation
of any new series of junior subordinated notes.
19
CONSOLIDATION, MERGER AND SALE
The Company shall not consolidate with or merge into any other corporation
or convey, transfer or lease its properties and assets substantially as an
entirety to any person, unless (1) such other corporation or person is a
corporation organized and existing under the laws of the United States, any
state thereof or the District of Columbia and such other corporation or person
expressly assumes, by supplemental indenture executed and delivered to the
Subordinated Note Indenture Trustee, the payment of the principal of (and
premium, if any) and interest (including Additional Interest) on all the Junior
Subordinated Notes and the performance of every covenant of the Subordinated
Note Indenture on the part of the Company to be performed or observed; (2)
immediately after giving effect to such transactions, no Event of Default, and
no event which, after notice or lapse of time or both, would become an Event of
Default, shall have happened and be continuing; and (3) the Company has
delivered to the Subordinated Note Indenture Trustee an officers' certificate
and an opinion of counsel, each stating that such transaction complies with the
provisions of the Subordinated Note Indenture governing consolidation, merger,
conveyance, transfer or lease and that all conditions precedent thereto have
been complied with.
INFORMATION CONCERNING THE SUBORDINATED NOTE INDENTURE TRUSTEE
The Subordinated Note Indenture Trustee, prior to an Event of Default with
respect to Junior Subordinated Notes of any series, undertakes to perform, with
respect to Junior Subordinated Notes of such series, only such duties as are
specifically set forth in the Subordinated Note Indenture and, in case an Event
of Default with respect to Junior Subordinated Notes of any series has occurred
and is continuing, shall exercise, with respect to Junior Subordinated Notes of
such series, the same degree of care as a prudent individual would exercise in
the conduct of his or her own affairs. Subject to such provision, the
Subordinated Note Indenture Trustee is under no obligation to exercise any of
the powers vested in it by the Subordinated Note Indenture at the request of any
holder of Junior Subordinated Notes of any series, unless offered reasonable
indemnity by such holder against the costs, expenses and liabilities which might
be incurred thereby. The Subordinated Note Indenture Trustee is not required to
expend or risk its own funds or otherwise incur any financial liability in the
performance of its duties if the Subordinated Note Indenture Trustee reasonably
believes that repayment or adequate indemnity is not reasonably assured to it.
The Chase Manhattan Bank, the Subordinated Note Indenture Trustee, also
serves as First Mortgage Bond Trustee, as Senior Note Indenture Trustee, as
Property Trustee and as Guarantee Trustee. The Company and certain of its
affiliates maintain deposit accounts and banking relationships with The Chase
Manhattan Bank. The Chase Manhattan Bank also serves as trustee under other
indentures pursuant to which securities of the Company and affiliates of the
Company are outstanding.
GOVERNING LAW
The Subordinated Note Indenture and the Junior Subordinated Notes will be
governed by, and construed in accordance with, the internal laws of the State of
New York.
MISCELLANEOUS
The Company will have the right at all times to assign any of its rights or
obligations under the Subordinated Note Indenture to a direct or indirect
wholly-owned subsidiary of the Company; provided, that, in the event of any such
assignment, the Company will remain primarily liable for all such obligations.
Subject to the foregoing, the Subordinated Note Indenture will be binding upon
and inure to the benefit of the parties thereto and their respective successors
and assigns.
DESCRIPTION OF THE PREFERRED SECURITIES
Each Trust may issue only one series of Preferred Securities having terms
described in the Prospectus Supplement relating thereto. The Trust Agreement of
each Trust will authorize the Administrative Trustees, on behalf of the Trust,
to issue the Preferred Securities of such Trust. The Preferred Securities of
each Trust will have such terms, including distributions, redemption, voting,
liquidation rights and such other preferred, deferral or other special rights or
such restrictions as shall be set forth in the Trust Agreement of such Trust.
20
Reference is made to the Prospectus Supplement relating to the Preferred
Securities of a Trust for specific terms, including (i) the distinctive
designation of such Preferred Securities; (ii) the number of Preferred
Securities issued by such Trust; (iii) the distribution rate (or method of
determining such rate) for Preferred Securities of such Trust and the date or
dates on which such distributions shall be payable; (iv) whether distributions
on such Preferred Securities shall be cumulative and, in the case of Preferred
Securities having cumulative distribution rights, the date or dates, or method
of determining the date or dates, from which distributions on such Preferred
Securities shall be cumulative; (v) the amount or amounts that shall be paid out
of the assets of such Trust to the holders of the Preferred Securities of such
Trust upon voluntary or involuntary dissolution, winding-up or termination of
such Trust; (vi) the obligation, if any, of such Trust to purchase or redeem
such Preferred Securities and the price or prices at which, the period or
periods within which, and the terms and conditions upon which such Preferred
Securities shall be purchased or redeemed, in whole or in part, pursuant to such
obligation; (vii) the voting rights, if any, of such Preferred Securities in
addition to those required by law, including the number of votes per Preferred
Security and any requirement for the approval by the holders of Preferred
Securities as a condition to specified action or amendments to the Trust
Agreement of such Trust; (viii) the rights, if any, to defer distributions on
the Preferred Securities by extending the interest payment period on the related
Junior Subordinated Notes; and (ix) any other relative rights, preferences,
privileges, limitations or restrictions of such Preferred Securities not
inconsistent with the Trust Agreement of such Trust or applicable law. All
Preferred Securities offered hereby will be guaranteed by the Company to the
extent set forth under "Description of the Guarantees." Any material United
States federal income tax considerations applicable to an offering of Preferred
Securities will be described in the Prospectus Supplement relating thereto.
DESCRIPTION OF THE GUARANTEES
Set forth below is a summary of information concerning the Guarantees that
will be executed and delivered by the Company for the benefit of the holders of
Preferred Securities of the respective Trusts from time to time. Each Guarantee
will be qualified as an indenture under the 1939 Act. The Chase Manhattan Bank
will act as indenture trustee under each Guarantee (the "Guarantee Trustee") for
purposes of the 1939 Act. The terms of the respective Guarantees will be those
set forth therein and those made part thereof by the 1939 Act. The following
summary does not purport to be complete and is subject in all respects to the
provisions of, and is qualified in its entirety by reference to, the Guarantees,
the form of which is filed as an exhibit to the Registration Statement of which
this Prospectus forms a part, and the 1939 Act. Each Guarantee will be held by
the Guarantee Trustee for the benefit of holders of the Preferred Securities to
which it relates.
GENERAL
Pursuant to each Guarantee, the Company will irrevocably and
unconditionally agree, to the extent set forth therein, to pay in full, to the
holders of the related Preferred Securities, the Guarantee Payments (as defined
herein), to the extent not paid by, or on behalf of, the related Trust,
regardless of any defense, right of set-off or counterclaim that the Company may
have or assert against any person. The following payments or distributions with
respect to the Preferred Securities of any Trust to the extent not paid or made
by, or on behalf of, such Trust will be subject to the Guarantee related thereto
(without duplication): (i) any accrued and unpaid distributions required to be
paid on the Preferred Securities of such Trust but if and only if and to the
extent that such Trust has funds legally and immediately available therefor,
(ii) the redemption price, including all accrued and unpaid distributions to the
date of redemption (the "Redemption Price"), with respect to any Preferred
Securities called for redemption by such Trust, but if and only to the extent
such Trust has funds legally and immediately available therefor, and (iii) upon
a dissolution, winding-up or termination of such Trust (other than in connection
with the distribution of Junior Subordinated Notes to the holders of Trust
Securities of such Trust or the redemption of all of the Preferred Securities of
such Trust), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid distributions on the Preferred Securities of such Trust to
the date of payment, to the extent such Trust has funds legally and immediately
available therefor, and (b) the amount of assets of such Trust remaining
available for distribution
21
to holders of Preferred Securities of such Trust in liquidation of such Trust
(the "Guarantee Payments"). The Company's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the Company to the
holders of the related Preferred Securities or by causing the related Trust to
pay such amounts to such holders.
Each Guarantee will be a guarantee of the Guarantee Payments with respect
to the related Preferred Securities from the time of issuance of such Preferred
Securities, but will not apply to the payment of distributions and other
payments on such Preferred Securities when the related Trust does not have
sufficient funds legally and immediately available to make such distributions or
other payments. IF THE COMPANY DOES NOT MAKE INTEREST PAYMENTS ON THE JUNIOR
SUBORDINATED NOTES HELD BY THE PROPERTY TRUSTEE UNDER ANY TRUST, SUCH TRUST WILL
NOT MAKE DISTRIBUTIONS ON ITS PREFERRED SECURITIES.
SUBORDINATION
The Company's obligations under each Guarantee to make the Guarantee
Payments will constitute an unsecured obligation of the Company and will rank
(i) subordinate and junior in right of payment to all other liabilities of the
Company, including the Junior Subordinated Notes, except those obligations or
liabilities made pari passu or subordinate by their terms, (ii) pari passu with
the most senior preferred or preference stock now or hereafter issued by the
Company and with any guarantee now or hereafter entered into by the Company in
respect of any preferred or preference securities of any affiliate of the
Company, and (iii) senior to all common stock of the Company. The terms of the
Preferred Securities will provide that each holder of Preferred Securities by
acceptance thereof agrees to the subordination provisions and other terms of the
Guarantee related thereto. The Company has outstanding preferred stock that
ranks pari passu to the Guarantees and common stock that ranks junior to the
Guarantees.
Each Guarantee will constitute a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly against
the guarantor to enforce its rights under the guarantee without first
instituting a legal proceeding against any other person or entity).
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially and adversely
affect the rights of holders of the related Preferred Securities (in which case
no consent will be required), each Guarantee may be amended only with the prior
approval of the holders of not less than 66 2/3% in liquidation amount of such
outstanding Preferred Securities. The manner of obtaining any such approval of
holders of the Preferred Securities will be as set forth in an accompanying
Prospectus Supplement. All guarantees and agreements contained in each Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Company and shall inure to the benefit of the holders of the related
Preferred Securities then outstanding.
TERMINATION
Each Guarantee will terminate and be of no further force and effect as to
the related Preferred Securities upon full payment of the Redemption Price of
all such Preferred Securities, upon distribution of Junior Subordinated Notes to
the holders of such Preferred Securities, or upon full payment of the amounts
payable upon liquidation of the related Trust. Each Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
holder of the related Preferred Securities must restore payment of any sums paid
with respect to such Preferred Securities or under such Guarantee.
EVENTS OF DEFAULT
An event of default under each Guarantee will occur upon the failure by the
Company to perform any of its payment obligations thereunder. The holders of a
majority in liquidation amount of the Preferred Securities to which any
Guarantee relates have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of such Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under such Guarantee. Any holder of the
related Preferred Securities may institute a legal proceeding directly against
the Company to enforce its rights under such Guarantee without first instituting
a legal proceeding against the Guarantee Trustee or any other
22
person or entity. The holders of a majority in liquidation amount of Preferred
Securities of any series may, by vote, on behalf of the holders of all the
Preferred Securities of such series, waive any past event of default and its
consequences.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of any event of default with
respect to any Guarantee and after the curing or waiving of all events of
default with respect to such Guarantee, undertakes to perform only such duties
as are specifically set forth in such Guarantee and, in case an event of default
has occurred, shall exercise the same degree of care as a prudent individual
would exercise in the conduct of his or her own affairs. Subject to such
provisions, the Guarantee Trustee is under no obligation to exercise any of the
powers vested in it by any Guarantee at the request of any holder of the related
Preferred Securities, unless offered reasonable indemnity against the costs,
expenses and liabilities which might be incurred thereby.
The Chase Manhattan Bank, the Guarantee Trustee, also serves as Property
Trustee, as First Mortgage Bond Trustee, as Senior Note Indenture Trustee and as
Subordinated Note Indenture Trustee. The Company and certain of its affiliates
maintain deposit accounts and banking relationships with The Chase Manhattan
Bank. The Chase Manhattan Bank serves as trustee under other indentures pursuant
to which securities of the Company and affiliates of the Company are
outstanding.
GOVERNING LAW
Each Guarantee will be governed by, and construed in accordance with, the
internal laws of the State of New York.
THE AGREEMENTS AS TO EXPENSES AND LIABILITIES
Pursuant to an Agreement as to Expenses and Liabilities to be entered into
by the Company under each Trust Agreement, the Company will irrevocably and
unconditionally guarantee to each person or entity to whom each Trust becomes
indebted or liable the full payment of any indebtedness, expenses or liabilities
of such Trust, other than obligations of such Trust to pay to the holders of the
related Preferred Securities or other similar interests in such Trust the
amounts due such holders pursuant to the terms of such Preferred Securities or
such other similar interests, as the case may be.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE JUNIOR SUBORDINATED NOTES AND THE GUARANTEES
As long as payments of interest and other payments are made when due on
each series of Junior Subordinated Notes issued to a Trust, such payments will
be sufficient to cover distributions and payments due on the related Trust
Securities of such Trust primarily because (i) the aggregate principal amount of
each series of Junior Subordinated Notes will be equal to the sum of the
aggregate stated liquidation amount of the related Trust Securities; (ii) the
interest rate and interest and other payment dates on each series of Junior
Subordinated Notes will match the distribution rate and distribution and other
payment dates for the related Preferred Securities; (iii) the Company shall pay
for all costs and expenses of each Trust pursuant to the Agreements as to
Expenses and Liabilities; and (iv) each Trust Agreement provides that the
Securities Trustees thereunder shall not cause or permit the Trust to, among
other things, engage in any activity that is not consistent with the purposes of
the Trust.
Payments of distributions (to the extent funds therefor are legally and
immediately available) and other payments due on the Preferred Securities (to
the extent funds therefor are legally and immediately available) will be
guaranteed by the Company as and to the extent set forth under "Description of
the Guarantees." If the Company does not make interest payments on any series of
Junior Subordinated Notes, it is not expected that the related Trust will have
sufficient funds to pay distributions on its Preferred Securities. Each
Guarantee is a guarantee from the time of its issuance, but does not apply to
any payment of distributions
23
unless and until the related Trust has sufficient funds legally and immediately
available for the payment of such distributions.
If the Company fails to make interest or other payments on any series of
Junior Subordinated Notes when due (taking into account any extension period as
described in the applicable Prospectus Supplement), the Trust Agreement provides
a mechanism whereby the holders of the related Preferred Securities may appoint
a substitute Property Trustee. Such holders may also direct the Property Trustee
to enforce its rights under the Junior Subordinated Notes of such series,
including proceeding directly against the Company to enforce such Junior
Subordinated Notes. If the Property Trustee fails to enforce its rights under
any series of Junior Subordinated Notes, to the fullest extent permitted by
applicable law, any holder of related Preferred Securities may institute a legal
proceeding directly against the Company to enforce the Property Trustee's rights
under such series of Junior Subordinated Notes without first instituting any
legal proceeding against the Property Trustee or any other person or entity.
Notwithstanding the foregoing, a holder of Preferred Securities may institute a
legal proceeding directly against the Company, without first instituting a legal
proceeding against the Property Trustee or any other person or entity, for
enforcement of payment to such holder of principal of or interest on Junior
Subordinated Notes of the related series having a principal amount equal to the
aggregate stated liquidation amount of the Preferred Securities of such holder
on or after the due dates specified in the Junior Subordinated Notes of such
series.
If the Company fails to make payments under any Guarantee, such Guarantee
provides a mechanism whereby the holders of the Preferred Securities to which
such Guarantee relates may direct the Guarantee Trustee to enforce its rights
thereunder. In addition, any holder of Preferred Securities may institute a
legal proceeding directly against the Company to enforce the Guarantee Trustee's
rights under the related Guarantee without first instituting a legal proceeding
against the Guarantee Trustee or any other person or entity.
Each Guarantee, the Subordinated Note Indenture, the Junior Subordinated
Notes of the related series, the related Trust Agreement and the related
Agreement as to Expenses and Liabilities, as described above, constitute a full
and unconditional guarantee by the Company of the payments due on the related
series of Preferred Securities.
Upon any voluntary or involuntary dissolution, winding-up or termination of
any Trust, unless Junior Subordinated Notes of the related series are
distributed in connection therewith, the holders of Preferred Securities of such
Trust will be entitled to receive, out of assets legally available for
distribution to holders, a liquidation distribution in cash as described in the
applicable Prospectus Supplement. Upon any voluntary or involuntary liquidation
or bankruptcy of the Company, the Property Trustee, as holder of the related
series of Junior Subordinated Notes, would be a subordinated creditor of the
Company, subordinated in right of payment to all Senior Indebtedness, but
entitled to receive payment in full of principal and interest, before any
stockholders of the Company receive payments or distributions. Because the
Company is guarantor under each Guarantee and has agreed to pay for all costs,
expenses and liabilities of each Trust (other than the Trust's obligations to
holders of the Preferred Securities) pursuant to the related Agreement as to
Expenses and Liabilities, the positions of a holder of Preferred Securities and
a holder of Junior Subordinated Notes of the related series relative to other
creditors and to stockholders of the Company in the event of liquidation or
bankruptcy of the Company would be substantially the same.
A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the Subordinated Note Indenture.
However, in the event of payment defaults under, or acceleration of, Senior
Indebtedness, the subordination provisions of the Junior Subordinated Notes
provide that no payments may be made in respect of the Junior Subordinated Notes
until such Senior Indebtedness has been paid in full or any payment default
thereunder has been cured or waived. Failure to make required payments on the
Junior Subordinated Notes of any series would constitute an Event of Default
under the Subordinated Note Indenture with respect to the Junior Subordinated
Notes of such series except that failure to make interest payments on the Junior
Subordinated Notes of such series will not be an Event of Default during an
extension period as described in the applicable Prospectus Supplement.
24
PLAN OF DISTRIBUTION
The Company may sell the new Bonds, new Stock, Senior Notes and the Junior
Subordinated Notes and the Trusts may sell the Preferred Securities in one or
more of the following ways from time to time: (i) to underwriters for resale to
the public or to institutional investors; (ii) directly to institutional
investors; or (iii) through agents to the public or to institutional investors.
The Prospectus Supplement with respect to each series of new Bonds, new Stock,
Senior Notes, Junior Subordinated Notes or Preferred Securities will set forth
the terms of the offering of such new Bonds, new Stock, Senior Notes, Junior
Subordinated Notes or Preferred Securities, including the name or names of any
underwriters or agents, the purchase price of such new Bonds, new Stock, Senior
Notes, Junior Subordinated Notes or Preferred Securities and the proceeds to the
Company or the applicable Trust from such sale, any underwriting discounts or
agency fees and other items constituting underwriters' or agents' compensation,
any initial public offering price, any discounts or concessions allowed or
reallowed or paid to dealers and any securities exchange on which such new
Bonds, new Stock, Senior Notes, Junior Subordinated Notes or Preferred
Securities may be listed.
If underwriters participate in the sale, such new Bonds, new Stock, Senior
Notes, Junior Subordinated Notes or Preferred 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.
Unless otherwise set forth in the Prospectus Supplement, the obligations of
the underwriters to purchase any series of new Bonds, new Stock, Senior Notes,
Junior Subordinated Notes or Preferred Securities will be subject to certain
conditions precedent and the underwriters will be obligated to purchase all of
such series of new Bonds, new Stock, Senior Notes, Junior Subordinated Notes or
Preferred Securities, if any are purchased.
Underwriters and agents may be entitled under agreements entered into with
the Company and/or the applicable Trust to indemnification against certain civil
liabilities, including liabilities under the 1933 Act. Underwriters and agents
may engage in transactions with, or perform services for, the Company in the
ordinary course of business.
Each series of new Bonds, new Stock, Senior Notes, Junior Subordinated
Notes or Preferred Securities will be a new issue of securities and will have no
established trading market. Any underwriters to whom new Bonds, new Stock,
Senior Notes, Junior Subordinated Notes or Preferred Securities are sold for
public offering and sale may make a market in such new Bonds, new Stock, Senior
Notes, Junior Subordinated Notes or Preferred Securities, but such underwriters
will not be obligated to do so and may discontinue any market making at any time
without notice. The new Bonds, new Stock, Senior Notes, Junior Subordinated
Notes or Preferred Securities may or may not be listed on a national securities
exchange.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the Preferred
Securities will be passed upon on behalf of the Company and the Trusts by
Richards, Layton & Finger, P.A., Wilmington, Delaware, special Delaware counsel
to the Company and the Trusts. The validity of the new Bonds, new Stock, Senior
Notes, Junior Subordinated Notes, Guarantees and certain matters relating
thereto will be passed upon on behalf of the Company by Balch & Bingham LLP,
Birmingham, Alabama, and by Troutman Sanders LLP, Atlanta, Georgia. Certain
legal matters will be passed upon for the underwriters by Dewey Ballantine LLP,
New York, New York.
EXPERTS
The financial statements and schedules of the Company included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2000,
incorporated by reference in this Prospectus, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports with
respect thereto, and are incorporated herein in reliance upon the authority of
said firm as experts in accounting and auditing in giving said reports.
25
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of issuance and distribution, other than
underwriting discounts and commissions, to be borne by the Company are as
follows:
Securities and Exchange Commission registration fee......... $ 225,000
Fees and expenses of trustees and/or Transfer Agent and
Registrar................................................. 40,000
Listing fees of New York Stock Exchange..................... 47,800
Printing and engraving expenses............................. 120,000
Rating Agency fees.......................................... 801,000
Services of Southern Company Services, Inc.................. 150,000
Fees and expenses of counsel................................ 610,000
Blue sky fees and expenses.................................. 25,000
Fees of accountants......................................... 200,000
Miscellaneous expenses...................................... 81,200
----------
Total............................................. $2,300,000*
==========
---------------
* Each Prospectus Supplement will reflect actual expenses of the Company based
upon the amount of the related offering.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Code of Alabama, 1975, Section 10-2B-8.51 and 10-2B-8.56 gives a
corporation power to indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative and whether
formal or informal by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee or agent of
another foreign or domestic corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against expenses (including
attorneys' fees), judgments, penalties, fines and amounts paid in settlement
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in the best
interests of the corporation, when acting in his or her official capacity with
the corporation, or, in all other cases, not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The same Sections also
give a corporation power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, against expenses (including attorneys' fees) reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
the best interests of the corporation, when acting in his or her official
capacity with the corporation or, in all other cases, not opposed to the best
interest of the corporation. No indemnification shall be made, however, in
respect of any claim, issue or matter as to which such person shall have not met
the applicable standard of conduct, shall have been adjudged to be liable to the
corporation or, in connection with any other action, suit or proceeding charging
improper personal benefit to such person, if such person was adjudged liable on
the basis that personal benefit was improperly received by him, unless and only
to the extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
Also, Section 10-2B-8.52 states that, to the extent that a director, officer,
employee or agent of a corporation has been
II-1
successful on the merits or otherwise in defense of any such action, suit or
proceeding, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) reasonably incurred by
him in connection therewith, notwithstanding that he has not been successful on
any other claim, issue or matter in any such action, suit or proceeding.
Article XIII of the By-laws of the Company provides in pertinent part as
follows:
Each person who is or was a director of the corporation, officer of
the corporation or employee of the corporation holding one or more
positions of management and who was or is a party or was or is threatened
to be made a party to any threatened, pending or completed claim, action,
suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director of the
corporation or officer of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee, agent or
trustee of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, shall be indemnified by the corporation
as a matter of right against any and all expenses (including attorneys'
fees) actually and reasonably incurred by him and against any and all
claims, judgments, fines, penalties, liabilities and amounts paid in
settlement actually incurred by him in defense of such claim, action, suit
or proceeding, including appeals, to the full extent permitted by
applicable law. The indemnification provided by this Section shall inure to
the benefit of the heirs, executors and administrators of such person.
Expenses (including attorneys' fees) incurred by a director or officer
of the corporation, or by an employee of the corporation holding one or
more positions of management, with respect to the defense of any such
claim, action, suit or proceeding may be advanced by the corporation prior
to the final disposition of such claim, action, suit or proceeding, as
authorized by the board of directors in the specific case, upon receipt of
an undertaking by or on behalf of such person to repay such amount unless
it shall ultimately be determined that such person is entitled to be
indemnified by the corporation under this Section or otherwise; provided,
however, that the advancement of such expenses shall not be deemed to be
indemnification unless and until it shall ultimately be determined that
such person is entitled to be indemnified by the corporation.
The corporation may purchase and maintain insurance at the expense of
the corporation on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or any person who is or was serving
at the request of the corporation as a director (or the equivalent),
officer, employee, agent or trustee of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, against
any liability or expense (including attorneys' fees) asserted against him
and incurred by him in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to indemnify him
against such liability or expense under this Section or otherwise.
Without limiting the generality of the foregoing provisions of this
Section, no present or future director or officer of the corporation, or
his heirs, executors, or administrators, shall be liable for any act,
omission, step, or conduct taken or had in good faith, which is required,
authorized, or approved by any order or orders issued pursuant to the
Public Utility Holding Company Act of 1935, the Federal Power Act, or any
federal or state statute or municipal ordinance regulating the corporation,
its parent or its subsidiaries by reason of their being holding or
investment companies, public utility companies, public utility holding
companies, or subsidiaries of public utility holding companies. In any
action, suit, or proceeding based on any act, omission, step, or conduct,
as in this paragraph described, the provisions hereof shall be brought to
the attention of the court. In the event that the foregoing provisions of
this paragraph are found by the court not to constitute a valid defense on
the grounds of not being applicable to the particular class of plaintiff,
each such director and officer, and his heirs, executors, and
administrators, shall be reimbursed for, or indemnified against, all
expenses and liabilities incurred by him or imposed on him, in connection
with, or arising out of, any such action, suit, or proceeding based on any
act, omission, step, or conduct taken or had in good faith as in this
paragraph described. Such expenses and liabilities shall include, but shall
not be limited to, judgments, court costs, and attorneys' fees.
II-2
The foregoing rights shall not be exclusive of any other rights to
which any such director or officer may otherwise be entitled and shall be
available whether or not the director or officer continues to be a director
or officer at the time of incurring any such expenses and liabilities.
The Company has an insurance policy covering its liabilities and expenses
which might arise in connection with its lawful indemnification of its directors
and officers for certain of their liabilities and expenses and also covering its
officers and directors against certain other liabilities and expenses.
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER
-------
1.1 -- Form of Underwriting Agreement relating to the new Bonds.*
1.2 -- Form of Underwriting Agreement relating to the new Stock.*
1.3 -- Form of Underwriting Agreement relating to Senior Notes.*
1.4 -- Form of Underwriting Agreement relating to Junior
Subordinated Notes.*
1.5 -- Form of Underwriting Agreement relating to Preferred
Securities.*
4.1 -- First Mortgage Bond Indenture dated as of January 1, 1942,
between Alabama Power Company and the Chase Manhattan Bank,
as Trustee, and indentures supplemental thereto through that
dated as of December 1, 1994. (Designated in Registration
Nos. 2-59843 as Exhibit 2(a)-2, 2-60484 as Exhibits 2(a)-3
and 2(a)-4, 2-60716 as Exhibit 2(c), 2-67574 as Exhibit
2(c), 2-68687 as Exhibit 2(c), 2-69599 as Exhibit 4(a)-2,
2-71364 as Exhibit 4(a)-2, 2-73727 as Exhibit 4(a)-2,
33-5079 as Exhibit 4(a)-2, 33-17083 as Exhibit 4(a)-2,
33-22090 as Exhibit 4(a)-2, in Form 10-K for the year ended
December 31, 1990, File No. 1-3164, as Exhibit 4(c), in
Registration Nos. 33-43917 as Exhibit 4(a)-2, 33-45492 as
Exhibit 4(a)-2, 33-48885 as Exhibit 4(a)-2, 33-48917 as
Exhibit 4(a)-2, in Form 8-K dated January 20, 1993, File No.
1-3164, as Exhibit 4(a)-3, in Form 8-K dated February 17,
1993, File No. 1-3164, as Exhibit 4(a)-3, in Form 8-K dated
March 10, 1993, File No. 1-3164, as Exhibit 4(a)-3, in
Certificate of Notification, File No. 70-8069, as Exhibits A
and B, in Form 8-K dated June 24, 1993, File No. 1-3164, as
Exhibit 4, in Certificate of Notification, File No. 70-8069,
as Exhibit A, in Form 8-K dated November 16, 1993, File No.
1-3164, as Exhibit 4(b), in Certificate of Notification,
File No. 70-8069, as Exhibits A and B, in Certificate of
Notification, File No. 70-8069, as Exhibit A, in Certificate
of Notification, File No. 70-8069, as Exhibit A and in Form
8-K dated November 30, 1994, File No. 1-3164, as Exhibit 4.)
4.2 -- Form of Supplemental Indenture to First Mortgage Bond
Indenture to be used in connection with the issuance of new
Bonds.*
4.3 -- Charter of Alabama Power Company and amendments thereto
through January 10, 2001. (Designated in Registration Nos.
2-59634 as Exhibit 2(b), 2-60209 as Exhibit 2(c), 2-60484 as
Exhibit 2(b), 2-70838 as Exhibit 4(a)-2, 2-85987 as Exhibit
4(a)-2, 33-25539 as Exhibit 4(a)-2, 33-43917 as Exhibit
4(a)-2, in Form 8-K dated February 5, 1992, File No. 1-3164,
as Exhibit 4(b)-3, in Form 8-K dated July 8, 1992, File No.
1-3164, as Exhibit 4(b)-3, in Form 8-K dated October 27,
1993, File No. 1-3164, as Exhibits 4(a) and 4(b), in Form
8-K dated November 16, 1993, File No. 1-3164, as Exhibit
4(a), in Certificate of Notification, File No. 70-8191, as
Exhibit A, in Form 10-K for the year ended December 31,
1997, File No. 1-3164, as Exhibit 3(b)2, in Form 8-K dated
August 10, 1998, File No. 1-3164, as Exhibit 4.4 and in Form
10-K for the year ended December 31, 2000, File No. 1-3164,
as Exhibit 3(b)2.)
4.4 -- Form of proposed Certificate of Resolutions of Board of
Directors of Alabama Power Company establishing the new Stock.*
4.5 -- By-laws of Alabama Power Company as amended effective April
26, 2001, and presently in effect.
II-3
EXHIBIT
NUMBER
-------
4.6 -- Senior Note Indenture dated as of December 1, 1997 between
Alabama Power Company and The Chase Manhattan Bank, as
Trustee, and indentures supplemental thereto through that
dated August 29, 2001. (Designated in Form 8-K dated
December 4, 1997, File No. 1-3164, as Exhibits 4.1 and 4.2,
in Form 8-K dated February 20, 1998, File No. 1-3164, as
Exhibit 4.2, in Form 8-K dated April 17, 1998, File No.
1-3164, as Exhibit 4.2, in Form 8-K dated August 11, 1998,
File No. 1-3164, as Exhibit 4.2, in Form 8-K dated September
8, 1998, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated
September 16, 1998, File No. 1-3164, as Exhibit 4.2, in Form
8-K dated October 7, 1998, File No. 1-3164, as Exhibit 4.2,
in Form 8-K dated October 28, 1998, File No. 1-3164, as
Exhibit 4.2, in Form 8-K dated November 12, 1998, File No.
1-3164, as Exhibit 4.2, in Form 8-K dated May 19, 1999, File
No. 1-3164, as Exhibit 4.2, in Form 8-K dated August 13,
1999, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated
September 21, 1999, File No. 1-3164, as Exhibit 4.2, in Form
8-K dated May 11, 2000, File No. 1-3164, as Exhibit 4.2 and
in Form 8-K dated August 22, 2001, File No. 1-3164, as
Exhibits 4.2(a) and 4.2(b).)
4.7 -- Form of Supplemental Indenture to Senior Note Indenture to be
used in connection with the issuance of Senior Notes.*
4.8 -- Subordinated Note Indenture dated as of January 1, 1997
between Alabama Power Company and The Chase Manhattan Bank,
as Trustee and indentures supplemental thereto through that
dated as of February 25, 1999. (Designated in the Company's
Current Report on Form 8-K dated January 9, 1997 as Exhibits
4.1 and 4.2. and in Form 8-K dated February 18, 1999, File
No. 3164, as Exhibit 4.2.)
4.9 -- Form of Supplemental Indenture to Subordinated Note Indenture
to be used in connection with the issuance of Junior Subordinated
Notes.*
4.10-A -- Certificate of Trust of Alabama Power Capital Trust IV.
(Designated in Registration No. 333-17333 as Exhibit 4.3-C.)
4.10-B -- Certificate of Trust of Alabama Power Capital Trust
V.(Designated in Registration No. 333-40629 as Exhibit
4.5-C.)
4.11-A -- Trust Agreement of Alabama Power Capital Trust IV.
(Designated in Registration No. 333-17333 as Exhibit 4.4-C.)
4.11-B -- Trust Agreement of Alabama Power Capital Trust V.(Designated
in Registration No. 333-40629 as Exhibit 4.6-C.)
4.12-A -- Form of Amended and Restated Trust Agreement of Alabama
Power Capital Trust IV. (Designated in Registration No.
333-17333 as Exhibit 4.5-C.)
4.12-B -- Form of Amended and Restated Trust Agreement of Alabama Power
Capital Trust V.(Designated in Registration No.
333-40629 as Exhibit 4.7-C.)
4.13-A -- Form of Preferred Security of Alabama Power Capital Trust IV
(included in Exhibit 4.7-B above).
4.13-B -- Form of Preferred Security of Alabama Power Capital Trust V
(included in Exhibit 4.7-C above).
4.14 -- Form of Senior Note (included in Exhibit 4.7 above).
4.15 -- Form of Junior Subordinated Note (included in Exhibit 4.9
above).
4.16-A -- Form of Guarantee relating to Alabama Power Capital Trust
IV. (Designated in Registration No. 333-17333 as Exhibit
4.8-C.)
4.16-B -- Form of Guarantee relating to Alabama Power Capital Trust
V.(Designated in Registration No. 333-40629 as Exhibit
4.11-C.)
4.17-A -- Form of Agreement as to Expenses and Liabilities relating to
Alabama Power Capital Trust IV (included in Exhibit 4.7-B above).
4.17-B -- Form of Agreement as to Expenses and Liabilities relating to
Alabama Power Capital Trust V (included in Exhibit 4.7-C above).
5.1 -- Opinion of Balch & Bingham LLP.
5.2-A -- Opinion of Richards, Layton & Finger, P.A. relating to
Alabama Power Capital Trust IV.
5.2-B -- Opinion of Richards, Layton & Finger, P.A. relating to
Alabama Power Capital Trust V.
12.1 -- Computation of ratio of earnings to fixed charges.
II-4
EXHIBIT
NUMBER
-------
12.2 -- Computation of ratio of earnings to fixed charges plus
preferred dividend requirements (pre-income tax basis).
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of Balch & Bingham LLP (included in Exhibit 5.1
above).
23.3 -- Consent of Richards, Layton & Finger, P.A. (included in
Exhibits 5.2-A and 5.2-B above).
24.1 -- Powers of Attorney and Resolution.
25.1 -- Statement of Eligibility under Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as First Mortgage Bond
Indenture Trustee.
25.2 -- Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Chase Manhattan Bank, as Senior Note
Indenture Trustee.
25.3 -- Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Chase Manhattan Bank, as Subordinated
Note Indenture Trustee.
25.4 -- Statement of Eligibility under Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Property Trustee,
relating to Alabama Power Capital Trust IV.
25.5 -- Statement of Eligibility under Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Guarantee Trustee,
relating to Alabama Power Capital Trust IV.
25.6 -- Statement of Eligibility under Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Property Trustee,
relating to Alabama Power Capital Trust V.
25.7 -- Statement of Eligibility under Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Guarantee Trustee,
relating to Alabama Power Capital Trust V.
Exhibits listed above which have heretofore been filed with the Commission
and which were designated as noted above are hereby incorporated herein by
reference and made a part hereof with the same effect as if filed herewith.
---------------
* To be subsequently filed or incorporated by reference.
ITEM 17. UNDERTAKINGS.
(a) Undertaking related to Rule 415 offering:
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act 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% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
(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;
II-5
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, S-8 or F-3 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrants
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 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) Undertaking related to filings incorporating subsequent Securities
Exchange Act of 1934 documents by reference:
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Company's annual report pursuant to Section 13(a) or 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
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.
(c) Undertaking related to acceleration of effectiveness:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrants pursuant to the foregoing provisions
or otherwise, the registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act 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 registrants 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
registrants will, unless in the opinion of their 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.
(d) The undersigned registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrants pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus 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.
II-6
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, ALABAMA POWER
COMPANY 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 BIRMINGHAM, STATE OF ALABAMA, ON THE 5TH DAY OF
NOVEMBER, 2001.
ALABAMA POWER COMPANY
By: CHARLES D. MCCRARY,
President and Chief Executive
Officer
By: WAYNE BOSTON,
Attorney-in-fact
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING DIRECTORS AND OFFICERS
OF ALABAMA POWER COMPANY IN THE CAPACITIES AND ON THE DATE INDICATED.
SIGNATURE TITLE DATE
--------- ----- ----
CHARLES D. MCCRARY President, Chief Executive
Officer and Director
(Principal Executive
Officer)
WILLIAM B. HUTCHINS, III Executive Vice President,
Chief Financial Officer
and Treasurer (Principal
Financial Officer)
ART P. BEATTIE Vice President and
Comptroller (Principal
Accounting Officer)
WHIT ARMSTRONG
DAVID J. COOPER
H. ALLEN FRANKLIN
ELMER B. HARRIS
R. KENT HENSLEE
CARL E. JONES, JR.
JAMES K. LOWDER
WALLACE D. MALONE, JR. Directors
THOMAS C. MEREDITH
MAYER MITCHELL
WILLIAM V. MUSE
ROBERT D. POWERS
JAMES H. SANFORD
JOHN COX WEBB, IV
JAMES W. WRIGHT
By WAYNE BOSTON November 5, 2001
(WAYNE BOSTON, ATTORNEY-IN-FACT)
II-7
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, ALABAMA POWER
CAPITAL TRUST IV 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 BIRMINGHAM, STATE OF ALABAMA, ON THE 5TH DAY OF
NOVEMBER, 2001.
ALABAMA POWER CAPITAL TRUST IV
By: ALABAMA POWER COMPANY,
Depositor
By: WAYNE BOSTON,
Assistant Secretary
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, ALABAMA POWER
CAPITAL TRUST V 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 BIRMINGHAM, STATE OF ALABAMA, ON THE 5TH DAY OF
NOVEMBER, 2001.
ALABAMA POWER CAPITAL TRUST V
By: ALABAMA POWER COMPANY,
Depositor
By: WAYNE BOSTON,
Assistant Secretary
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