-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GeKE0oMfSiS5dKAAS0J23KRjGZVxtQivb5PrVayOV1fU6pOEDe2A6WYqOF77GxF8 BmTpeP0am81XEpx3PzC9Hg== 0000043704-95-000034.txt : 19951119 0000043704-95-000034.hdr.sgml : 19951119 ACCESSION NUMBER: 0000043704-95-000034 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREEN MOUNTAIN POWER CORP CENTRAL INDEX KEY: 0000043704 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 030127430 STATE OF INCORPORATION: VT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08291 FILM NUMBER: 95589885 BUSINESS ADDRESS: STREET 1: 25 GREEN MOUNTAIN DR STREET 2: P.O.BOX 850 CITY: SOUTH BURLINGTON STATE: VT ZIP: 05402-0850 BUSINESS PHONE: 8028645731 MAIL ADDRESS: STREET 1: 25 GREEN MOUNTAIN DR STREET 2: P O BOX 850 CITY: SOUTH BURLINGTON STATE: VT ZIP: 05402-0850 10-Q 1 FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1995 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q X Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 1995 or Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number 1-8291 GREEN MOUNTAIN POWER CORPORATION (Exact name of registrant as specified in its charter) Vermont 03-0127430 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 25 Green Mountain Drive South Burlington, VT 05402 Address of principal executive offices (Zip Code) Registrant's telephone number, including area code (802) 864-5731 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class - Common Stock Outstanding September 30, 1995 $3.33 1/3 Par Value 4,792,715 GREEN MOUNTAIN POWER CORPORATION Consolidated Comparative Balance Sheets (Unaudited) Part 1 - Item 1
September 30 December 31 ----------------------------------- ---------------- 1995 1994 1994 ---------------- ---------------- ---------------- (In thousands) (In thousands) ASSETS ELECTRIC UTILITY Utility Plant Utility plant, at original cost.................... $234,597 $223,992 $227,991 Less accumulated depreciation...................... 74,542 69,282 69,246 ---------------- ---------------- ---------------- Net utility plant................................ 160,055 154,710 158,745 Property under capital lease....................... 10,278 11,029 10,278 Construction work in progress...................... 8,658 8,807 6,964 ---------------- ---------------- ---------------- Total utility plant, net......................... 178,991 174,546 175,987 ---------------- ---------------- ---------------- Other Investments Associated companies, at equity (Note 2)........... 16,216 16,700 16,684 Other investments.................................. 4,078 3,957 4,067 ---------------- ---------------- ---------------- Total other investments.......................... 20,294 20,657 20,751 ---------------- ---------------- ---------------- Current Assets Cash............................................... 60 70 2,113 Accounts receivable, customers and others, less allowance for doubtful accounts............. 16,387 10,875 15,240 Accrued utility revenues (Note 1).................. 4,651 4,640 6,012 Fuel, materials and supplies, at average cost...... 3,599 3,286 3,314 Prepayments........................................ 1,418 1,811 1,796 Other.............................................. 249 1,014 323 ---------------- ---------------- ---------------- Total current assets............................. 26,364 21,696 28,798 ---------------- ---------------- ---------------- Deferred Charges Demand side management programs................... 15,731 15,009 16,172 Environmental proceedings costs.................... 7,747 7,637 7,741 Purchased power costs.............................. 1,682 903 488 Other.............................................. 11,482 11,211 11,258 ---------------- ---------------- ---------------- Total deferred charges........................... 36,642 34,760 35,659 ---------------- ---------------- ---------------- NON-UTILITY Cash and cash equivalents.......................... 1,977 703 579 Other current assets............................... 2,358 4,705 5,716 Property and equipment............................. 11,354 11,090 11,329 Intangible assets.................................. 2,735 3,141 3,022 Other assets....................................... 18,198 12,978 12,770 ---------------- ---------------- ---------------- Total non-utility assets......................... 36,622 32,617 33,416 ---------------- ---------------- ---------------- Total Assets........................................... $298,913 $284,276 $294,611 ================ ================ ================ CAPITALIZATION AND LIABILITIES ELECTRIC UTILITY Capitalization Common Stock Equity Common stock,$3.33 1/3 par value, authorized 10,000,000 shares (issued 4,808,571, 4,640,671, and 4,677,512).......... $16,028 $15,469 $15,592 Additional paid-in capital....................... 63,204 59,575 60,378 Retained earnings................................ 25,937 25,306 25,727 Treasury stock, at cost (15,856 shares).......... (378) (378) (378) ---------------- ---------------- ---------------- Total common stock equity...................... 104,791 99,972 101,319 Redeemable cumulative preferred stock.............. 9,135 9,385 9,135 Long-term debt, less current maturities............ 67,134 78,000 74,967 ---------------- ---------------- ---------------- Total capitalization........................... 181,060 187,357 185,421 ---------------- ---------------- ---------------- Capital Lease Obligation............................... 10,278 11,029 10,278 ---------------- ---------------- ---------------- Current Liabilities Current maturuties of long-term debt............... 7,833 1,800 4,833 Short-term debt.................................... 23,016 12,815 20,214 Accounts payable, trade and accrued liabilities.... 4,669 4,691 5,489 Accounts payable to associated companies........... 4,537 4,012 4,860 Dividends declared................................. 198 199 194 Customer deposits.................................. 694 1,112 964 Taxes accrued...................................... 1,180 3,248 1,442 Interest accrued................................... 1,657 1,818 1,953 Other.............................................. 937 491 492 ---------------- ---------------- ---------------- Total current liabilities...................... 44,721 30,186 40,441 ---------------- ---------------- ---------------- Deferred Credits Accumulated deferred income taxes.................. 23,218 19,328 22,082 Unamortized investment tax credits................. 5,185 5,473 5,390 Other.............................................. 22,242 22,413 21,962 ---------------- ---------------- ---------------- Total deferred credits......................... 50,645 47,214 49,434 ---------------- ---------------- ---------------- NON-UTILITY Current liabilities................................ 896 648 918 Other liabilities.................................. 11,313 7,842 8,119 ---------------- ---------------- ---------------- Total non-utility liabilities.................. 12,209 8,490 9,037 ---------------- ---------------- ---------------- Total Capitalization and Liabilities................... $298,913 $284,276 $294,611 ================ ================ ================ The accompanying notes are an integral part of the consolidated financial statements.
GREEN MOUNTAIN POWER CORPORATION Consolidated Comparative Income Statements (Unaudited) Part 1 - Item 1
Three Months Ended Nine Months Ended September 30 September 30 ------------------------------- ------------------------------- 1995 1994 1995 1994 ------------ ------------ ------------ ------------ (In thousands, except amounts per share) Operating Revenues (Note 1)................................... $39,781 $36,684 $116,931 $110,898 ------------ ------------ ------------ ------------ Operating Expenses Power Supply Vermont Yankee Nuclear Power Corporation................. 7,263 7,419 22,065 21,861 Company-owned generation................................. 1,297 782 3,328 2,619 Purchases from others.................................... 12,548 11,340 36,850 35,210 Other operating............................................. 4,323 4,250 13,596 13,699 Transmission................................................ 2,528 2,683 7,440 7,884 Maintenance................................................. 1,074 963 3,158 3,475 Depreciation and amortization............................... 3,848 3,070 10,257 7,619 Taxes other than income..................................... 1,609 1,542 4,844 4,789 Income taxes................................................ 1,465 1,392 4,315 3,734 ------------ ------------ ------------ ------------ Total operating expenses................................. 35,955 33,441 105,853 100,890 ------------ ------------ ------------ ------------ Operating Income....................................... 3,826 3,243 11,078 10,008 ------------ ------------ ------------ ------------ Other Income Equity in earnings of affiliates and non-utility operations. 1,153 1,054 2,693 2,745 Allowance for equity funds used during construction......... -- 47 27 258 Other income and deductions, net............................ (2) 92 54 282 ------------ ------------ ------------ ------------ Total other income........................................ 1,151 1,193 2,774 3,285 ------------ ------------ ------------ ------------ Income before interest charges.......................... 4,977 4,436 13,852 13,293 ------------ ------------ ------------ ------------ Interest Charges Long-term debt.............................................. 1,580 1,694 4,924 5,174 Other....................................................... 414 188 1,065 581 Allowance for borrowed funds used during construction....... (88) (99) (427) (392) ------------ ------------ ------------ ------------ Total interest charges.................................... 1,906 1,783 5,562 5,363 ------------ ------------ ------------ ------------ Net Income.................................................... 3,071 2,653 8,290 7,930 Dividends on preferred stock.................................. 194 199 582 597 ------------ ------------ ------------ ------------ Net Income Applicable to Common Stock......................... $2,877 $2,454 $7,708 $7,333 ============ ============ ============ ============ Common Stock Data Earnings per share.......................................... $0.60 $0.54 $1.63 $1.61 Cash dividends declared per share........................... $0.53 $0.53 $1.59 $1.59 Weighted average shares outstanding......................... 4,771 4,605 4,724 4,569 Consolidated Comparative Statements of Retained Earnings (Unaudited) Balance - beginning of period................................. $25,584 $25,289 $25,727 $25,229 Net Income.................................................... 3,071 2,653 8,290 7,930 ------------ ------------ ------------ ------------ 28,655 27,942 34,017 33,159 ------------ ------------ ------------ ------------ Cash Dividends - redeemable cumulative preferred stock........ 194 199 582 597 - common stock................................. 2,524 2,437 7,498 7,256 ------------ ------------ ------------ ------------ 2,718 2,636 8,080 7,853 ------------ ------------ ------------ ------------ Balance - end of period....................................... $25,937 $25,306 $25,937 $25,306 ============ ============ ============ ============ The accompanying notes are an integral part of the consolidated financial statements.
GREEN MOUNTAIN POWER CORPORATION Consolidated Statements of Cash Flows (Unaudited) Part 1 - Item 1
Nine Months Ended September 30 --------------------------------------- 1995 1994 ----------------- ----------------- (In thousands) Operating Activities: Net Income........................................................... $8,290 $7,930 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization.................................... 10,257 7,619 Dividends from associated companies less equity income........... 468 186 Allowance for funds used during construction..................... (453) (651) Amortization of purchased power costs............................ 4,328 3,311 Deferred income taxes............................................ 1,546 (1,316) Deferred revenues................................................ 303 (700) Amortization of gain on sale of property......................... (40) (40) Deferred purchased power costs................................... (5,522) (80) Amortization of investment tax credits........................... (205) (200) Environmental proceedings costs, net............................. (837) 7,438 Changes in: Accounts receivable............................................ (1,147) 3,939 Accrued utility revenues....................................... 1,361 798 Fuel, materials and supplies................................... (285) (445) Prepayments and other current assets........................... 3,809 (979) Accounts payable............................................... (1,142) (3,973) Taxes accrued.................................................. (261) 2,851 Interest accrued............................................... (296) (252) Other current liabilities...................................... (147) (183) Other............................................................ 484 2,507 ----------------- ----------------- Net cash provided by operating activities.......................... 20,511 27,760 ----------------- ----------------- Investing Activities: Construction expenditures.......................................... (9,524) (9,075) Conservation expenditures.......................................... (2,423) (3,465) Investment in nonutility property.................................. (4,287) (1,566) ----------------- ----------------- Net cash used in investing activities............................ (16,234) (14,106) ----------------- ----------------- Financing Activities: Issuance of common stock........................................... 3,262 2,746 Issuance of long-term debt......................................... 1,916 -- Short-term debt, net............................................... 2,802 (6,201) Cash dividends..................................................... (8,080) (7,853) Reduction in long-term debt........................................ (4,833) (1,800) ----------------- ----------------- Net cash used in financing activities............................ (4,933) (13,108) ----------------- ----------------- Net increase (decrease) in cash and cash equivalents............... (656) 546 Cash and cash equivalents at beginning of period................... 2,693 227 ----------------- ----------------- Cash and Cash Equivalents at End of Period............................. $2,037 $773 ================= ================= Supplemental Disclosure of Cash Flow Information: Cash paid year-to-date for: Interest (net of amounts capitalized)........................... $6,180 $5,904 Income taxes.................................................... 2,949 2,240 The accompanying notes are an integral part of the consolidated financial statements.
GREEN MOUNTAIN POWER CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1995 Part 1 -- ITEM 1 1. SIGNIFICANT ACCOUNTING POLICIES Pursuant to an order of the Vermont Public Service Board (VPSB), the Company's rate structure is seasonally differentiated, with higher rates billed during the four winter months and lower rates billed during the remaining eight months of the year. In order to match revenues with related costs more accurately on an interim basis, the Company recognizes revenue in a manner that seeks to eliminate the impact of such seasonally differentiated rates. At both September 30, 1995 and 1994, the Company had recorded deferred revenues of $700,000, in accordance with this policy. This deferred asset is recognized as an expense in subsequent interim periods. Included in equity in earnings of affiliates and non-utility operations in the Other Income section of the Consolidated Comparative Income Statements are the results of operations of the Company's rental water heater program, which is not regulated by the VPSB, and four of the Company's wholly-owned subsidiaries, Green Mountain Propane Gas Company, Mountain Energy, Inc., GMP Real Estate Corporation, and Lease-Elec, Inc. (also unregulated). Summarized financial information for the rental water heater program and such wholly-owned subsidiaries is as follows: Three Months Ended Nine Months Ended September 30 September 30 --------------------- -------------------- 1995 1994 1995 1994 ---- ---- ---- ---- (In Thousands) (In Thousands) Revenue . . . . $2,938 $2,695 $8,562 $9,315 Expenses . . . . 2,310 2,155 7,393 8,112 ------ ------ ------ ------ Net Income . . . $ 628 $ 540 $1,169 $1,203 ====== ====== ====== ====== 2. INVESTMENT IN ASSOCIATED COMPANIES The Company accounts for its investment in the companies listed below using the equity method. Summarized financial information is as follows: Three Months Ended Nine Months Ended September 30 September 30 ------------------ ----------------- (In Thousands) 1995 1994 1995 1994 ---- ---- ---- ---- Vermont Yankee Nuclear Power Corporation Gross Revenue . . . . $38,350 $39,176 $136,768 $115,438 Net Income Applicable to Common Stock . . 1,647 1,642 5,121 4,920 Company's Equity in Net Income . . . . . 299 297 887 884 Vermont Electric Power Company, Inc. Gross Revenue . . . . $12,259 $12,837 $37,091 $35,883 Net Income Before Dividends . . 302 301 950 985 Company's Equity in Net Income (Includes preferred equity) .. 91 95 283 294 3. ENVIRONMENTAL MATTERS In 1982, the United States Environmental Protection Agency (EPA) notified the Company that the EPA, pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), was considering spending public funds to investigate and take corrective action involving claimed releases of allegedly hazardous substances at a site identified as the Pine Street Marsh in Burlington, Vermont. On part of this site was located a manufactured-gas facility owned and operated by a number of separate enterprises, including the Company, from the late 19th century to 1967. In its notice, the EPA stated that the Company may be a "potentially responsible party" (PRP) under CERCLA from which reimbursement of costs of investigation and of corrective action may be sought. On February 23, 1988, the Company received a Special Notice letter from the EPA stating that the letter constituted a formal demand for reimbursement of costs, including interest thereon, that were incurred and were expected to be incurred in response to the environmental problems at the site. On December 5, 1988, the EPA brought suit against the Company, New England Electric System, and Vermont Gas Systems, Inc. in the United States District Court for the District of Vermont seeking reimbursement for costs it incurred in conducting activities in 1985 to remove allegedly hazardous substances from the site, and requested a declaratory judgment that the Company and the other defendants are liable for all costs that have been incurred since the removal and that continue to be incurred in responding to claims of releases or threatened releases from the Maltex Pond Area -- the portion of the site where the removal action occurred. The complaint specifically alleged that the EPA expended at least $741,000 during the 1985 removal action and sought interest on this amount from the date the funds were expended and costs of litigation, including attorneys' fees. The Company entered a cross-claim against New England Electric System and third-party claims against UGI Corporation, Southern Union Corporation, the State of Vermont, and an individual property owner at the site for recovery of its response costs and for contribution. Fourth-party defendants subsequently were joined. In July 1990, the Company and other parties signed a proposed Consent Decree settling the removal action litigation. All 14 settling defendants contributed to the aggregate settlement amount of $945,000. Individual contributions were treated as confidential under the proposed Consent Decree. On December 26, 1990, upon the unopposed motion of the United States, the Consent Decree was entered by the Court. During the summer and fall of 1989, the EPA conducted the initial phase of a Remedial Investigation (RI) and commenced a Feasibility Study (FS) relating to the site. In the fall of 1990 and in 1991, the EPA conducted a second phase of RI work and studied the treatability of soils and groundwater at the site. In the fall of 1991, the EPA responded favorably to a request from the Company and other PRPs to participate in informal discussions on the EPA's ongoing investigation and evaluation of the site, and invited the Company and other interested parties to share technical information and resources with the EPA that might assist it in evaluating remedial options. On November 6, 1992, the EPA released its final RI/FS and announced a proposed remedy with an estimated total cost of approximately $47.0 million net present value, including 30 years' operation and maintenance costs, having an estimated net present value of approximately $26.4 million. The EPA's preferred remedy called for construction of a Containment/Disposal Facility (CDF) over a portion of the site. The CDF would have consisted of a large diked structure containing treated sediments and soils, subsurface vertical barriers and a low permeability cap, with collection trenches and hydraulic control system to capture groundwater and prevent its migration outside the area of the CDF. Collected groundwater would have been treated and discharged or stored and disposed of off-site. The proposed remedy also would have required a long-term monitoring program and construction of new wetlands to replace those that would be destroyed by construction of the CDF. In May 1993, the Company and other PRPs submitted extensive comments to the EPA opposing the proposed remedy. In response to an earlier request from the EPA, the PRP group also submitted a detailed analysis of an alternative remedy anticipated to cost approximately $20 million. In early June 1993, in response to overwhelming negative comment, the EPA withdrew its proposed remedy and announced that it would work with all interested parties in developing a new proposal. Since then, the EPA has established a coordinating council, with representatives of PRPs, environmental groups, neighboring businesses and government agencies, and presided over by a neutral facilitator. The council is charged with determining what additional studies may be appropriate for the site and also is beginning to address remedy selection issues. In July 1994, the Company, New England Electric System (NEES), and Vermont Gas Systems, Inc. (VGS), entered into an Administrative Order by Consent with the EPA, pursuant to which these PRPs conducted certain additional studies agreed to by the coordinating council. These studies constituted the first phase of action the council decided on to fill data gaps at the site. A second phase, including tasks carried over from the first phase, additional field studies and preparation of an addendum feasibility study are being performed by the Company and NEES under a second Order. The EPA has not required reimbursement for its past RI/FS study costs as a condition to allowing the PRPs to conduct these additional studies. The EPA has previously advised the Company that ultimately it will seek to hold the Company and the PRPs liable for such costs. On December 1, 1994, the Company, NEES and VGS entered into a confidential agreement with the State, the City of Burlington and nearly all other landowner PRPs under which the liability of those landowner PRPs for future Superfund response costs would be limited and specified. On December 1, 1994, the Company entered into a confidential agreement with VGS compromising contribution and cost recovery claims of each party and contractual indemnity claims of the Company arising from the 1964 sale of the manufactured gas plant to VGS, and also entered into a confidential agreement with NEES for funding of work under the second Order. In December 1991, the Company brought suit against several previous insurers seeking recovery of unrecovered past costs and indemnity against future liabilities associated with environmental problems at the site. Discovery in the case is largely complete, with the exception of expert discovery which was stayed by the magistrate pending the resolution of Summary Judgment Motions filed by the Company. In August 1994, the Magistrate granted the Company's Motion for Summary Judgment with respect to defense costs against one defendant and denied it against another defendant. The United States District Judge affirmed those orders on September 30, 1994. The Company has reached confidential settlements with two of the defendants in its insurance litigation. One of these defendants provided the Company with comprehensive general liability insurance between 1976 and 1982, and with environmental impairment liability insurance from 1981 to 1984. The defendant's policies were in place in 1982 when the EPA first notified the Company that it might be a potentially responsible party at the Pine Street Marsh site. The other defendant provided the Company with second layer excess liability coverage for a seven-month period in 1976. The Company has deferred amounts received from third parties pending resolution of the Company's ultimate liability with respect to the site and rate recognition of that liability. The Company is unable to predict at this time the magnitude of any liability resulting from potential claims for the costs of the RI/FS or the performance of any remedial action, or the likely disposition or magnitude of claims the Company may have against others, including its insurers, except to the extent described above. Through rate cases filed in 1991 and 1993, the Company has sought and received recovery for ongoing expenses associated with the Pine Street Marsh site. Specifically, the Company proposed rate recognition of its unrecovered expenditures between January 1991 and July 31, 1993 (in the total of approximately $4.6 million) for technical consultants and legal assistance in connection with the EPA's enforcement actions at the site and insurance litigation. While reserving the right to argue in the future about the appropriateness of rate recovery for Pine Street Marsh related costs, the Company and the Vermont Department of Public Service (the Department) reached agreements in both cases that the full amount of Pine Street Marsh costs reflected in those rate cases should be recovered in rates. The Company's rates approved by the VPSB on April 2, 1992 and on May 13, 1994 reflected the Pine Street Marsh related expenditures referred to above. In a rate case filed on September 26, 1994, the Company sought recovery in rates of approximately $2.7 million in expenses associated with the Pine Street site. This amount represented the Company's unrecovered expenditures between August 1993 and June 1994 for technical consultants and legal assistance in connection with EPA's enforcement action at the site and insurance litigation. While reserving the right to argue in the future about the appropriateness of rate recovery for Pine Street related costs (and whether recovery or non-recovery of past costs and any insurance proceeds is relevant to such issue), the parties to the case reached agreement that the full amount of Pine Street costs reflected in the Company's 1994 rate case should be recovered in rates. This agreement was approved by the VPSB in an order issued June 9, 1995. Management expects to seek and (assuming treatment consistent with the previous regulatory treatment set forth above) receive ratemaking treatment for unreimbursed costs incurred beyond the amounts for which ratemaking treatment has been received. As of September 30, 1995, such amounts are approximately $1.7 million. 4. 1995 RETAIL RATE CASE On September 15, 1995, the Company filed a request with the VPSB to increase retail rates by 12.7 percent. The increase is needed to cover higher power supply costs, to support additional investment in plant and equipment, to fund expenses associated with the Pine Street site and to cover higher costs of capital. 5. 1994 RETAIL RATE CASE On September 26, 1994, the Company filed a request with the VPSB to increase retail rates by 13.9 percent. The increase was needed primarily to cover the rising cost of existing power sources, the cost of new power sources the Company has secured to replace power supply that will be lost in the near future, and the cost of energy efficiency programs the Company has implemented for its customers. The Company, the Department and the other parties reached a settlement agreement providing for a 9.25 percent retail rate increase effective June 15, 1995, and a target return on equity for utility operations of 11.25 percent. The agreement was approved by the VPSB on June 9, 1995. Although the 9.25 percent rate increase was effective in June, certain of the higher power costs, which the increased rates were intended to recover, will not be incurred until the fourth quarter of 1995. As a result, the Company has elected to defer $1.0 million of revenue which was billed to customers in the third quarter of 1995. This deferred revenue will be recognized in the fourth quarter of 1995 when the contractually scheduled increase in power costs begins. 6. 1993 RETAIL RATE CASE On October 1, 1993, the Company filed a request with the VPSB to increase retail rates by 8.6 percent. The increase was needed primarily to cover the cost of buying power from independent power producers, the cost of energy conservation programs, the cost of plant additions made in the past two years, and costs incurred in 1992 and 1993 associated with the Company's response to the EPA's RI/FS and proposed remedy at the Pine Street Marsh site and with the Company's litigation against its previous insurers seeking recovery of past costs incurred and indemnity against future liabilities in connection with the site. On January 28, 1994, the Company and the other parties in the proceeding reached a settlement agreement providing for a 2.9 percent retail rate increase effective June 15, 1994, and a target return on equity for utility operations of 10.5 percent. The settlement agreement also provided for the Company's recovery in rates of $4.2 million in costs associated with the Pine Street Marsh site, as described herein above. The agreement was approved by the VPSB on May 13, 1994. 7. 1991 RETAIL RATE CASE On July 19, 1991, the Company filed a request with the VPSB to increase retail rates by 9.96 percent to cover power supply cost increases expected in 1992, the costs of upgrading and maintaining the Company's generation, transmission and distribution facilities; expenditures associated with the Company's conservation programs; and higher employee pension and health care costs. In orders dated April 2, 1992 and May 21, 1992, the VPSB approved an increase of 5.6 percent, or approximately $6.6 million, effective April 2, 1992. The Department appealed the VPSB orders challenging, among other rulings, the VPSB's acceptance of the Company's method of treating accumulated depreciation and certain Vermont Yankee-related power costs. The Company filed a cross-appeal contending, among other things, that the VPSB had erred in reducing ratebase relating to certain demand-side management (DSM) program cost projections that had been made in the Company's prior rate case. On April 22, 1994, the Vermont Supreme Court affirmed in part and reversed in part the VPSB orders. The Court overturned the VPSB's decision disallowing certain DSM costs. The impact of this portion of the Court's ruling resulted in the Company's other income since April 1992 being increased by $162,000. On the other hand, the Court overturned the VPSB decision in the Company's favor on an issue involving the method of treating accumulated depreciation, and on the inclusion of one item of Vermont Yankee's capital projections in power costs. The overall impact of the Court's ruling resulted in a reduction of $840,000 in the Company's revenues. The impact of this ruling was recognized in the first quarter of 1994. 8. RECLASSIFICATION Certain line items on the prior year balance sheet have been reclassified for consistent presentation with the current year. The Consolidated Financial Statements are unaudited and, in the opinion of the Company, reflect the adjustments necessary to a fair statement of the results of the interim periods. All such adjustments, except as specifically noted in the Consolidated Financial Statements, are of a normal, recurring nature. GREEN MOUNTAIN POWER CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SEPTEMBER 30, 1995 Part 1 -- ITEM 2 RESULTS OF OPERATIONS Earnings Summary Earnings per share of common stock in the third quarter of 1995 were $0.60 compared to $0.54 in the third quarter of 1994. The increase in earnings was primarily due to an increase in consumption by the Company's commercial and industrial customers and a 9.25 percent retail rate increase that went into effect June 15, 1995. For the nine months ended September 30, 1995 and 1994, earnings were $1.63 and $1.61, respectively. Operating Revenues and MWh Sales Operating revenues, megawatthour (MWh) sales and average number of customers are summarized as follows: Three Months Ended Nine Months Ended September 30 September 30 ------------------ ----------------- 1995 1994 1995 1994 ---- ---- ---- ---- Operating Revenues (In thousands) Retail . . . . . $ 34,400 $ 31,771 $ 101,694 $ 97,903 Sales for Resale . 4,762 4,234 12,780 10,504 Other . . . . . . 619 679 2,457 2,491 -------- -------- ---------- ---------- Total Operating Revenues . . . . . $ 39,781 $ 36,684 $ 116,931 $ 110,898 ======== ======== ========== ========== MWh Sales Retail . .. . . . 418,522 402,725 1,277,465 1,268,776 Sales for Resale . 192,502 129,601 446,268 295,699 ------- ------- --------- --------- Total MWh Sales. 611,024 532,326 1,723,733 1,564,475 ======= ======= ========= ========= Average Number of Customers Residential . . . 69,710 68,851 69,572 68,683 Commercial & Industrial . . . . 11,759 11,645 11,717 11,630 Other . . . . . . 74 79 76 75 ------ ------ ------ ------ Total Customers . 81,543 80,575 81,365 80,388 ====== ====== ====== ====== Total operating revenues in the third quarter of 1995 increased 8.4 percent over the third quarter of 1994. Retail revenues increased 8.3 percent in the third quarter of 1995 over the same period in 1994 primarily due to an increase in electricity consumption by the Company's commercial and industrial customers and a 9.25 percent retail rate increase that went into effect June 15, 1995. Wholesale revenues increased 12.5 percent in the third quarter of 1995 over the same period in 1994 primarily due to regional market conditions that allowed the Company to buy electricity and to resell that electricity to other utilities at prices slightly higher than the purchase price. For the nine months ended September 30, 1995, total operating revenues increased 5.4 percent over the same period in 1994. Retail revenues increased 3.9 percent over the same period in 1994 primarily due to and an increase in electricity consumption by the Company's industrial customers and a 9.25 percent retail rate increase that went into effect June 15, 1995. Wholesale revenues increased 21.7 percent over the same period in 1994 primarily due to the Company's purchases and sales in the wholesale market described above. Operating Expenses Power supply expenses increased 8.0 percent in the third quarter of 1995 over the same period in 1994 as the Company produced and purchased additional power to serve customer needs. Power supply expenses increased 4.3 percent for the nine months ended September 30, 1995 over the same period in 1994 for the same reason. Transmission expenses decreased 5.8 percent in the third quarter of 1995 compared to the same period in 1994 primarily due to cost reduction measures implemented by VELCO. Transmission expenses decreased 5.6 percent for the nine months ended September 30, 1995 compared to the same period in 1994 for the same reason. Other operating expenses increased 1.7 percent in the third quarter of 1995 over the same period in 1994 primarily due to an increase in rent expense. Other operating expenses decreased 0.8 percent for the nine months ended September 30, 1995 compared to the same period in 1994 primarily due to cost containment measures implemented by the Company. Maintenance expenses increased 11.6 percent in the third quarter of 1995 over the same period in 1994 primarily due to a scheduled increase in plant maintenance. Maintenance expenses decreased 9.1 percent for the nine months ended September 30, 1995 primarily due to cost containment measures implemented by the Company. Depreciation and amortization expenses increased 25.3 percent in the third quarter of 1995 over the same period in 1994 primarily due to the amortization of expenditures related to energy conservation programs and the Pine Street Marsh environmental matter and insurance litigation. (See Note 3 of Notes to Consolidated Financial Statements.) Depreciation and amortization expenses increased 34.6 percent for the nine months ended September 30, 1995 over the same period in 1994 for the same reasons. Taxes other than income taxes increased 4.4 percent in the third quarter of 1995 over the same period in 1994 primarily due to an increase in gross revenue taxes. Taxes other than income taxes increased 1.2 percent for the nine months ended September 30, 1995 over the same period in 1994 primarily due to an increase in property taxes. Income Taxes Income taxes were higher in the third quarter of 1995 compared to the same period in 1994 primarily due to an increase in taxable income. Income taxes were higher for the nine months ended September 30, 1995 compared to the same period in 1994 for the same reason. Other Income Other income decreased 3.5 percent in the third quarter of 1995 compared to the same period in 1994 primarily due to a decrease in the allowance for equity funds used during construction resulting from lower construction work in progress balances. Other income decreased 15.6 percent for the nine months ended September 30, 1995 compared to the same period in 1994 for the same reason. Additionally, other income for the nine months ended September 30, 1994 benefited from a one-time increase of $162,000 resulting from a Vermont Supreme Court ruling overturning a VPSB decision disallowing certain DSM costs. (See Note 7 of Notes to Consolidated Financial Statements.) Interest Charges Interest charges increased 6.9 percent in the third quarter of 1995 over the same period in 1994 primarily due to an increase in short-term debt outstanding during the period. These charges were partially offset by a decrease in long-term interest charges resulting from a decrease in long-term debt outstanding during the period. Interest charges increased 3.7 percent for the nine months ended September 30, 1995 for the same reasons. LIQUIDITY AND CAPITAL RESOURCES For the nine months ended September 30, 1995, construction and conservation expenditures totaled $13.6 million. Such expenditures in 1995 are expected to be approximately $21.9 million, principally for expansion and improvements of the Company's transmission and distribution plant and for conservation measures. The Company anticipates issuing approximately $15 million to $25 million of unsecured debt in 1995 and $10 million to $15 million of common stock in late 1995 or early 1996. The proceeds of these financings will be used to retire short-term debt and refund approximately $9 million of high cost long-term debt. GREEN MOUNTAIN POWER CORPORATION September 30, 1995 PART II - OTHER INFORMATION ITEM 1. Legal Proceedings See Notes 3, 4, 5, 6 and 7 of Notes to Consolidated Financial Statements ITEM 2. Changes in Securities NONE ITEM 3. Defaults Upon Senior Securities NONE ITEM 4. Submission of Matters to a Vote of Security Holders NONE ITEM 5. Other Information Regulatory and legislative authorities at the federal level and among states across the country, including Vermont, are considering how to facilitate competition for electricity sales at the wholesale and retail levels. On October 24, 1994, the VPSB and the Department convened a "Roundtable on Competition and the Electric Industry," consisting of representatives of utilities (including the Company), customers, environmental groups and other affected parties. On July 17, 1995, a subgroup of the Roundtable agreed on a set of fourteen principles intended to guide the debate in Vermont concerning competition. These principles, among other things, call for exploration of the potential for retail competition, honoring of past utility commitments incurred under regulation, protection for low income customers, and continued exploration of renewable resources, energy efficiency and environmental protections. On September 14, 1995, Governor Dean of Vermont announced his desire to provide for competition and a restructuring of the utility industry. The Governor's announcement included proposed legislative adoption of restructuring principles in 1996, a VPSB proceeding to address the issue, filing by Vermont electric utilities of detailed plans by May 1, 1996, and implementation of restructuring by the end of 1997. In response to a Department petition, the VPSB opened a proceeding on utility industry restructuring by order dated October 17, 1995. Increased competitive pressure in the electric utility industry may restrict the Company's ability to charge prices high enough to recover embedded costs and may lead to changes in the manner in which rates are set by regulators from cost- based regulation to a different form of regulation that approximates market conditions. ITEM 6. (a) EXHIBITS 3-b By-laws of the Company, as amended May 18, 1995 4-a-17 Revised form of Indenture as filed as an exhibit to Registration Statement No. 33- 59383. 10-d-15a Green Mountain Power Corporation Compensation Program for Officers and Certain Key Management Personnel as amended August 8, 1995 12 Computation of Ratio of Earnings to Fixed Charges 23 Consent of Arthur Andersen LLP 27 Financial Data Schedule (b) REPORTS ON FORM 8-K Form 8-K was not required to be filed during the current quarter GREEN MOUNTAIN POWER CORPORATION SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GREEN MOUNTAIN POWER CORPORATION (Registrant) Date: November 13, 1995 /s/ C. L. Dutton C. L. Dutton, Vice President, Chief Financial Officer and Treasurer Date: November 13, 1995 /s/ G. J. Purcell G. J. Purcell, Controller EX-1 2 EXHIBIT 3-B Exhibit 3-b BYLAWS OF GREEN MOUNTAIN POWER CORPORATION (As Amended Through May 18, 1995) ARTICLE I Stockholders Section 1. Annual Meeting. The annual meeting of the stockholders shall be held at such place within the State of Vermont as is designated in the notice of the meeting, on the third Thursday in May in each year, if it be not a legal holi-day, and if it be a legal holiday, on the next succeeding day not a legal holiday; provided, however, that a majority of the board of directors, acting at a regular or special meeting of such board, may specially determine an alternative time for the holding of any annual meeting. (Amended December 4, 1975 and August 31, 1982.) Section 2. Special Meetings. Special meetings of the stockholders may be called, to be held at such place within or without the State of Vermont as is designated in the notice of the meeting, by the chairman of the board of directors, the chief executive officer, the president or a majority of directors, and, subject to the provisions of law and of the articles of association, as amended, shall be called by the secretary, or in case of the death, absence, incapacity or refusal of the secretary, by any other officers of the Corporation, upon writ-ten application of stockholders who are entitled to vote and who hold at least thirty-three percent of all the shares at the time issued and outstanding and entitled to vote at the meeting, stating the time, place and purpose of the meeting. (Amended May 13, 1981, and September 8, 1988.) Section 3. Notice of Meeting. A written or printed notice of each meeting of stockholders, stating the place, day and hour thereof and, in case of a special meeting, the purpose for which the meeting is called, shall be given by the secre-tary, at least 10 days and not more than 60 days before such meeting, to each stockholder entitled to vote thereat, by leav-ing such notice with him or at his residence or usual place of business, or by mailing it, postage prepaid and addressed to such stockholder at his address as it appears upon the books of the Corporation. In the absence or disability of the secretary, such notice may be given by a person designated either by the secretary or by the person or persons calling the meeting or by the board of directors. No notice of the time, place or purpose of any regular or special meeting of the stockholders shall be required if every stockholder entitled to notice thereof is present in person or is represented at the meeting by proxy or if every such stockholder, or his attorney thereunto authorized by a writing which is filed with the records of the meeting, waives such notice. Notwithstanding the above, if the purpose for such a special meeting of stockholders requested by written application of stockholders under Section 2 of Article I of these bylaws relates to or involves in any way a merger or consolidation of the corporation or a sale, lease, exchange, pledge or other disposition of all, or substantially all, the property and assets of the Corporation not made in the usual and regular course of business, such notice must be given at least 30 days and not more than 60 days before such special meeting. (Amended September 8, 1988 and March 7, 1994.) Section 4. Quorum. At any meeting of the stockholders, a majority of interest of all stock issued and outstanding and entitled to vote upon a question to be considered at the meeting shall constitute a quorum for the consideration of such ques-tion, but a less interest may adjourn any meeting from time to time, and the meetings may be held as adjourned without further notice. When a quorum is present at any meeting, a majority of the stock represented thereat and entitled to vote shall, except where a larger vote is required by law, by the articles of asso-ciation, or by these bylaws, decide any question brought before such meeting. Section 5. Proxies and Voting. Stockholders who are entitled to vote shall have one vote for each share of stock owned by them. Stockholders may vote either in person or by proxy in writing dated not more than 11 months before the meet-ing named therein, which shall be filed with the secretary of the meeting before being voted. Such proxies shall entitle the holders thereof to vote at any adjournment of such meeting, but shall not be valid after the final adjournment of such meeting. ARTICLE II Directors Section 1. Powers. The board of directors shall have, and may exercise all the powers of the Corporation, except such as are conferred upon the stockholders by law, by the articles of association, and by these bylaws. Section 2. Election. The board of directors shall consist of twelve members and shall be elected at the annual meeting of the stockholders or at a special meeting held in place thereof. Subject to law, to the articles of association and to the other provisions of these bylaws, each director shall hold office until his or her term of office expires and until his or her successor shall have been elected and qualified. The directors shall be divided, with respect to the terms for which they severally hold office, into three classes, hereby designated as Class I, Class II and Class III. Each class shall have at least three directors and the three classes shall be as nearly equal in number as possible. The initial terms of office of the Class I, Class II and Class III directors, elected at the 1995 annual meeting of shareholders, shall expire at the next succeeding annual meeting of shareholders the second succeeding annual meeting of shareholders and the third succeeding annual meeting of shareholders, respectively. At each annual meeting of shareholders after 1995, the successors of the class of directors whose term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of shareholders to be held in the third year following the year of their election. No director may be removed from office prior to the expiration of his or her term of office except for cause. For purposes of this Section, the term "cause" means a willful and continued failure to perform the duties of a director (other than failure resulting from incapacity due to physical or mental illness) or conduct which is demonstrably and materially injurious to the corporation, monetarily or otherwise. Such removal from office can be effected only upon the affirmative vote of three quarters of the remaining membership of the board of directors. The board of directors shall elect from its members a chairman of the board of directors who will serve as such for one year or during the balance of his or her term as a director, whichever is less, and until a successor is elected and qualified. (Amended May 18, 1995.) Section 3. Duties of the Chairman. The chairman of the board of directors shall, when present, preside at all meetings of the stockholders and at all meetings of the board of directors. He shall perform such other duties as may be from time to time delegated to him by the board of directors. (Amended May 13, 1981.) Section 4. Regular Meetings. Regular meetings of the board of directors may be held at such places and at such times as the board may by vote from time to time determine, and if so determined, no notice thereof need be given. A regular meeting of the board of directors may be held without notice immediately after, and at the same place as the annual meeting of the stock-holders, or the special meeting of the stockholders held in place of such annual meeting. Section 5. Special Meetings. Special meetings of the board of directors may be held at any time and at any place when called by the chairman of the board of directors, chief executive officer, president, treasurer, or two or more directors, reasonable notice thereof being given to each director, or at any time without call or formal notice, provided all the direc-tors are present or waive notice thereof by a writing which is filed with the records of the meeting. In any case it shall be deemed sufficient notice to a director to give him personal notice or to send notice by mail or telegram at least forty-eight hours before the meeting addressed to him at his usual or last known business or residence address. Section 6. Quorum and Participation. (a) A majority of the board of directors shall constitute a quorum for the transaction of business, but a less number may adjourn any meeting from time to time, and the meeting may be held as adjourned without further notice. When a quorum is present at any meet-ing, a majority of the members in attendance thereat shall decide any question brought before such meeting. (b) Members of the board of directors and any committee designated by the board of directors, may participate in a meeting of such board or com- mittee by means of a conference telephone or similar communica-tions equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting in such a manner shall constitute presence in person at such meeting for all purposes. (Amended September 21, 1973, and May 13, 1981.) ARTICLE III Executive and Other Committees Section 1. Executive Committee. The board of directors may, by vote of a majority of their entire number, elect from their own number an executive committee of not less than three members, which committee may be vested with the management of the current and ordinary business of the Cor-poration, including the declaration of dividends, the fixing and altering of the powers and duties of the several officers and agents of the Corporation, the election of additional officers and agents, and the filling of vacancies other than on the board of directors, and with power to authorize purchases, sales, contracts, offers, conveyances, transfers and negotiable instru-ments except as otherwise provided by law. A majority of the members of the executive committee shall constitute a quorum for the transaction of business, but a lesser number may adjourn any meeting from time to time, and the meeting may be held as adjourned without further notice. The executive committee may make rules not inconsistent herewith for the holding and conduct of its meetings. The chief executive officer shall at all times be ex officio a member of the executive committee. The executive committee shall elect from its members a chairman of the executive committee who shall preside at meetings of the executive committee, when present, and, in his or her absence, the chief executive officer of the Corporation shall preside. The chairman shall also perform such other duties as may be from time to time delegated to him or her by the executive committee, and will serve as such for one year or during the balance of his or her term as a member of the executive committee, whichever is less, and until a successor is elected and qualified. In the absence of a quorum at any meeting of the executive committee, its chairman or, in his or her absence, the chief executive officer, may designate a director of the Corporation who is not a member of the executive committee temporarily as a member of the executive committee to act as such during such meeting. Any action taken by the executive committee will require the unani-mous vote of all members of the executive committee present and voting at any meeting. (Amended March 20, 1974; June 13, 1974; June 12, 1975; February 28, 1980; May 13, 1981, and March 1, 1985.) The executive committee shall report its action to the board of directors. The board of directors shall have the power to rescind any vote or resolution of the executive committee, but no such rescission shall have retroactive effect. Section 2. Other Committees. The board of directors may, by majority vote at any meeting, create any other committees and delegate to such committees any powers, duties and responsibilities as may be consistent with the laws of the State of Vermont and the articles of association of the Corporation. The resolutions creating such committees or electing its members may provide for a chairman of the committee or such selection may be left to the committee itself. The compensation, if any, to be paid members of the committees for committee services shall be established by the board of directors or its executive committee. (Amended August 17, 1976.) ARTICLE IV Officers and Agents Section 1. Election and Appointment. The officers shall be a chief executive officer, a president, a secretary, a treasurer, and such other officers and agents as the board of directors and executive committee may elect. The chief executive officer, president, treasurer and secretary shall be elected annually by the board of directors after its election by the stockholders and will hold office for one year and until their successors are elected and qualified. Any two or more offices may be filled by the same person except the offices of president and secretary. The other officers and agents shall hold office during the pleasure of the board of directors or for such terms as the board of directors or executive committee shall prescribe. Each officer shall, subject to these bylaws, have in addition to the duties and powers herein set forth such duties and powers as are commonly incident to his office, and such duties and powers as the board of directors or executive committee shall from time to time designate. (Amended March 20, 1974, and May 13, 1981.) Section 2. (Repealed March 20, 1974.) Section 3. (Repealed March 20, 1974.) Section 4. Chief Executive Officer, President and Vice Presidents. The chief executive officer shall have all powers and perform all duties incidental to such office and, in the absence of the chairman of the board of directors, he shall preside at all meetings of the stockholders and the board of directors, and in the absence of the chairman of the executive committee, at all meetings of the executive committee. The president shall be the chief administrative officer of the Corporation and shall have all powers and perform all duties incidental thereto. He shall have custody of any treasurer's bond. Any vice president shall have such powers as the board of directors or executive committee shall from time to time designate. (Amended March 20, 1974; February 28, 1980, and May 13, 1981.) Section 5. Secretary. The secretary shall record all votes and proceedings of the stockholders and of the directors or any executive committee thereof and shall have custody of the corporate seal and of the corporate records and keep such records at the principal office of the Corporation. He shall keep a record book containing the names of the stockholders, their addresses and the number of shares held by each, the time when they respectively acquired the shares and the time of any transfer thereof unless a majority of the stockholders approves a transfer agent to keep such record book, rather than the secretary. He shall procure and file in his own office certi-fied copies of all documents required to be filed with the secretary of state, except the annual report of the company. In the absence of the secretary at any meeting, a temporary secre-tary shall be chosen to record the proceedings of such meeting. (Amended May 13, 1976.) Any assistant secretary will have such powers as the board of directors or executive committee shall from time to time designate, except those powers set forth in Sec. 1894 of Title II of the Vermont Statutes Annotated. Section 6. Treasurer. The treasurer shall, subject to the direction and under the supervision of the board of direc-tors and executive committee, have general charge of the finan-cial concerns of the Corporation and the care and custody of the funds and valuable papers of the Corporation, except his own bond, and he shall have power to endorse for deposit or collec-tion all notes, checks, drafts, etc., payable to the Corporation or its order, and to accept drafts on behalf of the Corporation. He shall keep, or cause to be kept, accurate books of account, which shall be the property of the Corporation. If required by the board of directors, he shall give bond for the faithful per- formance of his duty in such form, in such sum, and with such sureties as the board of directors or executive committee shall require. Any assistant treasurer shall have such powers as the board of directors or executive committee shall from time to time designate. Section 7. Removals. The board of directors may remove from the executive committee any member thereof and remove from office any officer or agent of the Corporation whenever in its judgment the best interests of the Corporation will be served thereby. Section 8. Vacancies. If the office of any director or member of the executive committee or of any officer or agent, one or more, becomes vacant by reason of death, resignation, removal, disqualification or otherwise, the directors or the remaining directors, though less than a quorum, may choose by a majority vote of their entire number a successor or successors, who shall hold office for the unexpired term, subject to the provisions of the articles of association and Section 1 of this Article IV. The executive committee shall have like power to fill any such vacancy in any office to which the executive committee has power to appoint, unless such vacancy shall have been filled by the board of directors. Any directorship to be filled by reason of an increase in the number of directors, however, shall be filled by election at an annual meeting or at a special meeting of the stockholders called for that purpose. Section 9. Indemnification. This corporation shall indemnify any person threatened with or made a party to any action, suit or proceeding, civil or criminal, by reason of the fact that he, his testator or intestate, is or was a director or officer of this corporation or of any corporation which he served as such at the request of this corporation, against judgments, fines or penalties, and the reasonable cost and expenses, including but not restricted to attorney's fees, actually and reasonably incurred by him in connection with the defense of such action, suit or proceeding or in connection with any appeal therein, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such director or officer is liable for gross negligence or misconduct in the performance of duty to the Corporation; provided, however, that as to any matter disposed of by compromise by such person, pursuant to a consent decree or otherwise, no indemnification either for a compromise payment or for any other expenses shall be provided unless such compromise shall be approved as in the best interests of the Corporation after notice that it involves such indemnification: (a) by a disinterested majority of the directors then in office; or (b) by a majority of the disinterested directors then in office, provided that there has been obtained an opinion in writing of independent legal counsel to the effect that such person, his testator or intestate, as the case may be, appears not to be liable for gross negligence or misconduct in the performance of duty to the Corporation; or (c) by the holders of a majority of the outstanding stock at the time entitled to vote for directors, voting as a single class, exclusive of any stock owned by any interested director or officer. Expenses reasonably incurred by any such person in connection with the defense or disposition of any such action, suit or other proceeding shall be paid from time to time by this corporation in advance of the final determination thereof upon receipt of a written undertaking from such person to repay the amounts so paid by the Corporation if it is ultimately deter-mined that indemnification for such expenses is not required under this section. The foregoing right to indemnity shall not be deemed exclusive of any other rights to which such director or officer may be entitled apart from the provisions of this paragraph. (Amended March 9, 1978, and March 2, 1983.) ARTICLE V Capital Stock Section 1. Certificates. Each stockholder shall be entitled to a certificate or certificates signed by the president and the treasurer or secretary and separately by the chief executive officer, if that position is not held by the president, and which shall certify the number and class of paid-up shares held by him in the Corporation. These signatures may be facsimiles if the certificate is countersigned by a transfer agent or registered with and signed by a registrar other than the Corporation or an employee thereof. Such certificate shall be in such form, consistent with the articles of association and Vermont law, as may be prescribed by the board of directors or the executive committee, duly numbered and sealed with the corporate seal of this corporation or a facsimile thereof. No certificate for any share of this corporation shall be issued until it is fully paid. The board of directors or the executive com-mittee may appoint one or more transfer agents and/or registrars for its stock of any class or classes and may require stock certificates to be countersigned and/or registered by one or more of them. In case any officer or officers who shall have signed or whose facsimile signature shall have been used or printed on any certificate or certificates for shares shall cease to be such officer or officers of the Corporation before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates shall nevertheless be conclusively deemed to have been adopted by the Corporation by the use and delivery thereof and shall be as effective in all respects as though signed by a duly elected, qualified and authorized officer or officers and as though the person or per-sons who signed such certificate or certificates or whose facsimile signature or signatures had been used thereon had not ceased to be such officer or officers of this corporation. (Amended March 4, 1982.) Section 2. Transfer Books. The secretary or an assistant secretary appointed by the board of directors shall keep the stock and transfer books of the Corporation and a record of all certificates of stock issued and of all transfers of stock and a register of all the stockholders, their addresses, the number of shares held by each, the time when they acquired the shares and the time of any transfers thereof in books provided and approved by the board of directors or executive committee for that purpose, except that such books may be kept by a transfer agent rather than the secretary when such transfer agent is approved by the vote of a majority of the stockholders. The transfer books of the capital stock of the Corporation may be closed for such period from time to time in anticipation of stockholders' meetings or the declaration or payment of dividends, as the board of directors or executive committee may determine but such period shall not exceed 60 days, and, if the transfer books are closed for the purpose of determining stockholders entitled to notice of or to vote at a meeting of stockholders, such books shall be closed for at least 10 days imme- diately preceding such meeting. In lieu of closing the stock transfer books as provided in the preceding paragraph, the board of directors or the executive committee may fix in advance a date preceding the date of any meeting of stockholders, or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change, conversion or exchange of capital stock shall go into effect, as a record date for the determination of the stockholders entitled to notice of and to vote at any such meeting, or entitled to receive payment of any such dividend, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, and in such case only such stockholders as shall be stockholders of record on the date fixed shall be entitled to such notice of and to vote at such meeting, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid, but such record date shall not in any case be more than 60 days and, in the case of a meeting of stockholders, shall not be less than 10 days prior to the date on which the particular action, requiring such determination of stockholders, is to be taken. (Amended March 7, 1994.) Section 3. Transfer of Shares. Subject to the restrictions, if any, imposed by the articles of association, title to a certificate of stock and to the shares represented thereby shall be transferred only by delivery of the certificate properly endorsed, or by delivery of the certificate accompanied by a written assignment of the same, or a written power of attorney to sell, assign, or transfer the same or the shares represented thereby, properly executed; but the person regis- tered on the books of the Corporation as the owner of shares shall have the exclusive right to receive dividends thereon and to vote thereon as such owner, shall be held liable for such calls and assessments, if any, as may lawfully be made thereon, and except only as may be required by law, may in all respects be treated by the Corporation as the exclusive owner thereof. It shall be the duty of each stockholder to notify the Corporation of his post office address. Section 4. Loss of Certificates. In case of the alleged loss or destruction, or the mutilation of a certificate of stock, a duplicate certificate may be issued in place thereof, upon such reasonable terms as the board of directors may prescribe. ARTICLE VI Seal The seal of the Corporation shall, subject to alteration by the board of directors or executive committee, consist of a flat-faced circular die with words Green Mountain Power Corporation: Corporate Seal 1893, cut or engraved thereon. ARTICLE VII Execution of Papers Except as the board of directors or executive committee may generally or in particular cases authorize the execution thereof in some other manner, all deeds, leases, transfers, contracts, bonds, notes, checks, drafts and other obligations made, accepted or endorsed by the Corporation, shall be signed by the chairman of the board, chief executive officer, president, a vice president or the treasurer, or such other officer or employee as designated in writing by the president. (Amended May 13, 1981, and May 15, 1986.) ARTICLE VIII Fiscal Year Except as from time to time otherwise provided by the board of directors, the fiscal year of the Corporation shall be the calendar year. ARTICLE IX Amendments These bylaws may be amended, altered or repealed by the board of directors or at any meeting of the stockholders, by the holders of a majority of all stock issued, outstanding and entitled to vote, provided notice of the proposed amendment, alteration or repeal is given in the notice of said meeting. EX-2 3 EXHIBIT 4-A-17 Exhibit 4-a-17 GREEN MOUNTAIN POWER CORPORATION TO THE BANK OF NEW YORK Trustee INDENTURE Dated as of November 1, 1995 TABLE OF CONTENTS Parties ................................................ 1 Recital of the Company ................................. 1 ARTICLE ONE Definitions and Other Provisions of General Application Section 101. Definitions ............................. 1 Act ..................................... 2 Affiliate; control ...................... 2 Authenticating Agent .................... 2 Board of Directors ...................... 2 Board Resolution ........................ 2 Business Day ............................ 2 Commission .............................. 3 Company ................................. 3 Company Request; Company Order .......... 3 Corporate Trust Office .................. 3 Corporation ............................. 3 Defaulted Interest ...................... 3 Discount Security ....................... 3 Event of Default ........................ 3 Funded Debt ............................. 3 Government Obligations .................. 4 Holder .................................. 4 Indenture ............................... 4 Interest ................................ 4 Interest Payment Date ................... 4 Maturity ................................ 4 Net Tangible Assets ..................... 4 Officers' Certificate ................... 5 Opinion of Counsel ...................... 5 Outstanding ............................. 5 Paying Agent ............................ 6 Periodic Offering ....................... 6 Person .................................. 6 Place of Payment ........................ 6 Predecessor Security .................... 6 Redemption Date ......................... 7 Redemption Price ........................ 7 Regular Record Date ..................... 7 Responsible Officer ..................... 7 Security; Securities .................... 7 Security Register; Security Registrar .................... 7 ___________ Note: This table of contents shall not, for any purpose, be deemed to be a part of the Indenture. Special Record Date ..................... 7 Stated Maturity ......................... 7 Subsidiary .............................. 7 Tranche ................................. 7 Trustee ................................. 8 Trust Indenture Act ..................... 8 Section 102. Compliance Certificates and Opinions ........................... 8 Section 103. Form of Documents Delivered to Trustee ................... 9 Section 104. Acts of Holders ........................... 9 Section 105. Notices, Etc. to Trustee and Company ............................ 11 Section 106. Notice to Holders of Securities; Waiver ..................... 12 Section 107. Conflict with Trust Indenture Act .......................... 12 Section 108. Effect of Headings and Table of Contents ...................... 12 Section 109. Successors and Assigns .................... 12 Section 110. Separability Clause ....................... 13 Section 111. Benefits of Indenture ..................... 13 Section 112. Governing Law ............................. 13 Section 113. Legal Holidays ............................ 13 Section 114. Counterparts .............................. 13 ARTICLE TWO Security Forms Section 201. Forms Generally ........................... 14 Section 202. Form of Trustee's Certificate of Authentication .......... 14 ARTICLE THREE The Securities Section 301. Amount Unlimited; Issuable in Series and in Tranches thereof; Establishment of Series and of Tranches thereof ................................ 15 Section 302. Denominations ............................. 17 Section 303. Execution; Authentication and Delivery; Dating ................... 18 Section 304. Temporary Securities ...................... 21 Section 305. Registration, Registration of Transfer and Exchange .................. 21 Section 306. Mutilated, Destroyed, Lost and Stolen Securities .................. 23 Section 307. Payment of Interest; Interest Rights Preserved ....................... 24 Section 308. Persons Deemed Owners ..................... 25 Section 309. Cancellation .............................. 26 Section 310. Computation of Interest ................... 26 Section 311. CUSIP Numbers ............................. 26 ARTICLE FOUR Redemption of Securities Section 401. Applicability of Article .................. 26 Section 402. Election to Redeem; Notice to Trustee ............................. 27 Section 403. Selection of Securities to Be Redeemed ......................... 27 Section 404. Notice of Redemption ...................... 27 Section 405. Securities Payable on Redemption Date ........................ 28 Section 406. Securities Redeemed in Part ............... 29 ARTICLE FIVE Sinking Funds Section 501. Applicability of Article .................. 29 Section 502. Satisfaction of Sinking Fund Payments with Securities .............. 30 Section 503. Redemption of Securities for Sinking Fund ...................... 30 ARTICLE SIX Covenants Section 601. Payment of Principal, Premium and Interest .......................... 31 Section 602. Maintenance of Office or Agency ................................ 31 Section 603. Money for Securities Payments to Be Held in Trust ................... 32 Section 604. Corporate Existence ....................... 34 Section 605. Calculation of Original Issue Discount .... 34 ARTICLE SEVEN Satisfaction and Discharge Section 701. Satisfaction and Discharge of Securities ......................... 34 Section 702. Satisfaction and Discharge of Indenture .......................... 36 Section 703. Application of Trust Money ................ 37 ARTICLE EIGHT Events of Default; Remedies Section 801. Events of Default ......................... 37 Section 802. Acceleration of Maturity; Rescission and Annulment .............. 39 Section 803. Collection of Indebtedness and Suits for Enforcement by Trustee ............................ 40 Section 804. Trustee May File Proofs of Claim .............................. 41 Section 805. Trustee May Enforce Claims Without Possession of Securities ............................ 41 Section 806. Application of Money Collected ............ 42 Section 807. Limitation on Suits ....................... 42 Section 808. Unconditional Right of Holders to Receive Principal, Premium and Interest .................. 43 Section 809. Restoration of Rights and Remedies .............................. 43 Section 810. Rights and Remedies Cumulative ............ 43 Section 811. Delay or Omission Not Waiver .............. 44 Section 812. Control by Holders of Securities ............................ 44 Section 813. Waiver of Past Defaults ................... 44 Section 814. Undertaking for Costs ...................... 45 ARTICLE NINE The Trustee Section 901. Corporate Trustee Required; Eligibility ........................... 45 Section 902. Certain Duties and Responsibilities ...................... 46 Section 903. Notice of Defaults ........................ 47 Section 904. Certain Rights of Trustee ................. 48 Section 905. Not Responsible for Recitals or Issuance of Securities ............. 49 Section 906. May Hold Securities ....................... 49 Section 907. Preferential Collection of Claims Against Company ................ 50 Section 908. Money Held in Trust ....................... 54 Section 909. Compensation and Reimbursement ............ 54 Section 910. Disqualification; Conflicting Interests ............................. 55 Section 911. Resignation and Removals Appointment of Successor .............. 62 Section 912. Acceptance of Appointment by Successor .......................... 64 Section 913. Merger, Conversion, Consolidation or Succession to Business ............. 65 Section 914. Appointment of Authenticating Agent ................................. 65 ARTICLE TEN Holders' Lists and Reports by Trustee and Company Section 1001. Company to Furnish Trustee Names and Addresses of Holders .............. 67 Section 1002. Preservation of Information; Communications to Holders ............. 68 Section 1003. Reports by Trustee ....................... 70 Section 1004. Reports by Company ....................... 71 ARTICLE ELEVEN Consolidation, Merger, Conveyance, Transfer or Lease Section 1101. Company May Consolidate, Etc., Only on Certain Terms ................. 73 Section 1102. Successor Corporation Substituted ........................... 73 Section 1103. Restrictions on Liens .................... 74 ARTICLE TWELVE Supplemental Indentures Section 1201. Supplemental Indentures Without Consent of Holders .................... 77 Section 1202. Supplemental Indentures With Consent of Holders .................... 79 Section 1203. Execution of Supplemental Indentures ............................ 80 Section 1204. Effect of Supplemental Indentures ............................ 81 Section 1205. Conformity With Trust Indenture Act ......................... 81 Section 1206. Reference in Securities to Supplemental Indentures ............... 81 Section 1207. Modification Without Sup- plemental Indenture ................... 81 ARTICLE THIRTEEN Meetings of Holders; Action Without Meeting Section 1301. Purposes for Which Meetings May Be Called ............................. 82 Section 1302. Call, Notice and Place of Meetings .............................. 82 Section 1303. Persons Entitled to Vote at Meetings .............................. 83 Section 1304. Quorum; Action ........................... 83 Section 1305. Attendance at Meetings; Determination of Voting Rights; Conduct and Adjournment of Meetings ........................... 84 Section 1306. Counting Votes and Recording Action of Meetings .................... 85 Section 1307. Action Without Meeting ................... 86 Section 1308. Record Date .............................. 86 ARTICLE FOURTEEN Immunity of Incorporators, Stockholders, Officers and Directors Section 1401. Liability Solely Corporate ............... 87 Testimonium ............................................. 88 Signatures and Seals .................................... 88 Acknowledgments ......................................... 89 INDENTURE, dated as of November 1, 1995, from GREEN MOUNTAIN POWER CORPORATION, a corporation duly organized and existing under the laws of the State of Vermont (herein called the "Company"), having its principal office at 25 Green Mountain Drive, South Burlington, Vermont 05403, to The Bank of New York, a New York banking corporation, having its principal corporate trust office at 101 Barclay Street, New York, New York 10286, as Trustee (herein called the "Trustee"). RECITAL OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness to be issued in one or more series as in this Indenture provided (all of such securities authenticated and delivered under this Indenture being herein collectively referred to as the "Securities" and each of such Securities being herein individually referred to as a "Security"); and all other things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of series or Tranches thereof, as follows: ARTICLE ONE Definitions and Other Provisions of General Application SECTION 101. Definitions. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (b) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (c) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States of America, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United States of America at the date of such computation; provided, however, that in determining generally accepted accounting principles applicable to the Company, such principles shall, to the extent required, conform to any order, rule or regulation of any administrative agency, regulatory authority or other governmental body having jurisdiction over the Company; and (d) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. Certain terms, used principally in Article Nine, are defined in that Article. "Act", when used with respect to any Holder of a Security, has the meaning specified in Section 104. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Authenticating Agent" means any Person or Persons authorized by the Trustee to act on behalf of the Trustee to authenticate one or more series of Securities. "Board of Directors" means either the board of directors of the Company or any duly authorized committee thereof. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day", when used with respect to a Place of Payment or any other particular location specified in the Securities or this Indenture, means any day, other than a Saturday or Sunday, which is not a day on which banking institutions or trust companies in such Place of Payment or other location are generally authorized or required by law, regulation or executive order to remain closed, except as may be otherwise specified for any series of the Securities, or Tranche thereof, as contemplated by Section 301. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. "Company Request" or "Company Order" means a written request or order signed in the name of the Company by its Chairman of the Board, its President, a Vice President or an Assistant Vice President, and by its Treasurer, an Assistant Treasurer, its Controller, its Secretary or an Assistant Secretary, and delivered to the Trustee. "Corporate Trust Office" means the principal corporate trust office of the Trustee in the Borough of Manhattan, The City of New York, New York at which at any particular time its corporate trust business shall be administered, which at the date of this Indenture is at 101 Barclay Street, Floor 21 West, New York, New York 10286. "Corporation" means a corporation, association, company, joint stock company or business trust. "Defaulted Interest" has the meaning specified in Section 307. "Discount Security" means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 802. "Event of Default" has the meaning specified in Section 801. "Funded Debt" means all indebtedness for money borrowed having a maturity of more than 12 months from the date of the most recent balance sheet of the Company or having a maturity of less than 12 months but by its terms being renewable or extendible beyond 12 months from the date of such balance sheet at the option of the borrower. "Government Obligations" means: (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America entitled to the benefit of the full faith and credit thereof; and (b) certificates, depositary receipts or other instruments which evidence a direct ownership interest in obligations described in clause (a) above or in any specific interest or principal payments due in respect thereof; provided, however, that the custodian of such obligations or specific interest or principal payments shall be a bank or trust company subject to Federal or state supervision or examination with a combined capital and surplus of at least $50,000,000; and provided, further, that except as may be otherwise required by law, such custodian shall be obligated to pay to the holders of such certificates, depositary receipts or other instruments the full amount received by such custodian in respect of such obligations or specific payments and shall not be permitted to make any deduction therefrom. "Holder" means a Person in whose name a Security is registered in the Security Register. "Indenture" means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series or Tranche of Securities established as contemplated by Section 301. "Interest", when used with respect to a Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity. "Interest Payment Date", when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security. "Maturity", when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity, by declaration of acceleration, upon call for redemption or otherwise. "Net Tangible Assets" means the aggregate amount of assets (less applicable reserves and other properly deductible items) after deducting therefrom (a) all current liabilities (excluding any constituting Funded Debt by reason of their being renewable or extendible), and (b) all goodwill, trade names, trademarks, patents, unamortized debt discount and expense and other like intangibles, all as set forth on the most recent balance sheet of the Company and computed in accordance with generally accepted accounting principles. "Officers' Certificate" means a certificate signed by the Chairman of the Board, the President, a Vice President or an Assistant Vice President, and by the Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Company, and who shall be reasonably acceptable to the Trustee. "Outstanding", when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: (a) Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation; (b) Securities deemed to have been paid in accordance with Section 701; and (c) Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it and the Company that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; provided, however, that in determining whether or not the Holders of the requisite principal amount of the Securities Outstanding under this Indenture, or the Outstanding Securities of any series or Tranche, have given or concurred in any request, demand, authorization, direction, notice, consent or waiver hereunder or whether or not a quorum is present at a meeting of Holders of Securities, (x) Securities beneficially owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor (unless the Company, such Affiliate or such obligor owns all Securities Outstanding under this Indenture, or all Outstanding Securities of each such series and each such Tranche, as the case may be, determined without regard to this clause (x)) shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver or upon any such determination as to the presence of a quorum, only Securities which the Trustee actually knows to be so owned shall be so disregarded; provided, however, that Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes, to the satisfaction of the Trustee, the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor; and (y) the principal amount of a Discount Security that shall be deemed to be Outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the Maturity thereof pursuant to Section 802. "Paying Agent" means any Person, including the Company, authorized by the Company to pay the principal of, and premium, if any, or interest, if any, on any Securities on behalf of the Company. "Periodic Offering" means an offering of Securities of a series from time to time, the specific terms of which Securities, including without limitation the rate or rates of interest, if any, thereon, the Stated Maturity or Stated Maturities thereof and the redemption provisions, if any, with respect thereto, are to be determined by the Company or its agents upon the issuance of such Securities. "Person" means any individual, corporation, partnership, joint venture, trust or unincorporated organization or any government or any political subdivision, instrumentality or agency thereof. "Place of Payment", when used with respect to the Securities of any series, or tranche thereof, means the place or places, specified as contemplated by Section 301, at which, subject to Section 602, the principal of, and premium, if any, and interest, if any, on, the Securities of such series or tranche are payable upon presentation. "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. "Redemption Date", when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture. "Redemption Price", when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture. "Regular Record Date" for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 301. "Responsible Officer", when used with respect to the Trustee, means an officer of the Trustee assigned to the Corporate Trust Office, including any vice president, any assistant vice president, the secretary, any assistant secretary, any trust officer or assistant trust officer or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer of the Trustee to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Security" and "Securities" have the meanings stated in the first recital of this Indenture. "Security Register" and "Security Registrar" have the respective meanings specified in Section 305. "Special Record Date" for the payment of any Defaulted Interest on the Securities of any series or Tranche means a date fixed by the Trustee pursuant to Section 307. "Stated Maturity", when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable. "Subsidiary" means a corporation a majority of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, "voting stock" means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. "Tranche" means a group of Securities which (a) are of the same series and (b) have identical terms except as to principal amount and/or date of issuance. "Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such with respect to one or more series of Securities pursuant to the applicable provisions of this Indenture, and thereafter, "Trustee" shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series. "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed, except as contemplated by Section 1201 or as provided in Section 1205. SECTION 102. Compliance Certificates and Opinions. Except as otherwise expressly provided in this Indenture, upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate (other than certificates pursuant to clauses (d) or (e) of Section 1004) or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (a) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. SECTION 103. Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. SECTION 104. Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, election, waiver or other action provided by this Indenture to be made, given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing or, alternatively, may be embodied in and evidenced by the record of Holders voting in favor thereof, either in person or by proxies duly appointed in writing, at any meeting of Holders duly called and held in accordance with the provisions of Article Thirteen, or a combination of such instruments and any such record. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments and any such record (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments and so voting at any such meeting. Proof of execution of any such instrument or of a writing appointing any such agent, or of the holding by any Person of a Security, shall be sufficient for any purpose of this Indenture and (subject to Section 901) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. The record of any meeting of Holders shall be proved in the manner provided in Section 1306. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof or may be proved in any other manner which the Trustee and the Company deem sufficient. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. (c) The principal amount (except as otherwise contemplated in clause (y) of the proviso to the definition of Outstanding) and serial numbers of Securities held by any Person, and the date of holding the same, shall be proved by the Security Register. (d) Any request, demand, authorization, direction, no- tice, consent, election, waiver or other Act of a Holder shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security. (e) Until such time as written instruments shall have been delivered to the Trustee with respect to the requisite percentage of principal amount of Securities for the action contemplated by such instruments, any such instrument executed and delivered by or on behalf of a Holder may be revoked by written notice by such Holder or any subsequent Holder, proven in the manner in which such instrument was proven. (f) Securities of any series, or any Tranche thereof, authenticated and delivered after any Act of Holders may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any action taken by such Act of Holders. If the Company shall so determine, new Securities of any series, or any Tranche thereof, so modified as to conform, in the opinion of the Trustee and the Company, to such action may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series or Tranche. (g) If the Company shall solicit from Holders any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may, at its option, by Board Resolution, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on the record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of the Outstanding Securities have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Securities shall be computed as of the record date; provided that no such authorization, agreement or consent by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date. SECTION 105 Notices, Etc. to Trustee and Company. Any request, demand, authorization, direction, notice, consent, election, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, (a) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Trustee addressed to the attention of its corporate trust department at the address set forth in the introductory paragraph hereof, or at any other address previously furnished in writing to the Company by the Trustee, or (b) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to the attention of its Chief Financial Officer at the address set forth in the introductory paragraph hereof, or at any other address previously furnished in writing to the Trustee by the Company. SECTION 106. Notice to Holders of Securities; Waiver. Except as otherwise expressly provided herein, where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given, and shall be deemed given, to Holders if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at the address of such Holder as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such Notice. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice to Holders by mail, then such notification as shall be made with the reasonable approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Any notice required by this Indenture may be waived in writing by the Person entitled to receive such notice, either before or after the event otherwise to be specified therein, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 107. Conflict with Trust Indenture Act. This Indenture is intended to comply with the Trust Indenture Act. If any provision of this Indenture limits, qualifies, extends or conflicts with the duties imposed by such Act, such imposed duties shall control. SECTION 108. Effect of Headings and Table of Contents. The Article and Section headings in this Indenture and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 109. Successors and Assigns. All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not. SECTION 110. Separability Clause. In case any provision in this Indenture or the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 111. Benefits of Indenture. Nothing in this Indenture or the Securities, express or implied, shall give to any Person, other than the parties hereto, their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture. SECTION 112. Governing Law. This Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles thereof. SECTION 113. Legal Holidays. In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities other than a provision in Securities of any series, or any Tranche thereof, or in the Board Resolution or Officers' Certificate which establishes the terms of such Securities or Tranche, which specifically states that such provision shall apply in lieu of this Section) payment of interest or principal and premium, if any, need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, and, if such payment is made or duly provided for on such Business Day, then no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, to such Business Day. SECTION 114 Counterparts. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. ARTICLE TWO Security Forms SECTION 201. Forms Generally. The definitive Securities of each series shall be in substantially the form or forms thereof established (i) in indentures supplemental hereto, Board Resolutions or Officers' Certificates pursuant to Board Resolutions, or (ii) with respect to any Tranche of Securities of a series subject to Periodic Offering, to the extent permitted by any of the documents referred to in (i) above, in a Company Order or Orders or by procedures, reasonably acceptable to the Trustee, specified in such Company Order or Orders, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as, to the extent not inconsistent herewith, may be determined by the officers executing such Securities, as evidenced by their execution thereof. The Securities of each series shall be issuable in registered form without coupons. The definitive Securities shall be produced in such manner as shall be determined by the officers executing such Securities, as evidenced by their execution thereof. SECTION 202. Form of Trustee's Certificate of Authentication. The Trustee's certificate of authentication shall be in substantially the following form: "This is one of the Securities of the series designated in accordance with, and referred to in, the within-mentioned Indenture. Dated: THE BANK OF NEW YORK as Trustee By: " Authorized Signatory ARTICLE THREE The Securities SECTION 301. Amount Unlimited; Issuable in Series and in Tranches thereof; Establishment of Series and of Tranches thereof. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series and in one or more Tranches thereof. Each series shall be established by an indenture supplemental hereto, a Board Resolution or an Officers' Certificate pursuant to a Board Resolution, which shall specify whether the Securities of such series shall be subject to a Periodic Offering. With respect to each series so established, there shall be determined (i) by such indenture supplemental hereto, Board Resolution or Officers' Certificate pursuant to a Board Resolution, and (ii) with respect to any Tranche of Securities of a series subject to Periodic Offering, to the extent that any of the documents specified in (i) above both does not establish all of the terms of Securities of such Tranche and provides that such terms may be determined in a Company Order or by an officer or officers of the Company or its agent or agents in accordance with procedures, reasonably acceptable to the Trustee, specified in such Company Order, then either by a Company Order or by such specified procedures: (a) the title of the Securities of such series (which shall distinguish the Securities of such series from Securities of all other series); (b) any limit upon the aggregate principal amount of the Securities of such series, or any Tranche thereof, which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 304, 305, 306, 406 or 1206 and, except for any Securities which, pursuant to Section 303, are deemed never to have been authenticated and delivered hereunder); (c) whether the Securities of such series shall be subject to Periodic Offering; (d) the date or dates on which, and the manner in which (if other than as provided in Section 601), the principal of the Securities of such series, or any Tranche thereof, is payable; (e) the rate or rates at which the Securities of such series, or any Tranche thereof, shall bear interest, if any (including the rate or rates at which overdue principal, premium or interest shall bear interest, if any), or the method or methods by which such rate or rates shall be determined, the date or dates from which interest, if any, on the Securities of such series, or any Tranche thereof, shall accrue, the Interest Payment Dates for the payment of such interest, the record date for each such Interest Payment Date (the "Regular Record Date"), the manner in which such interest shall be payable (if other than as provided in Sections 307 and 601), and the basis of computation of interest (if other than as provided in Section 310); (f) if other than as provided in Section 602, the place or places where (1) any Securities of such series, or any Tranche thereof, may be surrendered for registration of transfer, (2) Securities of such series, or any Tranche thereof, may be surrendered for exchange and (3) notices and demands to or upon the Company in respect of the Securities of such series, or any Tranche thereof, and this Indenture may be served; (g) the period or periods within which, the price or prices at which and the terms and conditions upon which the Securities of such series, or any Tranche thereof, may be redeemed, in whole or in part, at the option of the Company; (h) the obligation, if any, of the Company to redeem or purchase the Securities of such series, or any Tranche thereof, pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which such Securities shall be redeemed or purchased, in whole or in part, pursuant to such obligation; (i) the denominations in which Securities of such series, or any Tranche thereof, shall be issuable if other than denominations of $1,000 and any integral multiple thereof; (j) if the amount of payments of principal of, or premium, if any, or interest, if any, on, the Securities of such series, or any Tranche thereof, may be determined with reference to an index, the manner in which such amounts shall be determined; (k) if other than the principal amount thereof, the portion of the principal amount of Securities of such series, or any Tranche thereof, which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 802; (l) any Events of Default, in addition to those specified in Section 801, with respect to the Securities of such series, or any Tranche thereof, and any covenants of the Company for the benefit of the Holders of the Securities of such series, or any Tranche thereof, in addition to those set forth in Article Six; (m) the terms, if any, pursuant to which the Securities of such series, or any Tranche thereof, may be converted into or exchanged for shares of capital stock or other securities of the Company or any other Person; (n) the Person or Persons (without specific identification) to whom interest on Securities of such series, or any Tranche thereof, shall be payable on any Interest Payment Date, if other than the Person or Persons specified in Section 307; (o) if a service charge will be made for the registration of transfer or exchange of Securities of such series, or any Tranche thereof, the amount and terms thereof; (p) any exceptions to Section 113, or variation in the definition of Business Day, with respect to the Securities of such series, or any Tranche thereof; (q) the terms, if any, required to permit the Securities of such series, or any Tranche thereof, to be registered pursuant to a non-certificated system of registration; and (r) any other terms of the Securities of such series, or any Tranche thereof, not inconsistent with the provisions of this Indenture. Except as to denominations and except as may otherwise be determined pursuant to this Section, all Securities of any series shall be substantially identical. SECTION 302. Denominations. Except as otherwise specified as contemplated by Section 301 with respect to any series or Tranche of Securities, the Securities of each series, or Tranche thereof, shall be issuable in denominations of $1,000 and any integral multiple thereof. SECTION 303. Execution; Authentication and Delivery; Dating. The Securities shall be executed on behalf of the Company by its Chairman of the Board, its President, one of its Vice Presidents, its Treasurer or any other of its duly authorized officers, under its corporate seal affixed thereto or reproduced thereon, and attested by its Secretary, one of its Assistant Secretaries or any other of its duly authorized officers. The signature of any or all of these officers on the Securities may be manual or facsimile. Securities bearing the manual or facsimile signatures of individuals who were, at the time that their signatures were affixed thereto, the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the dates of such Securities or the dates of their authentication and delivery. From time to time, the Company may deliver Securities of any series executed on behalf of the Company and with its corporate seal affixed thereto to the Trustee for authentication and delivery. Thereafter, upon receipt of (i) an indenture supplemental hereto, a Board Resolution or a Board Resolution and an Officers' Certificate pursuant thereto, in each case establishing such series, (ii) a Company Order requesting the authentication and delivery of any of such Securities and, to the extent permitted by any of the documents referred to in (i) above, establishing the terms of any Tranche of such series or specifying procedures, acceptable to the Trustee, for doing so, and (iii) an Opinion of Counsel with respect to the matters set forth in the following paragraph, the Trustee, in accordance with such documents and, in the case of Securities subject to a Periodic Offering, with such procedures, reasonably acceptable to the Trustee, as may be specified in such Company Order, shall authenticate and make available for delivery such Securities for original issue, from time to time, in an aggregate principal amount not exceeding the aggregate principal amount, if any, established for such series or Tranche thereof. If such procedures so provide, such Securities may be authorized, authenticated and delivered pursuant to oral or electronic instructions from the Company or its agent or agents, which oral instructions shall be promptly confirmed electronically or in writing. In authenticating and delivering Securities of any series, the Trustee shall be entitled to receive, and (subject to Section 902) shall be fully protected in relying upon, an Opinion of Counsel stating that: (a) the forms of such Securities have been duly authorized by the Company and have been established in conformity with the provisions of this Indenture; (b) the terms of such Securities have been duly authorized by the Company and have been established in conformity with the provisions of this Indenture; and (c) such Securities, when authenticated and delivered by the Trustee and issued and delivered by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will have been duly issued under this Indenture and will constitute valid and legally binding obligations of the Company, entitled to the benefits provided by this Indenture, and enforceable in accordance with their terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization and similar laws of general application relating to or affecting the rights and remedies of creditors and by general principles of equity (regardless of whether considered in a proceeding at law or in equity); provided, however, that, with respect to Securities of a series subject to a Periodic Offering, the Trustee shall be entitled to receive such Opinion of Counsel only once at or prior to the time of the first authentication of Securities of such series and that, in such opinion, the opinions described in clauses (b) and (c) above may state, respectively, that: (x) when the terms of such Securities, or each Tranche thereof, shall have been established pursuant to a Company Order or Orders or pursuant to such procedures, acceptable to the Trustee, as may be specified by a Company Order or Orders, all as contemplated by and in accordance with a supplemental indenture hereto, a Board Resolution or an Officers' Certificate pursuant to a Board Resolution, such terms will have been duly authorized by the Company and will have been established in conformity with the provisions of this Indenture; and (y) such Securities, or each Tranche thereof, when authenticated and delivered by the Trustee in accordance with this Indenture and any supplemental indenture hereto, Board Resolution, Officers' Certificate pursuant to a Board Resolution, Company Order or Company Orders and specified procedures referred to in paragraph (x) above and issued and delivered by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will have been duly issued under this Indenture and will constitute valid and legally binding obligations of the Company, entitled to the benefits provided by this Indenture and enforceable in accordance with their terms, subject, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization and similar laws of general application relating to or affecting the rights and remedies of creditors and by general principles of equity (regardless of whether considered in a proceeding at law or in equity). The Trustee shall have the right to decline to authenticate and deliver any Securities under this Section if the Trustee, being advised by counsel, determines that such action may not lawfully be taken or if the Trustee in good faith shall determine that such action would expose the Trustee to personal liability to existing Holders. With respect to Securities of a series subject to a Periodic Offering, the Trustee may conclusively rely, as to the authorization by the Company of any of such Securities, the forms and terms thereof and the legality, validity, binding effect and enforceability thereof, upon the Opinion of Counsel and other documents delivered pursuant to this Section at or prior to the time of the first authentication of Securities of such series unless and until such opinion or other documents have been superseded or revoked. In connection with the authentication and delivery of Securities of a series subject to a Periodic Offering, the Trustee shall be entitled to assume that the Company's instructions to authenticate and deliver such Securities do not violate any laws with respect to, or any rules, regulations or orders of, any governmental agency or commission having jurisdiction over the Company. No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee or its agent by manual signature, and such certificate upon such Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 309, together with a written statement (which need not comply with Section 102 and need not be accompanied by an Opinion of Counsel) stating that such Security has never been issued and sold by the Company, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits hereof. Each Security shall be dated the date of its original issue and shall have the date of its authentication noted thereon. SECTION 304. Temporary Securities. Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and make available for delivery, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued, with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities. If temporary Securities of any series, or any Tranche thereof, are issued, the Company shall cause definitive Securities of such series or Tranche to be prepared without unreasonable delay. After the preparation of such definitive Securities, such temporary Securities shall be exchangeable for such definitive Securities upon surrender of such temporary Securities at the office or agency of the Company maintained pursuant to Section 602 in a Place of Payment for such series or Tranche, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series, or any Tranche thereof, the Company shall execute and the Trustee shall authenticate and make available for delivery in exchange therefor definitive Securities of the same series or Tranche, of authorized denominations and of like tenor and aggregate principal amount. Until exchanged in full as hereinabove provided, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of the same series and Tranche and of like tenor authenticated and delivered hereunder. SECTION 305. Registration, Registration of Transfer and Exchange. The Company shall appoint a Security registrar (the "Security Registrar") and cause to be kept at the office of the Security Registrar (which, except as otherwise specified as contemplated by Section 301 for Securities of any series, or Tranche thereof, shall be located in the Borough of Manhattan, The City of New York) a register (the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and the registration of transfer thereof. If, at any time, there shall not be a Security Registrar acting pursuant to appointment by the Company, the Trustee shall be deemed to be, and shall act as, Security Registrar. The Trustee is hereby initially appointed Security Registrar for the purpose of registration and registration of transfer as herein provided. Upon surrender for registration of transfer of any Security of any series, or any Tranche thereof, at the office or agency of the Company maintained pursuant to Section 602 in a Place of Payment for such series or Tranche, the Company shall execute, and the Trustee shall authenticate and make available for delivery, in the name of the designated transferee or transferees, one or more new Securities of the same series and Tranche, of authorized denominations and of like tenor and aggregate principal amount. At the option of the Holder, Securities of any series, or any Tranche thereof, may be exchanged for other Securities of the same series and Tranche, of authorized denominations and of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at any such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and make available for delivery, the Securities which the Holder making the exchange is entitled to receive. All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee or any transfer agent) be duly endorsed or shall be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar or any transfer agent duly executed by the Holder thereof or his attorney duly authorized in writing. Except as otherwise specified as contemplated by Section 301 with respect to Securities of any series, or any Tranche thereof, no service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304, 406 or 1206 not involving any transfer. The Company shall not be required (a) to issue, to register the transfer of or to exchange Securities of any series, or any Tranche thereof, during a period of 15 days immediately preceding the date notice is given identifying the serial numbers of the Securities of such series or Tranche called for redemption or (b) to issue, to register the transfer of or to exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and make available for delivery in exchange therefor a new Security of the same series and Tranche, and of like tenor and principal amount and bearing a number not contemporaneously outstanding. If there shall be delivered to the Trustee (a) evidence to its satisfaction of the ownership of and the destruction, loss or theft of any Security and (b) such security or indemnity as it may reasonably require to save it, the Company and their respective agent or agents harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and make available for delivery, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and Tranche, and of like tenor and principal amount and bearing a number not contemporaneously outstanding. Notwithstanding the foregoing, in case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security of any series, or any Tranche thereof, issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and any such new Security shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of such series or Tranche duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. SECTION 307. Payment of Interest; Interest Rights Preserved. Except as otherwise specified as contemplated by Section 301 with respect to the Securities of any series, or any Tranche thereof: (a) interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date (except the Interest Payment Date, if any, which coincides with the Stated Maturity of the final payment of the principal of such Security) shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) shall be registered at the close of business on the Regular Record Date for such interest; provided, however, that, if the date of original issue of such Security shall be after a Regular Record Date and before the corresponding Interest Payment Date, payment of interest shall commence on the second Interest Payment Date succeeding such date of original issue and shall be paid to the Person in whose name such Security shall have been registered on the Regular Record Date for such second Interest Payment Date; and (b) Interest on any Security which is payable, and is punctually paid or duly provided for, on the Interest Payment Date which coincides with the Stated Maturity of the final payment of the principal of such Security shall be paid to the person to whom such final payment of principal shall be paid. Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the related Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in clause (a) or (b) below: (a) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall promptly cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first- class postage prepaid, to each Holder of Securities of such series at the address of such Holder as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date; or (b) The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section and Section 305, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. SECTION 308. Persons Deemed Owners. The Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name any Security is registered in the Security Register as the absolute owner of such Security for the purpose of receiving payment of principal of, and premium, if any, and (subject to Sections 305 and 307) interest, if any, on, such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. SECTION 309. Cancellation. All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and, if not theretofore cancelled, shall be promptly cancelled by the Trustee. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever or which the Company shall not have issued and sold, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be delivered to the Company. SECTION 310. Computation of Interest. Except as otherwise specified as contemplated by Section 301 for Securities of any series, or Tranche thereof, interest on the Securities of each series shall be computed on the basis of a 360-day year consisting of twelve 30-day months. SECTION 311. CUSIP Numbers. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. ARTICLE FOUR Redemption of Securities SECTION 401. Applicability of Article. Securities of any series, or any Tranche thereof, which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as con- templated by Section 301 for Securities of such series or Tranche) in accordance with this Article. SECTION 402. Election to Redeem; Notice to Trustee. The election of the Company to redeem any Securities shall be evidenced by a Board Resolution or an Officers' Certificate. The Company shall, at least 45 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee in writing of such Redemption Date and of the principal amount of such Securities to be redeemed. In the case of any redemption of Securities (a) prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture or (b) pursuant to an election of the Company which is subject to a condition specified in the terms of such Securities, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with such restriction or condition. SECTION 403. Selection of Securities to Be Redeemed. If less than all the Securities of any series, or any Tranche thereof, are to be redeemed, the particular Securities to be redeemed shall be selected by the Trustee from the Outstanding Securities of such series or Tranche not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions; provided, however, that no such partial redemption shall reduce the portion of the principal amount of a Security of such series not redeemed to less than the minimum authorized denomination for Securities of such series, if any, established pursuant to Section 301. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected to be redeemed in part, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Secu- rities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed. SECTION 404. Notice of Redemption. Notice of redemption shall be given in the manner provided in Section 106 to the Holders of Securities to be redeemed not less than 30 nor more than 90 days prior to the Redemption Date. All notices of redemption shall identify the Securities to be redeemed (including CUSIP numbers, if any) and shall state: (a) the Redemption Date, (b) the Redemption Price, (c) if less than all the Securities of any series or Tranche are to be redeemed, the identification of the particular Securities to be redeemed and the portion of the principal amount of any Security to be redeemed in part, (d) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date, (e) the place or places where such Securities are to be surrendered for payment of the Redemption Price, and (f) that the redemption is for a sinking fund or analogous provisions, if such is the case. With respect to any notice of redemption of Securities at the election of the Company, unless, upon the giving of such notice, such Securities shall be deemed to have been paid in accordance with Section 701, such notice may state that such redemption shall be conditional upon the receipt by the Trustee, on or prior to the date fixed for such redemption, of money sufficient to pay the Redemption Price of, and accrued interest, if any, on, such Securities and that if such money shall not have been so received such notice shall be of no force or effect and the Company shall not be required to redeem such Securities. In the event that such notice of redemption contains such a condition and such money is not so received, the redemption shall not be made and within a reasonable time thereafter notice shall be given, in the manner in which the notice of redemption was given, that such money was not so received and such redemption was not required to be made. Notice of redemption of Securities to be redeemed at the election of the Company, and any notice of non-satisfaction of a condition for redemption as aforesaid, shall be given by the Company or, at the Company's written request, by the Trustee in the name and at the expense of the Company. SECTION 405. Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, and the conditions, if any, set forth in such notice having been satisfied, the Securities or portions thereof so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless, in the case of an unconditional notice of redemption, the Company shall default in the payment of the Redemption Price and accrued interest, if any) such Securities or portions thereof, if interest-bearing, shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with such notice, such Security or portion thereof shall be paid by the Company at the Redemption Price, together with accrued interest, if any, to the Redemption Date; provided, however, that, except as otherwise specified as contemplated by Section 301 with respect to Securities of any series, or Tranche thereof, any installment of interest on any Security the Stated Maturity of which installment is on or prior to the Redemption Date shall be payable in accordance with Section 601. SECTION 406. Securities Redeemed in Part. Any Security which is to be redeemed in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and, in exchange therefor, the Company shall execute, and the Trustee shall authenticate and make available for delivery to the Holder of such Security, without service charge, a new Security or Securities of like tenor of the same series and Tranche, of any authorized denomination requested by such Holder, and in aggregate principal amount equal to the unredeemed portion of the principal of the Security so surrendered. If less than all the Securities of any series with differing issue dates, interest rates and stated maturities are to be redeemed, the Company in its sole discretion shall select the particular Securities to be redeemed and shall notify the Trustee in writing thereof at least 45 days prior to the relevant redemption date. ARTICLE FIVE Sinking Funds SECTION 501. Applicability of Article. The provisions of this Article shall be applicable to any sinking fund or analogous provisions for the retirement of the Securities of any series, or any Tranche thereof, except as otherwise specified as contemplated by Section 301 for Securities of such series or Tranche. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series, or any Tranche thereof, is herein referred to as a "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of Securities of any series, or any Tranche thereof, is herein referred to as an "optional sinking fund payment". Each sinking fund payment shall be applied to the redemption of Securities of the series or Tranche in respect of which it was made as provided for by the terms of such Securities. SECTION 502. Satisfaction of Sinking Fund Payments with Securities. Unless otherwise provided by the terms of Securities of any series, or any Tranche thereof, in respect of which a mandatory sinking fund payment is to be made, the Company (a) may deliver Outstanding Securities (other than those previously called for redemption) of such series or Tranche and (b) may apply as a credit Securities of such series or Tranche which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of such mandatory sinking fund payment; provided, however, that no Securities shall be applied in satisfaction of a mandatory sinking fund payment if such Securities shall have been previously so applied. Securities so applied shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such mandatory sinking fund payment shall be reduced accordingly. SECTION 503. Redemption of Securities for Sinking Fund. Not less than 60 days prior to each sinking fund payment date for the Securities of any series, or any Tranche thereof (unless shorter notice shall be satisfactory to the Trustee), the Company shall deliver to the Trustee an Officers' Certificate specifying: (a) the amount of the next succeeding mandatory sinking fund payment for such series or Tranche; (b) the amount, if any, of the optional sinking fund payment to be made together with such mandatory sinking fund payment; (c) the aggregate sinking fund payment; (d) the portion, if any, of such aggregate sinking fund payment which is to be satisfied by the payment of cash; (e) the portion, if any, of such aggregate sinking fund payment which is to be satisfied by delivering or crediting Securities of such series or Tranche pursuant to Section 502 and stating the basis for such credit and that such Securities have not previously been so credited, and the Company also shall deliver to the Trustee any Securities to be so delivered. If the Company shall not deliver such Officers' Certificate, the next succeeding sinking fund payment for such series or Tranche shall be made entirely in cash in the amount of the mandatory sinking fund payment. Not less than 45 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 403 and cause notice of the redemption thereof to be given in the name of the Company in the manner provided in Section 404. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 405 and 406. ARTICLE SIX Covenants SECTION 601. Payment of Principal, Premium and Interest. The Company shall duly and punctually pay the principal of, and premium, if any, and interest, if any, on, the Securities of each series in accordance with the terms of such Securities and this Indenture. All payments of the principal of, and premium, if any, and interest, if any, on, each Security will be made (i) in such coin or currency of the United States of America as, at the time of payment, shall be legal tender for the payment of public and private debts, and (ii) except as otherwise specified as contemplated by Section 301 for Securities of any series or Tranche thereof, at the office or agency of the Company maintained for such purpose in the Borough of Manhattan, The City of New York; provided, however, that, at the option of the Company, interest on such Security at any Stated Maturity may be paid by check mailed to the Holder thereof at such Holder's address as shown on the Security Register. SECTION 602. Maintenance of Office or Agency. The Company shall maintain in each Place of Payment for the Securities of any series, or any Tranche thereof, an office or agency where such Securities may be presented or surrendered for payment, where such Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of such Securities and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency and prompt notice to the Holders of any such change in the manner specified in Section 106. If at any time the Company shall fail to maintain any such required office or agency in respect of Securities of any series, or any Tranche thereof, or shall fail to furnish the Trustee with the address thereof, such presentations and surrenders of such Securities may be made and notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company hereby appoints the Trustee as its initial agent to receive such respective presentations, surrenders, notices and demands. The Company also may from time to time designate one or more other offices or agencies where the Securities of one or more series, or any Tranche thereof, may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency for such purposes in each Place of Payment for such Securities in accordance with the requirements set forth above. The Company shall give prompt written notice to the Trustee, and prompt notice to the Holders in the manner specified in Section 106, of any such designation or rescission and of any change in the location of any such other office or agency. Anything herein to the contrary notwithstanding, any office or agency required by this Section may be maintained at an office of the Company, in which event the Company shall perform all functions to be performed at such office or agency. SECTION 603. Money for Securities Payments to Be Held in Trust. If the Company shall at any time act as its own Paying Agent with respect to the Securities of any series, or any Tranche thereof, it shall, on or before each due date of the principal of, or premium or interest on, any of such Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal, premium or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and shall promptly notify the Trustee of its action or failure so to act. Whenever the Company shall have one or more Paying Agents for the Securities of any series, or any Tranche thereof, it shall, prior to each due date of the principal of, and premium and interest on, such Securities, deposit with such Paying Agents sums sufficient (without duplication) to pay the principal, premium and interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium and interest, and (unless such Paying Agent is the Trustee) the Company shall promptly notify the Trustee of its action or failure so to act. The Company shall cause each Paying Agent for the Securities of any series, or any Tranche thereof, other than the Trustee, to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent shall: (a) hold all sums held by it for the payment of the principal of, and premium and interest on, Securities of such series or Tranche in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (b) give the Trustee notice of any default by the Company (or any other obligor upon the Securities of such series or Tranche) in the making of any payment of principal of, or premium or interest on, the Securities of such series or Tranche; and (c) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent. The Company may at any time pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, or premium or interest on, any Security and remaining unclaimed for two years after such principal, premium, or interest shall have become due and payable shall be paid to the Company pursuant to a Company Request, or, if then held by the Company, shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such payment to the Company, may at the expense of the Company cause to be mailed, on one occasion only, notice to such Holder that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such mailing, any unclaimed balance of such money then remaining will be paid to the Company. SECTION 604. Corporate Existence. Subject to the rights of the Company under Article Eleven, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the rights (charter and statutory) and franchises of the Company; provided, however, that the Company shall not be required to preserve any such right or franchise if, in the judgment of the Company, the preservation thereof is no longer desirable in the conduct of the business of the Company. SECTION 605. Calculation of Original Issue Discount. The Company shall file with the Trustee promptly at the end of each calendar year a written notice specifying the amount of the original issue discount (including daily rates and accrual periods) accrued on Outstanding Securities as of the end of such year. ARTICLE SEVEN Satisfaction and Discharge SECTION 701. Satisfaction and Discharge of Securities. Any Securities, or any portion of the principal amount thereof, shall be deemed to have been paid for all purposes of this Indenture, and the entire indebtedness of the Company in respect thereof shall be deemed to have been satisfied and discharged, if there shall have been irrevocably deposited with the Trustee, in trust: (a) money in an amount which shall be sufficient, or (b) in the case of a deposit made prior to the Maturity of such Securities or portions thereof, Government Obligations, which shall not contain provisions permitting the redemption or other prepayment thereof at the option of the issuer thereof, the principal of and the interest on which when due, without any regard to reinvestment thereof, will provide moneys which, together with the money, if any, deposited with or held by the Trustee, shall be sufficient, or (c) a combination of (a) or (b) which shall be sufficient, to pay when due the principal of, and premium, if any, and interest, if any, on, such Securities or portions thereof; provided, however, that (i) in the case of the provision for payment of less than all of the Securities, such Securities or portions of the principal amounts thereof shall have been selected by the Security Registrar as provided herein; (ii) in the case of a redemption, the notice requisite to the validity of such redemption shall have been given or irrevocable authority shall have been given by the Company to the Trustee to give such notice; and (iii) the Company shall have delivered to the Trustee: (x) if such deposit shall have been made prior to the Maturity of such Securities, a Company Order stating that the money and Government Obligations deposited with the Trustee in accordance with this Section shall be held by the Trustee, in trust, as provided in Section 703; and (y) if Government Obligations shall have been deposited with the Trustee, an Officers' Certificate to the effect that the requirements set forth in clause (b) above have been satisfied. Upon receipt by the Trustee of money or Government Obligations, or both, in accordance with this Section, together with the documents required by clauses (x) and (y) above, the Trustee shall acknowledge in writing that the Security or Securities or portions thereof with respect to which such deposit was made are deemed to have been paid for all purposes of this Indenture and that the entire indebtedness of the Company in respect thereof is deemed to have been satisfied and discharged. If payment of less than all of the Securities is to be provided for in the manner and with the effect provided in this Section, the Security Registrar shall select such Securities, or portions of principal amounts thereof, in the manner specified by Section 403 for selection for redemption of less than all the Securities of a series. In the event that Securities which shall be deemed to have been paid as provided in this Section do not mature and are not to be redeemed within the sixty (60) day period commencing with the date of the deposit with the Trustee of moneys or Government Obligations, as aforesaid, the Company shall, as promptly as practicable, give a notice, in the same manner as a notice of redemption with respect to such Securities, to the Holders of such Securities to the effect that such deposit has been made and the effect thereof. Notwithstanding the satisfaction and discharge of any Securities as aforesaid, the obligations of the Company and the Trustee in respect of such Securities under Sections 305, 306, 602 and 603 and this Article Seven shall survive. The Company shall pay, and shall indemnify the Trustee and each Holder of Securities which are deemed to have been paid as provided in this Section against, any tax, fee or other charge imposed on or assessed against the Government Obligations deposited with the Trustee or the principal or interest received by the Trustee in respect of such Government Obligations. SECTION 702. Satisfaction and Discharge of Indenture. This Indenture shall upon Company Request cease to be of further effect (except as hereinafter expressly provided), and the Trustee, upon Company Request and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (a) both (1) all Securities theretofore authenticated and delivered (other than Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306) have been delivered to the Trustee for cancellation; and (2) all Securities not theretofore delivered to the Trustee for cancellation shall be deemed to have been paid in accordance with Section 701; (b) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and (c) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that there has been compliance with all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture. In the event there shall be Securities of two or more series Outstanding hereunder, the Trustee shall be required to execute an instrument acknowledging satisfaction and discharge of this Indenture only if requested to do so with respect to Securities of all series as to which it is Trustee and if the other conditions thereto are met. In the event there shall be two or more Trustees hereunder, then the effectiveness of each such instrument from each Trustee hereunder shall be conditioned upon receipt of such instruments from each other Trustee hereunder. Notwithstanding the satisfaction and discharge of this Indenture as aforesaid, the obligations of the Company to the Trustee under Section 909 shall survive. Upon satisfaction and discharge of this Indenture as provided in this Section, the Trustee shall assign, transfer and turn over to the Company, subject to the lien provided by Section 907, any and all money, securities and other property then held by the Trustee under this Indenture, other than money and Government Obligations held by the Trustee pursuant to Section 703. SECTION 703. Application of Trust Money. Neither the Government Obligations nor the money deposited with the Trustee pursuant to Section 701, nor the principal or interest payments on any such Government Obligations, shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal of, and premium, if any, and interest, if any, on, the Securities or portions of principal amount thereof in respect of which such deposit was made, all subject, however, to the provisions of Section 603; provided, however, that, so long as there shall not have occurred and be continuing an Event of Default, any cash received from such principal or interest payments on such Government Obligations deposited with the Trustee, if not then needed for such purpose, shall, to the extent practicable, be invested in Government Obligations of the type described in clause (b) in the first paragraph of Section 701 maturing at such times and in such amounts as shall be sufficient to pay when due the principal of, and premium, if any, and interest, if any, on, such Securities or portions thereof on and prior to the Maturity thereof, and interest earned from such reinvestment shall be paid over to the Company as received by the Trustee, free and clear of any trust, lien or pledge under this Indenture except the lien provided by Section 907; and provided, further, that, so long as there shall not have occurred and be continuing an Event of Default, any moneys held by the Trustee in accordance with this Section on the Maturity of all such Securities in excess of the amount required to pay the principal of, and premium, if any, and interest, if any, on, such Securities shall be paid over to the Company free and clear of any trust, lien or pledge under this Indenture except the lien provided by Section 907. ARTICLE EIGHT Events of Default; Remedies SECTION 801. Events of Default. "Event of Default", wherever used herein with respect to Securities of any series, means any one of the following events: (a) failure to pay any installment of interest on any such Security within 30 days after its Stated Maturity; or (b) failure to pay the principal of, or premium, if any, on, any such Security within three Business Days after its Maturity; or (c) failure to perform or breach of any covenant of the Company in this Indenture (other than a covenant a default in the performance of which is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of one or more series of Securities other than such series) for a period of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee, or to the Company and the Trustee by the Holders of at least 33% in principal amount of the Outstanding Securities of such series a written notice specifying such default and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (d) either (a) the entry of an order approving a petition seeking reorganization of the Company upon the basis of insolvency or inability to pay debts as they mature under the Federal bankruptcy laws or any other applicable law or statute of the United States of America or any State thereof; or (b) the appointment in any judicial proceeding upon the application of any creditor or creditors of a trustee or a receiver of all or a substantial part of the trust; and the continuance of such order or appointment unstayed and in effect for a period of 90 days; or (e) the adjudication of the Company as a bankrupt by any court of competent jurisdiction or the filing by the Company of a voluntary petition in bankruptcy or the making by the Company of an assignment for the benefit of creditors or the admission by the Company in writing of its inability to pay its debts as they become due; the consent by the Company to the appointment in any judicial proceeding upon the application of any creditor or creditors of a receiver or trustee of all or a substantial part of its properties; the filing by the Company of a petition or answer seeking reorganization or readjustment on the basis of insolvency or inability to pay debts as they mature under the Federal bankruptcy laws or any other applicable law or statute of the United States of America or of any State thereof; or the filing by the Company of a petition to take advantage of any insolvency act; or (f) default by the Company in the payment of principal of, or interest on, securities issued under the Indenture of First Mortgage and Deed of Trust, dated as of February 1, 1955, between the Company and United States Trust Company of New York [successor to The Chase Manhattan Bank (National Association), successor to The Chase National Bank of the City of New York], as amended and supplemented, in an aggregate amount exceeding $5,000,000, and the continuation thereof for 90 days after written notice to the Company by the Trustee, or to the Company and the Trustee by the Holders of at least 33% in principal amount of the Outstanding Securities of such series a written notice specifying such default and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (g) any other Event of Default specified with respect to Securities of such series. SECTION 802. Acceleration of Maturity; Rescission and Annulment. If an Event of Default shall have occurred and be continuing with respect to Securities of any series at the time Outstanding, either the Trustee or the Holders of not less than 33% in principal amount of the Outstanding Securities of such series may declare the principal amount (or, if any of such Securities are Discount Securities, such portion of the principal amount thereof as may be specified by their terms as contemplated by Section 301) of all of such Securities to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon receipt by the Company of notice of such declaration, such principal amount (or specified amount thereof) shall become immediately due and payable; provided, however, that if an Event of Default shall have occurred and be continuing with respect to more than one series of Securities, the Trustee or the Holders of not less than 33% in aggregate principal amount of the Outstanding Securities of all such series, considered as one class, may make such declaration of acceleration, and not the Holders of the Securities of any one of such series. At any time after such a declaration of acceleration with respect to Securities of any series shall have been made and before a judgment or decree for payment of the money due shall have been obtained by the Trustee as hereinafter in this Article provided, the Event or Events of Default giving rise to such declaration of acceleration shall, without further act, be deemed to have been waived, and such declaration and its consequences shall, without further act, be deemed to have been rescinded and annulled, if (a) the Company shall have paid or deposited with the Trustee a sum sufficient to pay (1) all overdue interest on all such Securities; (2) the principal of, and premium, if any, on, all such Securities which have become due, otherwise than by such declaration of acceleration, and interest thereon at the rate or rates prescribed therefor; (3) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor; (4) all amounts reasonably due to the Trustee under Section 909; and (b) any other Event or Events of Default with respect to such Securities, other than the non-payment of the principal of Securities of such series which shall have become due solely by such declaration of acceleration, shall have been cured or waived as provided in Section 813. No such rescission shall affect any subsequent Event of Default or impair any right consequent thereon. SECTION 803 Collection of Indebtedness and Suits for Enforcement by Trustee. If an Event of Default described in clause (a) or (b) of Section 801 shall have occurred and be continuing, the Company shall, upon demand of the Trustee, pay to it, for the benefit of the Holders of the Securities with respect to which such Event of Default shall have occurred, the whole amount then due and payable on such Securities for principal, premium, if any, and interest, if any, and, to the extent permitted by law, interest on premium, if any, and on any overdue principal and interest, at the rate or rates prescribed therefor in such Securities or, if no such rate or rates shall be prescribed, at the rate or rates borne by such Securities at the time of such Event of Default, and, in addition thereto, such further amount as shall be sufficient to cover any amounts reasonably due to the Trustee under Section 909. If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Securities, wherever situated. If an Event of Default with respect to any Securities shall have occurred and be continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of such Securities by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. SECTION 804. Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, (a) to file and prove a claim for the whole amount of principal, premium, if any, and interest, if any, owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for amounts due to the Trustee under Section 909) and of the Holders allowed in such judicial proceeding, and (b) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amounts due it under Section 909. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. SECTION 805. Trustee May Enforce Claims Without Possession of Securities. All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders in respect of which such judgment has been recovered. SECTION 806. Application of Money Collected. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or premium, if any, or interest, if any, upon presentation of the Securities in respect of which or for the benefit of which such money shall have been collected and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: First: To the payment of all amounts due the Trustee under Section 909; Second: To the payment of the amounts then due and unpaid upon the Securities for principal of and premium, if any, and interest, if any, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal, premium, if any, and interest, if any, respectively; and Third: To the Company. SECTION 807. Limitation on Suits. No Holder shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless: (a) such Holder shall have previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of such series; (b) the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities of all series in respect of which an Event of Default shall have occurred and be continuing, considered as one class, shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (c) such Holder or Holders shall have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such proceeding; and (e) no direction inconsistent with such written request shall have been given to the Trustee during such 60-day period by the Holders of a majority in aggregate principal amount of all Outstanding Securities in respect of which an Event of Default shall have occurred and be continuing, considered as one class; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders. SECTION 808. Unconditional Right of Holders to Receive Principal, Premium and Interest. Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of, and premium, if any, and interest, if any, on, such Security on the Stated Maturity or Maturities therefor (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired or affected without the consent of such Holder. SECTION 809. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, and Trustee and such Holder shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and such Holder shall continue as though no such proceeding had been instituted. SECTION 810. Rights and Remedies Cumulative. Except as otherwise provided in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 811. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. SECTION 812. Control by Holders of Securities. If an Event of Default shall have occurred and be continuing in respect of Securities of any series (determined as provided in Section 910(d)), the Holders of a majority in principal amount of the Outstanding Securities of such series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee hereby, with respect to such Securities; provided, however, that if an Event of Default shall have occurred and be continuing with respect to more than one such series of Securities, the Holders of a majority in aggregate principal amount of the Outstanding Securities of all such series, considered as one class, shall have the right to make such direction, and not the Holders of the Securities of any one of such series; and provided, further, that (a) such direction shall not be in conflict with any rule of law or with this Indenture, and would not involve the Trustee in personal liability in circumstances where indemnity, in the Trustee's sole discretion, would not be adequate, and (b) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. SECTION 813. Waiver of Past Defaults. The Holders of not less than a majority in principal amount of the Outstanding Securities of any series (determined as provided in Section 910(d)) may on behalf of the Holders of all the Securities of such series waive any past default hereunder with respect to such series and its consequences, except a default (a) in the payment of the principal of, or premium, if any, or interest, if any, on, such Securities, or (b) in respect of a covenant or provision hereof which under Section 1202 cannot be modified or amended without the consent of each such Holder; provided, however, that if any such default shall have occurred and be continuing with respect to more than one such series of Securities, the Holders of a majority in aggregate principal amount of the Outstanding Securities of all such series, considered as one class, shall have the right to waive such default, and not the Holders of the Securities of any one such series. Upon any such waiver, such default shall cease to exist, and any and all Events of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. SECTION 814. Undertaking for Costs. The Company and the Trustee agree, and each Holder of each Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in aggregate principal amount of the Outstanding Securities of all series in respect of which such suit may be brought, considered as one class, or to any suit instituted by any Holder for the enforcement of the payment of the principal of, or premium, if any, or interest, if any, on, any Security on or after the Stated Maturity or Maturities expressed in such Security (or, in the case of the redemption of any Security, on or after its Redemption Date). ARTICLE NINE The Trustee SECTION 901. Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder which shall be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia or such other corporation or person permitted to act as Trustee by the Commission, which (i) shall be authorized under such laws to exercise corporate trust powers, (ii) shall have a combined capital and surplus of at least $10,000,000, (iii) shall be subject to supervision or examination by Federal, state or District of Columbia authority or such other authority as the Commission shall permit, and (iv) shall be qualified and eligible under this Article. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of such supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Neither the Company nor any Person directly or indirectly controlling, controlled by, or under common control with the Company shall serve as Trustee. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. SECTION 902. Certain Duties and Responsibilities. (a) Except during the continuance of an Event of Default with respect to Securities of any series, (1) the Trustee undertakes to perform, with respect to Securities of such series, such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may, with respect to Securities of such series, conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture. (b) In case an Event of Default with respect to Securities of any series shall have occurred and be continuing, the Trustee shall exercise, with respect to Securities of such series, such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own wilful misconduct, except that (1) this Section 902(c) shall not be construed to limit the effect of Section 902(a); (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (3) the Trustee shall not be liable with respect to any action affecting Outstanding Securities of one or more series taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of such Outstanding Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to such Outstanding Securities; and (4) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (d) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. SECTION 903. Notice of Defaults. Within 90 days after the occurrence of any default hereunder known to the Trustee with respect to the Securities of any series, the Trustee shall give to all Holders of Securities of such series, in the manner and to the extent provided by Section 1003(c), notice of such default, unless such default shall have been cured and waived; provided, however, that, except in the case of a default in the payment of the principal of, or premium, if any, or interest, if any, on, any Security of such series or in the payment of any sinking or analogous fund installment with respect to Securities of such series, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interest of the Holders of Securities of such series; and provided, further, that in the case of any default of the character specified in Section 801(c) with respect to Securities of such series, no such notice to Holders shall be given until at least 120 days after the occurrence thereof. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series. SECTION 904. Certain Rights of Trustee. Subject to the provisions of Section 902: (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, or as otherwise expressly provided herein, and any action of the Board of Directors may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate; (d) the Trustee may consult with counsel of its selection and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any Holder pursuant to this Indenture, unless such Holder shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; (h) the Trustee shall not be charged with knowledge of any Event of Default with respect to the Securities of any series for which it is acting as Trustee unless either (1) a Responsible Officer of the Trustee assigned to the group of the Trustee responsible for corporate trustee administration (or any successor division or department of the Trustee) shall have actual knowledge of the Event of Default or (2) written notice of such Event of Default shall have been given to the Trustee by the Company, any other obligor on such Securities or by any Holder of such Securities; and (i) the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture. SECTION 905 Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Securities (except the Trustee's certificates of authentication) shall be taken as the statements of the Company, and neither the Trustee nor any other agent appointed hereunder assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. Neither the Trustee nor any other agent appointed hereunder shall be accountable for the use or application by the Company of Securities or the proceeds thereof. SECTION 906. May Hold Securities. The Trustee and any other agent appointed hereunder, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 907 and 910, may otherwise deal with the Company with the same rights it would have if it were not either the Trustee or such agent. SECTION 907. Preferential Collection of Claims Against Company. (a) Subject to Section 907(b), if the Trustee shall be or shall become a creditor, directly or indirectly, secured or unsecured, of the Company within three months prior to a default, as defined in Section 907(c), or subsequent to such a default, then, unless and until such default shall be cured, the Trustee shall set apart and hold in a special account for the benefit of the Trustee individually, the Holders and the holders of other indenture securities (as defined in Section 907(c)): (1) an amount equal to any and all reductions in the amount due and owing upon any claim as such creditor in respect of principal or interest, effected after the beginning of such three months' period and valid as against the Company and its other creditors, except any such reduction resulting from the receipt or disposition of any property described in clause (2) of this Section 907(a), or from the exercise of any right of set-off which the Trustee could have exercised if a petition in bankruptcy had been filed by or against the Company upon the date of such default; and (2) all property received by the Trustee in respect of any claim as such creditor, either as security therefor, or in satisfaction or composition thereof, or otherwise, after the beginning of such three months' period, or an amount equal to the proceeds of any such property, if disposed of, subject, however, to the rights, if any, of the Company and its other creditors in such property or such proceeds. Nothing herein contained, however, shall affect the right of the Trustee: (A) to retain for its own account (i) payments made on account of any such claim by any Person (other than the Company) who is liable thereon, (ii) the proceeds of the bona fide sale of any such claim by the Trustee to a third Person, and (iii) distributions made in cash, securities or other property in respect of claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Act or applicable state law; (B) to realize, for its own account, upon any property held by it as security for any such claim, if such property was so held prior to the beginning of such three months' period; (C) to realize, for its own account, but only to the extent of the claim hereinafter mentioned, upon any property held by it as security for any such claim, if such claim was created after the beginning of such three months' period and such property was received as security therefor simultaneously with the creation thereof, and if the Trustee shall sustain the burden of proving that, at the time such property was so received, the Trustee had no reasonable cause to believe that a default, as defined in Section 907(c), would occur within three months; or (D) to receive payment on any claim referred to in paragraph (B) or (C) of this Section 907(a), against the release of any property held as security for such claim as provided in such paragraph (B) or (C), as the case may be, to the extent of the fair value of such property. For the purposes of clauses (B), (C) and (D) of this Section 907(a), property substituted after the beginning of such three months' period for property held as security at the time of such substitution, to the extent of the fair value of the property released, shall have the same status as the property released, and, to the extent that any claim referred to in any of such clauses shall be created in renewal of or in substitution for or for the purpose of repaying or refunding any pre- existing claim of the Trustee as such creditor, such claim shall have the same status as such pre-existing claim. If the Trustee shall be required to account, the funds and property held in such special account and the proceeds thereof shall be apportioned among the Trustee, the Holders and the holders of other indenture securities in such manner that the Trustee, the Holders and the holders of other indenture securities shall realize, as a result of payments from such special account and payments of dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Act or applicable state law, the same percentage of their respective claims, figured before crediting to the claim of the Trustee anything on account of the receipt by it from the Company of the funds and property in such special account and before crediting to the respective claims of the Trustee and the Holders and the holders of other indenture securities dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Act or applicable state law, but after crediting thereon receipts on account of the indebtedness represented by their respective claims from all sources other than from such dividends and from the funds and property so held in such special account. As used in this paragraph, with respect to any claim, the term "dividends" shall include any distribution with respect to such claim, in bankruptcy or receivership or proceedings for reorganization pursuant to the Federal Bankruptcy Act or applicable state law, whether such distribution shall be made in cash, securities or other property, but shall not include any such distribution with respect to the secured portion, if any, of such claim. The court in which such bankruptcy, receivership or proceedings for reorganization shall be pending shall have jurisdiction (1) to apportion among the Trustee, the Holders and the holders of other indenture securities, in accordance with the provisions of this paragraph, the funds and property held in such special account and proceeds thereof, or (2) in lieu of such apportionment, in whole or in part, to give to the provisions of this paragraph due consideration in determining the fairness of the distributions to be made to the Trustee, the Holders and the holders of other indenture securities with respect to their respective claims, in which event, it shall not be necessary to liquidate or to appraise the value of any securities or other property held in such special account or as security for any such claim, or to make a specific allocation of such distributions as between the secured and unsecured portions of such claims, or otherwise to apply the provisions of this paragraph as a mathematical formula. Any Trustee which shall have resigned or been removed after the beginning of such three months' period shall be subject to the provisions of this subsection as though such resignation or removal had not occurred. Any Trustee which shall have resigned or been removed prior to the beginning of such three months' period shall be subject to the provisions of this Section 907(a) if, and only if, the following conditions shall exist: (1) the receipt of property or reduction of claim which would have given rise to the obligation to account, if such Trustee had continued as Trustee, occurred after the beginning of such three months' period; and (2) such receipt of property or reduction of claim occurred within three months after such resignation or removal. (b) There shall be excluded from the operation of Section 907(a) a creditor relationship arising from: (1) the ownership or acquisition of securities issued under any indenture, or any security or securities having a maturity of one year or more at the time of acquisition by the Trustee; (2) advances authorized by a receivership or bankruptcy court of competent jurisdiction or by this Indenture, for the purpose of preserving any property which shall at any time be subject to the lien of this Indenture or of discharging tax liens or other prior liens or encumbrances thereon, if notice of such advances and of the circumstances surrounding the making thereof shall have been given to the Holders at the time and in the manner provided in this Indenture; (3) disbursements made in the ordinary course of business in the capacity of trustee under an indenture, transfer agent, registrar, custodian, paying agent, fiscal agent or depositary, or other similar capacity; (4) an indebtedness created as a result of services rendered or premises rented; or an indebtedness created as a result of goods or securities sold in a cash transaction (as defined in Section 907(c)); (5) the ownership of stock or of other securities of a corporation organized under the provisions of Section 25(a) of the Federal Reserve Act, as amended, which is directly or indirectly a creditor of the Company; and (6) the acquisition, ownership, acceptance or negotiation of any drafts, bills of exchange, acceptances or obligations which fall within the classification of self-liquidating paper (as defined in Section 907(c)). (c) For the purposes of Section 907: (1) the term "default" means any failure to make payment in full of the principal of or interest on any of the Securities or other indenture securities when and as such principal or interest becomes due and payable; (2) the term "other indenture securities" means securities upon which the Company is an obligor outstanding under any indenture, other than this Indenture, (A) under which the Trustee is also trustee, (B) which contains provisions substantially similar to the provisions of Section 907 and (C) under which a default exists at the time of the apportionment of the funds and property held in the special account created pursuant to Section 907(a); (3) the term "cash transaction" means any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand; (4) the term "self-liquidating paper" means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Company for the purpose of financing the purchase, processing, manufacturing, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship with the Company arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligations; (5) the term "Company" means any obligor upon the Securities; and (6) the term "Federal Bankruptcy Act" means the Bankruptcy Act or Title 11 of the United States Code. SECTION 908. Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds, except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company. SECTION 909. Compensation and Reimbursement. The Company shall (a) pay to the Trustee from time to time such compensation as the Company and the Trustee shall from time to time agree in writing for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (b) except as otherwise expressly provided herein, reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence, willful misconduct or bad faith; and (c) indemnify each of the Trustee or any predecessor Trustee for, and hold it harmless from and against, any and all loss, damage, claim, liability or expense, including taxes imposed on the trust created by this Indenture (other than taxes based on the income of the Trustee), reasonably incurred without negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including liability which the Trustee may incur as a result of failure to withhold, pay or report any tax, assessment or other governmental charges and the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. As security for the performance of the obligations of the Company under this Section, the Trustee shall have a lien prior to the Securities upon all property and funds held or collected by the Trustee as such, except as otherwise provided in Section 703. When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 801(d) or Section 801(e), the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable Federal or state bankruptcy, insolvency or other similar law. The provisions of this Section shall survive the termination of this Indenture. SECTION 910. Disqualification; Conflicting Interests. (a) If a Trustee shall have or acquire any conflicting interest as defined in Section 910(d), then, within 90 days after ascertaining that it has such conflicting interest, and if the Default to which such conflicting interest relates has not been cured or duly waived or otherwise eliminated before the end of such 90-day period, it shall either eliminate such conflicting interest or, except as provided in this Section 910, resign; and the Company shall take prompt steps to have a successor appointed in the manner provided in this Article. (b) In the event that a Trustee shall fail to comply with the provisions of Section 910(a), it shall, within 10 days after the expiration of such 90-day period, transmit notice of such failure to the Holders of the Conflicted Securities (as hereinafter defined), in the manner and to the extent provided in Section 1003(c). (c) Subject to the provisions of Section 814, any Holder of any Conflicted Securities who shall have been a bona fide Holder of such Securities for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to such Securities, and the appointment of a successor, if such Trustee shall have failed, after written request thereof by such Holder, to comply with Section 910(a). (d) For the purposes of Section 910(a), a Trustee shall be deemed to have a conflicting interest with respect to the Securities of each series for which it shall act as trustee, if any of the Securities of such series shall be in Default (the Securities of each such series being referred to in this Section 910 as the "Conflicted Securities") and (1) such Trustee is trustee under this Indenture with respect to any Securities other than the Conflicted Securities or is trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the Company are outstanding, unless (i) the Conflicted Securities are collateral trust notes for which the only collateral consists of Securities other than the Conflicted Securities or securities issued under such other indenture, or (ii) such other indenture is a collateral trust indenture under which the only collateral consists of Conflicted Securities; provided, however, that there shall be excluded from the operation of this Section 910(d) all Securities, other than the Conflicted Securities, and any other securities, or certificates of interest or participation in any other securities, of the Company which shall be outstanding under any other indenture, if (A) this Indenture and such other indenture (and all series of securities issuable thereunder) are wholly unsecured and rank equally, and such other indenture (and such series) is specifically described in this Indenture or is hereafter qualified under the Trust Indenture Act, unless the Commission shall have found and declared by order pursuant to Section 305(b) or Section 307(c) of the Trust Indenture Act that differences exist between the provisions of this Indenture with respect to the Conflicted Securities and the Securities of any other series or the provisions of such other indenture (or such series) which are so likely to involve a material conflict of interest as to make it necessary in the public interest or for the protection of investors to disqualify the Trustee from acting as such under this Indenture with respect to the Conflicted Securities and such other Securities or under such other indenture, or (B) the Company shall have sustained the burden of proving, on application to the Commission and after opportunity for hearing thereon, that trusteeship under this Indenture with respect to the Conflicted Securities and any other Securities or such other indenture is not so likely to involve a material conflict of interest as to make it necessary in the public interest or for the protection of investors to disqualify such Trustee from acting as such under this Indenture with respect to the Conflicted Securities and any other Securities or under such other indenture; (2) such Trustee or any of its directors or executive officers is an underwriter for the Company; (3) such Trustee directly or indirectly controls or is directly or indirectly controlled by or is under direct or indirect common control with an underwriter for the Company; (4) such Trustee or any of its directors or executive officers is a director, officer, partner, employee, appointee or representative of the Company, or of an underwriter (other than such Trustee itself) for the Company which is currently engaged in the business of underwriting, except that (A) one individual may be a director or an executive officer, or both, of such Trustee and a director or an executive officer, or both, of the Company, but may not be at the same time an executive officer of both such Trustee and the Company; (B) if and so long as the number of directors of such Trustee in office is more than nine, one additional individual may be a director or an executive officer, or both, of such Trustee and a director of the Company; and (C) such Trustee may be designated by the Company or by any underwriter for the Company to act in the capacity of transfer agent, registrar, custodian, paying agent, fiscal agent, escrow agent or depositary, or in any other similar capacity, or, subject to the provisions of paragraph (1) of this Section, to act as trustee, whether under an indenture or otherwise; (5) 10% or more of the voting securities of such Trustee is beneficially owned either by the Company or by any director, partner or executive officer thereof, or 20% or more of such voting securities is beneficially owned, collectively, by any two or more of such persons; or 10% or more of the voting securities of such Trustee is beneficially owned either by an underwriter for the Company or by any director, partner or executive officer thereof, or is beneficially owned, collectively, by any two or more such persons; (6) such Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in Default, (A) 5% or more of the voting securities, or 10% or more of any other class of security, of the Company, not including the Securities and securities issued under any other indenture under which such Trustee is also trustee or (B) 10% or more of any class of security of an underwriter for the Company; (7) such Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in Default, 5% or more of the voting securities of any person who, to the knowledge of the Trustee, owns 10% or more of the voting securities of, or controls directly or indirectly or is under direct or indirect common control with, the Company; (8) such Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in Default, 10% or more of any class of security of any person who, to the knowledge of the Trustee, owns 50% or more of the voting securities of the Company; (9) such Trustee owns, on the date of Default upon the Conflicted Securities or any anniversary of such Default while such Default remains outstanding, in the capacity of executor, administrator, testamentary or inter vivos trustee, guardian, committee or conservator, or in any other similar capacity, an aggregate of 25% or more of the voting securities, or of any class of security, of any person, the beneficial ownership of a specified percentage of which would have constituted a conflicting interest under paragraph (6), (7) or (8) of this Section 910(d). As to any such securities of which such Trustee acquired ownership through becoming executor, administrator or testamentary trustee of an estate which included them, the provisions of the preceding sentence shall not apply, for a period of two years from the date of such acquisition, to the extent that such securities included in such estate do not exceed 25% of such voting securities or 25% of any such class of security. Promptly after the date of any such Default and annually in each succeeding year in which such Default shall be continuing, such Trustee shall make a check of its holdings of such securities in any of the above-mentioned capacities as of such date. If the Company shall fail to make payment in full of the principal of, or premium, if any, or interest, if any, on, any of the Securities when and as the same shall become due and payable, and such failure shall continue for 30 days thereafter, such Trustee shall make a prompt check of its holdings of such securities in any of the above-mentioned capacities as of the date of the expiration of such 30-day period, and after such date, notwithstanding the foregoing provisions of this paragraph, all such securities so held by such Trustee, with sole or joint control over such securities vested in it, shall be considered as though beneficially owned by such Trustee for the purposes of paragraphs (6), (7) and (8) of this Section; or (10) except under the circumstances described in paragraph (1), (3), (4), (5) or (6) of Section 907(b), such Trustee shall be or become a creditor of the Company. The specification of percentages in paragraphs (5) through (9) of this Section 910(d) shall not be construed as indicating that the ownership of such percentages of the securities of a person is or is not necessary or sufficient to constitute direct or indirect control for the purposes of paragraph (3) or (7) of this Section 910(d). For the purposes of paragraph (1) of this Section 910(d) and Sections 812 and 813, the terms "series of securities" or "series" means a series, class or group of securities issued under an indenture pursuant to the terms of which the Holders of one such series may vote to direct the indenture trustee therefor, or otherwise take action pursuant to a vote of such Holders, separately from the Holders of another such series, class or group; provided, that neither of such terms shall include any such series, class or group if all of such series, classes and groups rank equally and are wholly unsecured. For the purposes of paragraphs (6) through (9) of this Section 910(d), (a) the terms "security" and "securities" shall include only such securities as are generally known as corporate securities, but shall not include any note or other evidence of indebtedness issued to evidence an obligation to repay moneys lent to a person by one or more banks, trust companies or banking firms, or any certificate of interest or participation in any such note or evidence of indebtedness; and (b) the Trustee shall not be deemed to be the owner or holder of (i) any security which it holds as collateral security, as trustee or otherwise, for an obligation which is not in default as to payment of principal for 30 days or more, (ii) any security which it holds as collateral security under this Indenture, irrespective of any Default hereunder or (iii) any security which it holds as agent for collection, or as custodian, escrow agent or depositary, or in any similar representative capacity. (e) For the purpose of this Section 910: (1) the term "Company" means any obligor upon the Securities; (2) the term "Conflicted Securities" means the Securities of any series with respect to which the Trustee shall be deemed by virtue of Section 910(d) to have a conflicting interest for purposes of Section 910(a); (3) the term "Default" means an Event of Default exclusive of any period of grace or requirement of notice, except that, for the purposes of paragraphs (6) through (9) of Section 910(d), the term "Default", when used with respect to a failure to pay the principal of any Security, or any installment thereof, at its Stated Maturity, means a failure to pay such principal or installment, at its Stated Maturity, which failure shall have continued for 30 days or more and shall not have been cured; (4) the term "director" means any director of a corporation or any individual performing similar functions with respect to any organization, whether incorporated or unincorporated; (5) the term "executive officer" means the president, every vice president, every trust officer, the cashier, the secretary and the treasurer of a corporation, and any individual customarily performing similar functions with respect to any organization whether incorporated or unincorporated, but shall not include the chairman of the board of directors; (6) the term "person" means an individual, a corporation, a partnership, an association, a joint-stock company, a trust, an unincorporated organization or a government or political subdivision thereof; and as used in this paragraph, the term "trust" shall include only a trust where the interest or interests of the beneficiary or beneficiaries are evidenced by a security; (7) the term "underwriter", when used with reference to the Company, means every person who, within one year prior to the time as of which the determination is made, has purchased from the Company with a view to, or has offered or sold for the Company in connection with, the distribution of any security of the Company outstanding at such time, or has participated or has had a direct or indirect participation in any such undertaking, or has participated or has had a participation in the direct or indirect underwriting of any such undertaking, but such term shall not include a person whose interest was limited to a commission from an underwriter or dealer not in excess of the usual and customary distributors' or sellers' commission; and (8) the term "voting security" means any security presently entitling the owner or holder thereof to vote in the direction or management of the affairs of a person, or any security issued under or pursuant to any trust, agreement or arrangement whereby a trustee or trustees or agent or agents for the owner or holder of such security are presently entitled to vote in the direction or management of the affairs of a person; (f) The percentages of voting securities and other securities specified in Section 910(d) shall be calculated in accordance with the following provisions: (1) a specified percentage of the voting securities of the Trustee, the Company or any other person referred to in such Section (each of whom is referred to as a "person" in this paragraph) means such amount of the outstanding voting securities of such person as entitles the holder or holders thereof to cast such specified percentage of the aggregate votes which the holders of all the outstanding voting securities of such person are entitled to cast in the direction or management of the affairs of such person; (2) a specified percentage of a class of securities of a person means such percentage of the aggregate amount of securities of the class outstanding; (3) the term "amount", when used in regard to securities, means the principal amount if relating to evidences of indebtedness, the number of shares if relating to capital shares and the number of units if relating to any other kind of security; (4) the term "outstanding", as used in this Section 910(f), means issued and not held by or for the account of the issuer; the following securities shall not be deemed outstanding within the meaning of this definition: (A) securities of an issuer held in a sinking fund relating to securities of the issuer of the same class; (B) securities of an issuer held in a sinking fund relating to another class of securities of the issuer, if the obligation evidenced by such other class of securities is not in default as to principal or interest or otherwise; (C) securities pledged by the issuer thereof as security for an obligation of the issuer not in default as to principal or interest or otherwise; and (D) securities held in escrow if placed in escrow by the issuer thereof; provided, however, that any voting securities of an issuer shall be deemed outstanding if any person other than the issuer is entitled to exercise the voting rights thereof; and (5) a security shall be deemed to be of the same class as another security if both securities confer upon the holder or holders thereof substantially the same rights and privileges; provided, however, that, in the case of secured evidences of indebtedness, all of which are issued under a single indenture, differences in the interest rates or maturity dates of various series thereof shall not be deemed sufficient to constitute such series different classes; and provided, further, that, in the case of unsecured evidences of indebtedness, differences in the interest rates or maturity dates thereof shall not be deemed sufficient to constitute them securities of different classes, whether or not they are issued under a single indenture. (g) Except in the case of an Event of Default involving the failure to pay principal of or interest on any Security, the Trustee shall not be required to resign as provided by this Section if the Commission declares that the Trustee has sustained the burden of proving, on application to such Commission and after opportunity for hearing thereon, that: (i) such Event of Default may be cured or waived during a reasonable period and under the procedures described in such application; and (ii) a stay of the Trustee's duty to resign will not be inconsistent with the interests of holders of the Securities. The filing of such an application shall automatically stay the performance of the duty to resign until the Commission shall have ordered otherwise. SECTION 911. Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with Section 912. (b) The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 912 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. (c) The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Trustee and to the Company. (d) If at any time: (1) the Trustee shall fail to comply with Section 910(a) after written request therefor by the Company or by any Holder who has been a bona fide Holder for at least six months, or (2) the Trustee shall cease to be eligible under Section 901 and shall fail to resign after written request therefor by the Company or by any such Holder, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (x) the Company by a Board Resolution may remove the Trustee with respect to all Securities or (y) any Holder who has been a bona fide Holder for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 912. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 911, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 912, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. (f) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series by mailing written notice of such event by first-class mail, postage prepaid, to all Holders of Securities of such series as their names and addresses appear in the Security Register. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office. SECTION 912. Acceptance of Appointment by Successor. (a) In case of the appointment hereunder of a successor Trustee with respect to the Securities of all series, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. (b) In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee, upon payment of all sums owed to it, shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; provided, however, that the retiring Trustee shall not be required to indemnify the successor Trustee against any liability and expense incurred as a result of the appointment of the successor Trustee. (c) Upon request of any such successor Trustee, the Company shall execute any instruments which fully vest in and confirm to such successor Trustee all such rights, powers and trusts referred to in subsection (a) or (b) of this Section, as the case may be. (d) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. SECTION 913. Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. SECTION 914. Appointment of Authenticating Agent. The Trustee may appoint an Authenticating Agent or Agents with respect to the Securities of one or more series, or any Tranche thereof, which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series or Tranche issued upon original issuance, exchange, registration of transfer or partial redemption thereof or pursuant to Section 306, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State or territory thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $10,000,000 and subject to supervision or examination by Federal or state authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent. An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall make written notice at such appointment by first-class mail, postage prepaid, to all Holders. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. The Company agrees to pay to each Authenticating Agent, from time to time, reasonable compensation for its services under this Section and to reimburse each Authenticating Agent, from time to time, for its reasonable out-of-pocket expenses incurred under this Section. If an appointment with respect to the Securities of one or more series, or any Tranche thereof, shall be made pursuant to this Section, the Securities of such series or Tranche may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternate certificate of authentication substantially in the following form: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. Dated: THE BANK OF NEW YORK, As Trustee By: As Authenticating Agent By: Authorized Signatory If all of the Securities of a series may not be originally issued at one time, and if the Trustee does not have an office capable of authenticating Securities upon original issuance located in a Place of Payment where the Company wishes to have Securities of such series authenticated upon original issuance, the Trustee, if so requested by the Company in writing (which writing need not comply with Section 102 and need not be accompanied by an Opinion of Counsel), shall appoint, in accordance with this Section and in accordance with such procedures as shall be acceptable to the Trustee, an Authenticating Agent (which, if so requested by the Company, may be an Affiliate of the Company) having an office in a Place of Payment designated by the Company with respect to such series of Securities. ARTICLE TEN Holders' Lists and Reports by Trustee and Company SECTION 1001. Company to Furnish Trustee Names and Addresses of Holders. The Company shall furnish or cause to be furnished to the Trustee (a) semiannually, not later than June 1 and December 1, in each year, a list, in such form as the Trustee may reasonably require, containing all the information in the possession or control of the Company, or any of its Paying Agents other than the Trustee, as to the names and addresses of the Holders as of the preceding May 15 or November 15, as the case may be, and (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided, however, the Company may exclude from any such list names and addresses provided by it to the Trustee in its capacity as Security Registrar. SECTION 1002. Preservation of Information; Communications to Holders. (a) The Trustee shall preserve, in as current a form as shall be reasonably practicable, the names and addresses of Holders (1) contained in the most recent list furnished to the Trustee as provided in Section 1001 and (2) received by the Trustee in the capacity of Paying Agent. The Trustee may (A) destroy any list furnished to it as provided in Section 1001 upon receipt of a new list so furnished, (B) destroy any information received by it as Paying Agent (if so acting) hereunder with respect to the Securities of any series upon delivering to itself as Trustee, not earlier than forty-five days after the then most recent Interest Payment Date for such Securities, a list containing the names and addresses of the Holders of such Securities obtained from such information since the delivery of the next previous list, if any, and (C) destroy any list delivered to itself as Trustee which was compiled from information received by it as Paying Agent (if so acting) hereunder upon the receipt of a new list so delivered. (b) If three or more Holders (herein referred to as "applicants") shall apply in writing to the Trustee, and furnish to the Trustee reasonable proof that each such applicant has owned a Security for a period of at least six months preceding the date of such application, and such application shall state that the applicants desire to communicate with other Holders with respect to their rights under this Indenture or under the Securities and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Trustee shall, within five business days after the receipt of such application, at its election, either (1) afford such applicants access to the information preserved at the time by the Trustee in accordance with Section 1002(a), or (2) inform such applicants as to the approximate number of Holders whose names and addresses appear in the information preserved at the time by the Trustee in accordance with Section 1002(a), and as to the approximate cost of mailing to such Holders the form of proxy or other communication, if any, specified in such application. If the Trustee shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each Holder whose name and address appear in the information preserved at the time by the Trustee in accordance with Section 1002(a) a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Trustee by such applicants of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender, the Trustee shall mail to such applicants and file with the Commission, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interest of the Holders or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If the Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, the Commission shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all such Holders with reasonable promptness after the entry of such order and the renewal of such tender by such applicants as aforesaid. Otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application. (c) Every Holder of Securities, by receiving and holding the same, shall be deemed to have agreed with the Company and the Trustee that neither the Company nor the Trustee, nor any agent of either of them, shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with Section 1002(b), regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 1002(b). SECTION 1003. Reports by Trustee. (a) Within 60 days after March 1 of each year commencing with the year 1996, the Trustee, if any of the following events shall have occurred during the twelve-months ended on such March 1, shall transmit by mail to the Holders, as provided in subsection (c) of this Section, a brief report dated as of such March 1 with respect to: (1) any change to its eligibility under Section 901; (2) the creation of or any material change to a relationship specified in clauses (1) through (10) of Section 910(d); (3) the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such) which remain unpaid on the date of such report, and for the reimbursement of which it claims or may claim a lien or charge, prior to that of the Securities, on any property or funds held or collected by it as Trustee, if such advances so remaining unpaid aggregate more than 1/2 of 1% of the principal amount of the Securities Outstanding on the date of such report; (4) any change to the amount, interest rate and maturity date of all other indebtedness owing by the Company (or by any other obligor on the Securities) to the Trustee in its individual capacity, on the date of such report, with a brief description of any property held as collateral security therefor, except an indebtedness based upon a creditor relationship arising in any manner described in clauses (2), (3), (4) or (6) of Section 907(b); (5) any change to the property and funds, if any, physically in the possession of the Trustee as such on the date of such report; (6) any additional issue of Securities which the Trustee has not previously reported; and (7) any action taken by the Trustee in the performance of its duties hereunder which it has not previously reported and which, in its opinion, materially affects the Securities, except action in respect of a default, notice of which has been or is to be withheld by the Trustee in accordance with Section 903. (b) The Trustee shall transmit to the Holders, as provided in Section 1003(c), a brief report with respect to the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such) since the date of the last report transmitted pursuant to Section 1003(a) (or if no such report has yet been so transmitted, since the date of execution of this instrument) for the reimbursement of which it claims or may claim a lien or charge, prior to that of the Securities, on property or funds held or collected by it as Trustee and which it has not previously reported pursuant to this Section, except that the Trustee shall not be required (but may elect) to report such advances if such advances remaining unpaid at any time aggregate 10% or less of the principal amount of the Securities Outstanding at such time, such report to be transmitted within 90 days after such time. (c) Reports pursuant to Section 1003 shall be transmitted by mail: (1) to all Holders, as their names and addresses appear in the Security Register; (2) to such Holders as have, within the two years preceding such transmission, filed their names and addresses with the Trustee for that purpose; and (3) except in the case of reports pursuant to Section 1003(b), to all Holders whose names and addresses shall be preserved, at the time by the Trustee, as provided in Section 1002(a). (d) A copy of each such report, at the time of such transmission to Holders, shall be filed by the Trustee with each stock exchange upon which any Securities with respect to which it relates are listed, the Commission and the Company. The Company will promptly notify the Trustee when any Securities are listed on any stock exchange. SECTION 1004. Reports by Company. The Company shall: (a) file with the Trustee, within 30 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934; or, if the Company is not required to file information, documents or reports pursuant to either of such Sections, then it shall file with the Trustee and the Commission, in accordance with the rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations; (b) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Indenture as may be required, from time-to-time, by such rules and regulations; (c) transmit, within 30 days after the filing thereof with the Trustee, to the Holders, in the manner and to the extent provided in Section 1003(c), such summaries of any information, documents and reports required to be filed by the Company pursuant to clauses (a) or (b) of this Section as may be required by rules and regulations prescribed, from time-to-time, by the Commission; (d) furnish to the Trustee, not less often than annually, within 120 days after the end of the Company's fiscal year, a brief certificate from its principal executive officer, principal financial officer or principal accounting officer as to his knowledge of the Company's compliance with all of the conditions and covenants of this Indenture, such compliance to be determined without regard to any period of grace or requirement of notice; and (e) file with the Trustee a brief certificate from its principal executive officer, principal financial officer or principal accounting officer giving notice of the occurrence of any Event of Default or event which with the giving of notice or passage of time would become an Event of Default within five Business Days of such officer having actual knowledge of any Event of Default or of any such event. Delivery of the information, documents and reports required to be filed pursuant to clauses (a) or (b) of this Section to the Trustee shall be for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its convenants hereunder (as to which the Trustee shall be entitled to rely exclusively on Officers' Certificates). ARTICLE ELEVEN Consolidation, Merger, Conveyance, Transfer or Lease SECTION 1101. Company May Consolidate, Etc., Only on Certain Terms. 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 (a) the corporation formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a Person duly organized and validly existing under the laws of the jurisdiction of its organization, and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of, and premium, if any, and interest, if any, on, all Outstanding Securities and the performance of every covenant of this Indenture on the part of the Company to be performed or observed; and (b) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and such indenture supplemental hereto complies with this Article and that all conditions precedent herein provided for relating to such transactions have been complied with. SECTION 1102. Successor Corporation Substituted. Upon any consolidation by the Company with or merger by the Company into any other corporation or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 1101, the successor corporation formed by such consolidation or into which the Company is merged or the Person to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities Outstanding hereunder. SECTION 1103. Restrictions on Liens. Nothing in this Indenture or in the Securities shall in any way restrict or prevent the Company from incurring any indebtedness; provided, however, that the Company shall not issue, assume or guarantee any notes, bonds, debentures or other similar evidences of indebtedness for money borrowed (notes, bonds, debentures or other similar evidences of indebtedness for money borrowed being herein called "Debt") secured by mortgage, lien, pledge or other encumbrances (mortgages, liens, pledges or other encumbrances being herein called "Mortgages") upon any property of the Company, without effectively providing that the Securities of each series then outstanding and thereafter created (together with, if the Company so determines, any other indebtedness or obligation then existing and any other indebtedness or obligation thereafter created ranking equally with the Securities then existing or thereafter created which is not subordinated to the Securities of each series) shall be secured equally and ratably with (or prior to) such Debt so long as such Debt shall be so secured, except that the foregoing provisions shall not apply to: (a) Mortgages to secure Debt issued under the Company's Indenture of First Mortgage and Deed of Trust, dated as of February 1, 1955 to the United States Trust Company of New York [successor to the Chase Manhattan Bank (National Association), successor to the Chase National Bank of the City of New York], as trustee, as amended and supplemented to date and as it may be hereafter amended and supplemented from time to time (as it exists and may so exist from time to time, the "Existing Mortgage") or any extension, renewal or replacement thereof; (b) Mortgages affecting property of a corporation existing at the time it becomes a Subsidiary or at the time it is merged into or consolidated with the Company or a Subsidiary; provided, that the lien of any such Mortgage as a result of such consolidation or merger shall not be extended to the property owned by the Company immediately prior thereto; (c) Mortgages on property existing at the time of acquisition thereof or incurred to secure payment of all or part of the purchase price thereof or to secure Debt incurred prior to, at the time of or within 12 months after acquisition thereof for the purpose of financing all or part of the purchase price thereof; (d) Mortgages on any property to secure all or part of the cost of construction or improvements thereon or Debt incurred to provide funds for any such purpose in a principal amount not exceeding the cost of such construction or improvements; (e) Mortgages in favor of the United States or any state thereof, or any department, agency, instrumentality, or political subdivision of any such jurisdiction, to secure partial, progress, advance or other payments pursuant to any contract or statute or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or cost of constructing or improving the property subject thereto, including, without limitation, Mortgages to secure Debt of the pollution control or industrial revenue bond type; (f) Mortgages required by any contract or statute in order to permit the Company to perform any contract or subcontract made by it with or at the request of the United States of America, any state or any department, agency or instrumentality or political subdivision of either; (g) mortgages to secure loans to the Company or any Subsidiary maturing within 12 months from the creation thereof and made in the ordinary course of business; (h) "Permitted Encumbrances", as such term is defined in the Existing Mortgage referred to in clause (a) above or any encumbrances resulting from the Company's obligations arising from its ownership interest in Vermont Electric Power Company, Inc. or Vermont Yankee Nuclear Power Corporation; (i) without limiting the generality of clause (i) above, mortgages consisting of (i) pledges or deposits in the ordinary course of business to secure obligations under workers' compensation laws or similar legislation, including liens of judgments thereunder which are not currently dischargeable, (ii) deposits in the ordinary course of business to secure, or in lieu of, surety, appeal, or customs bonds to which the Company is a party, (iii) mortgages created by or resulting from any litigation or legal proceeding which is currently being contested in good faith by appropriate proceedings diligently conducted, (iv) pledges or deposits in the ordinary course of business to secure performance in connection with bids, tenders or contracts (other than contracts for the payment of money), or (v) materialmen's, mechanics', carriers', workmen's, repairmen's or other like liens incurred in the ordinary course of business for sums not yet due or currently being contested in good faith by appropriate proceedings diligently conducted, or deposits to obtain the release of such liens; or (j) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any Mortgage referred to in the foregoing clauses (b) to (i) inclusive or of any Debt secured thereby, provided that the principal amount of Debt secured thereby shall not exceed the principal amount of Debt so secured at the time of such extension, renewal or replacement, and that such extension, renewal or replacement Mortgage shall be limited to all or part of substantially the same property which secured the Mortgage extended, renewed or replaced (plus improvements on such property). Notwithstanding the restrictions contained in the foregoing provisions of this Section 1103, the Company may issue, assume or guarantee Debt secured by Mortgages in an aggregate principal amount which does not at any one time exceed 10% of the Net Tangible Assets of the Company. For the purposes of the foregoing sentence, the aggregate principal amount of Debt which shall be applied against such 10% limitation shall not include any Debt described in clauses (a) through (j), inclusive, above. If at any time the Company shall issue, assume or guarantee any Debt secured by any mortgage and if this Section 1103 requires that the Securities of each series be secured equally and ratably with such Debt, the Company will promptly deliver to the Trustee (i) an Officers' Certificate stating that the covenant of the Company contained in this Section 1103 has been complied with; and (ii) an Opinion of Counsel to the effect that such covenant has been complied with, and that any instruments executed by the Company in the performance of such covenant comply with the requirements of such covenant. In the event that the Company shall secure the Securities of each series equally and ratably with (or prior to) any other obligation or indebtedness pursuant to the provisions of this Section 1103, the Trustee is hereby authorized to enter into an indenture or agreement supplemental hereto and to take such action, if any, as it may deem advisable to enable it to enforce effectively the rights of the holders of the Securities so secured, equally and ratably with such other obligation or indebtedness; provided, however, that if such indenture or agreement affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture or agreement. ARTICLE TWELVE Supplemental Indentures SECTION 1201. Supplemental Indentures Without Consent of Holders. Without the consent of any Holders, the Company and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form reasonably satisfactory to the Trustee, for any of the following purposes: (a) to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities, all as provided in Article Eleven; or (b) to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities, or any Tranche thereof (and if such covenants are to be for the benefit of less than all Securities, stating that such covenants are expressly being included solely for the benefit of such series or Tranche) or to surrender any right or power herein conferred upon the Company; or (c) to add any additional Events of Default with respect to all or any series of Securities; or (d) to change or eliminate any provision of this Indenture or to add any new provision to this Indenture; provided, however, that if such change, elimination or addition shall adversely affect the interests of the Holders of Securities of any series, or a Tranche thereof, in any material respect, such change, elimination or addition shall become effective with respect to such series or Tranche only when no Security of such series or Tranche remains Outstanding; or (e) to provide collateral security for the Securities; or (f) to establish the form or terms of Securities of any series or Tranche as contemplated by Sections 201 and 301; or (g) to evidence and provide for the acceptance of appointment hereunder by a separate or successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 912(b); or (h) to provide for the procedures required to permit the Company to issue, at its option, the Securities of any series or Tranche thereof, in non-certificated form; or (i) to change any place or places where (1) the principal of, and premium, if any, and interest, if any, on, all or any series of Securities, or any Tranche thereof, shall be payable, (2) all or any series of Securities, or any Tranche thereof, may be surrendered for registration of transfer, (3) all or any series of Securities, or any Tranche thereof, may be surrendered for exchange and (4) notices and demands to or upon the Company in respect of all or any series of Securities, or any Tranche thereof, and this Indenture may be served; provided, however, that any such place shall be located in New York, New York or in the city specified pursuant to Section 301; or (j) to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided that such other provisions shall not adversely affect the interests of the Holders of Securities of any series, or Tranche thereof, in any material respect. Without limiting the generality of the foregoing, if the Trust Indenture Act as in effect at the date of the execution and delivery of this Indenture or at any time thereafter shall be amended and (x) if any such amendment shall require one or more changes to any provisions hereof or the inclusion herein of any additional provisions, or shall by operation of law be deemed to effect such changes or incorporate such provisions by reference or otherwise, this Indenture shall be deemed to have been amended so as to conform to such amendment to the Trust Indenture Act, and the Company and the Trustee may, without the consent of any Holders, enter into an indenture supplemental hereto to effect or evidence such changes or additional provisions; or (y) if any such amendment shall permit one or more changes to, or the elimination of, any provisions hereof which, at the date of the execution and delivery hereof or at any time thereafter, are required by the Trust Indenture Act to be contained herein, this Indenture shall be deemed to have been amended to effect such changes or elimination, and the Company and the Trustee may, without the consent of any Holders, enter into an indenture supplemental hereto to effect such changes or elimination; or (z) if, by reason of any such amendment, one or more provisions which, at the date of the execution and delivery hereof or at any time thereafter, are required by the Trust Indenture Act to be deemed to be incorporated herein by reference or otherwise, or otherwise made applicable hereto, shall no longer be required to be deemed to be so incorporated herein or otherwise made applicable hereto, the Company and the Trustee may, without the consent of any Holders, enter into an indenture supplemental hereto to effect the elimination of such provisions. SECTION 1202. Supplemental Indentures With Consent of Holders. With the consent of the Holders of not less than a majority in aggregate principal amount of the Securities of all series then Outstanding under this Indenture, considered as one class, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture; provided, however, that if there shall be Securities of more than one series Outstanding hereunder and if a proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such series, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all series so directly affected, considered as one class, shall be required; and provided, further, that if the Securities of any series shall have been issued in more than one Tranche and if the proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such Tranches, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all Tranches so directly affected, considered as one class, shall be required; and provided, further, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security of each series or Tranche so directly affected, (a) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or the method of calculating such rate (or the amount of any installment of interest thereon) or any premium payable upon the redemption thereof, or reduce the amount of the principal of a Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 802, 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 (b) reduce the percentage in principal amount of the Outstanding Securities of such series or Tranche, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with any provision of this Indenture or of any default hereunder and its consequences, or reduce the requirements of Section 1304 for quorum or voting, or (c) modify any of the provisions of this Section or Section 813, except to increase the percentages in principal amount referred to in this Section or such other Sections or to provide that other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to "the Trustee" and concomitant changes in this Section, or the deletion of this proviso, in accordance with the requirements of Sections 912(b) and 1201(g). A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or of one or more Tranches thereof, or which modifies the rights of the Holders of Securities of such series or Tranches with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series or Tranche. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. SECTION 1203. Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 902) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties, immunities or liabilities under this Indenture or otherwise. SECTION 1204. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, such supplemental indenture shall form a part of this Indenture for all purposes, and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. Any supplemental indenture permitted by this Article may restate this Indenture in its entirety, and, upon the execution and delivery thereof, any such restatement shall supersede this Indenture as theretofore in effect for all purposes. SECTION 1205. Conformity With Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect. SECTION 1206. Reference in Securities to Supplemental Indentures. Securities of any series, or any Tranche thereof, authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any series, or any Tranche thereof, so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series or Tranche. SECTION 1207. Modification Without Supplemental Indenture. If the terms of any particular series, or any Tranche thereof, of Securities shall have been established by a Board Resolution, an Officers' Certificate pursuant to a Board Resolution, a Company Order or procedures, acceptable to the Trustee, specified in a Company Order as contemplated by Section 301, and not in an indenture supplemental hereto, additions to, changes in or the elimination of any of such terms may be effected by means of a further Board Resolution or further Officers' Certificate pursuant to a Board Resolution, as the case may be, delivered to, and accepted by, the Trustee; provided, however, that such Board Resolution or Officers' Certificate shall not be accepted by the Trustee or otherwise be effective unless all conditions set forth in this Indenture which would be required to be satisfied if such additions, changes or elimination were contained in a supplemental indenture shall have been appropriately satisfied. Upon the acceptance thereof by the Trustee, any such Board Resolution or Officers' Certificate shall be deemed to be a "supplemental indenture" for purposes of Section 1204 and 1206. ARTICLE THIRTEEN Meetings of Holders; Action Without Meeting SECTION 1301. Purposes for Which Meetings May Be Called. A meeting of Holders of Securities of one or more series, or one or more Tranches thereof, may be called, at any time and from time- to-time, pursuant to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be made, given or taken by Holders of Securities of such series or Tranches. SECTION 1302. Call, Notice and Place of Meetings. (a) The Trustee may at any time call a meeting of Holders of Securities of one or more series, or one or more Tranches thereof, for any purpose specified in Section 1301, to be held at such time and at such place in the Borough of Manhattan, The City of New York, as the Trustee shall determine, or, with the approval of the Company, at any other place. Notice of every such meeting, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given, in the manner provided in Section 106, not less than 21 nor more than 360 days prior to the date fixed for the meeting. (b) If the Trustee shall have been requested to call a meeting of the Holders of Securities of one or more series, or one or more Tranches thereof, by the Company or by the Holders of 33% in aggregate principal amount of all of such series and Tranches, considered as one class, for any purpose specified in Section 1301, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have given the notice of such meeting within 21 days after receipt of such request or shall not thereafter proceed to cause the meeting to be held as provided herein, the Company or the Holders of Securities of such series and Tranches in the amount above specified, as the case may be, may determine the time and the place in the Borough of Manhattan, The City of New York, or in such other place as shall be determined or approved by the Company, for such meeting and may call such meeting for such purposes by giving notice thereof in the manner provided in Section 106. (c) Any meeting of Holders of Securities of one or more series, or one or more Tranches thereof, shall be valid without notice if the Holders of all Outstanding Securities of such series or Tranches are present in person or by proxy and if representatives of the Company and the Trustee are present, or if notice is waived in writing before or after the meeting by the Holders of all Outstanding Securities of such series or Tranches, or by such of them as are not present at the meeting in person or by proxy, and by the Company and the Trustee. SECTION 1303. Persons Entitled to Vote at Meetings. To be entitled to vote at any meeting of Holders of Securities of one or more series, or one or more Tranches thereof, a Person shall be (a) a Holder of one or more Outstanding Securities of such series or Tranches, or (b) a Person appointed by an instrument in writing as proxy for a Holder or Holders of one or more Outstanding Securities of such series or Tranches by such Holder or Holders. The only Persons who shall be entitled to attend any meeting of Holders of Securities of any series or Tranche shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company and its counsel. SECTION 1304. Quorum; Action. The Persons entitled to vote a majority in aggregate principal amount of the Outstanding Securities of the series and Tranches with respect to which a meeting shall have been called as hereinbefore provided, considered as one class, shall constitute a quorum for a meeting of Holders of Securities of such series and Tranches; provided, however, that if any action is to be taken at such meeting which this Indenture expressly provides may be taken by the Holders of a specified percentage, which is less than a majority in principal amount of the Outstanding Securities of such series and Tranches, considered as one class, the Persons entitled to vote such specified percentage in principal amount of the Outstanding Securities of such series and Tranches, considered as one class, shall constitute a quorum. In the absence of a quorum within one hour of the time appointed for any such meeting, the meeting shall, if convened at the request of Holders of Securities of such series and Tranches, be dissolved. In any other case the meeting may be adjourned for such period as may be determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for such period as may be determined by the chairman of the meeting prior to the adjournment of such adjourned meeting. Except as provided by Section 1305(e), notice of the reconvening of any meeting adjourned for more than 30 days shall be given in the manner provided in Section 106 not less than ten days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the principal amount of the Outstanding Securities of such series and Tranches which shall constitute a quorum. Except as limited by Section 1202, any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted only by the affirmative vote of the Holders of a majority in aggregate principal amount of the Outstanding Securities of the series and Tranches with respect to which such meeting shall have been called, considered as one class; provided, however, that, except as so limited, any resolution with respect to any action which this Indenture expressly provides may be taken by the Holders of a specified percentage, which is less than a majority, in principal amount of the Outstanding Securities of such series and Tranches, considered as one class, may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid by the affirmative vote of the Holders of such specified percentage in principal amount of the Outstanding Securities of such series and Tranches, considered as one class. Any resolution passed or decision taken at any meeting of Holders of Securities duly held in accordance with this Section shall be binding on all the Holders of Securities of the series and Tranches with respect to which such meeting shall have been held, whether or not present or represented at the meeting. SECTION 1305. Attendance at Meetings; Determination of Voting Rights; Conduct and Adjournment of Meetings. (a) Attendance at meetings of Holders of Securities may be in person or by proxy; and, to the extent permitted by law, any such proxy shall remain in effect and be binding upon any future Holder of the Securities with respect to which it was given unless and until specifically revoked by the Holder or future Holder of such Securities before being voted. (b) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders of Securities in regard to proof of the holding of such Securities and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem to be appropriate. Except as otherwise permitted or required by any such regulations, the holding of Securities shall be proved in the manner specified in Section 104 and the appointment of any proxy shall be proved in the manner specified in Section 104. With the consent of the Company, such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and genuine without the proof specified in Section 104 or other proof. (c) The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Holders as provided in Section 1302(b), in which case the Company or the Holders of Securities calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Persons entitled to vote a majority in aggregate principal amount of the Outstanding Securities of all series and Tranches represented at the meeting, considered as one class. (d) At any meeting each Holder or proxy shall be entitled to one vote for each $1,000 principal amount of Outstanding Securities held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Security challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote, except as a Holder of a Security or proxy. (e) Any meeting duly called pursuant to Section 1302 at which a quorum is present may be adjourned, from time to time, by Persons entitled to vote a majority in aggregate principal amount of the Outstanding Securities of all series and Tranches represented at the meeting, considered as one class; and the meeting may be held as so adjourned without further notice. SECTION 1306. Counting Votes and Recording Action of Meetings. The vote upon any resolution submitted to any meeting of Holders shall be by written ballots on which shall be subscribed the signatures of the Holders or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Securities, of the series and Tranches with respect to which the meeting shall have been called, held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports of all votes cast at the meeting. A record of the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 1302 and, if applicable, Section 1304. Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company, and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. SECTION 1307. Action Without Meeting. In lieu of a vote of Holders at a meeting as provided in this Article, any request, demand, authorization, direction, notice, consent, waiver or other action may be made, given or taken by Holders by written instruments as provided in Section 104. SECTION 1308. Record Date. The Company may set a record date for the purpose of determining the Holders of the Securities entitled to vote or consent, whether at a meeting thereof or otherwise, to any action authorized or permitted by the Indenture. If the Company should set a record date, that date shall be no less than 15 nor more than 30 days preceding the first solicitation of such vote or consent or notice of such meeting. ARTICLE FOURTEEN Immunity of Incorporators, Stockholders, Officers and Directors SECTION 1401. Liability Solely Corporate. No recourse shall be had for the payment of the principal of, or premium, if any, or interest, if any, on, any Securities, or any part thereof, or for any claim based thereon or otherwise in respect thereof, or of the indebtedness represented thereby, or upon any obligation, covenant or agreement under this Indenture, against any incorporator, stockholder, officer or director, as such, past, present or future of the Company or of any predecessor or successor corporation (either directly or through the Company or a predecessor or successor corporation), whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that this Indenture and all the Securities are solely corporate obligations, and that no personal liability whatsoever shall attach to, or be incurred by, any incorporator, stockholder, officer or director, past, present or future, of the Company or of any predecessor or successor corporation, either directly or indirectly through the Company or any predecessor or successor corporation, because of the indebtedness hereby authorized or under or by reason of any of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or to be implied herefrom or therefrom, and that any such personal liability is hereby expressly waived and released as a condition of, and as part of the consideration for, the execution of this Indenture and the issuance of the Securities. IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. GREEN MOUNTAIN POWER CORPORATION By: Title: Vice President, Chief Financial Officer & Treasurer [SEAL] ATTEST: By: Title: Secretary THE BANK OF NEW YORK , Trustee By: Title: [SEAL] ATTEST: By: Title: GREEN MOUNTAIN POWER CORPORATION Reconciliation and tie between Trust Indenture Act of 1939 and Indenture, dated as of November 1, 1995 Trust Indenture Act Section Indenture Section Section 310 (a)(1) ..................................... 901 (a)(2) ..................................... 901 (a)(3) ..................................... Not Applicable (a)(4) ..................................... Not Applicable (a)(5) ..................................... 901 (b) ........................................ 910 911 Section 311 (a) ....................................... 907(a) (b) ....................................... 907(b) (b)(2) ..................................... 1003(c) (c) ....................................... Not Applicable Section 312 (a) ....................................... 1001 1002(a) (b) ....................................... 1002(b) (c) ....................................... 1002(c) Sectio 313 (a)(except (6) ............................. 1003(a) (a)(6) ..................................... Not Applicable (b)(1) ..................................... Not Applicable (b)(2) ..................................... 1003(b) (c) ........................................ 1003(c) (d) ........................................ 1003(d) Section 314 (a) ........................................ 1004 (b) ........................................ Not Applicable (c)(1) ..................................... 102 (c)(2) ..................................... 102 (c)(3) ..................................... Not Applicable (d) ........................................ Not Applicable (e) ........................................ 102 Section 315 (a) ........................................ 902(a) (b) ........................................ 903 1003(a)(7) (c) ........................................ 902(b) (d) ........................................ 902(c) (d)(1) ..................................... 902(a) (d)(2) ..................................... 902(c)(2) (d)(3) ..................................... 902(c)(3) (e) ........................................ 814 Section 316 (a) ........................................ 101-"Outstanding" (a)(1)(A) .................................. 812 (a)(1)(B) .................................. 813 (a)(2) ..................................... Not Applicable (b) ........................................ 808 (c) ........................................ 1308 Section 317 (a)(1) ..................................... 803 (a)(2) ..................................... 804 (b) ........................................ 603 Section 318 (a) ........................................ 107 EX-3 4 EXHIBIT 10-D-15A Exhibit 10-d-15a Green Mountain Power Corporation Compensation Program for Officers And Certain Key Management Personnel Highlights Brochure/Program Document Table of Contents Page Preamble 1 Purpose of Program 1 Participants 1 Effective Date 1 Definitions 1 Program Components 3 Base Salary 3 Variable Compensation 6 Determination of Award 7 Variable Compensation Award Payment 7 Program Administration 8 Appendix I Appendix II Preamble This document describes and governs the Compensation Program for Officers and Certain Key Management Personnel for Green Mountain Power Corporation ("GMP" or "the Company"). The program is intended to assure that total compensation is competitive in the marketplace and promotes the Company's strategic objectives. Purpose of Program The purpose of the Compensation Program is to: o ensure that base compensation compares favorably with regard to organizations competing for similar talent; o provide an opportunity for officers and other key management personnel to share in the success of GMP by linking a portion of compensation (variable compensation) to corporate performance results; o encourage a longer-term view by paying part of an earned variable compensation award in deferred/restricted stock; and o foster and reinforce teamwork among officers and other key management personnel. Participants Senior officers of GMP and other key management personnel, as designated from time to time by the Board of Directors are eligible to participate in this program. Appendix I to this document, as amended from time to time, will list eligible participants so designated. Effective Date The stock award provisions contained herein shall be effective upon shareholder and other required regulatory approval. The program is otherwise effective January 1, 1994. Definitions The following definitions pertain to the program. Circuit Breaker - a performance level below which no variable compensation will be paid regardless of performance against the corporate measures. For this program, no awards will be paid unless earnings, less provision for awards, are greater than dividends paid in the year for which variable compensation is to be awarded. Compensation Committee - the Compensation Committee of the Board of Directors. Market Average - the average of salaries paid in the marketplace for positions similar to those at GMP. Market Range - a range running from 10% below to 10% above the market average. Marketplace - Companies that are determined by GMP to be those competing for similar talent. Depending on the position within GMP, marketplace companies can be utilities, general industry -- local, regional, national, or any combination thereof. Maximum - the maximum or optimal level of corporate performance with respect to a corporate performance measure. This determination will be applied separately to each performance measure. No variable compensation with respect to a performance measure will be paid in excess of the maximum level indicated. Compensation Program - the compensation program, which consists of base salary and the opportunity to earn variable compensation. Organization Bands - tiers within which management positions are clustered, to reflect the nature and scope of the jobs, reporting relationships, and the like. Peer Companies - a select group of utilities against which GMP's performance will be measured. Performance Measure - a critical factor used to measure the success of the business. Program Year - GMP's fiscal year. Restricted Stock Grants - the portion of the variable compensation award paid to officers in the form of GMP common stock that will be subject to two restrictions of a five (5) year duration: (1) no transferability; and (2) forfeiture of the stock upon termination of employment with the Company (except for retirement, death, disability or termination from employment in circumstances entitling the participant to the benefits payable under Paragraph 4 of a certain Letter Agreement between said participant and the Company that concerns a change in control of the Company). During the five-year restriction period, dividends will be paid and officers will have voting rights. The value of restricted stock is taxable when the restrictions lapse (after five years, or earlier in the case of the officer's retirement, disability or death). The restriction period begins on the date the awards are granted. Stock Grants - the portion of the variable compensation award paid to participants in the form of shares of GMP common stock. These shares are the property of the participant upon grant and may be retained or sold. Upon grant, shares are subject to current taxation. Target - the desired level of corporate performance with respect to a performance measure. This determination will be applied separately for each performance measure. Threshold - the acceptable level of corporate performance with respect to a performance measure. This determination will be applied separately to each performance measure. No variable compensation with respect to a performance measure will be paid unless the threshold level is attained. Total Compensation - an amount comprised of base salary and variable compensation. Variable Compensation - compensation that is earned based on the achievement of corporate performance objectives and that may be paid in cash, stock grants, or restricted stock grants. Program Components The Compensation Program is comprised of two compensation components: o Base Salary o Variable Compensation Base Salary Each officer or other key management employee is paid a base salary intended to be competitive with base compensation paid for similar positions in the marketplace. Variable Compensation Each officer or other key management employee is eligible to earn additional compensation when GMP's performance meets or exceeds various performance objectives. Base Salary Base salaries are intended to provide a competitive rate of fixed compensation. Base salary levels will be assessed by compiling and analyzing salary information from various published survey sources on an annual basis. Survey sources include: o Mercer Finance, Accounting & Legal Compensation Survey o Wyatt Top Management Report o Edison Electric Executive Compensation Survey Within one year after the adoption of the program, base salaries are intended to be managed to the market average (in any event, within a plus or minus 10% range around the market average) as determined from the survey analysis. The average and the range may or may not change from year to year depending on movement in the market and, therefore, it is possible that base salaries may not be increased annually. Appropriate adjustments will be made in May of each year. Actual base compensation within the market range will depend on internal equity, overall scope of responsibilities of the position, recruitment needs, and significant individual performance variations. The market ranges have been incorporated into three organization bands (in lieu of job grades), as set forth in Appendix I, which may be modified from time to time by direction of the Board or the Chief Executive Officer. These bands reflect the nature of the positions and their impact on the organization. Additionally, these bands signify varying levels of participation in the variable compensation component of the program. The band assignments are determined on the basis of survey data and the role of the position. Variable Compensation The purpose of the variable compensation component of this program is to tie compensation directly to the achievement of key corporate-wide objectives. Awards earned will be paid in cash, stock grants, and restricted stock as deemed appropriate by the Compensation Committee of the Board of Directors. The initial variable award payments will be made as set forth below. This award delivery feature is intended to motivate participants toward the annual attainment of critical corporate objectives consistent with the need to manage GMP to achieve longer-term success. Variable Compensation Award Opportunities Each band has a different variable compensation opportunity as noted in the following table. Award Table (AT) Variable Cash Opportunities as a % Band of Base Salary Threshold Target Maximum A 25% 50% 75% B 17.5% 35% 52.5% C 12.5% 25% 37.5% Note: Percentages are prorated for performance that falls between threshold and maximum levels. Performance Measures - Establishment At the beginning of each year, appropriate corporate performance measures will be determined for purposes of generating the variable compensation award. These measures are expected to remain in substantially the same form year-to-year. They may change, however, as GMP revisits its strategic and operational plans. The measures are: o Return on Equity o Total Shareholder Return o Rates o Customer Satisfaction; and o Reliability Performance objectives associated with these measures are established for each fiscal year by the Compensation Committee and reviewed by the Board of Directors. (See Appendix II for measures and specific objectives for 1994, and years following, as indicated.) After the close of each year, the Compensation Committee, with input from the CEO, will determine the degree to which these performance objectives were accomplished to determine if variable cash awards are to be paid. If the threshold level of performance is not met, an award will not be paid with respect to that specific performance measure. In addition, the program incorporates a circuit breaker to protect shareholder investment. The circuit breaker ensures that awards will not be paid unless earnings, after subtracting the variable awards, are greater than dividends paid in the year for which variable compensation is to be awarded. Performance Measures - Individual Performance Assessment Individual performance may, on an exceptions basis, be taken into consideration in determining the final award. However, the maximum shown in the Award Table cannot be exceeded. Performance Measures - Weighting The performance measures will be weighted each year to reflect the strategic plan and the impact each organization band/position has on performance. The number of measures used will be limited to ensure that the significance of the measures will not be diluted (weights less than 10% cannot be used). The performance measures will be weighted as noted in Appendix II. Determination of Award An award will be determined in accordance with the following example. Assume: o Participant is in Band B o Base Salary = $100,000* o Individual Performance = meets expectations o Circuit Breaker = achieved required level Performance Performance Award % Adjusted Award % Measure Weight Results (from AT) Weighted Time % ROE 30% 75% ile 35% 10.5% TSR oD&P 15% Threshold 17.5% 2.625% oSelect 15% Threshold 17.5% 2.625% Rates 20% 80% ile 35% 7.0% Customer Satisfaction 10% 80% 35% 3.5% Reliability oSAII 3.3% Threshold 17.5% .583% oSAIFI 3.3% Threshold 17.5% .583% oCAIDI 3.3% Threshold 17.5% .583% Total Award % = 28% Award = $28,000 * Base salary in effect as of December 31 of the year for which the award will be made. Variable Compensation Award Payment An award earned will be paid in cash and, subject to shareholder and required regulatory approval, stock grant and restricted stock grant in accordance with the following schedule: Band Cash Stock Grant Restricted Stock A 1/4 1/4 1/2 B&C 1/3 1/3 1/3 The Compensation Committee may make changes in this schedule, subject to review by the Board of Directors. Cash The cash portion of the award will be paid in a separate check. Stock Grants The stock grant portion of the award will be paid in shares of GMP common stock. The number of shares will be determined by dividing the portion of the award to be paid in stock by the closing stock price on the day the Board of Directors authorizes variable compensation payments (i.e., the annual meeting). The number of shares so determined will be rounded up to the nearest full share. Relevant taxes (e.g., federal, FICA, State), based on the cash and stock grant portions of the award, will be withheld. Restricted Stock The grant of restricted stock will be made upon execution of an agreement between the participant and the Company that will provide, for a period of five (5) years from the date of the grant, that: (a) the shares will not be transferable; and (b) the shares will be forfeited upon termination of employment with GMP, except where the termination of employment results from retirement, disability, death, or occurs in circumstances entitling the participant to the benefits payable under Paragraph 4 of a certain Letter Agreement between said participant and the Company that concerns a change in control of the Company. The number of restricted stock shares to be awarded will be determined as described immediately above with respect to stock grants. Program Administration The Program will be administered by the Chief Executive Office with approval of the Compensation Committee The Board of Directors will have the full power and authority to: o Interpret the program o Approve participants o Act on the CEO's recommendations o Amend or terminate the Program, subject to required shareholder and regulatory approval o Approve the CEO's award Participation in the program does not confer any right or privilege regarding continued employment with GMP upon a participant. Payment of the cash and, subject to required shareholder and regulatory approval, the stock grant portions, will be made during the second quarter following the end of the program year. Participants must be employed on the date the award is paid in order to receive an award unless the participant has retired, is disabled, or is deceased, has been terminated from employment in circumstances entitling the participant to the benefits payable under Paragraph 4 of a certain Letter Agreement between said participant and the Company that concerns a change in control of the Company, or the Compensation Committee determines that the circumstances under which the participant terminated employment warrant special consideration. Payments of variable compensation awards will not affect a participant's levels of entitlement to participate in other benefit plans unless expressly stated in documentation for such plans existing as of January 1, 1994. The program will be administered in accordance with the laws of the State of Vermont. Appendix I Band* Positioin Role A President and CEO Strategic Senior VP & COO B VP Finance & CFO Strategic VP Law & Administration VP External Affairs & Customer Service VP Planning General Counsel C Controller Strategic/ AVP Engineering Tactical AVP for Organizational Development AVP Customer Operations Central & Southern Divisions AVP Customer Operations Western Divisions Assistant General Counsel Assistant Treasurer General Manager, Administrative Services *Band A applies generally to the CEO and COO; Band B applies generally to Vice Presidents and General Counsel; and Band C applies generally to Assistant Vice Presidents and other key management personnel. Appendix II Performance Measures -- Weights o Return on Equity 30% o Total Shareholder Return 30% o Rates 20% o Customer Satisfaction 10% o Reliability 10% Performance Measures -- Objectives The objectives for 1995 for each of the performance measures are: o Return on Equity (ROE) -- The peer group shall be the utilities that comprise the Duff & Phelps 90. The consolidated ROE's of the utilities that comprise the Duff & Phelps 90, acquired from any reasonable source of such data, shall be used to determine the extent to which the objectives have been met. -- To achieve threshold performance, GMP's ROE for electric operations for the calendar year must be equal to or greater than the allowed ROE level, or its consolidated ROE must be equal to or greater than the consolidated ROE of 60% of the utilities in the peer group -- Target level is reached when GMP's consolidated ROE is equal to or greater than 75% of the peer group utilities' consolidated ROE -- Maximum performance is reached when GMP's consolidated ROE is equal to or greater than 90% of the peer group utilities' consolidated ROE o Total Shareholder Return -- Performance is measured using two different peer groups: the Duff & Phelps 90, and a select peer group. The select group includes: _ Atlantic Energy _ Bangor-Hydro _ Black Hills _ Central Hudson _ Central Vermont Public Service _ Eastern Utilities Associates _ Empire District _ Idaho Power _ Minnesota Power & Light _ Otter Tail Power -- Total Shareholder Return (TSR) is defined as dividends plus capital appreciation using a three-year rolling average -- To achieve threshold performance, GMP's TSR must be in the top half of the peer group -- Target performance is equal to or greater than 60% of the peer group -- Maximum performance is equal to or greater than 70% of the peer group o Rates -- Performance is measured against 10 New England utilities. They are: _ Central Maine Power _ Bangor-Hydro _ Public Service of New Hampshire _ Central Vermont _ Boston Edison _ Commonwealth Energy _ Massachusetts Electric _ Connecticut Power & Light _ United Illuminating _ Narragansett Electric -- To achieve threshold performance, GMP's rates must be equal to or lower than 70% of the peer group -- Target performance is achieved when GMP's rates are equal to or lower than 80% of peer group -- Maximum performance is reached when GMP's rates are lowest or second lowest among the peer group o Customer Satisfaction -- Performance is measured using two surveys (i.e., Commercial/Industrial, Residential) with respect to the following aspects of customer satisfaction: reliability of service, responsiveness to trouble calls, responsiveness to customer inquiries, accuracy of customers' bills, effectiveness of telephone communications, effective delivery of DSM services. -- To achieve threshold performance, 70% or more of customers must indicate satisfaction -- Target performance is achieved when 80% or more of customers indicate satisfaction -- Maximum performance is reached when 90% or more indicate satisfaction o Reliability -- Performance is measured using three indices: _ System average interruption index _ System average interruption frequency index _ Customer average interruption duration index -- To reach threshold performance, GMP's performance must improve 5% or more from that achieved in the previous year -- Target performance is 10% or greater improvement from the previous year -- Maximum performance is 12% or greater improvement from the previous year EX-4 5 EXHIBIT 12 Exhibit 12 Green Mountain Power Corporation Computation of Ratio of Earnings to Fixed Charges
Year Ended December 31, Period Ended September 30, 1995 --------------------------------------------- Three Months Twelve Months 1994 1993 1992 1991 1990 -------------------------------------- --------------------------------------------- (Dollars in thousands) Earnings: Net earnings 3,232 11,629 11,052 10,764 12,296 10,260 9,090 Income taxes 1,829 6,516 5,917 5,922 6,451 5,795 4,691 Fixed charges 2,551 10,077 9,777 9,370 9,332 9,303 9,373 -------------------------------------- --------------------------------------------- Total earnings 7,612 28,222 26,746 26,056 28,079 25,358 23,154 ====================================== ============================================= Fixed Charges: Interest 2,131 8,370 8,043 7,590 7,518 7,517 7,600 Amortization of debt premium and discount 35 140 138 102 85 48 44 Interest portion of rental payments 385 1,567 1,596 1,678 1,729 1,738 1,729 -------------------------------------- --------------------------------------------- Total fixed charges 2,551 10,077 9,777 9,370 9,332 9,303 9,373 ====================================== ============================================= Ratio of earnings to fixed charges 2.98 2.80 2.74 2.78 3.01 2.73 2.47 ====================================== =============================================
EX-5 6 EXBIBIT 23 Exhibit 23 As independent public accountants, we hereby consent to the incorporation by reference in Registration Statement No. 33-59383 on Form S-3 of our report dated January 31, 1995 including in Green Mountain Power Corporation's Form 10-K for the year ended December 31, 1994 and to all references to our firm included in that registration statement. \S\ Arthur Andersen LLP Boston, Massachusetts November 10, 1995 EX-27 7
UT This schedule contains summary financial information extracted from the Consolidated Balance Sheet as of September 30, 1995 and the related Statements of Income and Cash flows for the nine months ended September 30, 1995 and is qualified in its entirety by reference to such financial statements. 1,000 9-MOS DEC-31-1995 SEP-30-1995 PER-BOOK 178,991 20,294 26,364 36,642 36,622 298,913 16,028 62,826 25,937 104,791 8,280 855 67,134 23,016 0 0 7,833 0 10,278 0 76,726 298,913 116,931 4,315 101,538 105,853 11,078 2,774 13,852 5,562 8,290 582 7,708 7,498 4,924 20,511 1.63 1.63
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