-----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, LgYe+5a7HtWlMWzsJRy5OIOxQ2i0CUMdqb/FjEJgJBzhzMgU+S+21AbGQ/CgIEDT 6dtRS2CnCyDJ/IvZxHHUyA== /in/edgar/work/20000622/0000006879-00-000004/0000006879-00-000004.txt : 20000920 0000006879-00-000004.hdr.sgml : 20000920 ACCESSION NUMBER: 0000006879-00-000004 CONFORMED SUBMISSION TYPE: 424B2 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20000622 FILER: COMPANY DATA: COMPANY CONFORMED NAME: APPALACHIAN POWER CO CENTRAL INDEX KEY: 0000006879 STANDARD INDUSTRIAL CLASSIFICATION: [4911 ] IRS NUMBER: 540124790 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B2 SEC ACT: SEC FILE NUMBER: 333-84061 FILM NUMBER: 658842 BUSINESS ADDRESS: STREET 1: 40 FRANKLIN RD SW CITY: ROANOKE STATE: VA ZIP: 24011 BUSINESS PHONE: 7039852300 MAIL ADDRESS: STREET 1: 1 RIVERSIDE PLAZA CITY: COLUMBUS STATE: OH ZIP: 43215 424B2 1 0001.txt APCO FLOATING RATE NOTES PROSPECTUS SUPPLEMENT (To prospectus dated September 27, 1999) $75,000,000 APPALACHIAN POWER COMPANY Floating Rate Notes, Series A, due 2001 --------------- The Floating Rate Notes will bear interest payable quarterly beginning September 27, 2000. The per annum interest rate on the Floating Rate Notes for each quarterly interest period will be reset quarterly based on the three-month LIBOR rate plus .50%. The Floating Rate Notes will mature on June 27, 2001. The Floating Rate Notes are not redeemable prior to their maturity. The Floating Rate Notes are unsecured and rank equally with all of our other unsecured and unsubordinated indebtedness and will be effectively subordinated to all of our secured debt, including $784,237,000 of outstanding first mortgage bonds as of March 31, 2000. We will issue the Floating Rate Notes only in registered form in multiples of $1,000. The Floating Rate Notes should be delivered on or about June 27, 2000 through the book-entry facilities of The Depository Trust Company. Per Floating Rate Note Total Public offering price..............................100% $75,000,000 Underwriting discount...............................15% $ 112,500 Proceeds to Appalachian Power Company............99.85% $74,887,500 ......Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this prospectus supplement or the attached prospectus is truthful or complete. Any representation to the contrary is a criminal offense. --------------- McDonald Investments Inc. Banc One Capital Markets, Inc. --------------- June 20, 2000 ......You should rely only on the information incorporated by reference or provided in this Prospectus Supplement or the accompanying Prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this Prospectus Supplement is accurate as of any date other than the date on the front of the document. TABLE OF CONTENTS Prospectus Supplement Page SUPPLEMENTAL DESCRIPTION OF THE FLOATING RATE NOTES...................... S-3 Principal Amount, Maturity and Interest.............................. S-3 Redemption........................................................... S-4 Certain Definitions.................................................. S-4 UNDERWRITING............................................................. S-5 Prospectus WHERE YOU CAN FIND MORE INFORMATION ....................................... 2 THE COMPANY ............................................................... 2 PROSPECTUS SUPPLEMENTS .................................................... 3 RATIO OF EARNINGS TO FIXED CHARGES ........................................ 3 USE OF PROCEEDS ........................................................... 3 DESCRIPTION OF THE NOTES .................................................. 3 General ................................................................. 3 Redemptions ............................................................. 4 Remarketed Notes ........................................................ 4 Book-Entry Notes - Registration, Transfer, and Payment of Interest and Principal ..................... 4 Note Certificates- Registration, Transfer, and Payment of Interest and Principal .............................................. 6 Interest Rate ........................................................... 6 Fixed Rate Notes ..................................................... 7 Floating Rate Notes .................................................. 7 Events of Default........................................................ 7 Modification of Indenture................................................ 8 Consolidation, Merger or Sale............................................ 8 Legal Defeasance......................................................... 8 Covenant Defeasance...................................................... 8 Governing Law............................................................ 9 Concerning the Trustee................................................... 9 PLAN OF DISTRIBUTION....................................................... 9 LEGAL OPINIONS............................................................. 10 EXPERTS.................................................................... 10 SUPPLEMENTAL DESCRIPTION OF THE FLOATING RATE NOTES ......The following description of the particular terms of the Floating Rate Notes supplements and, to the extent it is not consistent with the description of the general terms and provisions of floating rate notes under "Description of the Notes" in the accompanying Prospectus, supersedes such description. There will be no additional pricing supplement relating to the Floating Rate Notes. We will issue the Floating Rate Notes under an Indenture, dated as of January 1, 1998, between us and The Bank of New York, as Trustee, as supplemented and amended and as to be further supplemented and amended. Principal Amount, Maturity and Interest ......The Floating Rate Notes will be limited in aggregate principal amount to $75,000,000. ......The Floating Rate Notes will mature and become due and payable, together with any accrued and unpaid interest, on June 27, 2001. The Company will pay interest on the Floating Rate Notes on March 27, June 27, September 27 and December 27, commencing on September 27, 2000, through the maturity date of June 27, 2001. Interest will accrue from the issue date of June 27, 2000 and will be paid to holders of record on the fifteenth calendar day before each interest payment date. Interest payable at maturity, however, will be payable to the person to whom principal is payable. If the scheduled interest payment date (other than the maturity date) of the Floating Rate Notes falls on a day which is not a Business Day, such interest payment date will be the following day that is a Business Day, except that if such Business Day is in the next calendar month, such interest payment date shall be the immediately preceding Business Day. If the maturity date of the Floating Rate Notes falls on a day that is not a Business Day, the payment of principal and interest will be made on the next succeeding Business Day, and interest will not accrue as a result of this delayed payment. ......The Floating Rate Notes will bear interest for each quarterly Interest Period at a per annum rate determined by the Calculation Agent, subject to the maximum interest rate permitted by New York or other applicable state law, as such law may be modified by United States law of general application. The interest rate applicable during each quarterly Interest Period will be equal to LIBOR on the Interest Determination Date for such Interest Period plus .50%; provided, however, that in certain circumstances described below, the interest rate will be determined without reference to LIBOR. Promptly upon such determination, the Calculation Agent will notify the trustee for the Floating Rate Notes, if the trustee is not then serving as the Calculation Agent, of the interest rate for the new Interest Period. The interest rate determined by the Calculation Agent, absent manifest error, shall be binding and conclusive upon the beneficial owners and holders of the Floating Rate Notes, the Company and the trustee for the Floating Rate Notes. ......If the following circumstances exist on any Interest Determination Date, the Calculation Agent shall determine the interest rate for the notes as follows: ......(1) In the event no Reported Rate (as defined below) appears on Telerate Page 3750 (as defined below) as of approximately 11:00 a.m. London time on an Interest Determination Date, the Calculation Agent shall request the principal London offices of each of four major banks in the London interbank market selected by the Calculation Agent (after consultation with the Company) to provide a quotation of the rate (the "Rate Quotation") at which three month deposits in amounts of not less than $1,000,000 are offered by it to prime banks in the London interbank market, as of approximately 11:00 a.m. on such Interest Determination Date, that is representative of single transactions at such time (the "Representative Amounts"). If at least two Rate Quotations are provided, the interest rate will be the arithmetic mean of the Rate Quotations obtained by the Calculation Agent, plus .50%. ......(2) In the event no Reported Rate appears on Telerate Page 3750 as of approximately 11:00 a.m. London time on an Interest Determination Date and there are fewer than two Rate Quotations, the interest rate will be the arithmetic mean of the rates quoted at approximately 11:00 a.m. New York City time on such Interest Determination Date, by three major banks in New York City selected by the Calculation Agent (after consultation with the Company), for loans in Representative Amounts in U. S. dollars to leading European banks, having an index maturity of three months for a period commencing on the second London Business Day immediately following such Interest Determination Date, plus .50%; provided, however, that if fewer than three banks selected by the Calculation Agent are quoting such rates, the interest rate for the applicable Interest Period will be the same as the interest rate in effect for the immediately preceding Interest Period. ......Upon the request of a holder of the Floating Rate Notes, the Calculation Agent will provide to such holder the interest rate in effect on the date of such request and, if determined, the interest rate for the next Interest Period. ......The accrued interest for any period is calculated by multiplying the principal amount of a note by an accrued interest factor. The accrued interest factor is computed by adding the interest factor calculated for each day in the period to the date for which accrued interest is being calculated. The interest factor (expressed as a decimal rounded upwards if necessary) is computed by dividing the interest rate (expressed as a decimal rounded upwards if necessary) applicable to such date by 360. ......All percentages resulting from any calculation of the interest rate on Floating Rate Notes will be rounded, if necessary, to the nearest one-hundred thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655) and 9.876544% (or .09876544) being rounded to 9.87654% (or .0987654)), and all dollar amounts used in or resulting from such calculation will be rounded to the nearest cent (with one-half cent being rounded upwards). Redemption ......The Floating Rate Notes may not be redeemed prior to their maturity. The Floating Rate Notes are not subject to the benefits of any sinking fund. Certain Definitions ......The following definitions apply to the Floating Rate Notes and, to the extent they are inconsistent with definitions appearing in the accompanying Prospectus, supersede the definitions in the accompanying Prospectus. ......"Business Day" means any day that is not a day on which banking institutions in New York City are authorized or required by law or regulation to close. "Calculation Agent" means The Bank of New York, or its successor appointed by the Company, acting as calculation agent. "Interest Determination Date" means the second London Business Day immediately preceding the first day of the relevant Interest Period. "Interest Period" means the period commencing on an interest payment date for the Floating Rate Notes (or commencing on the issue date for the Floating Rate Notes, if no interest has been paid or duly made available for payment since that date) and ending on the day before the next succeeding interest payment date for the Floating Rate Notes. ......"LIBOR" for any Interest Determination Date will be the offered rate for deposits in U. S. dollars having an index maturity of three months for a period commencing on the second London Business Day immediately following the Interest Determination Date in amounts of not less than $1,000,000, as such rate appears on Telerate Page 3750 or a successor reporter of such rates selected by the Calculation Agent and acceptable to the Company, at approximately 11:00 a.m. London time on the Interest Determination Date (the "Reported Rate"). ......"London Business Day" means a day other than a Saturday or Sunday that is not a day on which banking institutions in London, England and New York, New York are authorized or obligated by law or executive order to be closed and a day on which dealings in deposits in U. S. dollars are transacted, or with respect to any future date are expected to be transacted, in the London interbank market. ......"Telerate Page 3750" means the display designated on page 3750 on Dow Jones Markets Limited (or such other page as may replace the 3750 page on that service or such other service as may be nominated by the British Bankers' Association for the purpose of displaying London interbank offered rates for U. S. dollar deposits). ......We will pay the principal of the Floating Rate Notes and interest payable at maturity in immediately available funds at the office of The Bank of New York, 101 Barclay Street, New York, New York. UNDERWRITING ......Subject to the terms and conditions of the Underwriting Agreement, we have agreed to sell to each of the Underwriters named below (for whom McDonald Investments Inc. is acting as Representative) and each of the Underwriters has severally agreed to purchase from us the respective principal amount of Floating Rate Notes set forth opposite its name below: Principal Amount of Floating Underwriter Rate Notes ----------- ---------- McDonald Investments Inc. $52,500,000 Banc One Capital Markets, Inc. 22,500,000 Total $75,000,000 ......In the Underwriting Agreement, the Underwriters have agreed to the terms and conditions to purchase all of the Floating Rate Notes offered if any of the Floating Rate Notes are purchased. ......The expenses associated with the offer and sale of the Floating Rate Notes are expected to be approximately $100,000. ......The Underwriters propose to offer the Floating Rate Notes to the public at the initial public offering price set forth on the cover page of this prospectus supplement and to certain dealers at such price less a concession not in excess of .10% per Floating Rate Note. The Underwriters may allow, and such dealers may reallow, a discount not in excess of .05% per Floating Rate Note to certain other dealers. After the initial public offering, the public offering price, concession and discount may be changed. ......Prior to this offering, there has been no public market for the Floating Rate Notes. The Floating Rate Notes will not be listed on any securities exchange. The Representative has advised us that it intends to make a market in the Floating Rate Notes. The Representative will have no obligation to make a market in the Floating Rate Notes, however, and may cease market making activities, if commenced, at any time. There can be no assurance of a secondary market for the Floating Rate Notes, or that the Floating Rate Notes may be resold. ......We have agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933. ......In connection with the offering, the Underwriters may purchase and sell the Floating Rate Notes in the open market. These transactions may include over-allotment and stabilizing transactions and purchases to cover syndicate short positions created in connection with the offering. Stabilizing transactions consist of certain bids or purchases for the purposes of preventing or retarding a decline in the market price of the Floating Rate Notes and syndicate short positions involve the sale by the Underwriters of a greater number of Floating Rate Notes than they are required to purchase from us in the offering. The Underwriters also may impose a penalty bid, whereby selling concessions allowed to syndicate members or other broker dealers in respect of the securities sold in the offering for their account may be reclaimed by the syndicate if such Floating Rate Notes are repurchased by the syndicate in stabilizing or covering transactions. These activities may stabilize, maintain or otherwise affect the market price of the Floating Rate Notes, which may be higher than the price that might otherwise prevail in the open market; and these activities, if commenced, may be discontinued at any time. These transactions may be effected in the over-the-counter market or otherwise. ......The Underwriters or their affiliates engage in transactions with, and have performed services for, us and our affiliates in the ordinary course of business. PROSPECTUS APPALACHIAN POWER COMPANY 40 Franklin Road, S.W. Roanoke, Virginia 24011 540-985-2300 $250,000,000 UNSECURED NOTES TERMS OF SALE The following terms may apply to the notes that we may sell at one or more times. A pricing supplement will include the final terms for each note. If we decide to list upon issuance any note or notes on a securities exchange, a pricing supplement will identify the exchange and state when we expect trading could begin. - Mature 9 months to 50 years - Fixed or floating interest rate - Remarketing features - Certificate or book-entry form - Subject to redemption - Not convertible, amortized or subject to a sinking fund - Interest paid on fixed rate notes quarterly or semi-annually - Interest paid on floating rate notes monthly, quarterly, semi-annually, or annually - Issued in multiples of a minimum denomination The notes have not been approved by the SEC or any state securities commission, nor have these organizations determined that this prospectus is accurate or complete. Any represen-tation to the contrary is a criminal offense. The date of this prospectus is September 27, 1999. WHERE YOU CAN FIND MORE INFORMATION This prospectus is part of a registration statement we filed with the SEC. We also file annual, quarterly and special reports and other information with the SEC. You may read and copy any document we file at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. You may also examine our SEC filings through the SEC's web site at http://www.sec.gov. The SEC allows us to "incorporate by reference" the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until we sell all the notes. Annual Report on Form 10-K for the year ended December 31, 1998; Quarterly Report on Form 10-Q for the quarter ended March 31, 1999; Quarterly Report on Form 10-Q for the quarter ended June 30, 1999; and Current Report on Form 8-K dated September 15, 1999. You may request a copy of these filings, at no cost, by writing or telephoning us at the following address: Mr. G. C. Dean American Electric Power Service Corporation 1 Riverside Plaza Columbus, Ohio 43215 614-223-1000 You should rely only on the information incorporated by reference or provided in this prospectus or any supplement. We have not authorized anyone else to provide you with different information. We are not making an offer of these notes in any state where the offer is not permitted. You should not assume that the information in this prospectus or any supplement is accurate as of any date other than the date on the front of those documents. THE COMPANY We generate, sell, purchase, transmit and distribute electric power. We serve approximately 888,000 customers in southwestern Virginia and southern West Virginia. We also sell and transmit power at wholesale to other electric utilities, municipalities, electric cooperatives and non-utility entities engaged in the wholesale power market. Our principal executive offices are located at 40 Franklin Road, S.W., Roanoke, Virginia 24011 (telephone number 540-985-2300). We are a subsidiary of American Electric Power Company, Inc., a public utility holding company, and we are a part of the American Electric Power integrated utility system. The executive offices of American Electric Power Company, Inc. are located at 1 Riverside Plaza, Columbus, Ohio 43215 (telephone number 614-223-1000). PROSPECTUS SUPPLEMENTS We provide information to you about the notes in three separate documents that progressively provide more detail: (a) this prospectus provides general information some of which may not apply to your notes, (b) the accompanying prospectus supplement provides more specific terms of your notes, and (c) the pricing supplement provides the final terms of your notes. It is important for you to consider the information contained in this prospectus, the prospectus supplement and the pricing supplement in making your investment decision. RATIO OF EARNINGS TO FIXED CHARGES The Ratio of Earnings to Fixed Charges for each of the periods indicated is as follows: Twelve Months Period Ended Ratio December 31, 1994 2.37 December 31, 1995 2.54 December 31, 1996 2.78 December 31, 1997 2.44 December 31, 1998 2.07 March 31, 1999 2.15 For current information on the Ratio of Earnings to Fixed Charges, please see our most recent Form 10-K and 10-Q. See Where You Can Find More Information. USE OF PROCEEDS The net proceeds from the sale of the notes will be used for general corporate purposes relating to our utility business. These purposes include redeeming or repurchasing outstanding debt or preferred stock and replenishing working capital. If we do not use the net proceeds immediately, we temporarily invest them in short-term, interest-bearing obligations. We estimate that our construction costs in 1999 will approximate $254,600,000. At March 31,1999, our outstanding short-term debt was $57,275,000. DESCRIPTION OF THE NOTES General We will issue the notes under the Indenture dated January 1, 1998 (as previously supplemented and amended) between us and the Trustee, The Bank of New York. This prospectus briefly outlines some provisions of the Indenture. If you would like more information on these provisions, you should review the Indenture and any supplemental indentures or company orders that we have filed or will file with the SEC. See Where You Can Find More Information on how to locate these documents. You may also review these documents at the Trustee's offices at 101 Barclay Street, New York, New York. The Indenture does not limit the amount of notes that may be issued. The Indenture permits us to issue notes in one or more series or tranches upon the approval of our board of directors and as described in one or more company orders or supplemental indentures. Each series of notes may differ as to their terms. The notes are unsecured and will rank equally with all our unsecured unsubordinated debt. Substantially all of our fixed properties and franchises are subject to the lien of our first mortgage bonds issued under and secured by a Mortgage and Deed of Trust, dated as of December 1, 1940 (as previously supplemented and amended) between us and Bankers Trust Company, as trustee. For current information on our debt outstanding see our most recent Form 10-K and 10-Q. See Where You Can Find More Information. The notes will be denominated in U.S. dollars and we will pay principal and interest in U.S. dollars. Unless an applicable pricing or prospectus supplement states otherwise, the notes will not be subject to any conversion, amortization, or sinking fund. We expect that the notes will be "book-entry," represented by a permanent global note registered in the name of The Depository Trust Company, or its nominee. We reserve the right, however, to issue note certificates registered in the name of the noteholders. In the discussion that follows, whenever we talk about paying principal on the notes, we mean at maturity or redemption. Also, in discussing the time for notices and how the different interest rates are calculated, all times are New York City time and all references to New York mean the City of New York, unless otherwise noted. The following terms may apply to each note as specified in the applicable pricing or prospectus supplement and the note. Redemptions If we issue redeemable notes, we may redeem such notes at our option unless an applicable pricing or prospectus supplement states otherwise. The pricing or prospectus supplement will state the terms of redemption. We may redeem notes in whole or in part by delivering written notice to the noteholders no more than 60, and not less than 30, days prior to redemption. If we do not redeem all the notes of a series at one time, the Trustee selects the notes to be redeemed in a manner it determines to be fair. Remarketed Notes If we issue notes with remarketing features, an applicable pricing or prospectus supplement will describe the terms for the notes including: interest rate, remarketing provisions, our right to redeem notes, the holders' right to tender notes, and any other provisions. Book-Entry Notes - Registration, Transfer, and Payment of Interest and Principal Book-entry notes of a series will be issued in the form of a global note that the Trustee will deposit with The Depository Trust Company, New York, New York ("DTC"). This means that we will not issue note certificates to each holder. One or more global notes will be issued to DTC who will keep a computerized record of its participants (for example, your broker) whose clients have purchased the notes. The participant will then keep a record of its clients who purchased the notes. Unless it is exchanged in whole or in part for a note certificate, a global note may not be transferred; except that DTC, its nominees, and their successors may transfer a global note as a whole to one another. Beneficial interests in global notes will be shown on, and transfers of global notes will be made only through, records maintained by DTC and its participants. DTC has provided us the following information: DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the United States Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered under the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participants ("Direct Participants") deposit with DTC. DTC also records the settlement among Direct Participants of securities transactions, such as transfers and pledges, in deposited securities through computerized records for Direct Participant's accounts. This eliminates the need to exchange note certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Other organizations such as securities brokers and dealers, banks and trust companies that work through a Direct Participant also use DTC's book-entry system. The rules that apply to DTC and its participants are on file with the SEC. A number of its Direct Participants and the New York Stock Exchange, Inc., The American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. own DTC. We will wire principal and interest payments to DTC's nominee. We and the Trustee will treat DTC's nominee as the owner of the global notes for all purposes. Accordingly, we, the Trustee and any paying agent will have no direct responsibility or liability to pay amounts due on the global notes to owners of beneficial interests in the global notes. It is DTC's current practice, upon receipt of any payment of principal or interest, to credit Direct Participants' accounts on the payment date according to their respective holdings of beneficial interests in the global notes as shown on DTC's records. In addition, it is DTC's current practice to assign any consenting or voting rights to Direct Participants whose accounts are credited with notes on a record date. The customary practices between the participants and owners of beneficial interests will govern payments by participants to owners of beneficial interests in the global notes and voting by participants, as is the case with notes held for the account of customers registered in "street name." However, payments will be the responsibility of the participants and not of DTC, the Trustee or us. DTC management is aware that some computer applications, systems and the like for processing data ("Systems") that are dependent upon calendar dates, including dates before, on and after January 1, 2000, may encounter "Year 2000 problems". DTC has informed its Direct Participants and other members of the financial community (the "Industry") that it has developed and is implementing a program so that its Systems, as the same relate to the timely payment of distributions (including principal and income payments) to securityholders, book-entry deliveries and settlement of trades within DTC ("DTC Services"), continue to function appropriately. This program includes a technical assessment and a remediation plan, each of which is complete. Additionally, DTC's plan includes a testing phase, which is expected to be completed within appropriate time frames. However, DTC's ability to perform properly its services is also dependent upon other parties, including but not limited to issuers and their agents, as well as third party vendors from whom DTC licenses software and hardware, and third party vendors on whom DTC relies for information or the provision of services, including telecommunication and electrical utility service providers, among others. DTC has informed the Industry that it is contacting (and will continue to contact) third party vendors from whom DTC acquires services to: (i) impress upon them the importance of such services being Year 2000 compliant; and (ii) determine the extent of their efforts for Year 2000 remediation (and, as appropriate, testing) of their services. In addition, DTC is in the process of developing such contingency plans as it deems appropriate. According to DTC, the foregoing information with respect to DTC has been provided to the Industry for informational purposes only and is not intended to serve as a representation, warranty or contract modification of any kind. Notes represented by a global note will be exchangeable for note certificates with the same terms in authorized denominations only if: DTC notifies us that it is unwilling or unable to continue as depositary or if DTC ceases to be a clearing agency registered under applicable law and a successor depositary is not appointed by us within 90 days; or we determine not to require all of the notes of a series to be represented by a global note and notify the Trustee of our decision. Note Certificates-Registration, Transfer, and Payment of Interest and Principal If we issue note certificates, they will be registered in the name of the noteholder. The notes may be transferred or exchanged, pursuant to administrative procedures in the indenture, without the payment of any service charge (other than any tax or other governmental charge) by contacting the paying agent. Payments on note certificates will be made by check. Interest Rate The interest rate on the notes will either be fixed or floating. The interest paid will include interest accrued to, but excluding, the date of maturity or redemption. Interest is generally payable to the person in whose name the note is registered at the close of business on the record date before each interest payment date. Interest payable at maturity or redemption, however, will be payable to the person to whom principal is payable. If we issue a note after a record date but on or prior to the related interest payment date, we will pay the first interest payment on the interest payment date after the next record date. We will pay interest payments by check or wire transfer, at our option. Fixed Rate Notes A pricing or prospectus supplement will designate the record dates, payment dates and the fixed rate of interest payable on a note. We will pay interest quarterly or semi-annually, and upon maturity or redemption. Unless an applicable pricing or prospectus supplement states otherwise, if any payment date falls on a day that is not a business day, we will pay interest on the next business day and no additional interest will be paid. Interest payments will be the amount of interest accrued to, but excluding, each payment date. Interest will be computed using a 360-day year of twelve 30-day months. Floating Rate Notes Each floating rate note will have an interest rate formula. The applicable pricing supplement will state the initial interest rate or interest rate formula on each note effective until the first interest reset date. The applicable pricing or prospectus supplement will state the method and dates on which the interest rate will be determined, reset and paid. Events of Default "Event of Default" means any of the following: failure to pay for three Business Days the principal of (or premium, if any, on) any note of a series when due and payable; failure to pay for 30 days any interest on any note of any series when due and payable; failure to perform any other requirements in such notes, or in the Indenture in regard to such notes, for 90 days after notice; certain events of bankruptcy or insolvency; or any other event of default specified in a series of notes. An Event of Default for a particular series of notes does not necessarily mean that an Event of Default has occurred for any other series of notes issued under the Indenture. If an Event of Default occurs and continues, the Trustee or the holders of at least 33% of the principal amount of the notes of the series affected may require us to repay the entire principal of the notes of such series immediately ("Repayment Acceleration"). In most instances, the holders of at least a majority in aggregate principal amount of the notes of the affected series may rescind a previously triggered Repayment Acceleration. However, if we cause an Event of Default because we have failed to pay (unaccelerated) principal, premium, if any, or interest, Repayment Acceleration may be rescinded only if we have first cured our default by depositing with the Trustee enough money to pay all (unaccelerated) past due amounts and penalties, if any. The Trustee must within 90 days after a default occurs, notify the holders of the notes of the series of default unless such default has been cured or waived. We are required to file an annual certificate with the Trustee, signed by an officer, concerning any default by us under any provisions of the Indenture. Subject to the provisions of the Indenture relating to its duties in case of default, the Trustee shall be under no obligation to exercise any of its rights or powers under the Indenture at the request, order or direction of any holders unless such holders offer the Trustee reasonable indemnity. Subject to the provisions for indemnification, the holders of a majority in principal amount of the notes of any series may direct the time, method and place of conducting any proceedings for any remedy available to, or exercising any trust or power conferred on, the Trustee with respect to such notes. Modification of Indenture Under the Indenture, our rights and obligations and the rights of the holders of any notes may be changed. Any change affecting the rights of the holders of any series of notes requires the consent of the holders of not less than a majority in aggregate principal amount of the outstanding notes of all series affected by the change, voting as one class. However, we cannot change the terms of payment of principal or interest, or a reduction in the percentage required for changes or a waiver of default, unless the holder consents. We may issue additional series of notes and take other action that does not affect the rights of holders of any series by executing supplemental indentures without the consent of any noteholders. Consolidation, Merger or Sale We may merge or consolidate with any corporation or sell substantially all of our assets as an entirety as long as the successor or purchaser expressly assumes the payment of principal, and premium, if any, and interest on the notes. Legal Defeasance We will be discharged from our obligations on the notes of any series at any time if: we deposit with the Trustee sufficient cash or government securities to pay the principal, interest, any premium and any other sums due to the stated maturity date or a redemption date of the note of the series, and we deliver to the Trustee an opinion of counsel stating that the federal income tax obligations of noteholders of that series will not change as a result of our performing the action described above. If this happens, the noteholders of the series will not be entitled to the benefits of the Indenture except for registration of transfer and exchange of notes and replacement of lost, stolen or mutilated notes. Covenant Defeasance We will be discharged from our obligations under any restrictive covenant applicable to the notes of a particular series if we perform both actions described above. See Legal Defeasance. If this happens, any later breach of that particular restrictive covenant will not result in Repayment Acceleration. If we cause an Event of Default apart from breaching that restrictive covenant, there may not be sufficient money or government obligations on deposit with the Trustee to pay all amounts due on the notes of that series. In that instance, we would remain liable for such amounts. Governing Law The Indenture and notes of all series will be governed by the laws of the State of New York. Concerning the Trustee We and our affiliates use or will use some of the banking services of the Trustee in the normal course of business. PLAN OF DISTRIBUTION We may sell the notes (a) through agents; (b) through underwriters or dealers; or (c) directly to one or more purchasers. By Agents Notes may be sold on a continuing basis through agents designated by us. The agents will agree to use their reasonable efforts to solicit purchases for the period of their appointment. Unless the pricing supplement states otherwise, the notes will be sold to the public at 100% of their principal amount. Agents will receive commissions from .125% to .750% of the principal amount per note depending on the maturity of the note they sell. The Agents will not be obligated to make a market in the notes. We cannot predict the amount of trading or liquidity of the notes. By Underwriters If underwriters are used in the sale, the underwriters will acquire the notes for their own account. The underwriters may resell the notes in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The obligations of the underwriters to purchase the notes will be subject to certain conditions. The underwriters will be obligated to purchase all the notes of the series offered if any of the notes are purchased. Any initial public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time. Direct Sales We may also sell notes directly. In this case, no underwriters or agents would be involved. General Information Underwriters, dealers, and agents that participate in the distribution of the notes may be underwriters as defined in the Securities Act of 1933 (the "Act"), and any discounts or commissions received by them from us and any profit on the resale of the notes by them may be treated as underwriting discounts and commissions under the Act. We may have agreements with the underwriters, dealers and agents to indemnify them against certain civil liabilities, including liabilities under the Act. Underwriters, dealers and agents may engage in transactions with, or perform services for, us or our affiliates in the ordinary course of their businesses. LEGAL OPINIONS Our counsel, Simpson Thacher & Bartlett, New York, NY, and one of our lawyers will each issue an opinion about the legality of the notes for us. Dewey Ballantine LLP, New York, NY will issue an opinion for the agents or underwriters. From time to time, Dewey Ballantine LLP acts as counsel to our affiliates for some matters. EXPERTS The financial statements and related financial statement schedule incorporated in this prospectus by reference from the Company's Annual Report on Form 10-K have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports, which are incorporated herein by reference, and have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. Table of Contents WHERE YOU CAN FIND MORE INFORMATION ................... 2 THE COMPANY........................ 2 PROSPECTUS SUPPLEMENTS............. 3 RATIO OF EARNINGS TO FIXED CHARGES................... 3 USE OF PROCEEDS ................... 3 DESCRIPTION OF THE NOTES .......... 3 $250,000,000 UNSECURED NOTES General ....................... 3 Redemptions .................... 4 Remarketed Notes............. 4 Book-Entry Notes - Registration, Transfer, and Payment of Interest and Principal ... 4 PROSPECTUS Note Certificates - Registration, Transfer, and Payment of Interest and Principal .... 6 Interest Rate .................. 6 Fixed Rate Notes ............ 7 Floating Rate Notes ... 7 The date of this Events of Default............ 7 Prospectus is September 27, 1999 Modification of Indenture.... 8 Consolidation, Merger or Sale. 8 Legal Defeasance.............. 8 Covenant Defeasance........... 8 Governing Law................. 9 Concerning the Trustee........ 9 PLAN OF DISTRIBUTION............... 9 By Agents.................... 9 By Underwriters.............. 9 Direct Sales................. 9 General Information.......... 9 LEGAL OPINIONS..................... 10 EXPERTS............................ 10 -----END PRIVACY-ENHANCED MESSAGE-----