-----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, HZP+4YMHFF6R/49bF2pOlmR7kqS/Qqx+4E5byGcptjnNqpKS49rDLpA1tsW4Qpfs +K0cvpjmIbs4gNmvUKMt0w== 0000950152-96-001477.txt : 19960506 0000950152-96-001477.hdr.sgml : 19960506 ACCESSION NUMBER: 0000950152-96-001477 CONFORMED SUBMISSION TYPE: S-4/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19960412 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OHIO EDISON FINANCING TRUST II CENTRAL INDEX KEY: 0001009447 STANDARD INDUSTRIAL CLASSIFICATION: 0000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-01489 FILM NUMBER: 96546621 BUSINESS ADDRESS: STREET 1: 76 SOUTH MAIN ST CITY: AKRON STATE: OH ZIP: 44308 BUSINESS PHONE: 2163845100 MAIL ADDRESS: STREET 1: 76 SOUTH MAIN ST CITY: AKRON STATE: OH ZIP: 44308 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OHIO EDISON CO CENTRAL INDEX KEY: 0000073960 STANDARD INDUSTRIAL CLASSIFICATION: 4911 IRS NUMBER: 340437786 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-01489 FILM NUMBER: 96546622 BUSINESS ADDRESS: STREET 1: 76 S MAIN ST CITY: AKRON STATE: OH ZIP: 44308 BUSINESS PHONE: 2163845100 S-4/A 1 OHIO EDISON S-4/A 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 12, 1996 REGISTRATION NOS. 333-01489 AND 333-01489-01 - - - -------------------------------------------------------------------------------- - - - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ AMENDMENT NO. 1 TO FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ OHIO EDISON FINANCING TRUST II OHIO EDISON COMPANY (EXACT NAME OF REGISTRANT AS SPECIFIED (EXACT NAME OF REGISTRANT AS IN ITS CHARTER) SPECIFIED IN ITS CHARTER)
------------------------ DELAWARE OHIO (STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION) TO BE APPLIED FOR 34-0437786 (I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
76 SOUTH MAIN STREET, AKRON, OHIO 44308 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) REGISTRANTS' TELEPHONE NUMBER INCLUDING AREA CODE: (216) 384-5100 ------------------------ N.C. ASHCOM SECRETARY 76 SOUTH MAIN STREET AKRON, OHIO 44308 (216) 384-5504 (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE) ------------------------ THE COMMISSION IS REQUESTED TO MAIL SIGNED COPIES OF ALL ORDERS, NOTICES AND COMMUNICATIONS TO: MICHAEL F. CUSICK VINCENT PAGANO, JR. WINTHROP, STIMSON, PUTNAM & ROBERTS SIMPSON THACHER & BARTLETT ONE BATTERY PARK PLAZA 425 LEXINGTON AVENUE NEW YORK, NY 10004-1490 NEW YORK, NY 10017-3954
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective and all other conditions to the Exchange Offer (the "Offer") described in the enclosed Prospectus have been satisfied or waived. If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: / / CALCULATION OF REGISTRATION FEE - - - --------------------------------------------------------------------------------------------------------------------- - - - ---------------------------------------------------------------------------------------------------------------------
MAXIMUM MAXIMUM TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE REGISTRATION FEE - - - --------------------------------------------------------------------------------------------------------------------- Preferred Securities of Ohio Edison Financing Trust II....................................... 3,600,000(1) $24.875(2) $89,550,000(3) $30,880 - - - --------------------------------------------------------------------------------------------------------------------- Junior Subordinated Debentures of Ohio Edison Company........................................ (4) - - - --------------------------------------------------------------------------------------------------------------------- Guarantee of the Preferred Securities by Ohio Edison Company................................. (5) - - - --------------------------------------------------------------------------------------------------------------------- Back-up obligations of Ohio Edison Company in connection with the Preferred Securities....... (6) - - - --------------------------------------------------------------------------------------------------------------------- Total............................................ 3,600,000 $24.875 $89,550,000 $30,880(7) - - - --------------------------------------------------------------------------------------------------------------------- - - - ---------------------------------------------------------------------------------------------------------------------
(1) Estimated maximum amount of each class of securities listed above issuable by Ohio Edison Company and Ohio Edison Financing Trust II pursuant to the Offer as described herein. (2) Holders of shares of 7.75% Class A Preferred Stock, $25 par value, will receive one Preferred Security for each share tendered and accepted. (3) Calculated in accordance with Rule 457(f) under the Securities Act of 1933. (4) The Junior Subordinated Debentures will be purchased by Ohio Edison Financing Trust II with the shares of 7.75% Class A Preferred Stock exchanged pursuant to the Offer. No separate consideration will be received for the issuance of the Junior Subordinated Debentures. Pursuant to Rule 457(a) under the Securities Act of 1933, no separate fee is payable with respect to the Junior Subordinated Debentures. (5) No separate consideration will be received for the Ohio Edison Company Guarantee. Pursuant to Rule 457(n) under the Securities Act of 1933, no fee is payable with respect to the Guarantee. (6) Includes the obligations of Ohio Edison Company under the Declaration for Ohio Edison Financing Trust II, the Guarantee of the Preferred Securities by Ohio Edison Company, the Junior Subordinated Debentures of Ohio Edison Company purchased by Ohio Edison Financing Trust II and the related Indenture, including Ohio Edison Company's agreement (under Section 4.2 of the Declaration) to pay all fees, expenses, debts and obligations of Ohio Edison Financing Trust II (other than with respect to the Preferred and Common Securities thereof). No separate consideration will be received for these obligations. Pursuant to Rule 457(a) under the Securities Act of 1933, no separate fee is payable with respect to these obligations. (7) Previously paid. ------------------ THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - - - -------------------------------------------------------------------------------- - - - -------------------------------------------------------------------------------- 2 CROSS REFERENCE SHEET OHIO EDISON COMPANY OHIO EDISON FINANCING TRUST II CROSS REFERENCE SHEET PURSUANT TO ITEM 501(B) OF REGULATION S-K SHOWING LOCATION IN PROSPECTUS OF ITEMS OF FORM S-4
FORM S-4 ITEM NO. CAPTION IN PROSPECTUS ------------------------------------------- -------------------------------------------- 1. Forepart of Registration Statement and Outside Front Cover Page of Prospectus... Outside Front Cover Page; Inside Front Cover Page 2. Inside Front and Outside Back Cover Pages of Prospectus............................ Inside Front Cover Page; Available Information; Incorporation of Certain Documents by Reference; Table of Contents
3. Risk Factors, Ratio of Earnings to Fixed Charges and Other Information............ Prospectus Summary; Risk Factors; Ohio Edison Company; Certain Consolidated Financial Information of Ohio Edison; Ohio Edison Financing Trust II 4. Terms of the Transaction................... Prospectus Summary; Comparison of Preferred Securities and Class A Shares; Certain Consolidated Financial Information of Ohio Edison; The Offer; Description of the Preferred Securities; Description of the Preferred Securities Guarantee; Description of the Subordinated Debentures; Taxation 5. Pro Forma Financial Information............ Not Applicable 6. Material Contacts with the Company Being Acquired................................. Not Applicable 7. Additional Information Required for Reoffering by Persons and Parties Deemed to be Underwriters....................... Not Applicable 8. Interests of Named Experts and Counsel..... Legal Matters 9. Disclosure of Commission Position on Indemnification for Securities Act Liabilities.............................. Not Applicable 10. Information with Respect to S-3 Registrants.............................. Incorporation of Certain Documents by Reference 11. Incorporation of Certain Information by Reference................................ Incorporation of Certain Documents by Reference 12. Information with Respect to S-2 or S-3 Registrants.............................. Not Applicable 13. Incorporation of Certain Information by Reference................................ Not Applicable 14. Information with Respect to Registrants Other than S-3 or S-2 Registrants........ Not Applicable 15. Information with Respect to S-3 Companies................................ Not Applicable 16. Information with Respect to S-2 or S-3 Companies................................ Not Applicable 17. Information with Respect to Companies Other Than S-3 or S-2 Companies................ Not Applicable 18. Information if Proxies, Consents or Authorizations are to be Solicited....... Not Applicable 19. Information if Proxies, Consents or Authorizations are not to be Solicited or in an Exchange Offer........................ Incorporation of Certain Documents by Reference
3 SUBJECT TO COMPLETION PRELIMINARY PROSPECTUS DATED APRIL 12, 1996 PROSPECTUS - - - ---------- OHIO EDISON FINANCING TRUST II OFFER TO EXCHANGE ITS [ ]% TRUST ORIGINATED PREFERRED SECURITIES(SM) ("TOPRS(SM)") (LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY AND GUARANTEED TO THE EXTENT SET FORTH HEREIN BY OHIO EDISON COMPANY) FOR UP TO 3,600,000 OUTSTANDING SHARES OF 7.75% CLASS A PREFERRED STOCK, $25 PAR VALUE, OF OHIO EDISON COMPANY THE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON [ ], 1996, UNLESS THE OFFER IS EXTENDED. ------------------------ Ohio Edison Financing Trust II, a Delaware statutory business trust (the "Trust"), hereby offers, upon the terms and subject to the conditions set forth in this Prospectus and the accompanying Letter of Transmittal (the "Letter of Transmittal" which, together with this Prospectus, constitute the "Offer"), to exchange its [ ]% Trust Originated Preferred SecuritiesSM ("TOPrSSM"), representing preferred undivided beneficial interests in the assets of the Trust (the "Preferred Securities"), for up to 3,600,000 of the outstanding shares of 7.75% Class A Preferred Stock, $25 par value, (the "Class A Shares") of Ohio Edison Company, an Ohio corporation ("Ohio Edison"). Exchanges will be made on the basis of one Preferred Security for each Class A Share validly tendered and accepted for exchange in the Offer. As of the date of this Prospectus, there are 4,000,000 Class A Shares outstanding. Class A Shares not accepted for exchange because of proration will be returned. Concurrent with the issuance of Preferred Securities in exchange for Class A Shares validly tendered in the Offer, Ohio Edison will deposit in the Trust as trust assets its [ ]% Junior Subordinated Debentures Due 2016 (the "Subordinated Debentures"), having an aggregate principal amount equal to the aggregate stated liquidation amount of the Preferred Securities and the Common Securities to be issued by the Trust. ------------------------ SEE "RISK FACTORS" STARTING ON PAGE 18 FOR A DISCUSSION OF CERTAIN FACTORS RELATING TO THE PREFERRED SECURITIES THAT SHOULD BE CONSIDERED BY INVESTORS, INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS ON THE SUBORDINATED DEBENTURES AND THE PREFERRED SECURITIES MAY BE DEFERRED AND THE RELATED UNITED STATES FEDERAL INCOME TAX CONSEQUENCES. ------------------------ APPLICATION WILL BE MADE TO HAVE THE PREFERRED SECURITIES APPROVED FOR LISTING, SUBJECT TO OFFICIAL NOTICE OF ISSUANCE, ON THE NEW YORK STOCK EXCHANGE, INC. (THE "NYSE"). IF SUCH APPROVAL IS RECEIVED, TRADING OF THE PREFERRED SECURITIES ON THE NYSE IS EXPECTED TO COMMENCE WITHIN A 30-DAY PERIOD AFTER THE INITIAL DELIVERY OF THE PREFERRED SECURITIES. SEE "LISTING AND TRADING OF PREFERRED SECURITIES AND CLASS A SHARES." THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ Merrill Lynch & Co., has been retained as Dealer Manager to solicit exchanges of Class A Shares for Preferred Securities. See "The Offer -- Dealer Manager; Soliciting Dealers." The Bank of New York has been retained as Exchange Agent in connection with the Offer. Georgeson & Company Inc. has been retained to act as Information Agent to assist in connection with the Offer. ------------------------ The Dealer Manager for the Offer is: MERRILL LYNCH & CO. ------------------------ The date of this Prospectus is [ ], 1996. SM "Trust Originated Preferred Securities" and "TOPrS" are service marks of Merrill Lynch & Co. INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. 4 NEITHER THE BOARD OF DIRECTORS OF OHIO EDISON, OHIO EDISON, THE TRUSTEES NOR THE TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF CLASS A SHARES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING IN THE OFFER. HOLDERS OF CLASS A SHARES ARE URGED TO CONSULT THEIR FINANCIAL AND TAX ADVISORS IN MAKING THEIR DECISIONS ON WHAT ACTION TO TAKE IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES. IN ORDER TO PARTICIPATE IN THE OFFER, HOLDERS (AS DEFINED HEREIN) OF CLASS A SHARES MUST SUBMIT A LETTER OF TRANSMITTAL AND COMPLY WITH THE OTHER PROCEDURES FOR TENDERING IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED HEREIN AND IN THE LETTER OF TRANSMITTAL PRIOR TO THE EXPIRATION DATE (AS DEFINED HEREIN). SEE "THE OFFER -- PROCEDURES FOR TENDERING." For a description of the other terms of the Offer, see "The Offer -- Terms of the Offer", "-- Expiration Date; Extensions; Amendments; Termination", "-- Withdrawal of Tenders" and "-- Acceptance of Shares and Proration." Consummation of the Offer is conditioned on, among other things, receipt of at least 1,200,000 validly tendered Class A Shares, which condition may be waived. Application will be made to have the Preferred Securities approved for listing on the NYSE under the symbol "[ ]", subject to official notice of issuance. In order to satisfy the NYSE listing requirements, acceptance of Class A Shares validly tendered in the Offer is subject to the condition that as of the Expiration Date there be at least 400 record or beneficial holders of at least 1,000,000 Preferred Securities to be issued in exchange for such Class A Shares (the "Minimum Distribution Condition"), which condition may not be waived. See "The Offer -- Expiration Date; Extensions; Amendments; Termination" and "-- Conditions to the Offer." The Trust expressly reserves the right, in its sole discretion, subject to applicable law, to (i) terminate the Offer, and not accept for exchange any Class A Shares and promptly return all Class A Shares upon the failure of any of the conditions specified above or in "The Offer -- Conditions to the Offer", (ii) waive any condition to the Offer (other than the Minimum Distribution Condition) and accept all Class A Shares previously tendered pursuant to the Offer, (iii) extend the Expiration Date of the Offer and retain all Class A Shares tendered pursuant to the Offer until the Expiration Date, subject, however, to all withdrawal rights of holders, see "The Offer -- Withdrawal of Tenders", (iv) amend the terms of the Offer or (v) modify the form of the consideration to be paid pursuant to the Offer. Any amendment applicable to the Offer will apply to all Class A Shares tendered pursuant to the Offer. The minimum period during which the Offer must remain open following material changes in the terms of the Offer or the information concerning the Offer, other than a change in the percentage of securities sought or the price, depends upon the facts and circumstances, including the relative materiality of such terms or information. See "The Offer -- Expiration Date; Extensions; Amendments; Termination." Ohio Edison will own all of the securities representing common undivided beneficial interests in the assets of the Trust (the "Common Securities" and, together with the Preferred Securities, the "Trust Securities"). The Trust exists for the exclusive purposes of (a) (i) issuing its Preferred Securities in exchange for Class A Shares pursuant to the Offer and delivering such Class A Shares to Ohio Edison in consideration for the deposit by Ohio Edison in the Trust as trust assets of Subordinated Debentures having an aggregate principal amount equal to the aggregate par value of such Class A Shares so delivered, and (ii) issuing and selling its Common Securities to Ohio Edison for cash and using the proceeds thereof to purchase as trust assets an equal aggregate principal amount of Subordinated Debentures, and (b) engaging in such other activities as are necessary, convenient or incidental thereto. The Subordinated Debentures will be unsecured obligations of Ohio Edison and will be subordinate and junior in right of payment to certain other indebtedness of Ohio Edison, as described herein. Upon an event of default under the Declaration (as defined herein), the holders of the Preferred Securities will have a preference over the holder of the Common Securities with respect to payments in respect of distributions and payments upon liquidation, redemption and otherwise. See "Prospectus Summary -- Description of Preferred Securities and Subordinated Debentures." Cash distributions on the Preferred Securities will be cumulative from the first day following the Expiration Date (the "Accrual Date") at an annual rate of [ ]% of the liquidation amount of $25 per 2 5 Preferred Security, and will be payable quarterly in arrears on the last day of March, June, September and December of each year, commencing on [ ], 1996 ("distributions"). In addition, holders of the Preferred Securities will be entitled to an additional cash distribution at the rate of 7.75% per annum of the liquidation amount thereof from [ ], 1996 through the Expiration Date ("Pre-Issuance Accrued Distribution") in lieu of dividends accumulating and unpaid after [ ], 1996 on their Class A Shares accepted for exchange, such additional distribution to be made on [ ], 1996 to holders of the Preferred Securities on the record date for such distribution. The distribution payable on [ ], 1996, which will be calculated at the above rate and based on a period that is shorter than a full quarter, will be in the amount of $[ ] per Preferred Security. The distribution rate and the distribution and other payment dates for the Preferred Securities will correspond to the interest rate and interest and other payment dates on the Subordinated Debentures, which will be the sole assets of the Trust. As a result, if principal or interest is not paid on the Subordinated Debentures, no amounts will be paid on the Preferred Securities. The payment of distributions out of moneys held by the Trust, and payments on liquidation of the Trust or the redemption of Preferred Securities, as set forth below, are guaranteed by Ohio Edison (the "Preferred Securities Guarantee") if and to the extent the Trust has funds available therefor. Ohio Edison's obligations under the Preferred Securities Guarantee, taken together with its other obligations under the Subordinated Debentures and the Indenture and its obligations under the Declaration, including its obligation to pay all fees, expenses, debts and obligations (other than with respect to the Trust Securities) related to the Trust and the Offer, constitute a full and unconditional guarantee by Ohio Edison of payments due on the Preferred Securities (collectively, the obligations described in this sentence comprise the "Back-up Obligations"). See "Effect of Obligations Under the Subordinated Debentures and the Preferred Securities Guarantee" and "Description of the Preferred Securities Guarantee." The obligations of Ohio Edison under the Preferred Securities Guarantee are subordinate and junior in right of payment to all other liabilities of Ohio Edison and will rank pari passu with the most senior preferred stock issued by Ohio Edison from time to time and with any current or future guarantee entered into by Ohio Edison in respect of any preferred stock of any subsidiary or affiliate of Ohio Edison. If Ohio Edison does not make principal or interest payments on the Subordinated Debentures, the Trust will not have sufficient funds to redeem or make distributions on the Preferred Securities, in which event the Preferred Securities Guarantee will not apply to such redemptions or distributions until the Trust has sufficient funds available therefor. The obligations of Ohio Edison under the Subordinated Debentures are subordinate and junior in right of payment to all present and future Senior Indebtedness (as defined herein) of Ohio Edison. As of December 31, 1995, Ohio Edison had approximately $3.3 billion principal amount of indebtedness for borrowed money constituting Senior Indebtedness on a consolidated basis. Ohio Edison has the right to defer payments of interest on the Subordinated Debentures by extending the interest payment period on the Subordinated Debentures, at any time, for up to 20 consecutive quarters (each an "Extension Period"). If interest payments are so deferred, distributions on the Preferred Securities will also be deferred. Despite such deferral, during an Extension Period distributions will continue to accrue with interest thereon (to the extent permitted by applicable law) at an annual rate of [ ]% per annum, and the interest so accrued at the end of each quarter and remaining unpaid will itself bear interest (to the extent permitted by applicable law) thereafter until paid on the same basis, and holders of Preferred Securities will be required to include deferred interest income in their gross income for United States federal income tax purposes in advance of receipt of the cash interest payments attributable to such deferred income. There could be multiple Extension Periods of varying lengths throughout the term of the Subordinated Debentures. See "Description of the Subordinated Debentures -- Option to Extend Interest Payment Period," "Risk Factors -- Option to Extend Interest Payment Period" and "Taxation -- Original Issue Discount" and "-- Potential Extension of Payment Period on the Subordinated Debentures." In the event of any such deferral, the holders of the Preferred Securities do not have the right to appoint a special representative or trustee or otherwise act to protect their interests. The Subordinated Debentures are redeemable by Ohio Edison (in whole or in part) from time to time, after April 1, 1998, or at any time in certain circumstances upon the occurrence of a Tax Event (as defined herein). If Ohio Edison redeems Subordinated Debentures, the Trust must redeem Trust Securities having an 3 6 aggregate liquidation amount equal to the aggregate principal amount of the Subordinated Debentures so redeemed at $25 per Trust Security plus accrued and unpaid distributions thereon (the "Redemption Price") to the date fixed for redemption. See "Description of the Preferred Securities -- Mandatory Redemption." The Preferred Securities will be redeemed upon maturity of the Subordinated Debentures. The Subordinated Debentures mature on [ ], 2016. In addition, upon the occurrence of a Special Event (as defined herein) arising from a change in law or a change in legal interpretation, unless the Subordinated Debentures are redeemed in the limited circumstances described below, the Trust shall be terminated with the result that the Subordinated Debentures will be distributed to the holders of the Trust Securities, on a pro rata basis, in lieu of any cash distribution. In the case of the occurrence of a Special Event that is a Tax Event, Ohio Edison will have the right in certain circumstances to redeem the Subordinated Debentures, which would result in the redemption by the Trust of the Trust Securities in the same amount on a pro rata basis. If the Subordinated Debentures are distributed to the holders of the Preferred Securities, Ohio Edison will use its best efforts to have the Subordinated Debentures listed on the NYSE or on such other exchange as the Preferred Securities are then listed. See "Description of the Preferred Securities -- Special Event Redemption or Distribution" and "Description of the Subordinated Debentures." In the event of the voluntary or involuntary dissolution, winding-up or termination of the Trust, the holders of the Preferred Securities will be entitled to receive, for each Preferred Security, a liquidation amount of $25 plus accrued and unpaid distributions thereon (including interest, if any, thereon) to the date of payment, unless in connection with such dissolution, winding-up or termination the Subordinated Debentures are distributed to the holders of the Preferred Securities. See "Description of the Preferred Securities -- Liquidation Distribution Upon Termination." Ohio Edison will be the sole obligor under the Subordinated Debentures and the Preferred Securities Guarantee and with respect to the other obligations of Ohio Edison described herein. The Class A Shares are listed and principally traded on the NYSE and the Chicago Stock Exchange under the symbol "OECPrM". On [ ], 1996, the last full day of trading prior to the first public announcement of the Offer, the closing sales price per Class A Share on the NYSE as reported on the Composite Tape was $[ ]. HOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE CLASS A SHARES. To the extent that Class A Shares are tendered and accepted in the Offer, the terms on which untendered Class A Shares could subsequently be sold could be adversely affected. See "Listing and Trading of Preferred Securities and Class A Shares." Ohio Edison will pay to Soliciting Dealers (as defined herein) designated by the record or beneficial owner, as appropriate, of Class A Shares a solicitation fee of $[ ] per Class A Share validly tendered and accepted for exchange pursuant to the Offer, subject to certain conditions. Soliciting Dealers are not entitled to a solicitation fee for Class A Shares beneficially owned by such Soliciting Dealer. See "The Offer -- Dealer Manager; Soliciting Dealers." NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY OHIO EDISON, THE TRUST, THE TRUSTEES OR THE DEALER MANAGER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY EXCHANGE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF OHIO EDISON OR THE TRUST SINCE THE RESPECTIVE DATES AS OF WHICH INFORMATION IS GIVEN HEREIN. THE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS OF CLASS A SHARES IN ANY JURISDICTION IN WHICH THE MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. HOWEVER, OHIO EDISON AND THE TRUST MAY, AT THEIR DISCRETION, TAKE SUCH ACTION AS THEY MAY DEEM NECESSARY TO MAKE THE OFFER IN ANY SUCH JURISDICTION AND EXTEND THE OFFER TO HOLDERS OF CLASS A SHARES IN SUCH 4 7 JURISDICTION. IN ANY JURISDICTION THE SECURITIES LAWS OR BLUE SKY LAWS OF WHICH REQUIRE THE OFFER TO BE MADE BY A LICENSED BROKER OR DEALER, THE OFFER IS BEING MADE ON BEHALF OF THE TRUST BY THE DEALER MANAGER OR ONE OR MORE REGISTERED BROKERS OR DEALERS WHICH ARE LICENSED UNDER THE LAWS OF SUCH JURISDICTION. AVAILABLE INFORMATION Ohio Edison is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information filed by Ohio Edison may be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and 7 World Trade Center, New York, New York 10048. Copies of such materials can be obtained by mail from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, such material may also be inspected and copied at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005, on which certain of Ohio Edison's securities are listed. Ohio Edison and the Trust have filed with the Commission a registration statement on Form S-4 (herein, together with all amendments and exhibits, referred to as the "Registration Statement") under the Securities Act of 1933, as amended (the "Act"). This Prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information, reference is hereby made to the Registration Statement. No separate financial statements of the Trust are included herein. Ohio Edison considers that such financial statements would not be material to holders of the Preferred Securities because (i) all of the Common Securities of the Trust are owned by Ohio Edison, a reporting company under the Exchange Act; (ii) the Trust has no independent operations, but exists for the sole purpose of issuing securities representing undivided beneficial interests in the assets of the Trust and investing the proceeds thereof in the Subordinated Debentures (and engaging in those activities necessary, convenient or incidental thereto); and (iii) the obligations of the Trust under the securities issued thereby, to the extent funds are available therefor, are fully and unconditionally guaranteed to the extent set forth herein by Ohio Edison. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following document filed by Ohio Edison with the Commission pursuant to the Exchange Act is incorporated herein by reference: -- Ohio Edison's Annual Report on Form 10-K for the year ended December 31, 1995. All other documents filed by Ohio Edison pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the Expiration Date shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the respective dates of the filing of such documents. Any statement contained herein or in a document all or a portion of which is incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. Ohio Edison will provide without charge to each person, including a beneficial owner, to whom a copy of this Prospectus has been delivered, upon the written or oral request of any such person, a copy of any and all of the documents which are incorporated herein by reference, other than exhibits to such information (unless 5 8 such exhibits are specifically incorporated by reference into such documents). Requests for such copies should be directed to Ohio Edison Company, Investor Services, 76 South Main Street, Akron, Ohio 44308, telephone number 1-800-736-3402. The information relating to Ohio Edison contained in this document does not purport to be comprehensive and should be read together with the information contained in the incorporated documents. In order to assure timely delivery of the documents, any request should be made not later than five business days prior to the Expiration Date. ------------------------ THIS PROSPECTUS CONTAINS BRIEF SUMMARIES OF CERTAIN MORE DETAILED INFORMATION CONTAINED IN DOCUMENTS INCORPORATED HEREIN BY REFERENCE. SUCH SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY BY THE DETAILED INFORMATION CONTAINED IN THE INCORPORATED DOCUMENTS. ------------------------ 6 9 TABLE OF CONTENTS
PAGE ---- Available Information................................................................ 5 Incorporation of Certain Documents by Reference...................................... 5 Prospectus Summary................................................................... 8 Risk Factors......................................................................... 18 Comparison of Preferred Securities and Class A Shares................................ 23 Ohio Edison Company.................................................................. 27 Certain Consolidated Financial Information of Ohio Edison............................ 28 Ohio Edison Financing Trust II....................................................... 29 The Offer............................................................................ 32 Listing and Trading of Preferred Securities and Class A Shares....................... 39 Transactions and Arrangements Concerning the Offer................................... 40 Fees and Expenses; Transfer Taxes.................................................... 40 Price Range of Class A Shares........................................................ 40 Description of the Preferred Securities.............................................. 41 Description of the Preferred Securities Guarantee.................................... 52 Description of the Subordinated Debentures........................................... 54 Effect of Obligations Under the Subordinated Debentures and the Preferred Securities Guarantee.......................................................................... 61 Description of the Class A Shares.................................................... 62 Taxation............................................................................. 65 Legal Matters........................................................................ 68 Experts.............................................................................. 69 ERISA Considerations................................................................. 69
7 10 PROSPECTUS SUMMARY The following summary does not purport to be complete and is qualified in its entirety by the detailed information contained elsewhere in, or incorporated by reference in, this Prospectus. OHIO EDISON FINANCING TRUST II The Trust is a statutory business trust formed under the Delaware Business Trust Act, as amended (the "Business Trust Act"), on March 5, 1996. The Trust's business is defined in a Declaration of Trust which will be amended and restated in its entirety as of the date the Trust accepts Class A Shares in the Offer (see "The Offer -- Terms of the Offer") (as so amended and restated, the "Declaration") substantially in the form filed as an exhibit to the Registration Statement of which this Prospectus forms a part. The Declaration will be qualified as an indenture under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). Upon issuance of the Preferred Securities, the holders thereof will own all of the issued and outstanding Preferred Securities. See "Description of the Preferred Securities -- Book-Entry; Delivery and Form." Ohio Edison will acquire all of the Common Securities in an aggregate liquidation amount equal to 3% of the total capital of the Trust. The Trust exists for the exclusive purposes of (a) (i) issuing its Preferred Securities in exchange for Class A Shares pursuant to the Offer and delivering such Class A Shares to Ohio Edison in consideration of the deposit by Ohio Edison in the Trust as trust assets of Subordinated Debentures having an aggregate principal amount equal to the aggregate par value of such Class A Shares so delivered, and (ii) issuing and selling its Common Securities to Ohio Edison for cash and using the proceeds thereof to purchase as trust assets an equal aggregate principal amount of Subordinated Debentures and (b) engaging in such other activities as are necessary, convenient or incidental thereto. The rights of the holders of the Preferred Securities, including economic rights, rights to information and voting rights, are set forth in the Declaration, the Business Trust Act and the Trust Indenture Act. See "Description of the Preferred Securities." The Trust's business and affairs will be conducted by the trustees (the "Company Trustees") appointed by Ohio Edison, as holder of the Common Securities. The duties and obligations of the Company Trustees shall be governed by the Declaration and the Business Trust Act and, in the case of the Property Trustee (as defined below), the Trust Indenture Act. Pursuant to the Declaration, the number of Company Trustees will initially be four. Two of the Company Trustees (the "Regular Trustees") will be persons who are employees or officers of, or affiliated with, Ohio Edison. A third trustee will be a financial institution unaffiliated with Ohio Edison that will serve as property trustee (the "Property Trustee") under the Declaration and as indenture trustee for purposes of the Trust Indenture Act. The Bank of New York will act as the Property Trustee until removed or replaced by the holder of the Common Securities. The Bank of New York will also act as indenture trustee under the Preferred Securities Guarantee (the "Preferred Guarantee Trustee"). See "Description of the Preferred Securities Guarantee." The fourth trustee of the Trust will be a financial institution or an affiliate thereof which maintains a principal place of business in the State of Delaware (the "Delaware Trustee"). The Bank of New York (Delaware) will act as the Delaware Trustee. The Property Trustee will hold title to the Subordinated Debentures for the benefit of the Trust and holders of the Trust Securities and will have the power to exercise all rights, powers and privileges under the Indenture (as defined herein) as the holder of the Subordinated Debentures. In addition, the Property Trustee will maintain exclusive control of a segregated non-interest bearing trust account (the "Property Account") to hold all payments made in respect of the Subordinated Debentures for the benefit of the Trust and holders of the Trust Securities. The Property Trustee will make payments of distributions and payments on liquidation, redemption and otherwise to the holders of the Trust Securities out of funds from the Property Account. The Preferred Guarantee Trustee will hold the Preferred Securities Guarantee for the benefit of the holders of the Preferred Securities. Ohio Edison, as the holder of all the Common Securities, will have the right to appoint, remove or replace any Company Trustee and to increase or decrease the number of Company Trustees, provided that the number of Company Trustees shall be at least three if the Property Trustee is not also the Delaware Trustee. The Declaration provides that Ohio Edison will pay all fees, expenses, debts and obligations (other than with respect to the Trust Securities) related to the Trust and the offering of the Trust Securities. 8 11 CERTAIN POTENTIAL BENEFITS AND RISKS TO INVESTORS Prospective exchanging holders of Class A Shares who plan to participate in the Offer should carefully review the information contained elsewhere in this Prospectus prior to making a decision regarding the Offer and should particularly consider the following matters: POTENTIAL BENEFITS TO EXCHANGING HOLDERS - The cash distributions rate on the Preferred Securities will be [ ] basis points greater than the dividend rate on the Class A Shares. See "Comparison of Preferred Securities and Class A Shares." - Although the obligations of Ohio Edison under the Subordinated Debentures and the Preferred Securities Guarantee are unsecured and will be subordinated and junior in right of payment to all Senior Indebtedness (as herein defined) of Ohio Edison, they will be senior to all capital stock of Ohio Edison now or hereafter issued by Ohio Edison (including the Class A Shares), except that Ohio Edison's obligations under the Preferred Securities Guarantee will rank pari passu with the most senior preferred or preference stock issued by Ohio Edison from time to time and with any current or future guarantee by Ohio Edison in respect of any preferred or preference stock of any subsidiary or affiliate of Ohio Edison. - While no dividends are required to be paid with respect to the Class A Shares, interest payments on the Subordinated Debentures and therefore distributions on the Preferred Securities may not be deferred for more than 20 consecutive quarterly interest periods. Any Extension Period with respect to payment of interest on the Subordinated Debentures will also apply to distributions with respect to the Preferred Securities. Moreover, Ohio Edison may defer interest payments on the Subordinated Debentures only if it does not declare or pay dividends on, or redeem, purchase or make a distribution or liquidation payment with respect to, any of its capital stock (except under certain circumstances). See "Description of the Preferred Securities." However, to date, Ohio Edison has made each quarterly dividend payment with respect to the Class A Shares on the scheduled dividend payment date. In addition, such dividends accrue whether or not they are declared. See "Description of the Class A Shares -- Dividends." - The Offer will allow Ohio Edison to achieve certain tax efficiencies because, in contrast to dividend payments with respect to the Class A Shares which are not deductible by Ohio Edison, Ohio Edison will be able to deduct interest payments on the Subordinated Debentures for United States federal income tax purposes. See "The Offer -- Purpose of the Offer." - So long as payments of interest and other payments are made when due on the Subordinated Debentures, such payments will be sufficient to cover cash distributions and other payments made on the Trust Securities because (i) the aggregate principal amount of Subordinated Debentures will be equal to the sum of (x) the aggregate stated liquidation amount of the Preferred Securities issued by the Trust in exchange for the Class A Shares accepted in the Offer and (y) the amount of proceeds received by the Trust from the issuance of the Common Securities to Ohio Edison, which proceeds will be used by the Trust to purchase an equal principal amount of Subordinated Debentures, (ii) the interest rate and interest and other payment dates on the Subordinated Debentures will match the distribution rate and distribution and other payment dates for the Trust Securities, (iii) Ohio Edison is obligated under the Declaration to pay for all costs, expenses, debts and obligations of the Trust (other than with respect to the Trust Securities), and (iv) the Declaration further provides that the Regular Trustees shall not take any action that is inconsistent with the purposes of the Trust. See "Ohio Edison Financing Trust II," "Description of the Preferred Securities," "Description of the Subordinated Debentures" and "Effect of Obligations Under the Subordinated Debentures and the Preferred Securities Guarantee." - The Trust will have no independent operations and will exist for the sole purposes of effecting the Offer and issuing the Trust Securities as described herein and owning and holding the Subordinated Debentures. See "Ohio Edison Financing Trust II." - The Property Trustee will have the power to exercise all rights, powers and privileges under the Indenture (as defined herein) as the holder of the Subordinated Debentures, including its rights to enforce Ohio Edison's obligations under the Subordinated Debentures upon the occurrence of an Indenture Event of 9 12 Default (as defined herein). Upon the occurrence of an Event of Default under the Preferred Securities Guarantee, the Preferred Guarantee Trustee shall enforce the Preferred Securities Guarantee on behalf of the holders of the Preferred Securities. In addition, the holders of the Preferred Securities will have certain rights to direct the Property Trustee and the Preferred Guarantee Trustee with respect to certain matters under the Declaration and the Preferred Securities Guarantee, respectively. If the Preferred Guarantee Trustee fails to enforce the Preferred Securities Guarantee, any holder of Preferred Securities may institute a legal proceeding against Ohio Edison to enforce the Preferred Securities Guarantee. See "Description of the Preferred Securities" and "Description of the Preferred Securities Guarantee." POTENTIAL RISKS TO EXCHANGING HOLDERS - Participation in the Offer will be a taxable event for holders of Class A Shares. See "Risk Factors -- Exchange of Class A Shares for Preferred Securities Is a Taxable Event." - The obligations of Ohio Edison under (i) the Subordinated Debentures and the Preferred Securities Guarantee are subordinate in right of payment to all Senior Indebtedness (as defined herein) of Ohio Edison, and (ii) the Preferred Securities Guarantee is also subordinate in right of payment to the Subordinated Debentures. See "Risk Factors -- Ranking of Subordinated Obligations Under Preferred Securities Guarantee and Subordinated Debentures"; and "-- Trust Distributions Dependent on Ohio Edison's Payments on Subordinated Debentures." - If Ohio Edison were to default in its obligation to pay amounts payable on the Subordinated Debentures, the Trust would lack available funds for the payment of distributions or amounts payable on redemption of the Preferred Securities or otherwise. In addition, the interest payment period on the Subordinated Debentures may be extended from time to time under certain circumstances by Ohio Edison, in its sole discretion, for up to 20 consecutive quarterly interest periods. See "Risk Factors -- Ranking of Subordinated Obligations Under Preferred Securities Guarantee and Subordinated Debentures"; "-- Rights Under the Preferred Securities Guarantee"; "-- Enforcement of Certain Rights by Holders of Preferred Securities"; "-- Option to Extend Interest Payment Period"; and "-- Trading Price of Preferred Securities." - Should Ohio Edison not make interest or other payments on the Subordinated Debentures for any reason, including as a result of Ohio Edison's election to defer payments of interest on the Subordinated Debentures by extending the interest payment period on the Subordinated Debentures, the Trust will not make distributions or other payments on the Trust Securities. In such an event, holders of the Preferred Securities would not be able to rely on the Preferred Securities Guarantee since the Preferred Securities Guarantee covers distributions and other payments on the Preferred Securities only if and to the extent that Ohio Edison has made a payment to the Trust of interest or principal on the Subordinated Debentures deposited in the Trust as trust assets. See "Risk Factors -- Rights Under the Preferred Securities Guarantee"; and "-- Enforcement of Certain Rights by Holders of Preferred Securities." - If Ohio Edison elects to defer payments of interest on the Subordinated Debentures by extending the interest period on the Subordinated Debentures, distributions on the Preferred Securities would also be deferred but the Trust would continue to accrue interest income (as original issue discount) in respect of such Subordinated Debentures which would be taxable to beneficial owners of Preferred Securities. As a result, beneficial owners of Preferred Securities during an Extension Period would include their pro rata share of the interest in gross income in advance of the receipt of cash. See "Risk Factors -- Option to Extend Interest Payment Period"; and "Taxation -- Original Issue Discount." - Holders of Preferred Securities will have limited voting rights and will not be entitled to vote to appoint, remove or replace, or to increase or decrease the number of, Company Trustees, which voting rights are vested exclusively in the holder of the Common Securities. See "Risk Factors -- Limited Voting Rights" and "Description of the Preferred Securities -- Voting Rights." Holders of Class A Shares also have limited voting rights. However, if four quarterly dividends payable on the Class A Shares or any series of Ohio Edison's Preferred Stock, $100 Par Value (the "$100 Preferred Stock") shall be in default, in whole or in part, and thereafter until all defaults have been cured, the holders of the Class A Shares and the $100 Preferred Stock shall have the exclusive right, voting separately and as a single class, each share of $100 Preferred Stock 10 13 being counted as one and each Class A Share being counted as one-quarter, (i) to elect the smallest number of directors which shall constitute a majority of the directors of Ohio Edison, and (ii) to vote in all matters with respect to the governing of the affairs of Ohio Edison other than the election of directors. See "Risk Factors -- Limited Voting Rights." - While the Class A Shares are not redeemable on or prior to April 1, 1998, the Subordinated Debentures (and thus the Preferred Securities), though generally not redeemable on or prior to April 1, 1998 as well, in certain circumstances will be redeemable at any time prior to their maturity upon the occurrence of a Tax Event (as defined herein). See "Risk Factors -- Special Event Redemption or Distribution." - While dividends with respect to Class A Shares are eligible for the dividends received deduction for corporate holders, distributions on the Preferred Securities are not eligible for the dividends received deduction for corporate holders. - While the Preferred Securities are expected to be approved for listing on the NYSE, subject to official notice of issuance, the Preferred Securities are a new issue of securities with no established trading market. In addition, liquidity of the Preferred Securities will be affected by the number of Class A Shares exchanged in the Offer. See "Risk Factors -- Lack of Established Trading Market for Preferred Securities." - Under certain circumstances, Subordinated Debentures could be distributed to holders of Trust Securities. In such event, the Trust would be dissolved and the holders would become holders of Subordinated Debentures. While Ohio Edison will use its best efforts in such a situation to have the Subordinated Debentures listed on the NYSE, there is no guarantee that such listing will take place or that a market will exist for such Subordinated Debentures. See "Risk Factors -- Special Event Redemption or Distribution." POTENTIAL RISKS TO NON-EXCHANGING HOLDERS - The liquidity and trading market for untendered Class A Shares could be adversely affected to the extent Class A Shares are tendered and accepted in the Offer. See "Risk Factors -- Reduced Trading Market for Class A Shares." - The Subordinated Debentures will rank senior in right of payment to the untendered Class A Shares. See "Risk Factors -- Ranking of Subordinated Obligations Under Preferred Securities Guarantee and Subordinated Debentures." THE OFFER PURPOSE OF THE OFFER The purpose of the Offer is to refinance the Class A Shares with the Preferred Securities to achieve certain tax efficiencies while preserving Ohio Edison's flexibility with respect to future financings. This refinancing will permit Ohio Edison to deduct interest payable on the Subordinated Debentures for United States federal income tax purposes; dividends payable on the Class A Shares are not deductible. See "The Offer -- Purpose of the Offer." TERMS OF THE OFFER Upon the terms and subject to the conditions set forth herein and in the Letter of Transmittal, the Trust hereby offers to exchange its Preferred Securities for up to 3,600,000 of the outstanding Class A Shares of Ohio Edison. Exchanges will be made on the basis of one Preferred Security for each Class A Share validly tendered and accepted for exchange in the Offer. See "The Offer -- Terms of the Offer." EXPIRATION DATE; WITHDRAWALS Upon the terms and conditions of the Offer, including the provisions relating to proration described herein, the Trust will accept for exchange up to 3,600,000 Class A Shares validly tendered and not withdrawn prior to 12:00 Midnight, New York City time, on [ ], 1996, or if the Offer is extended by the Trust, 11 14 in its sole discretion, the latest date and time to which the Offer has been extended (the "Expiration Date"). Tenders of Class A Shares pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and, unless accepted for exchange by the Trust, may be withdrawn at any time after 40 Business Days (as defined herein) after the date of this Prospectus. Class A Shares not accepted because of proration will be returned to the tendering holders at the Trust's expense as promptly as practicable following the Expiration Date. A "Business Day" shall mean any day other than a day on which banking institutions in The City of New York are authorized or required by law to close. See "The Offer -- Expiration Date; Extensions; Amendments; Termination", "-- Withdrawal of Tenders" and "-- Acceptance of Shares and Proration." Tenders must be made to the Exchange Agent in order to be valid. CONDITIONS TO THE OFFER; EXTENSIONS; AMENDMENTS; TERMINATION Consummation of the Offer is conditioned on, among other things, (i) receipt of at least 1,200,000 validly tendered Class A Shares, which condition may be waived by the Trust, and (ii) tenders by a sufficient number of holders of Class A Shares to meet the Minimum Distribution Condition, which condition may not be waived. See "The Offer -- Conditions to the Offer" and "-- Expiration Date; Extensions; Amendments; Termination." The Trust expressly reserves the right, in its sole discretion, subject to applicable law, to (i) terminate the Offer, and not accept for exchange any Class A Shares and promptly return all Class A Shares, upon the failure of any of the conditions referred to above, (ii) waive any condition to the Offer (other than the Minimum Distribution Condition) and accept all Class A Shares previously tendered pursuant to the Offer, (iii) extend the Expiration Date of the Offer and retain all Class A Shares tendered pursuant to the Offer until the Expiration Date, subject, however, to all withdrawal rights of holders, see "The Offer -- Withdrawal of Tenders", (iv) amend the terms of the Offer or (v) modify the form of the consideration to be paid pursuant to the Offer. Any amendment applicable to the Offer will apply to all Class A Shares tendered pursuant to the Offer. The minimum period during which the Offer must remain open following material changes in the terms of the Offer or the information concerning the Offer, other than a change in the percentage of securities sought or the price, depends upon the facts and circumstances, including the relative materiality of such terms or information. See "The Offer -- Conditions to the Offer" and "-- Expiration Date; Extensions; Amendments; Termination." PROCEDURES FOR TENDERING Each holder of Class A Shares wishing to participate in the Offer must (i) properly complete and sign the Letter of Transmittal or a facsimile thereof (all references in this Prospectus to the Letter of Transmittal shall be deemed to include a facsimile thereof) in accordance with the instructions contained herein and in the Letter of Transmittal, together with any required signature guarantees, and deliver the same to The Bank of New York, as Exchange Agent, at one of its addresses set forth on the back cover page hereof, prior to the Expiration Date and either (a) certificates for the Class A Shares must be received by the Exchange Agent at such address or (b) such Class A Shares must be transferred pursuant to the procedures for book-entry transfer described herein and a confirmation of such book-entry transfer must be received by the Exchange Agent, in each case prior to the Expiration Date, or (ii) comply with the guaranteed delivery procedures described herein. See "The Offer -- Procedures for Tendering." IN ORDER TO PARTICIPATE IN THE OFFER, HOLDERS OF CLASS A SHARES MUST SUBMIT A LETTER OF TRANSMITTAL AND COMPLY WITH THE OTHER PROCEDURES FOR TENDERING IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED HEREIN AND IN THE LETTER OF TRANSMITTAL PRIOR TO THE EXPIRATION DATE. LETTERS OF TRANSMITTAL, CLASS A SHARES AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT ONLY TO THE EXCHANGE AGENT -- NOT TO OHIO EDISON, THE TRUST, THE TRUSTEES, THE DEALER MANAGER OR THE INFORMATION AGENT. 12 15 SPECIAL PROCEDURE FOR BENEFICIAL OWNERS Any beneficial owner whose Class A Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender such Class A Shares should contact such registered holder promptly and instruct such registered holder to tender on such beneficial owner's behalf. If such beneficial owner wishes to tender on its own behalf, such owner must, prior to completing and executing a Letter of Transmittal and delivering its Class A Shares, either make appropriate arrangements to register ownership of the Class A Shares in such owner's name or obtain a properly completed stock power from the registered holder. The transfer of registered ownership may take considerable time and may not be able to be completed prior to the Expiration Date. See "The Offer -- Procedures for Tendering -- Special Procedure for Beneficial Owners." GUARANTEED DELIVERY PROCEDURES If a holder of Class A Shares desires to accept the Offer and time will not permit a Letter of Transmittal or Class A Shares to reach the Exchange Agent before the Expiration Date or the procedure for book-entry transfer cannot be completed on a timely basis, a tender may be effected in accordance with the guaranteed delivery procedures set forth in "The Offer -- Procedures for Tendering -- Guaranteed Delivery." ACCEPTANCE OF SHARES AND PRORATION Upon the terms and subject to the conditions of the Offer, including the Minimum Distribution Condition, if 3,600,000 or fewer Class A Shares have been validly tendered and not withdrawn prior to the Expiration Date, the Trust will accept for exchange all such Class A Shares. Upon the terms and subject to the conditions of the Offer, if more than 3,600,000 Class A Shares (or, if decreased as described herein, such lesser number as the Trust may elect to purchase pursuant to the Offer) have been validly tendered and not withdrawn prior to the Expiration Date, the Trust will accept for exchange Class A Shares from each tendering holder on a pro rata basis, subject to adjustment to avoid the acceptance for exchange of fractional shares. If the Trust decides, in its sole discretion, to increase or decrease the number of Class A Shares sought in the Offer or to increase or decrease the consideration offered to holders of Class A Shares, and if the Offer is scheduled to expire less than ten Business Days from and including the date that notice of such increase or decrease is first published, sent or given in the manner specified in "The Offer -- Terms of the Offer" and "-- Expiration Date; Extensions; Amendments; Termination," then the Offer will remain open for a minimum of ten Business Days from and including the date of such notice. All Class A Shares not accepted pursuant to the Offer, including shares not purchased because of proration, will be returned to the tendering holders at the Trust's expense as promptly as practicable following the Expiration Date. DELIVERY OF PREFERRED SECURITIES Subject to the terms and conditions of the Offer, the delivery of the Preferred Securities to be issued pursuant to the Offer will occur as promptly as practicable following the Expiration Date. See "The Offer -- Terms of the Offer" and "-- Expiration Date; Extensions; Amendments; Termination." If proration of tendered Class A Shares is required, because of the difficulty in determining the number of Class A Shares validly tendered (including shares tendered by the guaranteed delivery procedures described in "The Offer -- Procedures for Tendering"), the Trust does not expect that it would be able to announce the final proration factor or to commence the exchange for any shares of Class A Shares pursuant to the Offer until approximately five Business Days after the Expiration Date. Preliminary results of the proration will be announced by press release as promptly as practicable after the Expiration Date. Holders of Class A Shares may obtain such preliminary information from the Dealer Manager or the Information Agent and may also be able to obtain such information from their brokers. 13 16 Until the final proration factors are known, the Trust will not issue any Preferred Securities in exchange for any Class A Shares accepted for exchange pursuant to the Offer or return Class A Shares delivered to the Exchange Agent but not tendered or return Class A Shares tendered but not accepted for exchange because of proration. DESCRIPTION OF PREFERRED SECURITIES AND SUBORDINATED DEBENTURES PREFERRED SECURITIES OFFERED 3,600,000 [ ]% Trust Originated Preferred Securities evidencing preferred undivided beneficial interests in the assets of the Trust are offered hereby. Holders of the Preferred Securities are entitled to receive cumulative cash distributions at an annual rate of [ ]% of the liquidation amount of $25 per Preferred Security, accruing from [ ], 1996 and payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, commencing on [ ], 1996. [The distribution payable on [ ], 1996, which will be calculated at the above rate and based on a period that is shorter than a full quarter, will be in the amount of $[ ] per Preferred Security.] In addition, holders of Preferred Securities will be entitled to an additional cash distribution at the rate of 7.75% per annum of the liquidation amount thereof from [ ], 1996 through the Expiration Date in lieu of dividends accumulating and unpaid after [ ], 1996 on their Class A Shares accepted for exchange, such additional distribution to be made on [ ], 1996 to holders of the Preferred Securities on the record date for such distribution. The distribution rate and the distribution and other payment dates for the Preferred Securities will correspond to the interest rate and interest and other payment dates on the Subordinated Debentures, which will be the sole assets of the Trust. As a result, if principal or interest is not paid on the Subordinated Debentures, no amounts will be paid on the Preferred Securities. See "Description of the Preferred Securities." SUBORDINATED DEBENTURES There will be deposited in the Trust as trust assets (i) Subordinated Debentures having an aggregate principal amount equal to the aggregate stated liquidation amount of the Preferred Securities issued by the Trust in exchange for the Class A Shares accepted in the Offer and (ii) Subordinated Debentures having an aggregate principal amount equal to the amount of proceeds received by the Trust from the sale of the Common Securities to Ohio Edison. The Subordinated Debentures will be subordinate and junior in right of payment to all Senior Indebtedness of Ohio Edison. See "Description of the Subordinated Debentures -- Subordination." PREFERRED SECURITIES GUARANTEE Payment of distributions out of moneys held by the Trust, and payments on liquidation of the Trust or the redemption of Preferred Securities, are guaranteed by Ohio Edison if and to the extent the Trust has funds available therefor. If Ohio Edison does not make principal or interest payments on the Subordinated Debentures, the Trust will not have sufficient funds to redeem or make distributions on the Preferred Securities, in which event the Preferred Securities Guarantee will not apply to such redemptions or distributions until the Trust has sufficient funds available therefor. Ohio Edison's obligations under the Preferred Securities Guarantee, together with the other Back-up Obligations, constitute a full and unconditional guarantee by Ohio Edison of payments due on the Preferred Securities. See "Effect of Obligations Under the Subordinated Debentures and the Preferred Securities Guarantee" and "Description of the Preferred Securities Guarantee." The obligations of Ohio Edison under the Preferred Securities Guarantee are subordinate and junior in right of payment to all other liabilities of Ohio Edison and will rank pari passu with the most senior preferred stock issued by Ohio Edison from time to time and with any guarantee that may be entered into by Ohio Edison in respect of any preferred stock of any subsidiary or affiliate of Ohio Edison. See "Risk Factors -- Ranking of Obligations Under the Preferred Securities Guarantee and the Subordinated 14 17 Debentures" and "-- Rights under the Preferred Securities Guarantee" and "Description of the Preferred Securities Guarantee." INTEREST DEFERRAL Ohio Edison has the right to defer payments of interest on the Subordinated Debentures by extending the interest payment period on the Subordinated Debentures, at any time and from time to time, for up to 20 consecutive quarters. If interest payments on the Subordinated Debentures are so deferred, distributions on the Preferred Securities will also be deferred. However, the right to defer payments of interest will not apply to Pre-Issuance Accrued Distribution. During any deferral, distributions will continue to accrue interest at the rate per annum of [ ]% and the interest so accrued at the end of each quarter and remaining unpaid will itself bear interest (to the extent permitted by law) thereafter until paid on the same basis. There could be multiple Extension Periods of varying lengths throughout the term of the Subordinated Debentures. During an Extension Period, holders of Preferred Securities will be required to include deferred interest income in their gross income in advance of receipt of the cash interest payments attributable thereto. See "Description of the Preferred Securities -- Voting Rights," "Description of the Subordinated Debentures -- Option to Extend Interest Payment Period" and "Taxation -- Original Issue Discount." MANDATORY REDEMPTION OF PREFERRED SECURITIES Unless previously redeemed pursuant to the optional or special redemption provisions described below, each of the outstanding Preferred Securities will be redeemed by the Trust, in cash, on [ ], 2016, which is the maturity date of the Subordinated Debentures, at the Redemption Price, which is equal to (a) $25 per Preferred Security plus (b) accrued and unpaid distributions thereon to the date of redemption. See "Description of the Preferred Securities -- Mandatory Redemption." OPTIONAL AND SPECIAL REDEMPTION The Subordinated Debentures are redeemable by Ohio Edison in whole or in part, from time to time, after April 1, 1998, or at any time in certain circumstances upon the occurrence of a Tax Event, in each case at a price equal to (a) 100% of the principal amount of Subordinated Debentures to be redeemed plus (b) accrued and unpaid interest thereon to the date of redemption. If Ohio Edison redeems Subordinated Debentures, the Trust must redeem Trust Securities, including the Preferred Securities, having an aggregate liquidation amount equal to the aggregate principal amount of the Subordinated Debentures so redeemed at the Redemption Price. See "Description of the Preferred Securities -- Mandatory Redemption" and "-- Special Event Redemption or Distribution." VOTING RIGHTS Holders of Preferred Securities will have limited voting rights and will not be entitled to vote to appoint, remove or replace, or to increase or decrease the number of, Company Trustees, which voting rights are vested exclusively in the holder of the Common Securities. See "Description of the Preferred Securities -- Voting Rights." LISTING Application has been made to have the Preferred Securities approved for listing, subject to official notice of issuance, on the NYSE under the symbol "[ ]." Trading of the Preferred Securities on the NYSE is expected to commence within a 30-day period after the initial delivery of the Preferred Securities. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS The exchange of Class A Shares for Preferred Securities pursuant to the Offer will be a taxable event. Generally, gain or loss will be recognized by an exchanging holder in an amount equal to the difference between the fair market value on the Expiration Date of the Preferred Securities received in the exchange 15 18 (which will reflect the Pre-Issuance Accrued Distribution) and the holder's tax basis in the Class A Shares exchanged therefor. See "Taxation -- Exchange of Class A Shares for Preferred Securities." The Subordinated Debentures will be treated as having been issued with "original issue discount" ("OID") for United States federal income tax purposes. Because the Trust will be classified as a grantor trust for United States federal income tax purposes, each holder will be considered the owner of a pro rata portion of the Subordinated Debentures held by the Trust. As a result, holders of Preferred Securities will be required to include their pro rata share of OID in gross income as it accrues on the Subordinated Debentures in advance of the receipt of cash. Generally, all of a holder's taxable interest income with respect to the Subordinated Debentures will be accounted for as OID and actual distributions of stated interest will not be separately reported as taxable income. See "Taxation -- Classification of the Trust," "-- Original Issue Discount" and "-- Potential Extension of Payment Period on the Subordinated Debentures." While dividends on the Class A Shares are eligible for the dividends-received deduction for corporate holders, distributions on the Preferred Securities are not eligible for the dividends-received deduction for corporate holders. The Preferred Securities may trade at a price that does not fully reflect the value of accrued but unpaid interest with respect to the underlying Subordinated Debentures. A holder who disposes of Preferred Securities between record dates for payments of distributions thereon (and consequently does not receive a cash distribution from the Trust for the period prior to such disposition) will nevertheless be required to include as ordinary income accrued but unpaid interest on the Subordinated Debentures through the date of disposition and to add such amount to such holder's adjusted tax basis in the Preferred Securities disposed of. Accordingly, such a holder will recognize a capital loss to the extent the selling price of the Preferred Securities (which may not fully reflect the amount of accrued but unpaid interest) is less than the holder's adjusted tax basis in the Preferred Securities (which will reflect accrued but unpaid interest). Subject to certain limited exceptions, capital losses cannot be applied to offset ordinary income for United States federal income tax purposes. See "Taxation -- Original Issue Discount" and "-- Disposition of the Preferred Securities." ACCOUNTING TREATMENT FOR PREFERRED SECURITIES The financial statements of the Trust will be included in the consolidated financial statements of Ohio Edison. The Preferred Securities will be disclosed in Ohio Edison's consolidated balance sheet between the liabilities and stockholders' equity sections as "Company obligated mandatorily redeemable preferred securities of subsidiary trusts holding solely Company subordinated debentures", and supplemented by certain disclosures in Ohio Edison's notes to the financial statements. UNTENDERED SHARES Holders of Class A Shares who do not tender their Class A Shares in the Offer or whose Class A Shares are not accepted for exchange will continue to hold such Class A Shares and will be entitled to all the rights and preferences, and will be subject to all of the limitations, applicable thereto. To the extent that Class A Shares are tendered and accepted in the Offer, the terms on which untendered Class A Shares could subsequently be sold could be adversely affected. See "Risk Factors -- Reduced Trading Market for Class A Shares." EXCHANGE AGENT AND INFORMATION AGENT The Bank of New York has been appointed as Exchange Agent in connection with the Offer. Questions and requests for assistance, requests for additional copies of this Prospectus or of the Letter of Transmittal and requests for Notices of Guaranteed Delivery should be directed to Georgeson & Company Inc., which has been retained by Ohio Edison and the Trust to act as Information Agent for the Offer. The addresses and 16 19 telephone numbers of the Exchange Agent and the Information Agent are set forth in "The Offer -- Exchange Agent and Information Agent" and on the outside back cover of this Prospectus. DEALER MANAGER Merrill Lynch & Co. has been retained as Dealer Manager in connection with the Offer. For information regarding fees payable to the Dealer Manager and Soliciting Dealers (as defined herein), see "The Offer -- Dealer Manager; Soliciting Dealers." 17 20 RISK FACTORS Prospective exchanging holders of Class A Shares who plan to participate in the Offer should carefully consider, in addition to the other information set forth elsewhere in this Prospectus, the following: RANKING OF OBLIGATIONS UNDER THE PREFERRED SECURITIES GUARANTEE AND THE SUBORDINATED DEBENTURES Ohio Edison's obligations under the Preferred Securities Guarantee are subordinate and junior in right of payment to all liabilities of Ohio Edison and pari passu with the most senior preferred stock issued by Ohio Edison from time to time and with any current or future guarantee entered into by Ohio Edison in respect of any preferred stock of any subsidiary or affiliate of Ohio Edison. The obligations of Ohio Edison under the Subordinated Debentures are subordinate and junior in right of payment to all present and future Senior Indebtedness (as defined herein) of Ohio Edison but senior to all of Ohio Edison's capital stock (including the Class A Shares). No payment of principal of (including redemption payments), premium, if any, or interest on the Subordinated Debentures may be made if (a) any Senior Indebtedness of Ohio Edison is not paid when due and any applicable grace period with respect to such default has ended with such default not being cured or waived or ceasing to exist, or (b) the maturity of any Senior Indebtedness has been accelerated because of a default. At December 31, 1995, Ohio Edison had approximately $3.3 billion principal amount of indebtedness for borrowed money constituting Senior Indebtedness on a consolidated basis. There are no terms in the Preferred Securities, the Subordinated Debentures or the Preferred Securities Guarantee that limit Ohio Edison's ability to incur additional indebtedness, including indebtedness that ranks senior to the Subordinated Debentures or the Preferred Securities Guarantee. See "Description of the Preferred Securities Guarantee" and "Description of the Subordinated Debentures -- Subordination." RIGHTS UNDER THE PREFERRED SECURITIES GUARANTEE The Preferred Securities Guarantee guarantees to the holders of the Preferred Securities the payment of (i) any accrued and unpaid distributions which are required to be paid on the Preferred Securities, to the extent the Trust shall have funds available therefor, (ii) the Redemption Price, which includes all accrued and unpaid distributions to the date of the redemption, to the extent the Trust has funds available therefor, with respect to any Preferred Securities called for redemption by the Trust and (iii) upon a voluntary or involuntary dissolution, winding-up or termination of the Trust (other than in connection with the distribution of Subordinated Debentures to the holders of Preferred Securities), the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid distributions on the Preferred Securities to the date of payment thereof, to the extent the Trust has funds available therefor, and (b) the amount of assets of the Trust remaining available for distribution to holders of Preferred Securities in liquidation of the Trust. Holders of the Preferred Securities have the right to proceed directly against Ohio Edison to enforce Ohio Edison's obligations to make payments under the Preferred Securities Guarantee, without first instituting a legal proceeding against the Trust, the Preferred Guarantee Trustee or any other person or entity. If Ohio Edison were to default in its obligation to pay amounts payable on the Subordinated Debentures, the Trust would lack available funds for the payment of distributions or amounts payable on redemption of the Preferred Securities or otherwise, and in such event holders of the Preferred Securities would not be able to rely upon the Preferred Securities Guarantee for payment of such amounts. Instead, a holder of Preferred Securities could either rely on the enforcement by the Property Trustee of its rights as registered holder of the Subordinated Debentures against Ohio Edison, pursuant to the terms of the Subordinated Debentures, or institute a legal proceeding directly against Ohio Edison in respect of such amounts due it. See "Description of the Preferred Securities Guarantee -- Status of the Preferred Securities Guarantee" and "Description of the Subordinated Debentures -- Subordination." The Declaration provides that each holder of Preferred Securities by acceptance thereof agrees to the provisions of the Preferred Securities Guarantee and the Indenture (as defined herein). ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES If a Declaration Event of Default (as defined herein) occurs and is continuing, then the holders of Preferred Securities would rely on the enforcement by the Property Trustee of its rights as the holder of the 18 21 Subordinated Debentures against Ohio Edison. In addition, the holders of a majority in aggregate liquidation amount of the Preferred Securities will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee or to direct the exercise of any trust or power conferred upon the Property Trustee under the Declaration, including the right to direct the Property Trustee to exercise the remedies available to it as a holder of the Subordinated Debentures. If a Declaration Event of Default occurs that results from the failure of Ohio Edison to pay principal of or interest on the Subordinated Debentures when due, during the continuance of such an event of default a holder of Preferred Securities may institute a legal proceeding directly against Ohio Edison to obtain payment of such principal or interest on Subordinated Debentures having a principal amount equal to the aggregate liquidation amount of the Preferred Securities owned of record by such holder. The holders of Preferred Securities will not be able to exercise directly against Ohio Edison any other remedy available to the Property Trustee unless the Property Trustee first fails to do so. See "Description of the Preferred Securities -- Voting Rights." OPTION TO EXTEND INTEREST PAYMENT PERIOD Ohio Edison has the right under the Indenture (as defined herein) to defer payments of interest on the Subordinated Debentures by extending the interest payment period at any time, and from time to time, on the Subordinated Debentures. As a consequence of such an extension, quarterly distributions on the Preferred Securities would be deferred (but despite such deferral would continue to accrue with interest, and the interest so accrued at the end of each quarter and remaining unpaid would itself bear interest (to the extent permitted by applicable law) thereafter until paid on the same basis) by the Trust during any such Extension Period. Such right to extend the interest payment period for the Subordinated Debentures is limited to a period not exceeding 20 consecutive quarters for any such extension. In the event that Ohio Edison exercises this right to defer payments of interest, then during such Extension Period (a) Ohio Edison shall not declare or pay any dividend on, make any distributions with respect to, or redeem, purchase or make a liquidation payment with respect to, any of its capital stock, (b) Ohio Edison shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by Ohio Edison which rank pari passu with or junior to the Subordinated Debentures and (c) Ohio Edison shall not make any guarantee payments (other than pursuant to the Preferred Securities Guarantee) with respect to the foregoing; provided, however, that the foregoing restriction (a) does not apply to any stock dividends paid by Ohio Edison where the dividend stock is the same as that on which the dividend is paid. Prior to the termination of any such Extension Period, Ohio Edison may further defer payments of interest by further extending the interest payment period, provided that such Extension Period, together with all such previous and further extensions thereof, may not exceed 20 consecutive quarters or extend beyond the maturity of the Subordinated Debentures. Upon the termination of any Extension Period and the payment of all amounts then due, Ohio Edison may select a new Extension Period, as if no Extension Period had previously been declared, subject to the above requirements. See "Description of the Preferred Securities -- Distributions" and "-- Voting Rights" and "Description of the Subordinated Debentures -- Option to Extend Interest Payment Period." Should Ohio Edison exercise its right to defer payments of interest by extending the interest payment period, each holder of Preferred Securities will continue to accrue interest income (as OID) for United States federal income tax purposes in respect of the deferred interest allocable to its Preferred Securities, which deferred interest will be allocated, but not distributed, to holders of record of Preferred Securities. As a result, holders of Preferred Securities will recognize income for United States federal income tax purposes in advance of the receipt of cash and will not receive cash from the Trust related to such income if such holder disposes of its Preferred Securities prior to the record date for the date on which distributions of such amounts are made. See "Taxation -- Original Issue Discount." Ohio Edison has no current intention of exercising its right to defer payments of interest by extending the interest payment period on the Subordinated Debentures. However, should Ohio Edison determine to exercise such right in the future, the market price of the Preferred Securities is likely to be affected. A holder that disposes of its Preferred Securities during an Extension Period, therefore, might not receive the same return on its investment as a holder that continues to hold its Preferred Securities. In addition, as a result of the existence of Ohio Edison's right to defer interest payments, the market price of the Preferred Securities (which represent a preferred undivided beneficial interest in the 19 22 Subordinated Debentures) may be more volatile than other securities on which OID accrues that are not subject to such right. SPECIAL EVENT REDEMPTION OR DISTRIBUTION Upon the occurrence of a Special Event, the Trust will be terminated, except in the limited circumstances described below, with the result that the Subordinated Debentures would be distributed to the holders of the Trust Securities in connection with the liquidation of the Trust. In the case of a Special Event that is a Tax Event, in certain circumstances Ohio Edison shall have the right to redeem the Subordinated Debentures, in whole or in part, in which event the Trust will redeem the Trust Securities on a pro rata basis to the same extent as the Subordinated Debentures are redeemed. See "Description of the Preferred Securities -- Special Event Redemption or Distribution" and "Taxation." Under current United States federal income tax law, a distribution of the Subordinated Debentures upon the termination of the Trust would not be a taxable event to holders of the Preferred Securities. However, a termination of the Trust in which holders of the Preferred Securities received cash would be a taxable event to such holders. See "Taxation -- Receipt of Subordinated Debentures or Cash upon Liquidation of the Trust." If Subordinated Debentures are distributed to the holders of the Preferred Securities, Ohio Edison will use its best efforts to have the Subordinated Debentures listed on the NYSE or on such other exchange as the Preferred Securities are then listed. There can be no assurance as to the market prices for the Preferred Securities, nor for the Subordinated Debentures that may be distributed in exchange for Preferred Securities if a termination of the Trust were to occur. Accordingly, the Preferred Securities that an investor may purchase, or the Subordinated Debentures that the investor may receive on dissolution and liquidation of the Trust, may trade at a discount to the price of the Class A Shares exchanged. Because holders of Preferred Securities may receive Subordinated Debentures upon the occurrence of a Special Event, prospective exchanging holders of Class A Shares who plan to participate in the Offer of Preferred Securities are also making an investment decision with regard to the Subordinated Debentures and should carefully review all the information regarding the Subordinated Debentures and Ohio Edison contained herein. See "Description of the Preferred Securities -- Special Event Redemption or Distribution" and "Description of the Subordinated Debentures." PROPOSED TAX LAW CHANGES On March 19, 1996, President Clinton announced a 1997 balanced budget proposal containing, among other things, an amendment that would classify a debt instrument issued on or after December 7, 1995 as equity if the instrument had a maximum term exceeding 20 years and was not classified as indebtedness on the issuer's applicable balance sheet. On March 29, 1996, Senate Finance Committee Chairman William V. Roth, Jr. and House Ways and Means Committee Chairman Bill Archer issued a joint statement indicating their intent that certain legislative proposals initiated by President Clinton, including the 1997 balanced budget proposal, that may be adopted by either of the tax-writing committees of Congress would have an effective date that is no earlier than the date of "appropriate Congressional action." Because the Subordinated Debentures will have a maximum term not exceeding 20 years, the provisions of the proposed amendment are not applicable to the Subordinated Debentures. Ohio Edison cannot predict whether this proposed amendment may be modified or other legislation may be enacted that might affect the character or treatment for United States federal income tax purposes of the Subordinated Debentures or otherwise affect the Preferred Securities offered hereby. If legislation were enacted limiting, in whole or in part, the deductibility by Ohio Edison of interest on the Subordinated Debentures for United States federal income tax purposes, such enactment would be a Tax Event. Depending upon the circumstances following a Tax Event, Ohio Edison could either cause the Trust to be dissolved and the Subordinated Debentures to be distributed to the holders of Preferred Securities, or cause the Subordinated Debentures to be redeemed, which would result in a redemption by the Trust of the Preferred Securities. See "Description of the Preferred Securities -- Special Event Redemption or Distribution." It is expected that the 1997 balanced budget proposal, even if enacted in a manner that would affect the Subordinated Debentures, would not alter the United States federal income tax 20 23 consequences of the exchange of Class A Shares for Preferred Securities and the ownership and disposition of Preferred Securities. See "Taxation." LIMITED VOTING RIGHTS Holders of Preferred Securities will have limited voting rights, primarily in connection with directing the activities of the Property Trustee as the holder of the Subordinated Debentures. Such holders will not be entitled to vote to appoint, remove or replace, or to increase or decrease the number of, Company Trustees, which voting rights are vested exclusively in Ohio Edison as the holder of the Common Securities. See "Description of the Preferred Securities -- Voting Rights." Holders of Class A Shares also have limited voting rights. However, if four quarterly dividends payable on the $100 Preferred Stock shall be in default, in whole or in part, and thereafter until all defaults have been cured, the holders of the Class A Shares and the $100 Preferred Stock shall have the exclusive right, voting separately and as a single class, each share of $100 Preferred Stock being counted as one and each Class A Share being counted as one-quarter, (i) to elect the smallest number of directors which shall constitute a majority of the directors of Ohio Edison, and (ii) to vote in all matters with respect to the governing of the affairs of Ohio Edison other than the election of directors. In addition, certain actions may not be effected without the consent or vote of a specified percentage of the Class A Shares and the $100 Preferred Stock, voting as a single class and calculating votes as described above. See "Description of the Class A Shares -- Voting Rights." TRADING PRICE OF PREFERRED SECURITIES The Preferred Securities may trade at a price that does not fully reflect the value of accrued but unpaid interest with respect to the underlying Subordinated Debentures. A holder who disposes of Preferred Securities between record dates for payments of distributions thereon (and consequently does not receive a cash distribution from the Trust for the period prior to such disposition) will nevertheless be required to include as ordinary income accrued but unpaid interest on the Subordinated Debentures through the date of disposition and to add such amount to such holder's adjusted tax basis in the Preferred Securities disposed of. Accordingly, such a holder will recognize a capital loss to the extent the selling price of the Preferred Securities (which may not fully reflect the amount of accrued but unpaid interest) is less than the holder's adjusted tax basis in the Preferred Securities (which will reflect accrued but unpaid interest). Subject to certain limited exceptions, capital losses cannot be applied to offset ordinary income for United States federal income tax purposes. See "Taxation -- Original Issue Discount" and "-- Disposition of the Preferred Securities." LACK OF ESTABLISHED TRADING MARKET FOR PREFERRED SECURITIES The Preferred Securities constitute a new issue of securities of the Trust with no established trading market. While the Preferred Securities are expected to be approved for listing on the NYSE, subject to official notice of issuance, there can be no assurance that an active market for the Preferred Securities will develop or be sustained in the future on such exchange. Although the Dealer Manager has indicated to Ohio Edison and the Trust that it intends to make a market in the Preferred Securities following the Expiration Date, as permitted by applicable laws and regulations prior to the commencement of trading on the NYSE, it is not obligated to do so and may discontinue any such market-making at any time without notice. Accordingly, no assurance can be given as to the liquidity of, or trading markets for, the Preferred Securities. In order to satisfy the NYSE listing requirements, acceptance of Class A Shares validly tendered in the Offer is subject to the Minimum Distribution Condition, which condition may not be waived by Ohio Edison or the Trust. In addition, liquidity of the Preferred Securities will be affected by the number of Class A Shares exchanged in the Offer. See "Listing and Trading of Preferred Securities and Class A Shares." REDUCED TRADING MARKET FOR CLASS A SHARES To the extent Class A Shares are tendered and accepted in the Offer, the liquidity and trading market for the Class A Shares to be outstanding following the Offer, and the terms upon which such Class A Shares could be sold, could be adversely affected. In addition, if the Offer is substantially subscribed or oversub- 21 24 scribed, there would be a significant risk that round lot holdings of Class A Shares outstanding following the Offer would be limited. In addition, liquidity of the Preferred Securities will be affected by the number of Class A Shares exchanged in the Offer. See "Listing and Trading of Preferred Securities and Class A Shares." The Offer is for up to 3,600,000 Class A Shares (or 90% of the 4,000,000 Class A Shares outstanding), rather than for all the outstanding Class A Shares, to reduce the risk that the Class A Shares would be subject to delisting following consummation of the Offer. Under the rules of the NYSE, preferred securities such as the Class A Shares are subject to delisting if (i) the aggregate value of publicly-held shares is less than $2 million and (ii) the number of publicly-held shares is less than 100,000. Since at least 400,000 Class A Shares will remain outstanding following consummation of the Offer, the number of outstanding Class A Shares will exceed the delisting criteria set forth in clause (ii) above. In addition, based on the market price of the Class A Shares on the NYSE ($[ ] on [ ], the closing sales price of the Class A Shares on the NYSE on the last full trading day immediately prior to Ohio Edison's first public announcement of the Offer, and $[ ] on [ ]), Ohio Edison believes that the aggregate value of the minimum number (400,000) of Class A Shares which will be outstanding following consummation of the Offer should exceed the delisting criteria set forth in clause (i) above. See "Price Range of Class A Shares." If less than 3,600,000 Class A Shares are validly tendered, then the number of Class A Shares remaining outstanding, and the market value thereof, will be even greater. EXCHANGE OF CLASS A SHARES FOR PREFERRED SECURITIES IS A TAXABLE EVENT The exchange of Class A Shares for Preferred Securities pursuant to the Offer will be a taxable event. Generally, gain or loss will be recognized by an exchanging holder in an amount equal to the difference between the fair market value on the Expiration Date of the holder's Preferred Securities received in the exchange (which will reflect the Pre-Issuance Accrued Distribution) and the holder's tax basis in the Class A Shares exchanged therefor. See "Taxation -- Exchange of Class A Shares for Preferred Securities." All holders of Class A Shares are advised to consult their tax advisors regarding the United States federal, state, local and foreign tax consequences of the exchange of Class A Shares for Preferred Securities and the ownership and disposition of Preferred Securities. CORPORATE HOLDERS OF PREFERRED SECURITIES NOT ENTITLED TO DIVIDENDS RECEIVED DEDUCTION While dividends with respect to the Class A Shares are eligible for the dividends-received deduction for corporate holders, distributions on the Preferred Securities are not eligible for the dividends-received deduction for corporate holders. 22 25 COMPARISON OF PREFERRED SECURITIES AND CLASS A SHARES The following is a brief summary of certain terms of the Preferred Securities and the Class A Shares. For a more complete description of the Preferred Securities, see "Description of the Preferred Securities." For a description of the Subordinated Debentures which will be deposited in the Trust as trust assets and will represent the sole source for the payment of distributions and other payments on the Preferred Securities, see "Description of the Subordinated Debentures." For a description of Class A Shares, see "Description of the Class A Shares." Ohio Edison's $100 Preferred Stock and Class A Shares are herein collectively referred to as the "Preferred Stock."
PREFERRED SECURITIES CLASS A SHARES ---------------------------------------- ---------------------------- Issuer................. The Trust. Payment of distributions and Ohio Edison on liquidation or redemption is guaranteed on a subordinated basis, as and to the extent described herein, by Ohio Edison. Distribution/Dividend Rate................. [ ]% per annum distribution payable 7.75% per annum dividend quarterly in arrears on the last day of payable on the first day of March, June, September and December of January, April, July and each year, commencing [ ], October of each year, when 1996, from and including the Accrual and as declared by Ohio Date, but only if, and to the extent Edison's Board of Directors that, interest payments are made in out of funds legally respect of the Subordinated Debentures available therefor. held by the Trust. During any Extension Dividends must be paid on Period on the Subordinated Debentures, all shares of Preferred distribution payments on the Preferred Stock if paid on the shares Securities will not be made but would of any series of Preferred continue to accrue, and, in the case of Stock. Dividends are distributions in arrears, would bear cumulative whether or not interest at the rate of [ ]% per there are funds legally annum, with the interest so accrued at available for the payment of the end of each quarter and remaining such dividends. unpaid itself bearing interest (to the Accumulations of dividends extent permitted by applicable law) do not bear interest. Ohio thereafter until paid on the same basis. Edison has made each quarterly dividend payment with respect to the Class A Shares on the scheduled dividend payment date. Maturity/Mandatory and Optional Redemption........... The Preferred Securities will be No maturity or mandatory redeemed upon the maturity or earlier redemption. The Class A redemption of the Subordinated Shares are redeemable at the Debentures, at a redemption price equal option of Ohio Edison after to $25 per Preferred Security to be April 1, 1998, in whole or redeemed, plus accrued and unpaid in part, at a redemption distributions, if any, to the redemption price of $25 per share plus date, including distributions accrued as accumulated and unpaid a result of Ohio Edison's election to dividends defer payments of interest on the Subordinated Debentures. The Subordinated Debentures are redeemable at the option of Ohio Edison, in whole or in part, after April 1, 1998, at a redemption price equivalent to $25 per Subordinated Debenture to be redeemed, plus accrued and unpaid interest thereon, to the redemption date. In
23 26 the event that the Subordinated Debentures are redeemed, upon the repayment of the Subordinated Debentures, upon maturity, upon redemption or otherwise, the proceeds thereof will be promptly applied to redeem the Preferred Securities and the Common Securities. The Subordinated Debentures have a final maturity of [ ], 2016. See "Description of the Preferred Securities -- Special Event Redemption or Distribution" and "-- Mandatory Redemption." See "Prospectus Summary -- Potential Risk to Non-Exchanging Holders." Holders of Preferred Securities have no right to require Ohio Edison to redeem the Preferred Securities at the option of the holders. Subordination.......... Subordinated to claims of creditors of As capital stock, the Class the Trust, if any. The Common Securities A Shares are junior to all rank pari passu, and payments will be of the debt of Ohio Edison, made thereon on a pro rata basis with including the claims of the Preferred Securities, except that creditors of Ohio Edison and (i) if an Event of Default under the the Subordinated Debentures, Declaration occurs and is continuing, but senior to the common the holders of Preferred Securities will stock of Ohio Edison and have a priority over holders of the pari passu with all other Common Securities with respect to outstanding series of payments in respect of distributions and preferred stock of Ohio payments upon liquidation, redemption or Edison. otherwise and (ii) holders of Common Securities have the exclusive right to appoint, remove or replace any Company Trustee and to increase or decrease (to a minimum of three, unless the Property Trustee and the Delaware Trustee are the same entity) the number of Company Trustees. The Trust is not permitted to incur any indebtedness for borrowed money. The Declaration provides that Ohio Edison shall pay for all debts and other obligations (other than with respect to the Trust Securities) and all costs and expenses of the Trust, including any income taxes, duties and other governmental charges, and all costs and expenses with respect thereto, to which the Trust may become subject, except for United States withholding taxes. The Subordinated Debentures will rank subordinate and junior to all Senior Indebtedness (as defined herein) of Ohio Edison and senior to all capital stock now or hereafter issued by Ohio Edison. Ohio Edison's obligations under the Preferred Securities Guarantee will rank (i) subordinate and junior in right of payment to all other liabilities of Ohio Edison, including the Subordinated Debentures, (ii) pari passu with the most senior preferred or preference stock
24 27 issued from time to time by Ohio Edison and with any guarantee now or hereafter entered into by Ohio Edison in respect of any preferred or preference stock of any subsidiary or affiliate of Ohio Edison and (iii) senior to Ohio Edison's common stock. At December 31, 1995, Ohio Edison had approximately $3.3 billion principal amount of indebtedness for borrowed money constituting Senior Indebtedness on a consolidated basis. Assuming 3,600,000 Class A Shares are tendered, there will be $[ ] in Subordinated Debentures senior to the Preferred Securities Guarantee in addition to the other obligations of Ohio Edison set forth above. Listing................ The Preferred Securities are expected to The Class A Shares are be approved for listing on the NYSE, listed on the NYSE and the subject to official notice of issuance, Chicago Stock Exchange under under the symbol "[ ]." In the symbol "OECPrM." order to satisfy the NYSE listing requirements, acceptance of Class A Shares validly tendered in the Offer is subject to the Minimum Distribution Condition, which condition may not be waived. Dividends Received Deduction............ Distributions on the Preferred Dividends are eligible for Securities are not eligible for the the dividends received dividends received deduction for deduction for corporate corporate holders. holders. Voting Rights/Enforcement... Holders of Preferred Securities have no Whenever and as often as voting rights other than as provided four quarterly dividends under the Business Trust Act or the payable on the Preferred Trust Indenture Act, except in the Stock of any series shall be limited circumstances discussed below. in default, in whole or in The Property Trustee has the power to part, and thereafter until exercise all rights under the Indenture all defaults have been with respect to the Subordinated cured, the holders of Debentures and is also authorized to Preferred Stock shall have enforce the Preferred Securities the exclusive right, voting Guarantee on behalf of holders of the separately and as a single Preferred Securities. If the Trust's class, each share of $100 failure to make distributions is a Preferred Stock being consequence of Ohio Edison's exercise of counted as one and each its right to extend the interest payment Class A Share being counted period for the Subordinated Debentures as one-quarter, (i) to elect as described under the smallest number of "Distribution/Dividend Rate", the directors which shall Property Trustee will have no right to constitute a majority of the enforce the payment of distributions directors of Ohio Edison, until an Event of Default under the and (ii) to vote in all Declaration shall have occurred. The matters with respect to the holders of at least a majority in governing of the affairs of liquidation amount of the Preferred Ohio Edison other than the Securities will have the right to direct election of directors. In the Property Trustee with respect to addition, certain actions certain matters under the Preferred may not be effected without Securities Guarantee and, upon a the consent or vote of a Declaration Event of Default, the specified percentage of the Declaration. If the Property Trustee Preferred Stock, voting as a fails to enforce the Preferred single class and calculating Securities Guarantee, votes
25 28 any holder of Preferred Securities may as described above. institute a legal proceeding against Ohio Edison to enforce the Preferred Securities Guarantee. In addition, any record holder of Preferred Securities will have the right, which is absolute and unconditional, to proceed directly against Ohio Edison to obtain Guarantee Payments, without first waiting to determine if the Preferred Guarantee Trustee has enforced the Preferred Securities Guarantee or instituting a legal proceeding against the Trust, the Preferred Guarantee Trustee or any other person or entity. See "Description of the Preferred Securities" and "Description of the Preferred Securities Guarantee."
26 29 OHIO EDISON COMPANY Ohio Edison was organized under the laws of the State of Ohio in 1930 and owns property and does business as an electric public utility in that state. Ohio Edison also has ownership interests in certain facilities located in the Commonwealth of Pennsylvania. Ohio Edison's principal executive offices are located at 76 South Main Street, Akron, Ohio 44308, telephone number 1-800-736-3402. Ohio Edison furnishes electric service to communities in a 7,500 square mile area of central and northeastern Ohio. It also provides transmission services and electric energy for resale to certain municipalities in the Company's service area and transmission services to certain rural cooperatives. Ohio Edison also engages in the sale, purchase and interchange of electric energy with other electric companies. The area it serves has a population of approximately 2,530,000. Ohio Edison owns all of the outstanding common stock of Pennsylvania Power Company ("Penn Power"), a Pennsylvania corporation, which furnishes electric service to communities in a 1,500 square mile area of western Pennsylvania. Penn Power also provides transmission services and electric energy for resale to certain municipalities in Pennsylvania. The area served by Penn Power has a population of approximately 342,000. Sources of generation for Ohio Edison and Penn Power (the "Companies") during the twelve months ended December 31, 1995 were 74.0% coal and 26.0% nuclear. 27 30 CERTAIN CONSOLIDATED FINANCIAL INFORMATION OF OHIO EDISON (THOUSANDS, EXCEPT PER SHARE AMOUNTS, RATIOS AND PERCENTAGES)
YEAR ENDED DECEMBER 31,(1) -------------------------------------------------------------- 1991 1992 1993(2) 1994 1995 ---------- ---------- ---------- ---------- ---------- Income Summary: Operating Revenues................. $2,358,946 $2,332,378 $2,369,940 $2,368,191 $2,465,846 Net Income......................... $ 264,823 $ 276,986 $ 82,724 $ 303,531 $ 317,241 Earnings on Common Stock........... $ 240,069 $ 253,060 $ 59,017 $ 281,852 $ 294,747 Earnings per share of Common Stock........................... $ 1.60 $ 1.70 $ .39 $ 1.97 $ 2.05 Ratio of Earnings to Fixed Charges(3)...................... 1.95 2.01 1.12 2.24 2.32 Ratio of Earnings to Fixed Charges plus Preferred and Preference Stock Dividend Requirements (pre-income tax basis)(3)....... 1.79 1.85 0.99(4) 2.06 2.12
DECEMBER 31, 1995 ------------------------------------------------------------------- AS ADJUSTED(5) ------------------------------------------- ACTUAL MAXIMUM MINIMUM ------------------- ------------------- ------------------- OUTSTANDING RATIO OUTSTANDING RATIO OUTSTANDING RATIO ----------- ----- ----------- ----- ----------- ----- Capitalization Summary: Common Stockholders' Equity...... $ 2,407,871 43.3% $ 2,407,871 43.3% $ 2,407,871 43.3% Preferred Stock Not Subject to Mandatory Redemption.......... 211,870 3.8% 121,870 2.2% 181,870 3.3% Preferred Stock Subject to Mandatory Redemption.......... 40,000 0.7% 40,000 0.7% 40,000 0.7% Company obligated mandatorily redeemable preferred securities of subsidiary trusts holding solely Company subordinated debentures(6).... 120,000 2.2% 210,000 3.8% 150,000 2.7% Long-Term Debt(7)................ 2,786,256 50.0% 2,786,256 50.0% 2,786,256 50.0% ---------- ----- ---------- ----- ---------- ----- Total Capitalization............... $ 5,565,997 100.0% $ 5,565,997 100.0% $ 5,565,997 100.0% ========== ===== ========== ===== ========== =====
- - - --------------- (1) Derived from audited financial information. (2) Includes net after tax charges of $218,377,000 ($1.43 per share) relating primarily to the termination of Perry Unit 2, partially offset by the cumulative effect of a change in accounting for unbilled revenues. (3) "Earnings" for purposes of these calculations have been computed by adding to "income before extraordinary items" all taxes based on income or profits, total interest charges and the estimated interest element of rentals charged to income. "Fixed charges" include total interest charges, the estimated interest element of rentals and subsidiaries' preferred stock dividend requirements, determined on a "pre-income tax" basis (computed, where applicable, at the effective income tax rates for the applicable periods). These ratios exclude fixed charges applicable to the guarantee of the debt of a coal supplier aggregating $13,298,000, $9,762,000, $8,565,000, $7,424,000 and $6,315,000 for each of the five years in the period ended December 31, 1995, respectively. (4) Earnings, as defined, were deficient in 1993 by $5,018,000 to cover fixed charges plus preferred stock dividend requirements (pre-income tax basis). (5) The maximum and minimum "As Adjusted" capitalization columns described in the table below assume that holders of a maximum of 3,600,000 Class A Shares and a minimum of 1,200,000 Class A Shares (which minimum condition may be waived by the Trust), respectively, elect to participate in the Offer. To the extent a different number of holders of Class A Shares elect to participate in the Offer, Preferred Securities of the Trust and Class A Shares would be increased or decreased, as the case may be, by equal and offsetting amounts. (6) As described in this Prospectus, all of the assets of the Trust will be the [ ]% Junior Subordinated Debentures Due 2016 of Ohio Edison. Assuming 3,600,000 Preferred Securities are issued in the Offer, the Trust will hold approximately $92,800,000 principal amount of Subordinated Debentures. All of the assets of Ohio Edison Financing Trust are approximately $124,000,000 principal amount of 9% Junior Subordinated Debentures, Series A, Due 2025 of Ohio Edison. (7) Excludes $376,716,000 of long-term debt due to be repaid or subject to put options within one year. 28 31 OHIO EDISON FINANCING TRUST II The Trust is a statutory business trust formed under the Business Trust Act pursuant to the filing of a certificate of trust dated March 1, 1996, filed with the Delaware Secretary of State on March 5, 1996. The Trust's business is defined in a Declaration of Trust, dated as of March 1, 1996, executed by Ohio Edison, as sponsor (the "Sponsor"), and the Company Trustees as of that date. The Declaration of Trust will be amended and restated in its entirety as of the date the Trust accepts Class A Shares in the Offer (see "The Offer -- Terms of the Offer") (as so amended and restated, the "Declaration") substantially in the form filed as an exhibit to the Registration Statement of which this Prospectus forms a part. The Declaration will be qualified as an indenture under the Trust Indenture Act. Upon issuance of the Preferred Securities, the holders thereof will own all of the issued and outstanding Preferred Securities. See "Description of the Preferred Securities -- Book-Entry; Delivery and Form." Ohio Edison will acquire all of the Common Securities in an aggregate liquidation amount equal to 3% of the total capital of the Trust. The Preferred Securities and the Common Securities will have equivalent terms; provided that (i) if an Event of Default under the Declaration occurs and is continuing, the holders of Preferred Securities will have a priority over holders of the Common Securities with respect to payments in respect of distributions and payments upon liquidation, redemption or otherwise and (ii) holders of Common Securities have the exclusive right (subject to the terms of the Declaration) to appoint, remove or replace Company Trustees and to increase or decrease the number of Company Trustees. The Common Securities will not be transferable by Ohio Edison except under certain circumstances to related parties, as defined in the Declaration. The Trust exists for the exclusive purposes of (a)(i) issuing its Preferred Securities in exchange for Class A Shares pursuant to the Offer and delivering such Class A Shares to Ohio Edison in consideration of the deposit by Ohio Edison in the Trust as trust assets of Subordinated Debentures having an aggregate principal amount equal to the aggregate par value of such Class A Shares so delivered, and (ii) issuing and selling its Common Securities to Ohio Edison for cash and using the proceeds thereof to purchase as trust assets an equal aggregate principal amount of Subordinated Debentures and (b) engaging in such other activities as are necessary, convenient or incidental thereto. The Trust has a term of approximately 55 years, but may terminate earlier as provided in the Declaration. The rights of the holders of the Preferred Securities, including economic rights, rights to information and voting rights, are set forth in the Declaration, the Business Trust Act and the Trust Indenture Act. See "Description of the Preferred Securities." The Trust's business and affairs will be conducted by the Company Trustees appointed by Ohio Edison, as holder of the Common Securities. The duties and obligations of the Company Trustees shall be governed by the Declaration and the Business Trust Act and, in the case of the Property Trustee, the Trust Indenture Act. Pursuant to the Declaration, the number of Company Trustees will initially be four. Two of the Company Trustees, the Regular Trustees, will be persons who are employees or officers of, or affiliated with, Ohio Edison. A third trustee will be a financial institution unaffiliated with Ohio Edison that will serve as the Property Trustee under the Declaration and as indenture trustee for purposes of the Trust Indenture Act. The Bank of New York will act as the Property Trustee until removed or replaced by the holder of the Common Securities. The Bank of New York will also act as Preferred Guarantee Trustee under the Preferred Securities Guarantee. See "Description of the Preferred Securities Guarantee." The fourth trustee, the Delaware Trustee, will be a financial institution or an affiliate thereof which maintains a principal place of business or residence in the State of Delaware. The Bank of New York (Delaware) will act as the Delaware Trustee. The Property Trustee will hold title to the Subordinated Debentures for the benefit of the Trust and holders of the Trust Securities and will have the power to exercise all rights, powers and privileges under the Indenture (as defined herein) as the holder of the Subordinated Debentures. In addition, the Property Trustee will maintain exclusive control of the Property Account to hold all payments made in respect of the Subordinated Debentures for the benefit of the Trust and holders of the Trust Securities. The Property Trustee will make payments of distributions and payments on liquidation, redemption and otherwise to the holders of the Trust Securities out of funds from the Property Account. The Preferred Guarantee Trustee will hold the Preferred Securities Guarantee for the benefit of the holders of the Preferred Securities. Ohio Edison, as the holder of all the Common Securities, will have the right to appoint, remove or replace any Company 29 32 Trustee and to increase or decrease the number of Company Trustees, provided that the number of Company Trustees shall be at least three if the Property Trustee is not also the Delaware Trustee. Under the Declaration, the Trust shall not, and the Company Trustees (including the Property Trustee) shall cause the Trust not to, engage in any activity other than in connection with the purposes of the Trust or other than as required or authorized by the Declaration. In particular, the Trust shall not and the Company Trustees (including the Property Trustee) shall not (a) invest any proceeds received by the Trust from holding the Subordinated Debentures but shall promptly distribute all such proceeds to holders of Trust Securities pursuant to the terms of the Declaration and of the Trust Securities; (b) acquire any assets other than as expressly provided in the Declaration; (c) possess Trust property for other than a Trust purpose; (d) make any investments, other than investments represented by the Subordinated Debentures; (e) possess any power or otherwise act in such a way as to vary the Trust assets or the terms of the Trust Securities in any way whatsoever; (f) issue any securities or other evidences of beneficial ownership of, or beneficial interests in, the Trust other than the Trust Securities; (g) incur any indebtedness for borrowed money or (h)(1) direct the time, method and place of exercising any trust or power conferred upon the Indenture Trustee with respect to the Subordinated Debentures, (2) waive any past default that is waivable under Section 6.04 of the Indenture, (3) exercise any right to rescind or annul any declaration that the principal of all of the Subordinated Debentures shall be due and payable or (4) consent to any amendment, modification or termination of the Indenture or the Subordinated Debentures where such consent shall be required unless the Trust shall have received an opinion of counsel to the effect that such modification or amendment will not cause more than an insubstantial risk that for United States federal income tax purposes the Trust will not be classified as a grantor trust. The books and records of the Trust will be maintained at the principal office of the Trust and will be open for inspection by a holder of Preferred Securities or the duly authorized representative of such holder for any purpose reasonably related to its interest in the Trust during normal business hours. The Trust anticipates that it will not be required to file with the Commission or distribute to holders of Preferred Securities periodic reports regarding the Trust. Except as provided below or under the Business Trust Act and the Trust Indenture Act, holders of Preferred Securities will have no voting rights. See "Description of the Preferred Securities -- Voting Rights". The Property Trustee, for the benefit of the holders of the Trust Securities, is authorized under the Declaration to exercise all rights under the Indenture with respect to the Subordinated Debentures and to enforce Ohio Edison's obligations under the Subordinated Debentures upon the occurrence of an Indenture Event of Default. The Property Trustee, as the Guarantee Trustee, shall also be authorized to enforce the rights of holders of Preferred Securities under the Preferred Securities Guarantee. If the Trust's failure to make distributions on the Preferred Securities is a consequence of Ohio Edison's exercise of its right to extend the interest payment period for the Subordinated Debentures, the Property Trustee will have no right to enforce the payment of distributions on the Preferred Securities until an Event of Default shall have occurred. Holders of at least a majority in liquidation amount of the Preferred Securities will have the right to direct the Property Trustee with respect to certain matters under the Declaration and the Preferred Securities Guarantee. Any holder of Preferred Securities may institute a legal proceeding against Ohio Edison to enforce the Preferred Securities Guarantee. See "Description of the Preferred Securities -- Voting Rights". If an Indenture Event of Default occurs and is continuing with respect to Subordinated Debentures, an Event of Default under the Declaration will occur and be continuing with respect to the Trust Securities. In such event, the Declaration provides that the holders of Common Securities will be deemed to have waived any such Event of Default with respect to the Common Securities until all Events of Default with respect to the Preferred Securities have been cured or waived. Until all such Events of Default with respect to the Preferred Securities have been so cured or waived, the Property Trustee will be deemed to be acting solely on behalf of the holders of the Preferred Securities and only the holders of the Preferred Securities will have the right to direct the Property Trustee with respect to certain matters under the Declaration and consequently under the Indenture. If any Event of Default with respect to the Preferred Securities is waived by the holders of the Preferred Securities as provided in the Declaration, the holders of Common Securities pursuant to the 30 33 Declaration have agreed that such waiver also constitutes a waiver of such Event of Default with respect to the Common Securities for all purposes under the Declaration without any further act, vote or consent of the holders of the Common Securities. See "Description of the Preferred Securities". The Declaration provides that the Company Trustees may treat the person in whose name a Preferred Security is registered on the books and records of the Trust as the sole holder thereof and of the Preferred Securities represented thereby for purposes of receiving distributions and for all other purposes and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such certificate or in the Preferred Securities represented thereby on the part of any person, whether or not the Trust shall have actual or other notice thereof. Preferred Securities will be issued in fully registered form. Investors may elect to hold their Preferred Securities directly or, subject to the rules and procedures of The Depository Trust Company and Philadelphia Depository Trust Company (each a "Depository Institution") described under "Description of the Preferred Securities -- Book-Entry; Delivery and Form", hold interests in a global certificate registered on the books and records of the Trust in the name of a Depository Institution or its nominee. Under the Declaration: (i) the Trust and the Company Trustees shall be entitled to deal with a Depository Institution (or any successor depositary) for all purposes, including the payment of distributions and receiving approvals, votes or consents under the Declaration, and except as set forth in the Declaration, shall have no obligation to persons owning Preferred Securities ("Preferred Security Beneficial Owners") registered in the name of and held by a Depository Institution or its nominee; and (ii) the rights of Preferred Security Beneficial Owners shall be exercised only through a Depository Institution (or any successor depository) and shall be limited to those established by law and agreements between such Preferred Security Beneficial Owners and a Depository Institution and/or its participants. See "Description of the Preferred Securities -- Book-Entry; Delivery and Form". With respect to Preferred Securities registered in the name of and held by a Depository Institution or its nominee, all notices and other communications required under the Declaration shall be given to, and all distributions on such Preferred Securities shall be given or made to, a Depository Institution (or its successor). In the Declaration, Ohio Edison has agreed to pay for all debts and obligations (other than with respect to the Trust Securities) and all costs and expenses of the Trust, including the fees and expenses of the Company Trustees and any taxes and all costs and expenses with respect thereto, to which the Trust may become subject, except for United States withholding taxes. See "Risk Factors -- Trust Distributions Dependent on Ohio Edison's Payments on Subordinated Debentures". The foregoing obligations of Ohio Edison under the Declaration, which are a part of the Back-up Obligations, are for the benefit of, and shall be enforceable by, any person to whom any such debts, obligations, costs, expenses and taxes are owed (a "Creditor") whether or not such Creditor has received notice thereof. Any such Creditor may enforce such obligations of Ohio Edison directly against Ohio Edison and Ohio Edison has irrevocably waived any right or remedy to require that any such Creditor take any action against the Trust or any other person before proceeding against Ohio Edison. Ohio Edison has agreed in the Declaration to execute such additional agreements as may be necessary or desirable in order to give full effect to the foregoing. THE FOREGOING SUMMARY OF CERTAIN PROVISIONS OF THE DECLARATION IS A DISCUSSION OF ALL MATERIAL TERMS OF THE DECLARATION, BUT DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE DECLARATION WHICH HAS BEEN FILED AS AN EXHIBIT TO THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS IS A PART. The principal place of business of the Trust shall be c/o Ohio Edison Company, 76 South Main Street, Akron, Ohio 44308, telephone number (330) 384-5100. 31 34 THE OFFER PURPOSE OF THE OFFER The purpose of the Offer is to refinance the Class A Shares with the Preferred Securities and to achieve certain tax efficiencies while preserving Ohio Edison's flexibility with respect to future financings. This refinancing will permit Ohio Edison to deduct interest payable on the Subordinated Debentures for United States federal income tax purposes; dividends payable with regard to the Class A Shares are not deductible. GENERAL PARTICIPATION IN THE OFFER IS VOLUNTARY AND HOLDERS OF CLASS A SHARES SHOULD CAREFULLY CONSIDER WHETHER TO ACCEPT. NEITHER THE BOARD OF DIRECTORS OF OHIO EDISON, OHIO EDISON, THE TRUSTEES NOR THE TRUST MAKES ANY RECOMMENDATION TO HOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING IN THE OFFER. HOLDERS OF CLASS A SHARES ARE URGED TO CONSULT THEIR FINANCIAL AND TAX ADVISORS IN MAKING THEIR DECISIONS ON WHAT ACTION TO TAKE IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES. SEE "PRICE RANGE OF CLASS A SHARES." Unless the context requires otherwise, the term "Holder" with respect to the Offer means (i) any person in whose name any Class A Shares are registered on the books of Ohio Edison or (ii) any other person who has obtained a properly completed stock power from the registered holder, or (iii) any person whose Class A Shares are held of record by a Depository Institution. TERMS OF THE OFFER Upon the terms and subject to the conditions set forth herein and in the Letter of Transmittal, the Trust will exchange its Preferred Securities for up to 3,600,000 of the outstanding Class A Shares. The Offer will be effected on a basis of one Preferred Security for each Class A Share validly tendered and accepted for exchange. See "-- Procedures for Tendering." Upon the terms and subject to the conditions set forth herein and in the Letter of Transmittal, the Trust will accept up to 3,600,000 Class A Shares validly tendered and not withdrawn prior to the Expiration Date and, unless the Offer has been withdrawn or terminated, will deliver Preferred Securities in exchange therefor to tendering Holders of Class A Shares as promptly as practicable following the Expiration Date. The Trust expressly reserves the right, in its sole discretion, to delay acceptance for exchange of Class A Shares tendered under the Offer and the delivery of the Preferred Securities with respect to the Class A Shares accepted for exchange (subject to Rules 13e-4 and 14e-1 under the Exchange Act, which require that the Trust consummate the Offer or return the Class A Shares deposited by or on behalf of the Holders thereof promptly after the termination or withdrawal of the Offer), or to amend, withdraw or terminate the Offer at any time prior to the Expiration Date for any of the reasons set forth in "-- Conditions to the Offer" and "-- Expiration Date; Extensions; Amendments; Termination." In all cases, except to the extent waived by the Trust, delivery of Preferred Securities issued with respect to the Class A Shares accepted for exchange pursuant to the Offer will be made only after timely receipt by the Exchange Agent of Class A Shares (or confirmation of book-entry transfer thereof), a properly completed and duly executed Letter of Transmittal and any other documents required thereby. As of the date of this Prospectus, there are 4,000,000 Class A Shares outstanding. This Prospectus, together with the Letter of Transmittal, is being sent to all registered Holders commencing on or about the date of this Prospectus. The Trust shall be deemed to have accepted validly tendered Class A Shares (or defectively tendered Class A Shares with respect to which the Trust has waived such defect) when, as and if the Trust has given oral or written notice thereof to the Exchange Agent. The Exchange Agent will act as agent for the tendering Holders for the purpose of receiving Class A Shares from, and remitting Preferred Securities to, tendering 32 35 Holders who are participating in the Offer. Upon the terms and subject to the conditions of the Offer, delivery of Preferred Securities to tendering Holders will be made as promptly as practicable following the Expiration Date. If proration of tendered Class A Shares is required, because of the difficulty in determining the number of Class A Shares validly tendered (including shares tendered by the guaranteed delivery procedures described in "-- Procedures for Tendering"), the Trust does not expect that it would be able to announce the final proration factor or to commence the exchange for any Class A Shares pursuant to the Offer until approximately five Business Days after the Expiration Date. Preliminary results of the proration will be announced by press release as promptly as practicable after the Expiration Date. Holders of Class A Shares may obtain such preliminary information from the Dealer Manager, the Information Agent or the Exchange Agent and may also be able to obtain such information from their brokers. Until the final proration factors are known, the Trust will not issue any Preferred Securities in exchange for any Class A Shares accepted for exchange pursuant to the Offer or return Class A Shares delivered to the Exchange Agent but not tendered or return Class A Shares tendered but not accepted for exchange because of proration. If any tendered Class A Shares are not accepted for exchange because of an invalid tender, proration, the occurrence of certain other events set forth herein or otherwise, unless otherwise requested by the Holder under "Special Delivery Instructions" in the Letter of Transmittal, such Class A Shares will be returned, without expense, to the tendering Holder thereof (or in the case of Class A Shares tendered by book-entry transfer into the Exchange Agent's account at a Depository Institution, such Class A Shares will be credited to an account maintained at the Depository Institution designated by the participant therein who so delivered such Class A Shares), as promptly as practicable after the Expiration Date or the withdrawal or termination of the Offer. Holders of Class A Shares will not have any appraisal or dissenters' rights under the Ohio General Corporation Law in connection with the Offer. The Trust intends to conduct the Offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the Commission thereunder. Holders who tender Class A Shares in the Offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the Letter of Transmittal, transfer taxes with respect to the exchange of Class A Shares pursuant to the Offer. See "Fees and Expenses; Transfer Taxes." Holders tendering Class A Shares held in global form shall receive Preferred Securities in global form and holders tendering Class A Shares held directly in certificated form shall receive Preferred Securities in certificated form, in each case unless otherwise specified in the Letter of Transmittal. See "-- Procedures for Tendering." CONDITIONS TO THE OFFER Notwithstanding any other provisions of the Offer, or any extension of the Offer, the Trust will not be required to deliver Preferred Securities in respect of any properly tendered Class A Shares and may terminate the Offer by oral or written notice to the Exchange Agent and the holders of Class A Shares, or, at its option, may modify or otherwise amend the Offer (other than with respect to the Minimum Distribution Condition) with respect to such Class A Shares if any of the following conditions are not satisfied at or prior to the Expiration Date in the case of clauses (a) and (b) below or if any of the events specified in clauses (c) through (e) occurs at or prior to the exchange date for the Class A Shares: (a) receipt of at least 1,200,000 validly tendered Class A Shares in the Offer; (b) tenders by a sufficient number of holders of Class A Shares to satisfy the Minimum Distribution Condition; (c) any action has been taken or threatened, or any statute, rule, regulation, judgment, order, stay, decree or injunction has been promulgated, enacted, entered, enforced or deemed applicable to the Offer, by or before any court or governmental regulatory or administrative agency or authority or tribunal, 33 36 domestic or foreign, which (i) challenges the making of the Offer, or might directly or indirectly prohibit, prevent, restrict or delay consummation of the Offer, or otherwise and adversely affect in any material manner the Offer or (ii) could materially adversely affect the business, condition (financial or otherwise), income, operations, properties, assets, liabilities or prospects of Ohio Edison and its subsidiaries, taken as a whole or materially impair the contemplated benefits of the Offer to Ohio Edison; (d) any event has occurred or is likely to occur affecting the business or financial affairs of Ohio Edison that would or might prohibit, prevent, restrict or delay consummation of the Offer or that will, or is reasonably likely to, materially impair the contemplated benefits of the Offer or might be material to holders of Class A Shares in deciding whether to accept the Offer; and (e) any of the following events shall have occurred (i) any general suspension of or limitation on trading in securities on the NYSE or in the over-the-counter market (whether or not mandatory), (ii) any significant adverse change in the price of the Class A Shares or in the United States securities or financial markets, (iii) a material impairment in the trading market for debt or equity securities, (iv) a declaration of a banking moratorium or any suspension of payments in respect of banks by federal or state authorities in the United States (whether or not mandatory), (v) a commencement of a war, armed hostilities or other national or international crisis directly or indirectly relating to the United States, (vi) any limitation (whether or not mandatory) by any governmental authority on, or other event having a reasonable likelihood of affecting, the extension of credit by banks or other lending institutions in the United States, (vii) any significant adverse change in United States securities or financial markets generally or in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof. The foregoing conditions are for the sole benefit of the Trust and Ohio Edison and, except for the Minimum Distribution Condition, may be waived by the Trust and Ohio Edison, in whole or in part, in their sole discretion. Any determination made by Ohio Edison or the Trust concerning an event, development or circumstance described or referred to above will be final and binding on all parties. EXPIRATION DATE; EXTENSIONS; AMENDMENTS; TERMINATION The Offer will expire on the Expiration Date. The Trust expressly reserves the right, in its sole discretion, subject to applicable law, to (i) terminate the Offer, and not accept for exchange any Class A Shares and promptly return all Class A Shares upon the failure of any of the conditions specified above in "-- Conditions to the Offer", (ii) waive any condition to the Offer (other than the Minimum Distribution Condition) and accept all Class A Shares previously tendered pursuant to the Offer, (iii) extend the Expiration Date of the Offer and retain all Class A Shares tendered pursuant to the Offer until the Expiration Date, subject, however, to all withdrawal rights of holders, see "-- Withdrawal of Tenders," (iv) amend the terms of the Offer or (v) modify the form of the consideration to be paid pursuant to the Offer. Any amendment applicable to the Offer will apply to all Class A Shares tendered pursuant to the Offer. During any extension of the Offer, all Class A Shares previously tendered pursuant to the Offer and not withdrawn will remain subject to the Offer. If the Trust makes a material change in the terms of the Offer, the Trust will extend the Offer. The minimum period for which the Offer will be extended following a material change, other than a change in the amount of Class A Shares sought for exchange or an increase or decrease in the consideration offered to Holders of Class A Shares, will depend upon the facts and circumstances, including the relative materiality of the change. With respect to an increase or decrease in the number of Class A Shares sought in the Offer or an increase or decrease in the consideration offered to Holders of Class A Shares, if required, the Offer will remain open for a minimum of ten Business Days following public announcement of such change. In the case of any amendment, withdrawal or termination of the Offer, a public announcement will be issued no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date of the Offer subject to such extension. If the Trust withdraws or terminates the Offer, it will give immediate notice to the Exchange Agent, and all Class A Shares theretofore tendered pursuant to the Offer will be returned promptly to the tendering Holders thereof. See "-- Withdrawal of Tenders." In order to satisfy the 34 37 NYSE listing requirements, acceptance of Class A Shares validly tendered in the Offer is subject to the Minimum Distribution Condition, which condition may not be waived. PROCEDURES FOR TENDERING The tender of Class A Shares by a Holder thereof pursuant to one of the procedures set forth below will constitute an agreement between such Holder and the Trust in accordance with the terms and subject to the conditions set forth herein and in the Letter of Transmittal. Each Holder of Class A Shares wishing to participate in the Offer must (i) properly complete and sign the Letter of Transmittal in accordance with the instructions contained herein and in the Letter of Transmittal, together with any required signature guarantees, and deliver the same to the Exchange Agent, at one of its addresses set forth on the back cover page hereof prior to the Expiration Date and either (a) certificates for the Class A Shares must be received by the Exchange Agent at such address or (b) such Class A Shares must be transferred pursuant to the procedures for book-entry transfer described below and a confirmation of such book-entry transfer must be received by the Exchange Agent, in each case prior to the Expiration Date, or (ii) comply with the guaranteed delivery procedures described below. IN ORDER TO PARTICIPATE IN THE OFFER, HOLDERS OF CLASS A SHARES MUST SUBMIT A LETTER OF TRANSMITTAL AND COMPLY WITH THE OTHER PROCEDURES FOR TENDERING IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED HEREIN AND IN THE LETTER OF TRANSMITTAL PRIOR TO THE EXPIRATION DATE. LETTERS OF TRANSMITTAL, CLASS A SHARES AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT ONLY TO THE EXCHANGE AGENT -- NOT TO THE TRUST, OHIO EDISON, THE DEALER MANAGER OR THE INFORMATION AGENT. Special Procedure for Beneficial Owners. Any beneficial owner whose Class A Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact such registered Holder promptly and instruct such registered Holder to tender on such beneficial owner's behalf. If such beneficial owner wishes to tender on its own behalf, such owner must, prior to completing and executing the Letter of Transmittal and delivering its Class A Shares, either make appropriate arrangements to register ownership of the Class A Shares in such owner's name or obtain a properly completed stock power from the registered Holder. The transfer of registered ownership may take considerable time and may not be able to be completed prior to the Expiration Date. THE METHOD OF DELIVERY OF CLASS A SHARES AND ALL OTHER DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDER. IF SENT BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, RETURN RECEIPT REQUESTED, BE USED, INSURANCE BE OBTAINED, AND THE MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO PERMIT DELIVERY TO THE EXCHANGE AGENT ON OR BEFORE THE EXPIRATION DATE. Signature Guarantees. If tendered Class A Shares are registered in the name of the signer of the Letter of Transmittal and the Preferred Securities to be issued in exchange therefor are to be issued (and any untendered Class A Shares are to be reissued) in the name of the registered Holder, the signature of such signer need not be guaranteed. If the tendered Class A Shares are registered in the name of someone other than the signer of the Letter of Transmittal, or if Preferred Securities issued in exchange therefor are to be issued in the name of any person other than the signer of the Letter of Transmittal, such tendered Class A Shares must be endorsed or accompanied by written instruments of transfer in form satisfactory to the Trust and duly executed by the registered Holder, and the signature on the endorsement or instrument of transfer must be guaranteed by a financial institution (including most banks, savings and loans associations and brokerage houses) that is a participant in the Security Transfer Agents Medallion Program or the Stock Exchange Medallion Program (any of the foregoing hereinafter referred to as an "Eligible Institution"). If the Preferred Securities (and/or any tendered Class A Shares not exchanged) are to be delivered to an address other than that of the registered Holder appearing on the register for the Class A Shares, the signature in the Letter of Transmittal must be guaranteed by an Eligible Institution. 35 38 Book-Entry Transfer. The Trust understands that the Exchange Agent will make a request promptly after the date of this Prospectus to establish accounts with respect to the Class A Shares at a Depository Institution for the purpose of facilitating the Offer, and subject to the establishment thereof, any financial institution that is a participant in a Depository Institution's system may make book-entry delivery of Class A Shares by causing the Depository Institution to transfer such Class A Shares into the Exchange Agent's account with respect to the Class A Shares in accordance with such Depository Institution's Automated Tender Offer Program ("ATOP") procedures for such book-entry transfers. However, the exchange for the Class A Shares so tendered will only be made after timely confirmation (a "Book-Entry Confirmation") of such Book-Entry Transfer of Class A Shares into the Exchange Agent's account, and timely receipt by the Exchange Agent of an Agent's Message (as such term is defined in the next sentence) and any other documents required by the Letter of Transmittal. The term "Agent's Message" means a message, transmitted by a Depository Institution and received by the Exchange Agent and forming a part of a Book-Entry Confirmation, which states that such Depository Institution has received an express acknowledgment from a participant tendering Class A Shares that is the subject of such Book-Entry Confirmation, that such participant has received and agrees to be bound by the terms of the Letter of Transmittal, and that the Trust may enforce such agreement against such participant. Guaranteed Delivery. If a Holder desires to participate in the Offer and time will not permit a Letter of Transmittal or Class A Shares to reach the Exchange Agent before the Expiration Date or the procedure for book-entry transfer cannot be completed on a timely basis, a tender may be effected if the Exchange Agent has received at one of its addresses on the back cover page hereof prior to the Expiration Date, a letter, telegram or facsimile transmission from an Eligible Institution setting forth the name and address of the tendering Holder, the name(s) in which the Class A Shares are registered and, if the Class A Shares are held in certificated form, the certificate numbers of the Class A Shares to be tendered, and stating that the tender is being made thereby and guaranteeing that within three NYSE trading days after the date of execution of such letter, telegram or facsimile transmission by the Eligible Institution, the Class A Shares in proper form for transfer together with a properly completed and duly executed Letter of Transmittal (and any other required documents), or a confirmation of book-entry transfer of such Class A Shares into the Exchange Agent's account at a Depository Institution, will be delivered by such Eligible Institution. Unless the Class A Shares being tendered by the above-described method are deposited with the Exchange Agent within the time period set forth above (accompanied or preceded by a properly completed Letter of Transmittal and any other required documents) or a confirmation of book-entry transfer of such Class A Shares into the Exchange Agent's account at the Depository Institution in accordance with such Depository Institution's ATOP procedures is received, the Trust may, at its option, reject the tender. In addition to the copy being transmitted herewith, copies of a Notice of Guaranteed Delivery which may be used by Eligible Institutions for the purposes described in this paragraph are available from the Exchange Agent and the Information Agent. Miscellaneous. All questions as to the validity, form, eligibility (including time of receipt) and acceptance for exchange of any tender of Class A Shares will be determined by the Trust, whose determination will be final and binding. The Trust reserves the absolute right to reject any or all tenders not in proper form or the acceptance for exchange of which may, in the opinion of the Trust's counsel, be unlawful. The Trust also reserves the absolute right to waive any defect or irregularity in the tender of any Class A Shares, and the Trust's interpretation of the terms and conditions of the Offer (including the instructions in the Letter of Transmittal) will be final and binding. None of the Trust, the Exchange Agent, the Dealer Manager, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. Tenders of Class A Shares involving any irregularities will not be deemed to have been made until such irregularities have been cured or waived. Class A Shares received by the Exchange Agent that are not validly tendered and as to which the irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering Holder (or in the case of Class A Shares tendered by book-entry transfer into the Exchange Agent's account at a Depository Institution, such Class A Shares will be credited to an account maintained at the Depository Institution designated by the participant therein who so delivered such Class A 36 39 Shares), unless otherwise requested by the Holder in the Letter of Transmittal, as promptly as practicable after the Expiration Date or the withdrawal or termination of the Offer. LETTER OF TRANSMITTAL The Letter of Transmittal contains, among other things, the following terms and conditions, which are part of the Offer. The party tendering Class A Shares for exchange (the "Transferor") exchanges, assigns and transfers the Class A Shares to the Trust, and irrevocably constitutes and appoints the Exchange Agent as the Transferor's agent and attorney-in-fact to cause the Class A Shares to be assigned, transferred and exchanged. The Transferor represents and warrants that it has full power and authority to tender, exchange, assign and transfer the Class A Shares and to acquire Preferred Securities issuable upon the exchange of such tendered Class A Shares and that, when such Transferor's Class A Shares are accepted for exchange, the Trust will acquire good and unencumbered title to such tendered Class A Shares, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim. The Transferor also warrants that it will, upon request, execute and deliver any additional documents deemed by the Trust to be necessary or desirable to complete the exchange, assignment and transfer of tendered Class A Shares or transfer ownership of such Class A Shares on the account books maintained by the Depository Institution. All authority conferred by the Transferor will survive the death, bankruptcy or incapacity of the Transferor and every obligation of the Transferor shall be binding upon the heirs, legal representatives, successors, assigns, executors and administrators of such Transferor. WITHDRAWAL OF TENDERS Tenders of Class A Shares pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and, unless accepted for exchange by the Trust, may be withdrawn at any time after 40 Business Days after the date of this Prospectus. To be effective, a written notice of withdrawal delivered by mail, hand delivery or facsimile transmission must be timely received by the Exchange Agent at one of its addresses set forth on the back cover page hereof. The method of notification is at the risk and election of the Holder. Any such notice of withdrawal must specify (i) the Holder named in the Letter of Transmittal as having tendered Class A Shares to be withdrawn, (ii) if the Class A Shares are held in certificated form, the certificate numbers of the Class A Shares to be withdrawn, (iii) that such Holder is withdrawing his election to have such Class A Shares exchanged and (iv) the name of the registered Holder of such Class A Shares, and must be signed by the Holder in the same manner as the original signature on the Letter of Transmittal (including any required signature guarantees) or be accompanied by evidence satisfactory to the Trust that the person withdrawing the tender has succeeded to the beneficial ownership of the Class A Shares being withdrawn. The Exchange Agent will return the properly withdrawn Class A Shares promptly following receipt of notice of withdrawal. If Class A Shares have been tendered pursuant to the procedure for book-entry transfer, any notice of withdrawal must specify the name and number of the account at a Depository Institution to be credited with the withdrawn Class A Shares and otherwise comply with such Depository Institution procedures. All questions as to the validity of notice of withdrawal, including time of receipt, will be determined by the Trust, and such determination will be final and binding on all parties. Withdrawals of tenders of Class A Shares may not be rescinded and any Class A Shares withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. Properly withdrawn Class A Shares, however, may be retendered by following the procedures therefor described elsewhere herein at any time prior to the Expiration Date. See "-- Procedures for Tendering." ACCEPTANCE OF SHARES AND PRORATION Upon the terms and subject to the conditions of the Offer, including the Minimum Distribution Condition, if 3,600,000 or fewer Class A Shares have been validly tendered and not withdrawn prior to the Expiration Date, the Trust will accept for exchange all such Class A Shares. Upon the terms and subject to the conditions of the Offer, if more than 3,600,000 Class A Shares have been validly tendered and not 37 40 withdrawn prior to the Expiration Date, the Trust will accept for exchange Class A Shares from each tendering Holder on a pro rata basis, subject to adjustment to avoid the acceptance for exchange of fractional shares. If the Trust decides, in its sole discretion, to increase or decrease the number of Class A Shares sought in the Offer or to increase or decrease the consideration offered to Holders of Class A Shares, and if the Offer is scheduled to expire less than ten Business Days from and including the date that notice of such increase or decrease is first published, sent or given in the manner specified in "-- Expiration Date; Extensions; Amendments; Termination", then the Offer will be extended for a minimum of ten Business Days from and including the date of such notice. All Class A Shares not accepted pursuant to the Offer, including shares not accepted because of proration, will be returned to the tendering Holders at the Trust's expense as promptly as practicable following the Expiration Date. EXCHANGE AGENT AND INFORMATION AGENT The Bank of New York has been appointed as Exchange Agent for the Offer. The Exchange Agent Is: THE BANK OF NEW YORK 101 Barclay Street New York, New York 10286 (800) 507-9357 Georgeson & Company Inc. has been retained as the Information Agent to assist in connection with the Offer. Questions and requests for assistance regarding the Offer, requests for additional copies of this Prospectus, the Letter of Transmittal and requests for Notice of Guaranteed Delivery may be directed to the Information Agent. The Information Agent Is: (LOGO) Wall Street Plaza New York, New York 10005 (800) 223-2064 (Toll-Free) Banks and Brokers Call Collect: (212) 440-9800 Ohio Edison will pay the Exchange Agent and Information Agent reasonable and customary fees for their services and will reimburse them for all their reasonable out-of-pocket expenses in connection therewith. DEALER MANAGER; SOLICITING DEALERS Merrill Lynch & Co., as Dealer Manager, has agreed to solicit exchanges of Class A Shares for Preferred Securities. Ohio Edison will pay the Dealer Manager a fee of $[ ] per Class A Share accepted pursuant to the Offer. The maximum fee payable to the Dealer Manager is approximately $[ ] plus any amount that the Dealer Manager may be entitled to pursuant to the next paragraph. Ohio Edison will also reimburse the Dealer Manager for certain reasonable out-of-pocket expenses in connection with the Offer and will indemnify the Dealer Manager against certain liabilities, including liabilities under the Securities Act. The Dealer Manager engages in transactions with, and from time to time has performed services for, Ohio Edison. 38 41 Ohio Edison will pay to a Soliciting Dealer a solicitation fee of $[ ] per Class A Share validly tendered and accepted for exchange pursuant to the Offer. As used in this Prospectus, "Soliciting Dealer" includes (i) any broker or dealer in securities, including the Dealer Manager in its capacity as a broker or dealer, who is a member of any national securities exchange or of the National Association of Securities Dealers, Inc. (the "NASD"), (ii) any foreign broker or dealer not eligible for membership in the NASD who agrees to conform to the NASD's Rules of Fair Practice in soliciting tenders outside the United States to the same extent as though it were an NASD member, or (iii) any bank or trust company, any one of whom has solicited and obtained a tender pursuant to the Offer. No solicitation fee shall be payable to a Soliciting Dealer with respect to the tender of Class A Shares by a Holder unless the Letter of Transmittal accompanying such tender designates such Soliciting Dealer as such in the box captioned "Solicited Tenders." If tendered Class A Shares are being delivered by book-entry transfer made to an account maintained by the Exchange Agent with Depository Institutions, the Soliciting Dealer must return a Notice of Solicited Tenders (included in the materials provided to brokers and dealers) to the Exchange Agent within three trading days after the Expiration Date in order to receive a solicitation fee. No solicitation fee shall be payable to a Soliciting Dealer in respect of Class A Shares (i) beneficially owned by such Soliciting Dealer or (ii) registered in the name of such Soliciting Dealer unless such Class A Shares are held by such Soliciting Dealer as nominee and such Class A Shares are being tendered for the benefit of one or more beneficial owners identified on the Letter of Transmittal or the Notice of Solicited Tenders. No solicitation fee shall be payable to the Soliciting Dealer with respect to the tender of Class A Shares by the Holder of record, for the benefit of the beneficial owner, unless the beneficial owner has designated such Soliciting Dealer. No solicitation fee shall be payable to a Soliciting Dealer if such Soliciting Dealer is required for any reason to transfer any portion of such fee to a tendering Holder (other than itself). No broker, dealer, bank, trust company or fiduciary shall be deemed to be the agent of Ohio Edison, the Trust, the trustees, the Exchange Agent, the Information Agent or the Dealer Manager for purposes of the Offer. Other than as described above, Ohio Edison will not pay any solicitation fees to any broker, dealer, bank, trust company or other person for any Class A Shares exchanged in connection with the Offer. Ohio Edison will reimburse such persons for customary handling and mailing expenses incurred in connection with the Offer. Additional solicitations may be made by telephone, in person or otherwise by officers and regular employees of Ohio Edison and its affiliates. No additional compensation will be paid to any such officers and employees who engage in soliciting tenders. LISTING AND TRADING OF PREFERRED SECURITIES AND CLASS A SHARES The Preferred Securities constitute a new issue of securities with no established trading market. While the Preferred Securities are expected to be approved for listing on the NYSE, subject to official notice of issuance, there can be no assurance that an active market for the Preferred Securities will develop or be sustained in the future on such exchange. Although the Dealer Manager has indicated to the Trust that it intends to make a market in the Preferred Securities following the Expiration Date as permitted by applicable laws and regulations prior to the commencement of trading on the NYSE, it is not obligated to do so and may discontinue any such market-making at any time without notice. Accordingly, no assurance can be given as to the liquidity of, or trading markets for, the Preferred Securities. In order to satisfy the NYSE listing requirements, acceptance of Class A Shares validly tendered in the Offer is subject to the Minimum Distribution Condition, which condition may not be waived. To the extent that Class A Shares are tendered and accepted in the Offer, the terms on which untendered Class A Shares could subsequently be sold could be adversely affected. In addition, if the Offer is substantially subscribed or oversubscribed, there would be a significant risk that round lot holdings of Class A Shares outstanding following the Offer would be limited. See "Risk Factors -- Lack of Established Trading Market for Preferred Securities" and "-- Reduced Trading Market for Class A Shares." 39 42 TRANSACTIONS AND ARRANGEMENTS CONCERNING THE OFFER Except as described herein, there are no contracts, arrangements, understandings or relationships in connection with the Offer between Ohio Edison or any of its directors or executive officers, the Trust or the Trustees and any person with respect to any securities of Ohio Edison or the Trust, including the Subordinated Debentures, the Class A Shares and the Preferred Securities. FEES AND EXPENSES; TRANSFER TAXES The expenses of soliciting tenders of the Class A Shares will be borne by Ohio Edison. For compensation to be paid to the Dealer Manager and Soliciting Dealers, see "The Offer -- Dealer Manager; Soliciting Dealers." The total cash expenditures to be incurred by Ohio Edison in connection with the Offer, other than fees payable to the Dealer Manager and Soliciting Dealers, but including the expenses of the Dealer Manager, printing, accounting and legal fees, and the fees and expenses of the Exchange Agent, the Information Agent, the Property Trustee, the Delaware Trustee and the Indenture Trustee, are estimated to be approximately [ ]. Ohio Edison will pay all transfer taxes, if any, applicable to the exchange of Class A Shares pursuant to the Offer. If, however, certificates representing Preferred Securities or Class A Shares not tendered or accepted for exchange, are to be delivered to, or are to be issued in the name of, any person other than the registered Holder of the Class A Shares tendered or if a transfer tax is imposed for any reason other than the exchange of Class A Shares pursuant to the Offer, then the amount of any such transfer taxes (whether imposed on the registered Holder or any other persons) will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering Holder. PRICE RANGE OF CLASS A SHARES The Class A Shares are listed and principally traded on the NYSE and the Chicago Stock Exchange. The following table sets forth, for each period shown, the high and low closing sales prices of the Class A Shares as reported on the NYSE Composite Tape.
HIGH LOW ------ ------ Year Ended December 31, 1993 1st Quarter.............................................. -- -- 2nd Quarter.............................................. 25.750 24.500 3rd Quarter.............................................. 26.500 25.375 4th Quarter.............................................. 26.375 24.750 Year Ended December 31, 1994 1st Quarter.............................................. 25.625 22.750 2nd Quarter.............................................. 23.250 21.875 3rd Quarter.............................................. 23.000 21.250 4th Quarter.............................................. 22.000 19.750 Year Ending December 31, 1995 1st Quarter.............................................. 23.500 21.250 2nd Quarter.............................................. 25.250 22.875 3rd Quarter.............................................. 24.875 24.125 4th Quarter.............................................. 26.125 24.875 Year Ending December 31, 1996 1st Quarter.............................................. 25.625 24.000
On [ ], 1996, the last full day of trading prior to the first public announcement of the Offer, the closing sales price of Class A Shares on the NYSE as reported on the Composite Tape was $[ ] per share. Stockholders are urged to obtain a current market quotation for Class A Shares. 40 43 DESCRIPTION OF THE PREFERRED SECURITIES The Preferred Securities will be issued pursuant to the terms of the Declaration. The Declaration will be qualified as an indenture under the Trust Indenture Act. The Property Trustee will act as the indenture trustee for purposes of compliance with the provisions of the Trust Indenture Act. The terms of the Preferred Securities will include those stated in the Declaration and those made part of the Declaration by the Business Trust Act and the Trust Indenture Act. The following summary of the principal terms and provisions of the Preferred Securities does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Declaration (a copy of which is filed as an exhibit to the Registration Statement, of which this Prospectus forms a part), the Business Trust Act and the Trust Indenture Act. GENERAL The Declaration authorizes the Regular Trustees, on behalf of the Trust, to issue the Preferred Securities, which represent preferred undivided beneficial interests in the assets of the Trust, and the Common Securities, which represent common undivided beneficial interests in the assets of the Trust. Upon issuance of the Preferred Securities, the holders thereof will own all of the issued and outstanding Preferred Securities. All of the Common Securities will be owned by Ohio Edison. The Common Securities rank pari passu, and payments will be made thereon on a pro rata basis with the Preferred Securities, except that upon the occurrence and during the continuation of a Declaration Event of Default, the rights of the holders of the Common Securities to receive payment of periodic distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights to payment of the holders of the Preferred Securities. The Declaration does not permit the issuance by the Trust of any securities other than the Trust Securities or the incurrence of any indebtedness by the Trust. Pursuant to the Declaration, the Property Trustee will own and hold the Subordinated Debentures for the benefit of the Trust and the holders of the Trust Securities. The payment of distributions out of money held by the Trust, and payments upon redemption of the Preferred Securities or liquidation of the Trust, are guaranteed by Ohio Edison to the extent described under "Description of the Preferred Securities Guarantee." The Preferred Guarantee Trustee will hold the Preferred Securities Guarantee for the benefit of the holders of the Preferred Securities. The Preferred Securities Guarantee does not cover payment of distributions on the Preferred Securities when the Trust does not have sufficient available funds in the Property Account to make such distributions. DISTRIBUTIONS Distributions on the Preferred Securities will be fixed at a rate per annum of [ ]% of the stated liquidation amount of $25 per Preferred Security (equivalent to $[ ] per Preferred Security). Distributions in arrears for more than one quarter will accrue interest at the rate of [ ]% per annum and the interest so accrued at the end of each quarter and remaining unpaid will itself bear interest (to the extent permitted by applicable law) thereafter until paid on the same basis. The term "distributions" as used herein includes any such interest payable unless otherwise stated. Distributions on the Preferred Securities will be cumulative, will accrue from [ ], 1996, and will be payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, commencing [ ], 1996, to the holders of record on the applicable record date, which will be 15 calendar days prior to the relevant distribution payment date when, as and if available for payment by the Property Trustee, except as otherwise described below. The amount of distributions payable for any full quarterly period will be computed on the basis of a 360-day year of twelve 30-day months, and for any period shorter than a full quarter, on the basis of the actual number of days elapsed in such a 90-day quarter. The initial distribution, payable on [ ], 1996, will be based on a period shorter than a full quarter ([ ] to [ ], 1996) and will be in the amount of $[ ] per Preferred Security. In addition, holders of Preferred Securities will be entitled to an additional cash distribution at the rate 7.75% per annum of the liquidation amount thereof from [ ], 1996 through the Expiration Date in lieu of dividends accumulating after [ ], 1996 on their Class A Shares accepted for exchange, such 41 44 additional distribution to be made on [ ], 1996 to holders of the Preferred Securities on the record date for such distribution. Ohio Edison has the right under the Indenture to defer payments of interest on the Subordinated Debentures by extending the interest payment period from time to time on the Subordinated Debentures which, if exercised, would defer quarterly distributions on the Preferred Securities (though such distributions would continue to accrue interest since interest would continue to accrue on the Subordinated Debentures) during any such extended interest payment period. In the event that Ohio Edison exercises this right, then (a) Ohio Edison shall not declare or pay any dividend on, make any distributions with respect to, or redeem, purchase or make a liquidation payment with respect to, any of its capital stock, (b) Ohio Edison shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by Ohio Edison which rank pari passu with or junior to the Subordinated Debentures, and (c) Ohio Edison shall not make any guarantee payments (other than pursuant to the Preferred Securities Guarantee) with respect to the foregoing; provided, however, that the foregoing restriction (a) does not apply to any stock dividends paid by Ohio Edison where the dividend stock is the same as that on which the dividend is paid. Prior to the termination of any such Extension Period, Ohio Edison may further extend the interest payment period, provided that such Extension Period, together with all such previous and further extensions thereof, may not exceed 20 consecutive quarters or extend beyond the maturity of the Subordinated Debentures. Upon the termination of any Extension Period and the payment of all amounts then due, Ohio Edison may select a new Extension Period as if no Extension Period had previously been declared, subject to the above requirements. See "-- Voting Rights" below and "Description of the Subordinated Debentures -- Interest" and "-- Option to Extend Interest Payment Period." If distributions are deferred, the deferred distributions and accrued interest thereon shall be paid to holders of record of the Preferred Securities, if funds are available therefor, as they appear on the books and records of the Trust on the record date next following the termination of such Extension Period. Distributions on the Preferred Securities must be paid on the dates payable to the extent that the Trust has funds available for the payment of such distributions in the Property Account. The Trust's funds available for distribution to the holders of the Preferred Securities will be limited to payments received under the Subordinated Debentures. See "Description of the Subordinated Debentures." The payment of distributions out of moneys held by the Trust is guaranteed by Ohio Edison to the extent set forth under "Description of the Preferred Securities Guarantee." Distributions on the Preferred Securities will be payable to the holders thereof as they appear on the books and records of the Trust on the relevant record dates, which will be 15 calendar days prior to the relevant distribution payment date, which record dates and payment dates correspond to the record dates and interest payment dates on the Subordinated Debentures. Such distributions will be paid through the Property Trustee, who will hold amounts received in respect of the Subordinated Debentures in the Property Account for the benefit of the Trust and the holders of the Trust Securities. Subject to any applicable laws and regulations and the provisions of the Declaration, each such payment will be made at the office or agency maintained therefore pursuant to the provisions of the Declaration; provided that payment of Distributions may be made at the option of the Regular Trustees on behalf of the Trust by check mailed to the address of the persons entitled thereto. In the event that any date on which distributions are to be made on the Preferred Securities is not a Business Day, then payment of the distributions payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) except that if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. A "Business Day" shall mean any day other than a Saturday, Sunday or other day on which banking institutions in New York, New York are authorized or required by law to close. MANDATORY REDEMPTION The Subordinated Debentures will mature on [ ], 2016 and may be redeemed, in whole or in part, at any time after April 1, 1998, or at any time in certain circumstances upon the occurrence of a Tax Event. Upon the repayment of the Subordinated Debentures, whether at maturity or upon acceleration, 42 45 redemption or otherwise, the proceeds from such repayment or payment shall simultaneously be applied to redeem Trust Securities having an aggregate liquidation amount equal to the aggregate principal amount of the Subordinated Debentures so repaid or redeemed at the Redemption Price; provided, that except in the case of payments upon maturity, holders of Trust Securities shall be given not less than 30 nor more than 60 days' notice of such redemption. See "Description of the Subordinated Debentures." In the event that fewer than all of the outstanding Preferred Securities are to be redeemed, the Preferred Securities will be redeemed pro rata from each holder of Trust Securities. SPECIAL EVENT REDEMPTION OR DISTRIBUTION A "Tax Event" means the receipt by the Regular Trustees of an opinion of a nationally recognized independent tax counsel experienced in such matters (a "Dissolution Tax Opinion") to the effect that, on or after the date of this Prospectus, as a result of (a) any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein or (b) any amendment to, or change in, an interpretation or application of such laws or regulations by any legislative body, court, governmental agency or regulatory authority, in each case which amendment or change is enacted, promulgated, issued or announced on or after the date of this Prospectus, there is more than an insubstantial risk that (i) the Trust is or will be, within 90 days of the date thereof, subject to United States federal income tax with respect to interest accrued or received on the Subordinated Debentures, (ii) interest payable by Ohio Edison to the Trust on the Subordinated Debentures is not or, within 90 days of the date thereof, will not be deductible, in whole or in part, by Ohio Edison for United States federal income tax purposes, or (iii) the Trust is or will be, within 90 days of the date thereof, subject to more than a de minimis amount of taxes, duties or other governmental charges. An "Investment Company Event" means that the Regular Trustees shall have received an opinion of a nationally recognized independent counsel experienced in practice under the 1940 Act (as hereinafter defined) (an "Investment Company Event Opinion") to the effect that, as a result of the occurrence of a change in law or regulation or a written change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law"), there is more than an insubstantial risk that the Trust is or will be considered an "investment company" which is required to be registered under the Investment Company Act of 1940, as amended (the "1940 Act"), which Change in 1940 Act Law becomes effective on or after the date of this Prospectus. If, at any time, a Tax Event or an Investment Company Event (each, as defined above, a "Special Event") shall occur and be continuing, the Regular Trustees shall, except in the circumstances described below, dissolve the Trust and, after satisfaction of creditors, cause Subordinated Debentures, having an aggregate principal amount equal to the aggregate stated liquidation amount of, with an interest rate identical to the distribution rate of, and accrued and unpaid interest equal to accrued and unpaid distributions on, and having the same record date for payment as, the Trust Securities, to be distributed to the holders of the Trust Securities, in liquidation of such holders' interests in the Trust on a pro rata basis, within 90 days following the occurrence of such Special Event; provided, however, that in the case of the occurrence of a Tax Event, as a condition of such dissolution and distribution, the Regular Trustees shall have received an opinion of a nationally recognized independent tax counsel experienced in such matters (a "No Recognition Opinion"), which opinion may rely on published revenue rulings of the Internal Revenue Service, to the effect that neither the Trust nor the holders of the Preferred Securities will recognize any gain or loss for United States federal income tax purposes as a result of the dissolution of the Trust and the distribution of the Subordinated Debentures; and, provided, further, that, if at the time there is available to the Trust the opportunity to eliminate, within such 90-day period, the Special Event by taking some ministerial action, such as filing a form or making an election, or pursuing some other similar reasonable measure that has no adverse effect on the Trust, Ohio Edison or the holders of the Preferred Securities, the Trust will pursue such measure in lieu of dissolution. Furthermore, if in the case of the occurrence of a Tax Event (i) Ohio Edison has received an opinion of a nationally recognized independent tax counsel experienced in such matters (a "Redemption Tax Opinion") that, as a result of a Tax Event, there is more than an insubstantial risk that Ohio Edison would be 43 46 precluded from deducting the interest on the Subordinated Debentures for United States federal income tax purposes even if the Subordinated Debentures were distributed to the holders of Preferred Securities in liquidation of such holders' interests in the Trust as described above, or (ii) in the event of any Special Event, after receipt of a Dissolution Tax Opinion or Investment Company Event Opinion, as the case may be, the Regular Trustees shall have been informed by such tax counsel that a No Recognition Opinion cannot be delivered, Ohio Edison shall have the right at any time, upon not less than 30 nor more than 60 days' notice, to redeem the Subordinated Debentures in whole or in part for cash within 90 days following the occurrence of such Special Event, and, following such redemption, Trust Securities with an aggregate liquidation amount equal to the aggregate principal amount of the Subordinated Debentures so redeemed shall be redeemed by the Trust at the Redemption Price on a pro rata basis; provided, however, that, if there is available to the Trust the opportunity to eliminate, within such 90-day period, the Special Event by taking some ministerial action, such as filing a form or making an election, or pursuing some other similar reasonable measure that has no adverse effect on the Trust, Ohio Edison or the holders of the Preferred Securities, Ohio Edison or the Trust will pursue such measure in lieu of redemption. If Subordinated Debentures are distributed to the holders of the Preferred Securities, Ohio Edison will use its best efforts to have the Subordinated Debentures listed on the NYSE or on such other exchange as the Preferred Securities are then listed. After the date for any distribution of Subordinated Debentures upon dissolution of the Trust, (i) the Preferred Securities and Preferred Securities Guarantee will no longer be deemed to be outstanding and (ii) any certificates representing Preferred Securities and the Preferred Securities Guarantee will be deemed to represent Subordinated Debentures having an aggregate principal amount equal to the aggregate stated liquidation amount of, with an interest rate identical to the distribution rate of, and accrued and unpaid interest equal to accrued and unpaid distributions on, such Preferred Securities, until such certificates are presented to Ohio Edison or its agent for transfer or reissue. There can be no assurance as to the market prices for the Preferred Securities or the Subordinated Debentures that may be distributed in exchange for the Preferred Securities if a termination and liquidation of the Trust were to occur. Accordingly, the Preferred Securities that an investor may purchase, whether pursuant to the offer hereby or in the secondary market, or the Subordinated Debentures that the investor may receive on termination and liquidation of the Trust, may trade at a discount to the price that the investor paid to purchase the Preferred Securities offered hereby. On May 19, 1996, President Clinton announced a 1997 balanced budget proposal containing, among other things, an amendment that would classify a debt instrument issued on or after December 7, 1995 as equity if the instrument had a maximum term exceeding 20 years and was not classified as indebtedness on the issuer's applicable balance sheet. On March 29, 1996, Senate Finance Committee Chairman William V. Roth, Jr. and House Ways and Means Committee Chairman Bill Archer issued a joint statement indicating their intent that certain legislative proposals initiated by President Clinton, including the 1997 balanced budget proposal, that may be adopted by either of the tax-writing committees of Congress would have an effective date that is no earlier than the date of "appropriate Congressional action." Because the Subordinated Debentures will have a maximum term not exceeding 20 years, the provisions of the proposed amendment are not applicable to the Subordinated Debentures. Ohio Edison cannot predict whether this proposed amendment may be modified or other legislation may be enacted that might affect the character or treatment for United States federal income tax purposes of the Subordinated Debentures or otherwise affect the Preferred Securities offered hereby. If legislation were enacted limiting, in whole or in part, the deductibility by Ohio Edison of interest on the Subordinated Debentures for United States federal income tax purposes, such enactment would be a Tax Event. Depending upon the circumstances following a Tax Event, Ohio Edison could either cause the Trust to be dissolved and the Subordinated Debentures to be distributed to the holders of Preferred Securities, or cause the Subordinated Debentures to be redeemed, which would result in a redemption by the Trust of the Preferred Securities. It is expected that the 1997 balanced budget proposal, even if enacted in a manner that would affect the Subordinated Debentures, would not alter the United States federal income tax 44 47 consequences of the exchange of Class A Shares for Preferred Securities and the ownership and disposition of Preferred Securities. See "Taxation." REDEMPTION PROCEDURES The Trust may not redeem fewer than all of the outstanding Preferred Securities unless all accrued and unpaid distributions have been paid on all Trust Securities for all quarterly distribution periods terminating on or prior to the date of redemption. If the Trust gives a notice of redemption in respect of Preferred Securities (which notice will be irrevocable), then immediately prior to the close of business on the redemption date, provided that Ohio Edison has paid to the Trust a sufficient amount of cash in connection with the related redemption or maturity of the Subordinated Debentures, distributions will cease to accrue on the Preferred Securities called for redemption, such Preferred Securities shall no longer be deemed to be outstanding and all rights of holders of such Preferred Securities so called for redemption will cease, except the right of the holders of such Preferred Securities to receive the Redemption Price, but without interest on such Redemption Price. Neither the Company Trustees nor the Trust shall be required to register or cause to be registered the transfer of any Preferred Securities which have been so called for redemption or during the 15-day period prior to the mailing of notice of redemption in respect thereof. If any date fixed for redemption of Preferred Securities is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date fixed for redemption. If Ohio Edison fails to repay Subordinated Debentures on maturity or on the date fixed for a redemption or if payment of the Redemption Price in respect of Preferred Securities is improperly withheld or refused and not paid by the Trust or by Ohio Edison pursuant to the Preferred Securities Guarantee described under "Description of the Preferred Securities Guarantee", distributions on such Preferred Securities will continue to accrue from the original redemption date of the Preferred Securities to the date of payment in which case the actual payment date will be considered the date fixed for redemption for purposes of calculating the Redemption Price. In the event that fewer than all of the outstanding Preferred Securities are to be redeemed, the Preferred Securities will be redeemed pro rata as described under "-- Book-Entry; Delivery and Form" below. Subject to the foregoing and to applicable law (including, without limitation, United States federal securities laws), Ohio Edison or its affiliates may, at any time and from time to time, purchase outstanding Preferred Securities by tender, in the open market or by private agreement. LIQUIDATION DISTRIBUTION UPON TERMINATION In the event of any voluntary or involuntary termination, dissolution or winding-up of the Trust, the holders of the Preferred Securities at that time will be entitled to receive out of the assets of the Trust, after satisfaction of liabilities to creditors, distributions in an amount equal to the aggregate of the stated liquidation amount of $25 per Preferred Security plus accrued and unpaid distributions thereon to the date of payment (the "Liquidation Distribution"), unless, in connection with such termination, dissolution or winding-up Subordinated Debentures in an aggregate principal amount equal to the aggregate stated liquidation amount of, with an interest rate identical to the distribution rate of, and accrued and unpaid interest equal to accrued and unpaid distributions on, the Preferred Securities, have been distributed on a pro rata basis to the holders of Preferred Securities in exchange for such Preferred Securities. If, upon any such termination, dissolution or winding-up the Liquidation Distribution can be paid only in part because the Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then the amounts payable directly by the Trust on the Preferred Securities shall be paid on a pro rata basis. The holders of the Common Securities will be entitled to receive distributions upon any such dissolution pro rata with the holders of the Preferred Securities, except that if a Declaration Event of Default has occurred 45 48 and is continuing, the Preferred Securities shall have a preference over the Common Securities with regard to such distributions. Pursuant to the Declaration, the Trust shall terminate (i) on March 5, 2025, the expiration of the term of the Trust, (ii) upon the bankruptcy of Ohio Edison or the holder of the Common Securities, (iii) upon the filing of a certificate of dissolution or its equivalent with respect to Ohio Edison or the holder of the Common Securities, the filing of a certificate of cancellation with respect to the Trust, or the revocation of the charter of Ohio Edison or the holder of the Common Securities and the expiration of 90 days after the date of revocation without a reinstatement thereof, (iv) upon the distribution of the Subordinated Debentures following the occurrence of a Special Event, (v) upon the entry of a decree of a judicial dissolution of Ohio Edison or the holder of the Common Securities or the Trust, (vi) upon the redemption of all of the Trust Securities or (vii) before the issuance of any Trust Securities, with the consent of all of the Regular Trustees and the Sponsor. DECLARATION EVENTS OF DEFAULT An event of default under the Indenture (an "Indenture Event of Default") (see "Description of the Subordinated Debentures -- Indenture Events of Default") constitutes an event of default under the Declaration with respect to the Trust Securities (a "Declaration Event of Default"); provided, that pursuant to the Declaration, the holder of the Common Securities will be deemed to have waived any Declaration Event of Default with respect to the Common Securities or its consequences until all Declaration Events of Default with respect to the Preferred Securities have been cured, waived or otherwise eliminated. Until such Declaration Events of Default with respect to the Preferred Securities have been so cured, waived or otherwise eliminated, the Property Trustee will be deemed to be acting solely on behalf of the holders of the Preferred Securities and only the holders of the Preferred Securities will have the right to direct the Property Trustee with respect to certain matters under the Declaration, and therefore the Indenture. Upon the occurrence of a Declaration Event of Default, the Property Trustee, as the sole holder of the Subordinated Debentures, will have the right under the Indenture to declare the principal of, and interest on, the Subordinated Debentures to be immediately due and payable. If a Declaration Event of Default occurs that results from the failure of Ohio Edison to pay principal of or interest on the Subordinated Debentures when due, during the continuance of such an event of default a holder of Preferred Securities may institute a legal proceeding directly against Ohio Edison to obtain payment of such principal or interest on Subordinated Debentures having a principal amount equal to the aggregate liquidation amount of the Preferred Securities owned of record by such holder. The holders of Preferred Securities will not be able to exercise directly against Ohio Edison any other remedy available to the Property Trustee unless the Property Trustee first fails to do so. See "-- Voting Rights." VOTING RIGHTS Except as provided below and except as provided under the Business Trust Act, the Trust Indenture Act and under "Description of the Preferred Securities Guarantee -- Amendments and Assignment" below, and except as otherwise required by law and the Declaration, the holders of the Preferred Securities will have no voting rights. In the event that Ohio Edison elects to defer payments of interest on the Subordinated Debentures as described above under "-- Distributions," the holders of the Preferred Securities do not have the right to appoint a special representative or trustee or otherwise act to protect their interests. Subject to the requirement of the Property Trustee obtaining a tax opinion as set forth in the last sentence of this paragraph, the holders of a majority in aggregate liquidation amount of the Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or to direct the exercise of any trust or power conferred upon the Property Trustee under the Declaration, including to (i) direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Trustee (as hereinafter defined) under the Indenture with respect to the Subordinated Debentures or exercising any trust or power conferred on the Debenture Trustee, (ii) waive any past Indenture Event of Default which is waivable under the Indenture, (iii) exercise any right to rescind or 46 49 annul a declaration that the principal of all the Subordinated Debentures shall be due and payable, or (iv) consent to any amendment, modification or termination of the Indenture or the Subordinated Debentures, where such consent shall be required, provided that where a consent under the Indenture would require the consent of the holders of greater than a majority in principal amount of Subordinated Debentures affected thereby (a "Super-Majority"), only the holders of at least the proportion in liquidation amount of the Preferred Securities which the relevant Super-Majority represents of the aggregate principal amount of the Subordinated Debentures may direct the Property Trustee to give such consent. If the Property Trustee fails to enforce its rights under the Declaration (including, without limitation, its rights, powers and privileges as the holder of the Subordinated Debentures under the Indenture), a holder of Preferred Securities may, to the extent permitted by law, institute a legal proceeding directly against any person to enforce the Property Trustee's rights under the Declaration without first instituting any legal proceeding against the Property Trustee or any other person or entity. Following and during the continuance of a Declaration Event of Default that results from the failure of Ohio Edison to pay principal of or interest on the Subordinated Debentures when due, a holder may also proceed directly against Ohio Edison, without first waiting to determine if the Property Trustee has enforced its rights under the Indenture, to obtain payment of such principal or interest on Subordinated Debentures having a principal amount equal to the aggregate liquidation amount of the Preferred Securities owned of record by such holder. The Property Trustee shall notify all holders of the Preferred Securities of any notice of default received from the Debenture Trustee with respect to the Subordinated Debentures. Such notice shall state that such Indenture Event of Default also constitutes a Declaration Event of Default. The Property Trustee shall not take any action described in clause (ii), (iii) or (iv) above unless the Property Trustee has obtained an opinion of independent tax counsel to the effect that, as a result of such action, the Trust will not be classified as other than a grantor trust for United States federal income tax purposes. In the event the consent of the Property Trustee, as the holder of the Subordinated Debentures, is required under the Indenture with respect to any amendment, modification or termination of the Indenture, the Property Trustee shall request the direction of the holders of the Trust Securities with respect to such amendment, modification or termination. The Property Trustee shall vote with respect to such amendment, modification or termination as directed by a majority in liquidation amount of the Preferred Securities and, if no Declaration Event of Default has occurred and is continuing, a majority in liquidation amount of the Common Securities, voting together as a single class, provided that where a consent under the Indenture would require the consent of a Super-Majority, the Property Trustee may only give such consent at the direction of the holders of at least the proportion in liquidation amount of the Preferred Securities and Common Securities, respectively, which the relevant Super-Majority represents of the aggregate principal amount of the Subordinated Debentures outstanding. The Property Trustee shall not take any such action in accordance with the directions of the holders of the Trust Securities unless the Property Trustee has obtained an opinion of independent tax counsel to the effect that, as a result of such action, the Trust will not be classified as other than a grantor trust for United States federal income tax purposes. A waiver of an Indenture Event of Default will constitute a waiver of the corresponding Declaration Event of Default. Any required approval or direction of holders of Preferred Securities may be given at a separate meeting of holders of Preferred Securities convened for such purpose, at a meeting of all of the holders of Trust Securities or pursuant to written consent. The Regular Trustees will cause a notice of any meeting at which holders of Preferred Securities are entitled to vote, or of any matter upon which action by written consent of such holders is to be taken, to be mailed to each holder of record of Preferred Securities. Each such notice will include a statement setting forth (i) the date of such meeting or the date by which such action is to be taken, (ii) a description of any resolution proposed for adoption at such meeting on which such holders are entitled to vote or of such matter upon which written consent is sought and (iii) instructions for the delivery of proxies or consents. No vote or consent of the holders of Preferred Securities will be required for the Trust to redeem and cancel Preferred Securities or distribute Subordinated Debentures in accordance with the Declaration. Notwithstanding that holders of Preferred Securities are entitled to vote or consent under any of the circumstances described above, any of the Preferred Securities that are owned at such time by Ohio Edison or 47 50 any entity directly or indirectly controlling or controlled by, or under direct or indirect common control with, Ohio Edison, shall not be entitled to vote or consent and shall, for purposes of such vote or consent, be treated as if they were not outstanding. The procedures by which holders of Preferred Securities registered in the name of and held by a Depository Institution or its nominee may exercise their voting rights are described below. See "-- Book-Entry; Delivery and Form." Holders of the Preferred Securities will have no rights to appoint or remove the Company Trustees, who may be appointed, removed or replaced solely by Ohio Edison, as the holder of all the Common Securities. MODIFICATION OF THE DECLARATION The Declaration may be amended or modified if approved and executed by a majority of the Regular Trustees, provided that if any proposed amendment provides for, or the Regular Trustees otherwise propose to effect, (i) any action that would adversely affect the powers, preferences or special rights of the Trust Securities, whether by way of amendment to the Declaration or otherwise or (ii) the dissolution, winding-up or termination of the Trust other than pursuant to the terms of the Declaration, then the holders of the Trust Securities as a single class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of at least a majority in liquidation amount of the Trust Securities affected thereby. In the event any amendment or proposal referred to in clause (i) above would adversely affect only the Preferred Securities or the Common Securities, then only the affected class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of a majority in liquidation amount of such class of Trust Securities. Notwithstanding the foregoing, no amendment or modification may be made to the Declaration if such amendment or modification would (i) cause the Trust to be classified for purposes of United States federal income taxation as other than a grantor trust, (ii) reduce or otherwise adversely affect the powers of the Property Trustee or (iii) cause the Trust to be deemed to be an "investment company" which is required to be registered under the 1940 Act. EXPENSES AND TAXES In the Declaration, Ohio Edison has agreed to pay for all debts and other obligations (other than with respect to the Trust Securities) and all costs and expenses of the Trust (including costs and expenses relating to the organization of the Trust, the fees and expenses of the Company Trustees and the costs and expenses relating to the operation of the Trust) and to pay any and all taxes and all costs and expenses with respect thereto (other than United States withholding taxes) to which the Trust might become subject. The foregoing obligations of the Trust under the Declaration, which are a part of the Back-up Obligations, are for the benefit of, and shall be enforceable by, the Property Trustee and any person to whom any such debts, obligations, costs, expenses and taxes are owed (a "Creditor") whether or not such Creditor has received notice thereof. The Property Trustee and any such Creditor may enforce such obligations of the Trust directly against Ohio Edison, and Ohio Edison has irrevocably waived any right or remedy to require that the Property Trustee or any such Creditor take any action against the Trust or any other person before proceeding against Ohio Edison. Ohio Edison has also agreed in the Declaration to execute such additional agreements as may be necessary or desirable to give full effect to the foregoing agreement of Ohio Edison. MERGERS, CONSOLIDATIONS OR AMALGAMATIONS The Trust may not consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any corporation or other body, except as described below. The Trust may, with the consent of a majority of the Regular Trustees and without the consent of the holders of the Trust Securities, consolidate, amalgamate, merge with or into, or be replaced by a trust organized as such under the laws of any State; provided, that (i) such successor entity either (x) expressly assumes all of the obligations of the Trust with respect to the Trust Securities or (y) substitutes for the Trust Securities other securities having substantially the same terms as the Trust Securities (the "Successor 48 51 Securities") so long as the Successor Securities rank the same as the Trust Securities rank in priority with respect to distributions and payments upon termination, liquidation, redemption, maturity and otherwise, (ii) Ohio Edison expressly acknowledges a trustee of such successor entity which possesses the same powers and duties as the Property Trustee as the holder of the Subordinated Debentures, (iii) the Preferred Securities or any Successor Securities are listed, or any Successor Securities will be listed upon notification of issuance, on any national securities exchange or other organization on which the Preferred Securities are then listed, (iv) such merger, consolidation, amalgamation or replacement does not cause the Preferred Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization, (v) such merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the holders of the Trust Securities (including any Successor Securities) in any material respect (other than with respect to any dilution of the holders' interest in the new entity), (vi) such successor entity has a purpose identical to that of the Trust, (vii) prior to such merger, consolidation, amalgamation or replacement, Ohio Edison has received an opinion from independent counsel to the Trust experienced in such matters to the effect that (A) such merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the holders of the Trust Securities (including any Successor Securities) in any material respect (other than with respect to any dilution of the holders' interest in the new entity), and (B) following such merger, consolidation, amalgamation or replacement, neither the Trust nor such successor entity will be required to register as an investment company under the 1940 Act and (viii) Ohio Edison guarantees the obligations of such successor entity under the Successor Securities at least to the extent provided by the Preferred Securities Guarantee. Notwithstanding the foregoing, the Trust shall not, except with the consent of holders of 100% in liquidation amount of the Trust Securities, consolidate, amalgamate, merge with or into, or be replaced by any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it if such consolidation, amalgamation, merger or replacement would cause the Trust or the successor entity to be classified for United States federal income tax purposes as other than a grantor trust. BOOK-ENTRY; DELIVERY AND FORM Preferred Securities will be issued in fully registered form. Investors may elect to hold their Preferred Securities directly or, subject to the rules and procedures of a Depository Institution described below, hold interests in a global certificate (the "Preferred Securities Global Certificate") registered in the name of a Depository Institution or its nominee. However, tendering holders of Depositary Shares held in global form shall initially receive an interest in the Preferred Securities Global Certificate and tendering holders of Depositary Shares held directly in certificated form shall initially receive Preferred Securities in certificated form, in each case unless otherwise specified in the Letter of Transmittal. See "The Offer -- Procedures for Tendering". The laws of some jurisdictions require that certain purchasers of securities take physical delivery of securities in definitive form. Such laws may impair the ability to transfer beneficial interests in a global Preferred Security. A Depository Institution holds securities that its participants ("Participants") deposit with the Depository Institution. A Depository Institution also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations ("Direct Participants"). A Depository Institution is owned by a number of its Direct Participants and by the NYSE, the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the Depository Institution's system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The rules applicable to a Depository Institution and its Participants are on file with the Commission. Upon issuance of a Preferred Securities Global Certificate, the Depository Institution will credit on its book-entry registration and transfer system the number of Preferred Securities represented by such Preferred Securities Global Certificate to the accounts of institutions that have accounts with the Depository Institution. 49 52 Ownership of beneficial interests in a Preferred Securities Global Certificate will be limited to Participants or persons that may hold interests through Participants. The ownership interest of each actual purchaser of each Preferred Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from the Depository Institution of their purchases, but Beneficial Owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the Direct or Indirect Participants through which the Beneficial Owners purchased Preferred Securities. Transfers of ownership interests in the Preferred Securities are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. A Depository Institution has no knowledge of the actual Beneficial Owners of the Preferred Securities; a Depository Institution's records reflect only the identity of the Direct Participants to whose accounts such Preferred Securities are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. So long as a Depository Institution, or its nominee, is the owner of a Preferred Securities Global Certificate, a Depository Institution or such nominee, as the case may be, will be considered the sole owner and holder of record of the Preferred Securities represented by such Preferred Securities Global Certificate for all purposes. Conveyance of notices and other communications by a Depository Institution to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to the Depository Institution. If less than all of the Preferred Securities are being redeemed, the Depository Institution will reduce pro rata (subject to adjustment to eliminate fractional Preferred Securities) the amount of interest of each Direct Participant in the Preferred Securities to be redeemed. Although voting with respect to the Preferred Securities is limited, in those instances in which a vote is required, the Depository Institution will not consent or vote with respect to Preferred Securities. Under its usual procedures, the Depository Institution would mail an Omnibus Proxy to the Trust as soon as possible after the record date. The Omnibus Proxy assigns the Depository Institution's consenting or voting rights to those Direct Participants to whose accounts the Preferred Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). Distribution payments on the Preferred Securities represented by a Preferred Securities Global Certificate will be made by the Trust to the Depository Institution. The Depository Institution's practice is to credit Direct Participants' accounts on the relevant payment date in accordance with their respective holdings shown on a Depository Institution's records unless the Depository Institution has reason to believe that it will not receive payments on such payment date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices and will be the responsibility of such Participants and not of a Depository Institution, the Trust or Ohio Edison, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of distributions to a Depository Institution is the responsibility of the Trust, disbursement of such payments to Direct Participants is the responsibility of the Depository Institution, and disbursement of such payments to the Beneficial Owners is the responsibility of Direct and Indirect Participants. A Depository Institution may discontinue providing its services as securities depository with respect to the Preferred Securities at any time by giving reasonable notice to the Trust. Under such circumstances, if a successor securities depository is not obtained, Preferred Security certificates will be required to be printed and delivered. Additionally, the Trust may decide to discontinue use of the system of book-entry transfers through the Depository Institution (or a successor depository). In that event, certificates for the Preferred Securities will be printed and delivered. 50 53 The information in this section concerning the Depository Institution and the Depository Institution's book-entry system has been obtained from sources that the Trust and Ohio Edison believe to be reliable, but the Trust and Ohio Edison take no responsibility for the accuracy thereof. INFORMATION CONCERNING THE PROPERTY TRUSTEE The Property Trustee, prior to the occurrence of a default with respect to the Trust Securities and after the curing of all such defaults that may have occurred, undertakes to perform only such duties as are specifically set forth in the Declaration and, after default, shall exercise the same degree of care as a prudent individual would exercise in the conduct of his or her own affairs. Subject to such provisions, the Property Trustee is under no obligation to exercise any of the powers vested in it by the Declaration at the request of any holder of Preferred Securities, unless offered reasonable indemnity by such holder against the costs, expenses and liabilities which might be incurred thereby; but the foregoing shall not relieve the Property Trustee, upon the occurrence of a Declaration Event of Default, from exercising the rights and powers vested in it by the Declaration. The Property Trustee also serves as the Debenture Trustee under the Indenture and as the Preferred Guarantee Trustee under the Preferred Securities Guarantee. Ohio Edison and certain of its subsidiaries maintain deposit accounts and conduct other banking transactions with the Property Trustee in the ordinary course of their businesses. The Property Trustee also acts as trustee under certain indentures relating to borrowings by or for the benefit of the lessors to finance their acquisition of Ohio Edison's interest in the Perry Nuclear Power Plant and Beaver Valley Power Station in connection with the sale and leaseback of certain undivided interests in those plants. Under the sale/leaseback documents, Ohio Edison is ultimately responsible for the payment of this indebtedness. The Property Trustee also acts as trustee under the trust agreement, guarantee and indenture relating to a series of preferred securities issued by another Ohio Edison trust subsidiary. REGISTRAR AND TRANSFER AGENT The Property Trustee will act as initial paying agent and initial transfer agent and registrar and may designate an additional paying agent at any time. The Regular Trustees have the right to appoint and replace any paying agent or transfer agent and registrar. Registration of transfers of Preferred Securities will be effected without charge by or on behalf of the Trust, but upon payment (with the giving of such indemnity as the Regular Trustees may require) in respect of any tax or other government charges which may be imposed in relation to it. The Trust will not be required to register or cause to be registered the transfer of Preferred Securities after such Preferred Securities have been called for redemption. GOVERNING LAW The Declaration and the Preferred Securities will be governed by, and construed in accordance with, the internal laws of the State of Delaware. MISCELLANEOUS The Regular Trustees are authorized and directed to operate the Trust in such a way so that the Trust will not be deemed to be an "investment company" required to be registered under the 1940 Act or characterized for United States federal income tax purposes as other than a grantor trust. Ohio Edison is authorized and directed to conduct its affairs so that the Subordinated Debentures will be treated as indebtedness of Ohio Edison for United States federal income tax purposes. In this connection, the Regular Trustees and Ohio Edison are authorized to take any action, not inconsistent with applicable law, the Declaration or the Restated Articles of Incorporation of Ohio Edison, that each of the Regular Trustees and Ohio Edison determines in their discretion to be necessary or desirable for such purposes, as long as such action does not materially and adversely affect the interests of the holders of the Preferred Securities. Holders of the Preferred Securities will have no preemptive rights. 51 54 DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE Set forth below is a summary of information concerning the Preferred Securities Guarantee that will be executed and delivered by Ohio Edison for the benefit of the holders from time to time of the Preferred Securities. The Preferred Securities Guarantee will be qualified as an indenture under the Trust Indenture Act. The Bank of New York will act as the Preferred Guarantee Trustee. The terms of the Preferred Securities Guarantee will be those set forth therein and those made part thereof by the Trust Indenture Act. The following summary does not purport to be complete and is subject in all respects to the provisions of, and is qualified in its entirety by reference to, the Preferred Securities Guarantee (which is filed as an exhibit to the Registration Statement of which this Prospectus forms a part) and the Trust Indenture Act. The Preferred Securities will be held by the Preferred Guarantee Trustee for the benefit of the holders of the Preferred Securities. GENERAL Pursuant to the Preferred Securities Guarantee, Ohio Edison will irrevocably and unconditionally agree, to the extent set forth therein, to pay in full to the holders of the Preferred Securities the Guarantee Payments (as defined herein) (without duplication of amounts theretofore paid by the Trust), to the extent not paid by the Trust, regardless of any defense, right of set-off or counterclaim that the Trust may have or assert. The following payments or distributions with respect to the Preferred Securities to the extent not paid or made by the Trust (the "Guarantee Payments") will be subject to the Preferred Securities Guarantee (without duplication): (i) any accrued and unpaid distributions that are required to be paid on the Preferred Securities, to the extent the Trust has funds available therefor, (ii) the Redemption Price, which includes all accrued and unpaid distributions to the date of the redemption, to the extent the Trust has funds available therefor, with respect to any Preferred Securities called for redemption by the Trust and (iii) upon a voluntary or involuntary termination, dissolution or winding-up of the Trust (other than in connection with the distribution of Subordinated Debentures to the holders of Preferred Securities in exchange for Preferred Securities), the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid distributions on the Preferred Securities to the date of payment, to the extent the Trust has funds available therefor, and (b) the amount of assets of the Trust remaining available for distribution to holders of Preferred Securities in liquidation of the Trust. Ohio Edison's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by Ohio Edison to the holders of Preferred Securities or by causing the Trust to pay such amounts to such holders. The Preferred Securities Guarantee will be a full and unconditional guarantee of the Guarantee Payments with respect to the Preferred Securities from the time of issuance of the Preferred Securities, but will not apply to the payment of distributions and other payments on the Preferred Securities when the Property Trustee does not have sufficient funds in the Property Account to make such distributions or other payments. If Ohio Edison does not make interest payments on the Subordinated Debentures held by the Property Trustee, the Trust will not make distributions on the Preferred Securities issued by the Trust and will not have funds available therefor. See "Risk Factors -- Rights Under the Preferred Securities Guarantee" and "Description of the Subordinated Debentures -- Certain Covenants." Ohio Edison has also agreed separately to guarantee the obligations of the Trust with respect to the Common Securities (the "Common Securities Guarantee") to the same extent as the Preferred Securities Guarantee, except that upon the occurrence and during the continuation of an Indenture Event of Default, holders of Preferred Securities shall have priority over holders of Common Securities with respect to distributions and payments on liquidation, redemption or otherwise. CERTAIN COVENANTS OF OHIO EDISON In the Preferred Securities Guarantee, Ohio Edison will covenant that, so long as the Preferred Securities remain outstanding, if there shall have occurred and is continuing any event that would constitute an event of default under the Preferred Securities Guarantee or the Declaration, then (a) Ohio Edison shall not declare or pay any dividend on, or make any distribution with respect to, or redeem, purchase, acquire or make a 52 55 liquidation payment with respect to, any of its capital stock, (b) Ohio Edison shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by Ohio Edison which rank pari passu with or junior to the Subordinated Debentures and (c) Ohio Edison shall not make any guarantee payments (other than pursuant to the Preferred Securities Guarantee) with respect to the foregoing. However, neither the foregoing restriction (a) nor any other language in the Preferred Securities Guarantee shall prevent Ohio Edison from paying stock dividends where the dividend stock is the same as that on which the dividend is paid. AMENDMENTS AND ASSIGNMENT Except with respect to any changes which do not materially adversely affect the rights of holders of Preferred Securities (in which case no vote will be required), the Preferred Securities Guarantee may be amended only with the prior approval of the holders of not less than a majority in liquidation amount of the outstanding Preferred Securities. The manner of obtaining any such approval of holders of the Preferred Securities is set forth under "Description of the Preferred Securities -- Voting Rights." All guarantees and agreements contained in the Preferred Securities Guarantee shall bind the successors, assigns, receivers, trustees and representatives of Ohio Edison and shall inure to the benefit of the Preferred Guarantee Trustee and the holders of the Preferred Securities then outstanding. TERMINATION OF THE PREFERRED SECURITIES GUARANTEE The Preferred Securities Guarantee will terminate and be of no further force and effect as to the Preferred Securities upon full payment of the Redemption Price of all Preferred Securities, or upon distribution of the Subordinated Debentures to the holders of the Preferred Securities, and will terminate completely upon full payment of the amounts payable upon liquidation of the Trust. The Preferred Securities Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any holder of Preferred Securities must repay to the Trust or Ohio Edison, or their successors, any sums paid to them under such Preferred Securities or the Preferred Securities Guarantee. EVENTS OF DEFAULT An event of default under the Preferred Securities Guarantee will occur upon the failure of Ohio Edison to perform any of its payment or other obligations thereunder. The holders of a majority in liquidation amount of the Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Preferred Guarantee Trustee in respect of the Preferred Securities Guarantee or to direct the exercise of any trust or power conferred upon the Preferred Guarantee Trustee under the Preferred Securities Guarantee. If the Preferred Guarantee Trustee fails to enforce the Preferred Securities Guarantee, any holder of Preferred Securities may institute a legal proceeding directly against Ohio Edison to enforce the Preferred Guarantee Trustee's rights under the Preferred Securities Guarantee, without first instituting a legal proceeding against the Trust, the Preferred Guarantee Trustee or any other person or entity. In addition, any record holder of Preferred Securities shall have the right, which is absolute and unconditional, to proceed directly against Ohio Edison to obtain Guarantee Payments, without first waiting to determine if the Preferred Guarantee Trustee has enforced the Preferred Securities Guarantee or instituting a legal proceeding against the Trust, the Preferred Guarantee Trustee or any other person or entity. STATUS OF THE PREFERRED SECURITIES GUARANTEE Ohio Edison's obligations under the Preferred Securities Guarantee to make the Guarantee Payments will constitute an unsecured obligation of Ohio Edison and will rank (i) subordinate and junior in right of payment to all other liabilities of Ohio Edison, including the Subordinated Debentures, (ii) pari passu with the most senior preferred or preference stock issued from time to time by Ohio Edison and with any current or future guarantee entered into by Ohio Edison in respect of any preferred or preference stock of any subsidiary or affiliate of Ohio Edison and (iii) senior to Ohio Edison's common stock. The terms of the Preferred 53 56 Securities provide that each holder of Preferred Securities by acceptance thereof agrees to the subordination provisions and other terms of the Preferred Securities Guarantee. The Preferred Securities Guarantee will constitute a guarantee of payment and not of collection (that is, the guaranteed party may institute a legal proceeding directly against the guarantor to enforce its rights under the guarantee without instituting a legal proceeding against any other person or entity). The Preferred Securities Guarantee will be deposited with the Preferred Guarantee Trustee to be held for the benefit of the holders of the Preferred Securities. Except as otherwise noted herein, the Preferred Guarantee Trustee has the right to enforce the Preferred Securities Guarantee on behalf of the holders of the Preferred Securities. The Preferred Securities Guarantee will not be discharged except by payment of the Guarantee Payments in full (without duplication of amounts theretofore paid by the Trust). Ohio Edison's obligations under the Preferred Securities Guarantee, together with the other Back-up Obligations, in the aggregate provide a full and unconditional guarantee by Ohio Edison of payments due on the Preferred Securities. INFORMATION CONCERNING THE PREFERRED GUARANTEE TRUSTEE The Preferred Guarantee Trustee, prior to the occurrence of a default with respect to the Preferred Securities Guarantee and after the curing of all such defaults that may have occurred, undertakes to perform only such duties as are specifically set forth in the Preferred Securities Guarantee and, after default, shall exercise the same degree of care as a prudent individual would exercise in the conduct of his or her own affairs. Subject to such provisions, the Preferred Guarantee Trustee is under no obligation to exercise any of the powers vested in it by the Preferred Securities Guarantee at the request of any holder of Preferred Securities, unless offered reasonable indemnity against the costs, expenses and liabilities which might be incurred thereby; but the foregoing shall not relieve the Preferred Guarantee Trustee, upon the occurrence of an event of default under the Preferred Securities Guarantee, from exercising the rights and powers vested in it by the Preferred Securities Guarantee. The Preferred Guarantee Trustee also serves as Property Trustee under the Declaration and as Debenture Trustee under the Indenture. GOVERNING LAW The Preferred Securities Guarantee will be governed by, and construed in accordance with, the internal laws of the State of New York. DESCRIPTION OF THE SUBORDINATED DEBENTURES Set forth below is a description of the terms of the Subordinated Debentures. The following description does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the Indenture, to be dated as of [ ], 1996, as supplemented by a First Supplemental Indenture (as so supplemented, the "Indenture"), between Ohio Edison and The Bank of New York, as Trustee (the "Debenture Trustee"), the form of which is filed as an exhibit to the Registration Statement of which this Prospectus forms a part. The terms of the Subordinated Debentures will include those stated in the Indenture and those made a part of the Indenture by reference to the Trust Indenture Act. Certain capitalized terms used herein are defined in the Indenture. Under certain circumstances involving the termination of the Trust following the occurrence of a Special Event, Subordinated Debentures may be distributed to the holders of Trust Securities in liquidation of the Trust. See "Description of the Preferred Securities -- Special Event Redemption or Distribution." If the Subordinated Debentures are distributed to the holders of the Trust Securities, Ohio Edison will use its best efforts to have the Subordinated Debentures listed on the NYSE or on such other exchange as the Preferred Securities are then listed. 54 57 GENERAL The Subordinated Debentures will be issued as unsecured subordinated debt securities under the Indenture. The Subordinated Debentures will be limited in aggregate principal amount to (i) the aggregate liquidation preference of the Preferred Securities issued by the Trust in the Offer and (ii) the proceeds received by the Trust upon issuance of the Common Securities to Ohio Edison (which proceeds will be used to purchase an equal principal amount of Subordinated Debentures). The Subordinated Debentures are not subject to any sinking fund provision. The entire principal amount of the Subordinated Debentures will mature and become due and payable, together with any accrued and unpaid interest thereon, including Additional Interest (as defined herein), if any, on [ ], 2016. If Subordinated Debentures are distributed to holders of Trust Securities in dissolution of the Trust, such Subordinated Debentures will be so issued in fully registered certificated form without coupons in denominations of $25 and integral multiples thereof and may be transferred or exchanged at the offices described below. Payments of principal and interest on Subordinated Debentures will be payable, the transfer of the Subordinated Debentures will be registrable, and Subordinated Debentures will be exchangeable for Subordinated Debentures of other denominations of a like aggregate principal amount, at the corporate trust office of the Debenture Trustee in The City of New York; provided that payments of interest may be made at the option of Ohio Edison by check mailed to the address of the persons entitled thereto and that the payment of principal with respect to any Subordinated Debenture will be made only upon surrender of such Subordinated Debenture to the Indenture Trustee. The Indenture does not contain provisions that afford holders of the Subordinated Debentures protection in the event of a highly leveraged transaction involving Ohio Edison or a decline in the credit quality of Ohio Edison resulting from a change of control transaction. SUBORDINATION The Indenture provides that the Subordinated Debentures are subordinated and junior in right of payment to all Senior Indebtedness of Ohio Edison, whether now existing or hereafter incurred. No payment of principal of (including redemption payments, if any), premium, if any, or interest on, the Subordinated Debentures may be made if (a) any Senior Indebtedness of Ohio Edison is not paid when due and any applicable grace period with respect to such default has ended with such default not being cured or waived or ceasing to exist, or (b) the maturity of any Senior Indebtedness has been accelerated because of a default. Upon any distribution of assets of Ohio Edison to creditors upon any dissolution, winding-up, liquidation or reorganization, whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or other proceedings, all principal of, premium, if any, and interest due or to become due on, all Senior Indebtedness must be paid in full before the holders of the Subordinated Debentures are entitled to receive or retain any payment. Subject to the payment in full of all Senior Indebtedness, the rights of the holders of the Subordinated Debentures will be subrogated to the rights of the holders of Senior Indebtedness to receive payments or distributions applicable to such Senior Indebtedness until all amounts owing on the Subordinated Debentures are paid in full. The term "Senior Indebtedness" shall mean the principal of, premium, if any, interest on and any other payment due pursuant to any of the following, whether outstanding at the date of execution of the Indenture or thereafter incurred, created or assumed: (a) all indebtedness of Ohio Edison on a consolidated basis (other than any obligations to trade creditors) evidenced by notes, debentures, bonds, other securities or other instruments issued by Ohio Edison for money borrowed and capitalized lease obligations; (b) all indebtedness of others of the kinds described in the preceding clause (a) assumed or guaranteed in any manner by Ohio Edison or in effect guaranteed by Ohio Edison; and (c) all renewals, extensions or refundings of indebtedness of the kinds described in either of the preceding clauses (a) or (b), unless, in the case of any particular indebtedness, renewal, extension or 55 58 refunding, the instrument creating or evidencing the same or the assumption or guarantee of the same expressly provides that such indebtedness, renewal, extension or refunding is not superior in right of payment to or is pari passu with the Subordinated Debentures. The Indenture does not limit the aggregate amount of Senior Indebtedness that may be issued. At December 31, 1995, Ohio Edison had approximately $3.3 billion principal amount of indebtedness for borrowed money constituting Senior Indebtedness on a consolidated basis. CERTAIN COVENANTS If (i) there shall have occurred any event that would constitute an Indenture Event of Default or (ii) Ohio Edison shall be in default with respect to its payment of any obligations under the Preferred Securities Guarantee, then (a) Ohio Edison shall not declare or pay any dividend on, make any distributions with respect to, or redeem, purchase or make a liquidation payment with respect to, any of its capital stock, (b) Ohio Edison shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by Ohio Edison which rank pari passu with or junior to the Subordinated Debentures and (c) Ohio Edison shall not make any guarantee payments (other than pursuant to the Preferred Securities Guarantee) with respect to the foregoing. If Ohio Edison shall have given notice of its election of an Extension Period as provided in the Indenture and such period, or any extension thereof, shall be continuing, then (a) Ohio Edison shall not declare or pay any dividend on, make any distributions with respect to, or redeem, purchase or make a liquidation payment with respect to, any of its capital stock, (b) Ohio Edison shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by Ohio Edison which rank pari passu with or junior to the Subordinated Debentures and (c) Ohio Edison shall not make any guarantee payments (other than pursuant to the Preferred Securities Guarantee) with respect to the foregoing. Notwithstanding the foregoing restrictions, Ohio Edison will be permitted, in any event, to pay any stock dividend where the dividend stock is the same as that on which the dividend is paid. For so long as the Trust Securities remain outstanding, Ohio Edison will covenant (i) to directly or indirectly maintain 100% direct or indirect ownership of the Common Securities of the Trust; provided, however, that any permitted successor of Ohio Edison under the Indenture may succeed to Ohio Edison's ownership of such Common Securities, (ii) not to cause, as sponsor of the Trust, or to permit, as holder of the Common Securities, the termination, dissolution or winding-up of the Trust, except in connection with a distribution of the Subordinated Debentures as provided in the Declaration and in connection with certain mergers, consolidations or amalgamations, (iii) to use its reasonable efforts to cause the Trust (a) to remain a statutory business trust, except in connection with the distribution of Subordinated Debentures to the holders of Trust Securities in liquidation of the Trust, the redemption of all of the Trust Securities of the Trust, or certain mergers, consolidations or amalgamations, each as permitted by the Declaration, and (b) to otherwise continue to be classified as a grantor trust for United States federal income tax purposes and (iv) to use reasonable efforts to cause each holder of Trust Securities to be treated as owning an undivided beneficial interest in the Subordinated Debentures. OPTIONAL REDEMPTION Ohio Edison shall have the right to redeem the Subordinated Debentures, in whole or in part, from time to time, after April 1, 1998, or at any time in certain circumstances upon the occurrence of a Tax Event as described under "Description of the Preferred Securities -- Special Event Redemption or Distribution," upon not less than 30 nor more than 60 days' notice, at a redemption price equal to 100% of the principal amount to be redeemed plus any accrued and unpaid interest, including Additional Interest, if any, to the redemption date. If a partial redemption of the Preferred Securities resulting from a partial redemption of the Subordinated Debentures would result in the delisting of the Preferred Securities, Ohio Edison may only redeem the Subordinated Debentures in whole. 56 59 INTEREST Each Subordinated Debt Security shall bear interest at the rate of [ ]% per annum from [ ], 1996, payable quarterly in arrears on March 31, June 30, September 30, December 31 of each year (each, an "Interest Payment Date"), commencing [ ], 1996, to the person in whose name such Subordinated Debenture is registered on the relevant record date, which shall be fifteen calendar days prior to each Interest Payment Date. In addition, holders of the Subordinated Debentures will be entitled to Pre-Issuance Accrued Distribution at the rate of 7.75% per annum of the principal amount thereof from [ ], 1996 through the Expiration Date, payable on [ ], 1996 to holders of the Preferred Securities on the record date for such distributions. The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. The amount of interest payable for any period shorter than a full quarterly period will be computed on the basis of the actual number of days elapsed in such 90-day quarter. In the event that any date on which interest is payable on the Subordinated Debentures is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. OPTION TO EXTEND INTEREST PAYMENT PERIOD Ohio Edison shall have the right at any time, and from time to time, during the term of the Subordinated Debentures to defer payments of interest by extending the interest payment period for a period not exceeding 20 consecutive quarters, at the end of which Extension Period Ohio Edison shall pay all interest then accrued and unpaid (including any Additional Interest), together with interest thereon at the rate specified for the Subordinated Debentures to the extent permitted by applicable law; provided, that, during any such Extension Period, (a) Ohio Edison shall not declare or pay any dividend on, make any distributions with respect to, or redeem, purchase or make a liquidation payment with respect to, any of its capital stock, (b) Ohio Edison shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by Ohio Edison which rank pari passu with or junior to the Subordinated Debentures and (c) Ohio Edison shall not make any guarantee payments (other than pursuant to the Preferred Securities Guarantee) with respect to the foregoing; provided, however, the foregoing restrictions will not prevent Ohio Edison, in any event, from paying any stock dividend where the dividend stock is the same as that on which the dividend is paid. Prior to the termination of any such Extension Period, Ohio Edison may further defer payments of interest by extending the interest payment period, provided that such Extension Period together with all such previous and further extensions thereof may not exceed 20 consecutive quarters or extend beyond the maturity of the Subordinated Debentures. Upon the termination of any Extension Period and the payment of all amounts then due, Ohio Edison may select a new Extension Period, as if no Extension Period had previously been declared, subject to the above requirements. No interest during an Extension Period, except at the end thereof, shall be due and payable. Ohio Edison has no present intention of exercising its rights to defer payments of interest by extending the interest payment period on the Subordinated Debentures. The right to defer payments of interest will not apply to the Pre-Issuance Accrued Distribution. If the Property Trustee shall be the sole holder of the Subordinated Debentures, Ohio Edison shall give the Regular Trustees and the Property Trustee notice of its selection of an Extension Period one Business Day prior to the earlier of (i) the next succeeding date on which distributions on the Preferred Securities are payable or (ii) the date the Trust is required to give notice to the NYSE or other applicable self-regulatory organization or to holders of the Preferred Securities of the record date or the date such distribution is payable, but in any event not less than one Business Day prior to such record date. The Regular Trustees shall give notice of Ohio Edison's selection of such Extension Period to the holders of the Preferred Securities. If the Property Trustee shall not be the sole holder of the Subordinated Debentures, Ohio Edison shall give the holders of the Subordinated Debentures notice of its selection of such Extension Period ten Business Days prior to the earlier of (i) the relevant Interest Payment Date or (ii) the date Ohio Edison is required to give notice to the NYSE or other 57 60 applicable self-regulatory organization or to holders of the Subordinated Debentures of the record or payment date of such related interest payment. ADDITIONAL INTEREST If at any time the Trust shall be required to pay any taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed by the United States, or any other taxing authority, then, in any such case, Ohio Edison will pay as additional interest ("Additional Interest") such additional amounts as shall be required so that the net amounts received and retained by the Trust after paying such taxes, duties, assessments or other governmental charges will be equal to the amounts the Trust would have received had no such taxes, duties, assessments or other governmental charges been imposed. INDENTURE EVENTS OF DEFAULT In case any Indenture Event of Default shall occur and be continuing, the Property Trustee, as the holder of the Subordinated Debentures, may declare the principal of and the interest on the Subordinated Debentures (including Additional Interest, if any) to be forthwith due and payable and to enforce its other rights as a creditor with respect to the Subordinated Debentures. The Indenture provides that any one or more of the following described events constitutes an "Event of Default" with respect to the Subordinated Debentures: (a) failure for 30 days to pay interest on the Subordinated Debentures, including any Additional Interest in respect thereof, when due; provided, however, that a valid extension of the interest payment period by Ohio Edison shall not constitute a default in the payment of interest for this purpose; or (b) failure to pay principal on the Subordinated Debentures when due whether at maturity, upon earlier redemption or otherwise; or (c) failure to comply with any of its other agreements (other than those specifically relating to another series of subordinated debt securities) contained in the Indenture for 90 days after written notice to Ohio Edison from the Debenture Trustee or the holders of at least 25% in aggregate principal amount of the outstanding Subordinated Debentures; or (d) certain events of bankruptcy, insolvency or reorganization of Ohio Edison; or (e) the voluntary or involuntary dissolution, winding-up or termination of the Trust, except in connection with the distribution of Subordinated Debentures to holders of Preferred Securities in liquidation or redemption of their interests in the Trust, the redemption of all outstanding Preferred Securities or certain mergers, consolidations or amalgamations permitted by the Declaration. The holders of a majority in aggregate outstanding principal amount of the Subordinated Debentures may direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Trustee. The Debenture Trustee or the holders of not less than 25% in aggregate outstanding principal amount of the Subordinated Debentures may declare the principal due and payable immediately on default, but the holders of a majority in aggregate outstanding principal amount may rescind such acceleration if all existing Events of Default (other than the non-payment of the principal of and accrued interest, if any, due solely by such acceleration) have been cured or waived and if the rescission would not conflict with any judgment or decree. The holders of a majority in aggregate outstanding principal amount of the Subordinated Debentures may, on behalf of the holders of all the Subordinated Debentures, waive certain past defaults, which shall not include (i) a default in the payment of principal of or accrued interest on the Subordinated Debentures (unless a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration has been deposited with the Debenture Trustee), or (ii) a default that arises out of a breach by Ohio Edison of any of the covenants described in the first two paragraphs of "-- Certain Covenants," above. An Indenture Event of Default also constitutes a Declaration Event of Default. The holders of Preferred Securities in certain circumstances have the right to direct the Property Trustee to exercise its rights as the 58 61 holder of the Subordinated Debentures. See "Description of the Preferred Securities -- Declaration Events of Default" and "-- Voting Rights." In addition, if an Indenture Event of Default results from the failure of Ohio Edison to pay principal of or interest on the Subordinated Debentures when due, during the continuance of such an event of default a holder of Preferred Securities may directly institute proceedings against Ohio Edison, without first waiting to determine if the Property Trustee has enforced its rights under the Indenture, to obtain payment of such principal or interest on Subordinated Debentures having a principal amount equal to the aggregate liquidation amount of the Preferred Securities owned by such holder. BOOK-ENTRY AND SETTLEMENT If any Subordinated Debentures are distributed to holders of Trust Securities (see "Description of the Preferred Securities"), such Subordinated Debentures will be issued in fully registered form without coupons. In such event, investors may elect to hold their Subordinated Debentures directly or, subject to the rules and procedures of a Depository Institution, hold interests in a book-entry certificate registered in the name of a Depository Institution or its nominee. For a description of a Depository Institution's book-entry system, see "Description of the Preferred Securities -- Book-Entry; Delivery and Form." As of the date of this Prospectus, the description herein of a Depository Institution's book-entry system and a Depository Institution's practices as they relate to purchases, transfers, notices and payments with respect to the Preferred Securities apply in all material respects to any Subordinated Debentures registered in the name of and held by a Depository Institution or its nominee. PAYMENT AND PAYING AGENTS Payment of principal of and premium, if any, on the Subordinated Debentures will be made only against surrender to the Paying Agent (as defined in the Indenture) of the Subordinated Debentures. Principal of and premium, if any, and interest on Subordinated Debentures will be payable, subject to any applicable laws and regulations, at the office of the Paying Agent (as defined in the Indenture) or such additional paying agents as Ohio Edison may designate, except that (i) at the option of Ohio Edison payment of any interest may be made by check mailed to the address of the person entitled thereto as such address shall appear in the security register with respect to the Subordinated Debentures and (ii) so long as the registered Holder (as defined in the Indenture) of any Subordinated Debentures is the Property Trustee, the payment of the principal of and interest (including Additional Interest, if any) on such Subordinated Debentures will be made at such place and to such account as the Property Trustee may designate. Payment of interest on the Subordinated Debentures on any Interest Payment Date will be made to the person in whose name the Subordinated Debenture (or predecessor security) is registered at the close of business on the relevant record date for such interest payment. The Debenture Trustee will initially act as Paying Agent with respect to the Subordinated Debentures. Ohio Edison may at any time have one or more additional paying agents, except that if Ohio Edison fails to maintain a Paying Agent, the Debenture Trustee shall act as such. The Debenture Trustee and the Paying Agent shall pay to Ohio Edison upon written request any money or securities held by them for the payment of principal or interest, if any, that remains unclaimed for two years. After that, Holders entitled to the money or securities must look to Ohio Edison for payment unless an applicable abandoned property law dictates otherwise. MODIFICATION OF THE INDENTURE The Indenture contains provisions permitting Ohio Edison and the Debenture Trustee, with the consent of the holders of not less than a majority in principal amount of the Subordinated Debentures, to amend, supplement or waive compliance with any provision of the Indenture or any supplemental indenture affecting that series or the rights of the holders of the Subordinated Debentures; provided that no such amendment, supplement or waiver may, without the consent of the holder of each outstanding Subordinated Debenture 59 62 affected thereby, (i) extend the fixed maturity of the Subordinated Debentures, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, (ii) waive a default in the payment of the principal of, or interest, if any, on any Subordinated Debenture, unless Ohio Edison has paid or deposited with the Debenture Trustee a sum sufficient to pay all matured installments of interest upon all of the Subordinated Debentures and the principal of the Subordinated Debentures that shall have become due otherwise than by acceleration, (iii) make any Subordinated Debenture payable in money or securities other than that stated in the terms thereof, or (iv) reduce the percentage of Subordinated Debentures the holders of which are required to consent to any such amendment, supplement or waiver. In addition, Ohio Edison and the Debenture Trustee may execute, without the consent of or notice to holders of the Subordinated Debentures, any amendment or supplemental indenture for certain other usual purposes including the creation of any new series of subordinated debt securities. SUCCESSOR CORPORATION Ohio Edison may not consolidate with or merge into, or transfer its properties and assets substantially as an entirety to, another corporation unless (i) the successor corporation, which shall be a corporation organized and existing under the laws of the United States or a State thereof, assumes by supplemental indenture all the obligations of Ohio Edison under the Subordinated Debentures and the Indenture, and (ii) immediately after giving effect to such transaction, no Indenture Event of Default shall have occurred and be continuing. The Indenture does not otherwise contain any covenant which restricts the ability of Ohio Edison to merge or consolidate with or into any other corporation, sell or convey all or substantially all of its assets to any person, firm or corporation or otherwise engage in restructuring transactions. DEFEASANCE AND DISCHARGE Under the terms of the Indenture, Ohio Edison will be discharged from any and all obligations in respect of the Subordinated Debentures (except in each case for certain obligations with respect to provisions for payment of the Subordinated Debentures and obligations to maintain records, register the transfer or exchange of Subordinated Debentures, replace stolen, lost or mutilated Subordinated Debentures, maintain paying agencies, compensate and indemnify the Debenture Trustee, and replace the Debenture Trustee under certain circumstances) if Ohio Edison (i) irrevocably deposits with the Debenture Trustee, in trust, moneys or U.S. Government Obligations (as defined in the Indenture) sufficient to pay the principal of, and interest on, all Subordinated Debentures not theretofore cancelled, replaced or paid, all in accordance with their terms and (ii) delivers to the Debenture Trustee an opinion of counsel to the effect that, based upon Ohio Edison's receipt from, or the publication by, the Internal Revenue Service of a ruling or a change in law, the holders of the Subordinated Debentures will not recognize income, gain or loss for United States federal income tax purposes as a result of the deposit, defeasance and discharge and will be subject to United States federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit, defeasance or discharge had not occurred. GOVERNING LAW The Indenture (for all purposes relating to the Subordinated Debentures) and the Subordinated Debentures will be governed by, and construed in accordance with, the internal laws of the State of New York. INFORMATION CONCERNING THE DEBENTURE TRUSTEE The Debenture Trustee, prior to default, undertakes to perform only such duties as are specifically set forth in the Indenture and the Trust Indenture Act and, after default, shall exercise the same degree of care and skill as a prudent individual would exercise under the circumstances in the conduct of his or her own affairs. Subject to such provision, the Debenture Trustee is under no obligation to perform any duty or exercise any right or power, unless it receives indemnity satisfactory to it against any loss, liability or expense. The 60 63 Debenture Trustee also serves as Property Trustee under the Declaration and as the Preferred Guarantee Trustee under the Preferred Securities Guarantee. Ohio Edison and certain of its subsidiaries maintain deposit accounts and conduct other banking transactions with the Debenture Trustee in the ordinary course of their businesses. The Debenture Trustee also acts as trustee under certain indentures relating to borrowings by or for the benefit of the lessors to finance their acquisition of Ohio Edison's interest in the Perry Nuclear Power Plant and Beaver Valley Power Station in connection with the sale and leaseback of certain undivided interests in those plants. Under the sale/leaseback documents, Ohio Edison is ultimately responsible for the payment of this indebtedness. The Debenture Trustee also acts as trustee under the trust agreement, guarantee and indenture relating to a series of preferred securities issued by another Ohio Edison trust subsidiary. MISCELLANEOUS Ohio Edison will have the right at all times to assign any of its rights or obligations under the Indenture to a direct or indirect wholly owned subsidiary of Ohio Edison; provided, that in the event of any such assignment, Ohio Edison will remain liable for all such obligations. Subject to the foregoing, the Indenture will be binding upon the parties thereto and their respective successors. The Indenture provides that Ohio Edison will pay all costs and expenses of the Trust. EFFECT OF OBLIGATIONS UNDER THE SUBORDINATED DEBENTURES AND THE PREFERRED SECURITIES GUARANTEE As set forth in the Declaration, the Trust exists for the purpose of (a) issuing (i) its Preferred Securities in exchange for Class A Shares validly tendered in the Offer and delivering such Class A Shares to Ohio Edison in consideration of the deposit by Ohio Edison in the Trust, as Trust assets, of Subordinated Debentures having an aggregate stated principal amount equal to the aggregate stated liquidation amount of such Preferred Securities, and (ii) its Common Securities to Ohio Edison in exchange for cash and investing the proceeds thereof in an equivalent amount of Subordinated Debentures and (b) engaging in such other activities as are necessary, convenient or incidental thereto. As long as payments of interest and other payments are made when due on the Subordinated Debentures, such payments will be sufficient to cover distributions and payments due on the Trust Securities primarily because (i) the aggregate principal amount of the Subordinated Debentures will be equal to the aggregate stated liquidation amount of the Trust Securities; (ii) the interest rate and interest and other payment dates on the Subordinated Debentures will match the distribution rate and distribution and other payment dates for the Preferred Securities; (iii) Ohio Edison is obligated under the Declaration to pay for all costs, expenses, debts and obligations of the Trust (other than with respect to the Trust Securities), which obligation is one of the Back-up Obligations; and (iv) the Declaration provides that Ohio Edison Trustees shall not cause or permit the Trust to, among other things, engage in any activity that is not consistent with the purposes of the Trust. Payments of distributions (to the extent funds therefor are available) and other payments due on the Preferred Securities (to the extent funds therefor are available) are guaranteed by Ohio Edison as and to the extent set forth under "Description of the Preferred Securities Guarantee." If Ohio Edison does not make interest payments on the Subordinated Debentures purchased by the Trust, it is expected that the Trust will not have sufficient funds to pay distributions on the Preferred Securities. The Preferred Securities Guarantee does not apply to any payment of distributions unless and until the Trust has sufficient funds for the payment of such distributions. If Ohio Edison fails to make interest or other payments on the Subordinated Debentures when due (taking into account any Extension Period), the Declaration provides a mechanism whereby the holders of the Preferred Securities, using the procedures described in "Description of the Preferred Securities -- Voting Rights," may direct the Property Trustee to enforce its rights under the Subordinated Debentures or may proceed directly against Ohio Edison to enforce the Subordinated Debentures. If the Property Trustee fails to enforce its rights under the Declaration, a holder of Preferred Securities may institute a legal proceeding 61 64 directly against Ohio Edison to enforce the Property Trustee's rights under the Declaration without first instituting any legal proceeding against the Property Trustee or any other person or entity, including the Trust. In addition, during the continuance of a Declaration Event of Default that results from the failure of Ohio Edison to pay principal of or interest on the Subordinated Debentures when due, a holder may proceed directly against Ohio Edison, without first waiting to determine if the Property Trustee has enforced its rights under the Indenture, to obtain payment of such principal or interest on Subordinated Debentures having a principal amount equal to the aggregate liquidation amount of the Preferred Securities owned of record by such holder. If Ohio Edison fails to make payments under the Preferred Securities Guarantee, the Preferred Securities Guarantee provides a mechanism whereby the holders of a majority in liquidation amount of the Preferred Securities may direct the Preferred Guarantee Trustee to enforce its rights thereunder. If the Preferred Guarantee Trustee fails to enforce the Preferred Securities Guarantee, any holder of Preferred Securities may institute a legal proceeding directly against Ohio Edison to enforce the Preferred Guarantee Trustee's rights under the Preferred Securities Guarantee, without first instituting a legal proceeding against the Trust, the Preferred Guarantee Trustee or any other person or entity. In addition, any record holder of Preferred Securities shall have the right, which is absolute and unconditional, to proceed directly against Ohio Edison to obtain Guarantee Payments, without first waiting to determine if the Preferred Guarantee Trustee has enforced the Preferred Security Guarantee or instituting a legal proceeding against the Trust, the Preferred Guarantee Trustee or any other person or entity. Ohio Edison's obligations under the Preferred Securities Guarantee and the Subordinated Debentures, together with the other Back-up Obligations, in the aggregate, provide a full and unconditional guarantee by Ohio Edison of payments due on the Preferred Securities. DESCRIPTION OF THE CLASS A SHARES The description set forth below of certain provisions of the Preferred Stock and Ohio Edison's Amended Articles of Incorporation, as amended (the "Amended Articles of Incorporation"), do not purport to be complete and are subject to and qualified in their entirety by reference to the Amended Articles of Incorporation and do not relate or give effect to provisions of statutory or common law. Unless otherwise indicated, whenever particular headings or paragraph designations are referred to, they are headings and paragraph designations in Article Fourth of the Amended Articles of Incorporation. Ohio Edison's Preferred Stock, $100 Par Value (the "$100 Preferred Stock"), and Class A Shares are herein collectively referred to as the "Preferred Stock." GENERAL The Preferred Stock is issuable in series of equal rank except that shares of different series may vary in certain respects, which will be determined by the Board of Directors of Ohio Edison and set forth in an amendment to the Amended Articles of Incorporation prior to the issuance such stock. The currently authorized Preferred Stock consists of 6,000,000 shares of Preferred Stock, $100 Par Value ("$100 Preferred Stock"), of which 859,650 shares were issued and outstanding as of December 31, 1995 as shares of various series heretofore established and 8,000,000 shares of Class A Preferred Stock, $25 Par Value ("Class A Preferred Stock"), of which 4,000,000 shares are issued and outstanding. DIVIDENDS Holders of Class A Shares, pari passu with each other series of the Preferred Stock, will be entitled to receive, when and as declared by the Board of Directors out of funds legally available therefor, in preference to the common stock and any other stock which by its terms is junior to the Preferred Stock, to cumulative dividends at the rate of 7.75% per annum, payable quarterly on January 1, April 1, July 1 and October 1 of each year. Dividends must be paid on all shares of Preferred Stock if paid on the shares of any series of Preferred Stock. After payment in full of all dividends accrued on the Preferred Stock, dividends on the 62 65 Common Stock or any other junior stock of Ohio Edison may be declared and paid as the Board of Directors may determine, subject to certain conditions. (General Provisions (A) and (B).) REDEMPTION The Class A Shares are not redeemable on or before April 1, 1998. However, a redemption price of $25 per share plus an amount equal to accumulated and unpaid dividends would be applicable during this period in the event of a voluntary liquidation, dissolution or winding up of Ohio Edison, as described in the first sentence under "-- Liquidation." After April 1, 1998, Ohio Edison may redeem the Class A Shares in whole or in part upon not less than 30 days' notice at a price of $25 per share plus an amount equal to the accumulated and unpaid dividends thereon, if any, to the date set for redemption. The Class A Shares are not subject to a sinking fund. LIQUIDATION Upon any dissolution, liquidation or winding up of Ohio Edison, whether voluntary or involuntary, the holders of Preferred Stock are entitled to receive the par value of their particular series, plus dividends accrued to the date of distribution, before any distribution shall be made to holders of Common Stock or any other class of stock of Ohio Edison which is junior to the Preferred Stock by its terms. Distributions of assets on liquidation must be pro rata in proportion to the amount fixed for each series of Preferred Stock, if the available assets are insufficient to provide for the full payment of such amount. After payment of the full distributive amount to which they are entitled, the holders of such series of the Preferred Stock will have no right or claim to any of the remaining assets of Ohio Edison. Neither the sale of all or substantially all of the property of Ohio Edison nor the merger or consolidation of Ohio Edison into or with any other corporation shall be deemed to be a dissolution, liquidation or winding up of Ohio Edison. VOTING RIGHTS The Amended Articles of Incorporation provides that at all elections of directors of Ohio Edison, and on all other matters, except as otherwise required by the Amended Articles of Incorporation or by the laws of the State of Ohio, the holders of Common Stock shall have the exclusive right to vote; provided, however, that whenever and as often as four quarterly dividends payable on the Preferred Stock of any series shall be in default, in whole or in part, and thereafter until all defaults have been cured, the holders of Preferred Stock shall have the exclusive right, voting separately and as a single class, each share of $100 Preferred Stock being counted as one and each Class A Share being counted as one-quarter, to elect the smallest number of directors which shall constitute a majority of the directors of Ohio Edison, and, in all matters with respect to the governing of the affairs of Ohio Edison other than the election of directors, each share of the $100 Preferred Stock shall be counted as one and each Class A Share shall be counted as one-quarter so that each holder of $100 Preferred Stock shall be entitled to one vote for each share of such stock held, and each holder of Class A Shares shall be entitled to one-quarter vote for each share of such stock held. In the event of defaults entitling the holders of Preferred Stock to vote, the holders of the Common Stock, subject to the rights, if any, existing at the time of the holders of Ohio Edison's Preference Stock, shall have the exclusive right, voting separately and as a class, to elect the greatest number of directors which shall constitute a minority of the directors of Ohio Edison, and, on all other matters, each holder of Common Stock shall be entitled to one vote for each such share of stock held. At all elections of directors of Ohio Edison, each stockholder entitled to vote may cast the whole number of his votes for one candidate or distribute them among two or more candidates as he may prefer. (Voting Powers and Other Rights.) The Amended Articles of Incorporation also provides that certain actions may not be effected without the consent or vote of a specified percentage of the Preferred Stock, voting as a single class; in each such instance, for the purpose of determining the total number of outstanding shares of Preferred Stock (as well as the number of shares voted for or against the questions presented), each share of $100 Preferred Stock shall be counted as one share and each Class A Share shall be counted as one-quarter share. 63 66 RESTRICTIONS ON ISSUANCE OF PRIOR PREFERRED STOCK AND ALTERING TERMS OF PREFERRED STOCK The Amended Articles of Incorporation requires the affirmative vote of holders of 66 2/3% of outstanding shares of the Preferred Stock voting as a single class (1) before any substantially prejudicial change of any rights or preferences of any outstanding shares of the Preferred Stock, (2) before the creation or authorization of shares of stock preferred as to dividends or assets over the Preferred Stock, and (3) within 180 days before the issuance of any such shares so preferred or any securities convertible into such shares. (General Provisions (E).) RESTRICTIONS ON MERGER OR SALE OF ASSETS, ISSUE OF UNSECURED DEBT AND SALE OF ADDITIONAL PREFERRED STOCK The Amended Articles of Incorporation requires the affirmative vote of the holders of a majority of outstanding shares of the Preferred Stock, voting as a single class, each share of $100 Preferred Stock being counted as one share and each share of Class A Preferred Stock being counted as one-quarter share, for the following corporate actions. (1) Merger, consolidation, or any disposition of substantially all of Ohio Edison's property, unless such action has been approved or directed by a Federal regulatory authority. (2) The issue or assumption of unsecured indebtedness in excess of 20% of capital, surplus and secured indebtedness (not counting certain long-term unsecured indebtedness not in excess of 20% of capital, surplus and secured indebtedness), except to redeem all outstanding shares of [$100] Preferred Stock or to refund or retire indebtedness. (3) The issue or other disposition of shares of Preferred Stock (a) when current gross income available for payment of interest, as defined, is less than one and one-half times the aggregate of the annual dividend requirements on all shares of the Preferred Stock and of all classes of senior or equal ranking stock thereupon to be outstanding and annual interest requirements on all indebtedness of Ohio Edison or (b) when the aggregate of capital applicable to common stock and of surplus is less than the amount payable on involuntary liquidation to all shares of the Preferred Stock and of all classes of senior or equal ranking stock thereupon to be outstanding. (General Provisions (E).) The issue or other disposition of shares of the Preferred Stock when current net income available for payment of dividends, as defined, is less than twice the annual dividend requirements on all shares of Preferred Stock and of all classes of senior or equal ranking stock thereupon to be outstanding is prohibited without amendment of the Amended Articles of Incorporation, so long as any shares of the 4.40% Preferred Stock, $100 Par Value ("4.40% Preferred Stock") or of the 3.90% Preferred Stock, $100 Par Value ("3.90% Preferred Stock"), are outstanding, but when no such shares are outstanding, such an issue or disposition would be permitted if approved by the affirmative vote of the holders of at least a majority of the outstanding shares of the Preferred Stock, voting as a single class, each share of $100 Preferred Stock being counted as one share and each share of Class A Preferred Stock being counted as one-quarter share. The issue or disposition of shares of the Preferred Stock, so long as any shares of the 4.40% Preferred Stock or of the 3.90% Preferred Stock are outstanding, is prohibited unless the par or stated value of outstanding Common Stock exceeds $14,366,776 by an amount at least equal to $75 times the number of shares of $100 Preferred Stock, and $18.75 times the number of Class A Shares, thereupon to be outstanding in excess of 200,000 shares thereof (such number of shares to be calculated on the basis of each share of $100 Preferred Stock being counted as one share and each share of Class A Preferred Stock being counted as one-quarter share). No provision is made by which either of the foregoing prohibitions can be waived (without amendments to the Amended Articles of Incorporation) by any vote of holders of shares of the Preferred Stock. (General Provisions (E) and (F).) PREEMPTIVE RIGHTS The holders of the Preferred Stock do not have any preemptive rights. (Article Twelfth.) 64 67 LISTING The Class A Shares are listed on the NYSE and the Chicago Stock Exchange under the symbol "OECPrM". TRANSFER AGENT AND REGISTRAR Ohio Edison, is the transfer agent and registrar for the Class A Shares. TAXATION The following discussion describes certain United States federal income tax consequences of the acquisition, ownership and disposition of Preferred Securities as of the date hereof and represents the opinion of Winthrop, Stimson, Putnam & Roberts, counsel to Ohio Edison, insofar as it relates to matters of law or legal conclusions. Except where noted, it addresses only Preferred Securities held as capital assets and acquired pursuant to the Offer and does not address special situations, such as those of dealers in securities or currencies, financial institutions, life insurance companies, persons holding Preferred Securities as part of a hedging or conversion transaction or a straddle, or United States Holders (as defined below) whose "functional currency" is not the United States dollar. The following discussion is based upon the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations promulgated thereunder, rulings and judicial decisions as of the date hereof, which authorities may be repealed, revoked or modified (possibly on a retroactive basis) so as to result in United States federal tax consequences different from those discussed below. ALL HOLDERS OF CLASS A SHARES ARE ADVISED TO CONSULT THEIR TAX ADVISORS AS TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE EXCHANGE OF CLASS A SHARES FOR PREFERRED SECURITIES AND OF THE OWNERSHIP AND DISPOSITION OF PREFERRED SECURITIES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR OTHER TAX LAWS. UNITED STATES HOLDERS As used herein, a "United States Holder" is a holder that is a citizen or resident of the United States, a corporation, partnership or other entity created or organized in or under the law of the United States or any state, or an estate or trust the income of which is subject to United States federal income taxation regardless of its source. A "Non-United States Holder" is a holder that is not a United States Holder. EXCHANGE OF CLASS A SHARES FOR PREFERRED SECURITIES The exchange of Class A Shares for Preferred Securities pursuant to the Offer will be a taxable transaction. In the case of a United States Holder who owns (actually or constructively) solely Class A Shares, or not more than one percent of the Class A Shares outstanding and not more than one percent of any other class of Ohio Edison stock, gain or loss will be recognized in an amount equal to the difference between the fair market value on the Expiration Date of the Preferred Securities received in the exchange (which will reflect the Pre-Issuance Accrued Distribution) and the exchanging holder's tax basis in the Class A Shares exchanged therefor, and such gain or loss will be long-term capital gain or loss if the Class A Shares have been held for more than one year as of such date. Ohio Edison will furnish to the Exchange Agent the fair market value per security on the Expiration Date of the Preferred Securities. The Exchange Agent will in turn furnish such information to the relevant Depository Institutions. Such information will be furnished to tendering Holders of certificates representing Class A Shares by the Exchange Agent, and to tendering beneficial owners of Class A Shares held in book-entry form by the relevant Depository Institution through the appropriate Direct or Indirect Participant. 65 68 Holders of Class A Shares who own (actually or constructively) more than one percent of any class of Ohio Edison stock are advised to consult their tax advisors as to the income tax consequences of exchanging Class A Shares for Preferred Securities. CLASSIFICATION OF THE TRUST In the opinion of Winthrop, Stimson, Putnam & Roberts, under current law and assuming full compliance with the terms of the Declaration, the Trust will be classified for United States federal income tax purposes as a grantor trust and not as an association taxable as a corporation. Accordingly, each holder will be considered the owner of a pro rata portion of the Subordinated Debentures held by the Trust and will be required to include in gross income his or her pro rata share of the income accrued on the Subordinated Debentures. ORIGINAL ISSUE DISCOUNT Under the terms of the Subordinated Debentures, Ohio Edison has the right to defer payments of interest for up to 20 consecutive quarterly interest payment periods. This option to defer interest payments will cause the Subordinated Debentures to be treated as having been issued with OID. As a result, United States Holders will be required to accrue their pro rata share of OID (as interest income) on an economic accrual basis over the term of the Subordinated Debentures regardless of whether they receive a cash payment with respect to the period to which such income is attributable and even if they use the cash method of accounting, and actual distributions on the Preferred Securities will not be separately reported as taxable income. The amount of OID will be increased or decreased if the "issue price" of a Preferred Security (the fair market value on the Expiration Date, which will reflect the Pre-Issuance Accrued Distribution) is less than or greater than $25. In the event that the issue price of a Preferred Security is less than $25, the Treasury Regulations may require a recalculation of the amount of OID for each period that Ohio Edison does not exercise its right to defer payments of interest. This recalculation could result in minor adjustments to the amount of OID taxable to holders for such period. POTENTIAL EXTENSION OF PAYMENT PERIOD ON THE SUBORDINATED DEBENTURES In the event that Ohio Edison elects to defer interest payments, a United States Holder will continue to accrue OID during an Extension Period, and any Holders who dispose of Preferred Securities prior to the record date for the payment of interest following such extended interest payment period will not receive from the Trust any cash related thereto. See "-- Disposition of the Preferred Securities." RECEIPT OF SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF THE TRUST Under current law, a distribution of the Subordinated Debentures as described under the caption "Description of the Preferred Securities -- Special Event Redemption or Distribution" would be a non-taxable event to holders for United States federal income tax purposes. In the event of such a distribution, a holder would receive an aggregate tax basis and a holding period in the Subordinated Debentures equal to the adjusted tax basis and holding period such holder had in his or her Preferred Securities. Under current law, a redemption of the Subordinated Debentures for cash as described under the caption "Description of the Preferred Securities -- Special Event Redemption or Distribution" would be a taxable event to holders for United States federal income tax purposes. In the event of such a redemption, a holder would recognize gain or loss as if he or she had sold such redeemed Preferred Securities for cash. See "-- Disposition of the Preferred Securities." MARKET DISCOUNT AND BOND PREMIUM Holders other than holders who acquire Preferred Securities pursuant to the Offer may be considered to have acquired their Preferred Securities with market discount, acquisition premium or amortizable bond premium. Such holders are advised to consult their tax advisors as to the tax consequences of the acquisition, ownership and disposition of Preferred Securities. 66 69 DISPOSITION OF THE PREFERRED SECURITIES Upon a sale, exchange or other disposition of Preferred Securities (including a redemption for cash, but excluding a distribution of Subordinated Debentures), a holder will recognize gain or loss equal to the difference between the amount realized and the holder's adjusted tax basis in his or her Preferred Securities. A holder's adjusted tax basis in his or her Preferred Securities will generally equal the holder's initial tax basis (the fair market value on the Expiration Date, which will reflect the Pre-Issuance Accrued Distribution) increased by accrued OID and decreased by the amount of cash distributions. Gain or loss will be capital gain or loss and will be long-term capital gain or loss if, at the time of the sale, exchange or other disposition, the Preferred Securities have been held for more than one year. The Preferred Securities may trade at a price that does not fully reflect the value of accrued but unpaid interest with respect to the underlying Subordinated Debentures. In such event, a holder who disposes of Preferred Securities between record dates for payments of distributions thereon (and consequently does not receive a cash distribution from the Trust for the period prior to such disposition) will nevertheless be required to include as ordinary income accrued but unpaid interest on the Subordinated Debentures through the date of disposition and to add such amount to such holder's adjusted tax basis in the Preferred Securities disposed of. Accordingly, such a holder will recognize a capital loss to the extent the selling price of the Preferred Securities (which may not fully reflect the amount of accrued but unpaid interest) is less than the holder's adjusted tax basis in the Preferred Securities (which will reflect accrued but unpaid interest). Subject to certain limited exceptions, capital losses cannot be applied to offset ordinary income for United States federal income tax purposes. NON-UNITED STATES HOLDERS Under present United States federal income tax law, and subject to the discussion below concerning backup withholding: (i) no withholding of United States federal income tax will be required with respect to a Non-United States Holder upon the exchange of Class A Shares for Preferred Securities pursuant to the Offer, provided such holder certifies to Ohio Edison or its agents, that such holder owns (actually or constructively) solely Class A Shares, or not more than one percent of the Class A Shares outstanding and not more than one percent of any other class of Ohio Edison stock, or that the exchange of Class A Shares for Preferred Securities otherwise qualifies as a sale or exchange for United States federal income tax purposes. If a Non-United States Holder does not provide the certification described in the preceding sentence, Ohio Edison will withhold federal income tax at a rate of 30% of the gross proceeds paid to such holder pursuant to the Offer; (ii) payments by the Trust or any of its paying agents to any Non-United States Holder will not be subject to United States federal withholding tax, provided that (a) the beneficial owner of the Preferred Security does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of Ohio Edison entitled to vote, (b) the beneficial owner of the Preferred Security is not a controlled foreign corporation that is related to Ohio Edison through stock ownership, and (c) either (A) the beneficial owner of the Preferred Security certifies to the Trust or its agent, under penalties of perjury, that it is not a United States Holder and provides its name and address or (B) a securities clearing organization, bank or other financial institution that holds customers' securities in the ordinary course of its trade or business (a "Financial Institution") and holds the Preferred Security in such capacity certifies to the Trust or its agent, under penalties of perjury, that such statement has been received from the beneficial owner by it, or by a Financial Institution between it and the beneficial owner, and furnishes the Trust or its agent with a copy thereof; and (iii) a Non-United States Holder will generally not be subject to United States federal income or withholding tax on any gain realized upon the sale or other disposition of a Preferred Security, except that a Non-United States Holder will be subject to United States federal income tax on any gain if such holder (a) is engaged in a trade or business in the United States and such gain is effectively connected 67 70 with the conduct of such trade or business or (b) is an individual present in the United States for 183 days or more during the taxable year, and certain other conditions are met. INFORMATION REPORTING TO HOLDERS The Property Trustee will report the OID that accrued during the year with respect to the Subordinated Debentures, and any gross proceeds received by the Trust from the retirement or redemption of the Subordinated Debentures, annually to the holders of record of the Preferred Securities and the Internal Revenue Service. The Property Trustee currently intends to deliver such reports to holders of record prior to January 31 following each calendar year. It is anticipated that persons who hold Preferred Securities as nominees for beneficial holders will report the required tax information to beneficial holders on Form 1099. BACKUP WITHHOLDING Payments made in respect of, and proceeds from the sale of, Preferred Securities, or Subordinated Debentures distributed to holders of Preferred Securities, may be subject to a "backup" withholding tax of 31% unless the holder complies with certain identification requirements. Any withheld amounts will generally be allowed as a credit against the holder's federal income tax liability, provided the required information is timely provided to the Internal Revenue Service. PROPOSED TAX LAW CHANGES On March 19, 1996, President Clinton announced a 1997 balanced budget proposal containing, among other things, an amendment that would classify a debt instrument issued on or after December 7, 1995 as equity if the instrument had a maximum term exceeding 20 years and was not classified as indebtedness on the issuer's applicable balance sheet. On March 29, 1996, Senate Finance Committee Chairman William V. Roth, Jr. and House Ways and Means Committee Chairman Bill Archer issued a joint statement indicating their intent that certain legislative proposals initiated by President Clinton, including the 1997 balanced budget proposal, that may be adopted by either of the tax-writing committees of Congress would have an effective date that is no earlier than the date of "appropriate Congressional action." Because the Subordinated Debentures will have a maximum term not exceeding 20 years, the provisions of the proposed amendment are not applicable to the Subordinated Debentures. Ohio Edison cannot predict whether this proposed amendment may be modified or other legislation may be enacted that might affect the character or treatment for United States federal income tax purposes of the Subordinated Debentures or otherwise affect the Preferred Securities offered hereby. If legislation were enacted limiting, in whole or in part, the deductibility by Ohio Edison of interest on the Subordinated Debentures for United States federal income tax purposes, such enactment would be a Tax Event. Depending upon the circumstances following a Tax Event, Ohio Edison could either cause the Trust to be dissolved and the Subordinated Debentures to be distributed to the holders of Preferred Securities, or cause the Subordinated Debentures to be redeemed, which would result in a redemption by the Trust of the Preferred Securities. See "Description of the Preferred Securities -- Special Event Redemption or Distribution." It is expected that the 1997 balanced budget proposal, even if enacted in a manner that would affect the Subordinated Debentures, would not alter the United States federal income tax consequences of the exchange of Class A Shares for Preferred Securities and the ownership and disposition of Preferred Securities. LEGAL MATTERS Certain matters of Delaware law relating to the validity of the Preferred Securities will be passed upon for the Trust by Richards, Layton & Finger, special Delaware counsel to the Trust. The validity of the Preferred Securities Guarantee and the Subordinated Debentures, and certain legal matters in connection with the Preferred Securities, the Preferred Securities Guarantee and the Subordinated Debentures, will be passed upon for the Trust and Ohio Edison by Anthony J. Alexander, Esq., Akron, Ohio, who is Senior Vice President and General Counsel of Ohio Edison, and Winthrop, Stimson, Putnam & Roberts, New York, New York, counsel to Ohio Edison and the Trust. Any tax matters with respect to the Preferred Securities, the 68 71 Subordinated Debentures, and the Preferred Securities Guarantee will be passed on for Ohio Edison and the Trust by Winthrop, Stimson, Putnam & Roberts, New York, New York, counsel to Ohio Edison and the Trust. Certain legal matters in connection with the Preferred Securities will be passed upon for the Dealer Manager by Simpson Thacher & Bartlett (a partnership which includes professional corporations), New York, New York. EXPERTS The consolidated financial statements and related schedule incorporated by reference or included in Ohio Edison's Annual Report on Form 10-K for the year ended December 31, 1995, incorporated by reference in this Prospectus, have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their report dated February 8, 1996 with respect thereto, and are incorporated by reference herein in reliance upon the authority of said firm as experts in accounting and auditing in giving said reports. Reference is made to said reports which include an explanatory paragraph with respect to certain changes in accounting methods as discussed in the Notes to the consolidated financial statements. ERISA CONSIDERATIONS Generally, employee benefit plans that are subject to the Employee Retirement Income Security Act of 1974 ("ERISA"), or Section 4975 of the Code ("Plans"), may purchase Preferred Securities, subject to the investing fiduciary's determination that the investment in Preferred Securities satisfies ERISA's fiduciary standards and other requirements applicable to investments by the Plan. In any case, Ohio Edison and/or any of its affiliates may be considered a "party in interest" (within the meaning of ERISA) or a "disqualified person" (within the meaning of Section 4975 of the Code) with respect to certain plans (generally, Plans maintained or sponsored by, or contributed to by Ohio Edison or any of its affiliates). The acquisition and ownership of Preferred Securities by a Plan (or by an individual retirement arrangement or other Plans described in Section 4975(e)(1) of the Code) with respect to which Ohio Edison or any of its affiliates is considered a party in interest or a disqualified person, may constitute or result in a prohibited transaction under ERISA or Section 4975 of the Code, unless such Preferred Securities are acquired pursuant to and in accordance with an applicable exemption. As a result, Plans with respect to which Ohio Edison or any of its affiliates is a party in interest or a disqualified person should not acquire Preferred Securities. Any other Plans or other entities whose assets include Plan assets subject to ERISA proposing to acquire Preferred Securities should consult with their own ERISA counsel. 69 72 Facsimile copies of the Letter of Transmittal will be accepted. Letters of Transmittal, certificates representing Class A Shares and any other required documents should be sent by each Holder of Class A Shares or his broker, dealer, commercial bank, trust company or other nominee to the Exchange Agent at one of the addresses as set forth below: THE EXCHANGE AGENT IS: THE BANK OF NEW YORK By Mail: By Hand or By Overnight Courier: Tender and Exchange Department Tender & Exchange Department P.O. Box 11248 101 Barclay Street Church Street Station Receive and Deliver Window New York, NY 10286-1248 New York, New York 10286
By Facsimile Transmission: (For Eligible Institutions Only) (212) 815-6213 Confirm by Telephone: (800) 507-9357 The Information Agent Is: (LOGO) Wall Street Plaza New York, New York 10005 (800) 223-2064 (Toll-Free) Banks and Brokers Call Collect: (212) 440-9800 Any questions or requests for assistance or additional copies of this Prospectus, the Letter of Transmittal or for copies of the Notice of Guaranteed Delivery may be directed to the Information Agent at its telephone number and location set forth above. You may also contact your broker, dealer, commercial bank or trust company or other nominee for assistance concerning the Offer. The Dealer Manager for the Offer Is: MERRILL LYNCH & CO. World Financial Center North Tower -- Seventh Floor New York, New York 10281 (212) 236-4565 (Collect) 70 73 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 21. EXHIBITS.
EXHIBIT NO. - - - ----------- 1 -- Form of Dealer Manager Agreement 4.1 -- Form of Indenture between Ohio Edison and The Bank of New York, as Trustee* 4.2 -- Form of First Supplemental Indenture to Indenture* 4.3 -- Declaration of Trust of Ohio Edison Financing Trust II* 4.4 -- Certificate of Trust of Ohio Edison Financing Trust II* 4.5 -- Form of Amended and Restated Declaration of Trust of Ohio Edison Financing Trust II* 4.6 -- Form of Preferred Security (included in Exhibit 4.5 above) 4.7 -- Form of Junior Subordinated Debenture (included in Exhibit 4.2 above) 4.8 -- Form of Guarantee Agreement with respect to Preferred Securities* 5.1 -- Opinion of Anthony J. Alexander, Esq., Senior Vice President and General Counsel of Ohio Edison Company* 5.2 -- Opinion of Richards, Layton & Finger* 8 -- Tax Opinion of Winthrop, Stimson, Putnam & Roberts 12 -- Ohio Edison Company Computations of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Fixed Charges Plus Preferred and Preference Stock Dividend Requirements (Pre-Income Tax Basis)* 15 -- Deleted 23.1 -- Consent of Arthur Andersen LLP 23.2 -- Consents of Anthony J. Alexander, Esq. and Winthrop, Stimson, Putnam & Roberts (included in Exhibits 5.1 and 8 above, respectively) 23.3 -- Consent of Richards, Layton & Finger (included in Exhibit 5.2 above) 24.1 -- Powers of Attorney for Ohio Edison Company* 24.2 -- Power of Attorney for Ohio Edison Company, as sponsor, to sign this Registration Statement on behalf of Ohio Edison Financing Trust II (included in Exhibit 4.3 above) 25.1 -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New York, as Trustee under the Indenture* 25.2 -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New York, as Property Trustee, under the Amended and Restated Declaration of Trust* 25.3 -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New York, as Trustee, under the Preferred Securities Guarantee* 99.1 -- Form of Letter of Transmittal* 99.2 -- Form of Notice of Guaranteed Delivery* 99.3 -- Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees* 99.4 -- Form of Letter to Clients* 99.5 -- Form of Exchange Agent Agreement* 99.6 -- Form of Information Agent Agreement* 99.7 -- Form of Newspaper Announcement* 99.8 -- Form of Ohio Edison Company Letter to Holders of 7.75% Class A Preferred Stock* 99.9 -- Questions and Answers Regarding Preferred Securities* 99.10 -- Form of Designation of Soliciting Dealers*
- - - --------------- * Previously filed. II-1 74 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Ohio Edison Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned thereunto duly authorized, in The City of Akron and State of Ohio on the 12th day of April, 1996. OHIO EDISON COMPANY By: W. R. HOLLAND -------------------------------------- W.R. Holland President and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
NAME TITLE DATE - - - ------------------------------------- -------------------------------- ----------------- W. R. HOLLAND President and Chief Executive April 12, 1996 - - - ------------------------------------- Officer and Director (Principal (W.R. Holland) Executive Officer) H.P. BURG* Senior Vice President and April 12, 1996 - - - ------------------------------------- Director (Principal Financial (H.P. Burg) Officer and Principal Accounting Officer) DONALD C. BLASIUS* Director April 12, 1996 - - - ------------------------------------- (Donald C. Blasius) ROBERT H. CARLSON* Director April 12, 1996 - - - ------------------------------------- (Robert H. Carlson) ROBERT M. CARTER* Director April 12, 1996 - - - ------------------------------------- (Robert M. Carter) CAROL A. CARTWRIGHT* Director April 12, 1996 - - - ------------------------------------- (Carol A. Cartwright) R.L. LOUGHHEAD* Director April 12, 1996 - - - ------------------------------------- (R.L. Loughhead) RUSSELL W. MAIER* Director April 12, 1996 - - - ------------------------------------- (Russell W. Maier)
II-2 75
NAME TITLE DATE - - - ------------------------------------- -------------------------------- ----------------- GLENN H. MEADOWS* Director April 12, 1996 - - - ------------------------------------- (Glenn H. Meadows) PAUL J. POWERS* Director April 12, 1996 - - - ------------------------------------- (Paul J. Powers) CHARLES W. RAINGER* Director April 12, 1996 - - - ------------------------------------- (Charles W. Rainger) GEORGE M. SMART* Director April 12, 1996 - - - ------------------------------------- (George M. Smart) JESSE T. WILLIAMS, SR.* Director April 12, 1996 - - - ------------------------------------- (Jesse T. Williams, Sr.) *By: JOHN H. BYINGTON, JR. - - - ------------------------------------- (Attorney-in-fact) April 12, 1996
Pursuant to the requirements of the Securities Act of 1933, Ohio Edison Financing Trust II certifies that it has reasonable grounds to believe that it meets all of the requirement for filing on Form S-4 and has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of Akron and State of Ohio on the 12th day of April, 1996. OHIO EDISON FINANCING TRUST II By: Ohio Edison Company, as Sponsor By: T.F. STRUCK, II ---------------------------------- T.F. Struck, II Assistant Treasurer II-3 76 EXHIBIT INDEX
EXHIBIT NO. DOCUMENT - - - ----------- ------------------------------------------------------------------------------ 1 -- Form of Dealer Manager Agreement 4.1 -- Form of Indenture between Ohio Edison and The Bank of New York, as Trustee* 4.2 -- Form of First Supplemental Indenture to Indenture* 4.3 -- Declaration of Trust of Ohio Edison Financing Trust II* 4.4 -- Certificate of Trust of Ohio Edison Financing Trust II* 4.5 -- Form of Amended and Restated Declaration of Trust of Ohio Edison Financing Trust II* 4.6 -- Form of Preferred Security (included in Exhibit 4.5 above) 4.7 -- Form of Junior Subordinated Debenture (included in Exhibit 4.2 above) 4.8 -- Form of Guarantee Agreement with respect to Preferred Securities* 5.1 -- Opinion of Anthony J. Alexander, Esq., Senior Vice President and General Counsel of Ohio Edison Company* 5.2 -- Opinion of Richards, Layton & Finger* 8 -- Tax Opinion of Winthrop, Stimson, Putnam & Roberts 12 -- Ohio Edison Company Computations of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Fixed Charges Plus Preferred and Preference Stock Dividend Requirements (Pre-Income Tax Basis)* 15 -- Deleted 23.1 -- Consent of Arthur Andersen LLP 23.2 -- Consents of Anthony J. Alexander, Esq. and Winthrop, Stimson, Putnam & Roberts (included in Exhibits 5.1 and 8 above, respectively) 23.3 -- Consent of Richards, Layton & Finger (included in Exhibit 5.2 above) 24.1 -- Powers of Attorney for Ohio Edison Company* 24.2 -- Power of Attorney for Ohio Edison Company, as sponsor, to sign this Registration Statement on behalf of Ohio Edison Financing Trust II (included in Exhibit 4.3 above) 25.1 -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New York, as Trustee under the Indenture* 25.2 -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New York, as Property Trustee, under the Amended and Restated Declaration of Trust* 25.3 -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New York, as Trustee, under the Preferred Securities Guarantee* 99.1 -- Form of Letter of Transmittal* 99.2 -- Form of Notice of Guaranteed Delivery* 99.3 -- Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees* 99.4 -- Form of Letter to Clients* 99.5 -- Form of Exchange Agent Agreement* 99.6 -- Form of Information Agent Agreement* 99.7 -- Form of Newspaper Announcement* 99.8 -- Form of Ohio Edison Company Letter to Holders of 7.75% Class A Preferred Stock* 99.9 -- Questions and Answers Regarding Preferred Securities* 99.10 -- Form of Designation of Soliciting Dealers*
- - - ------------------------ *Previously filed. 77 REGISTRATION STATEMENT NOS. 33-333-01489 AND 333-01489-01 - - - -------------------------------------------------------------------------------- - - - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 ------------------------ EXHIBITS TO FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ OHIO EDISON FINANCING TRUST II OHIO EDISON COMPANY (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) ------------------------ - - - -------------------------------------------------------------------------------- - - - -------------------------------------------------------------------------------- EX-1 2 FORM OF DEALER MANAGER AGREEMENT 1 EXHIBIT 1 DEALER MANAGER AGREEMENT __________ __, 1996 MERRILL LYNCH & CO. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED Merrill Lynch World Headquarters North Tower World Financial Center New York, New York 10281-1329 Ladies and Gentlemen: Ohio Edison Financing Trust II (the "Trust"), a statutory business trust organized under the Business Trust Act (the "Delaware Act") of the State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. Section 3801 et seq.) all of whose trust interests represented by common securities (the "Common Securities") are held by Ohio Edison Company, an Ohio corporation (the "Company"), proposes to issue its ___% Trust Originated Preferred Securities ("TOPrS") representing preferred undivided beneficial interests in the assets of the Trust (the "Preferred Securities") in exchange for up to 3,600,000 shares of the Company's 7.75% Class A Preferred Stock, $25 Par Value (the "Target Securities"). The Preferred Securities shall have the designation, preferences, rights, powers and restrictions set forth in the Trust's Amended and Restated Declaration of Trust (the "Declaration"). The Preferred Securities will be guaranteed by the Company to the extent described in the Prospectus (as hereinafter defined) and as set forth in the Preferred Securities Guarantee Agreement to be dated as of __________ ___, 1996 (the "Guarantee"), between the Company and The Bank of New York, as trustee (the "Guarantee Trustee"). The offer to exchange securities described above is herein referred to as the "Exchange Offer" and any exchange of Preferred Securities for Target Securities pursuant to the Exchange Offer is herein referred to as an "Exchange". In connection with the Exchange Offer, the Company will deposit in the Trust as trust assets its Junior Subordinated Debentures due _________ __, 1996 (the "Debentures") to be issued pursuant to an Indenture dated as of _________ __, 1996 (the "Indenture") between the Company and the Bank of New York, as trustee (the "Debenture Trustee"), and as set forth in the Prospectus. Each of the Company and the Trust hereby confirms its agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch" or the "Dealer Manager") as follows: 1. REGISTRATION STATEMENT, PROSPECTUS AND OFFERING MATERIALS. The Company and the Trust have prepared and filed with the Securities and Exchange Commission (the "Commission"), under the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder 2 2 (collectively, the "Securities Act"), a registration statement on Form S-4 covering the registration of the Preferred Securities, the Guarantee and the Debentures (the "prospectus"), and will prepare and file with, or electronically transmit for filing to, the Commission, on or prior to the effective date of such registration statement, amendments to such registration statement, including a final prospectus. Such registration statement, including the exhibits thereto and any documents incorporated by reference therein, as amended at the time it becomes effective or as thereafter amended or supplemented from time to time, is herein called the "Registration Statement". The final prospectus included in the Registration Statement (including any documents incorporated in the prospectus by reference) is herein called the "Prospectus", except that if the final prospectus furnished to the Dealer Manager for use in connection with the Exchange Offer differs from the prospectus set forth in the Registration Statement (whether or not such prospectus is required to be filed pursuant to Rule 424 (b)), the term "Prospectus" shall refer to the final prospectus furnished to the Dealer Manager for such use. The terms "supplement" and "amendment" or "amend" as used herein with respect to the Prospectus shall include all documents deemed to be incorporated by reference in the Prospectus that are filed with the Commission subsequent to the date of the Prospectus and prior to the termination of the Exchange Offer by the Company pursuant to the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder (collectively, the "Exchange Act"). The Registration Statement, Prospectus and the related letters from the Dealer Manager to securities brokers, dealers, commercial banks, trust companies and other nominees, letters to beneficial owners of Target Securities, letters of transmittal (the "Letters of Transmittal"), notices of guaranteed delivery (the "Notices of Guaranteed Delivery") and any newspaper announcements, press releases and other offering materials and information the Company may use or prepare, approve or authorize for use in connection with the Exchange Offer, as amended or supplemented from time to time, are herein collectively referred to as the "Offering Materials". 2. EXCHANGE OFFER; AGREEMENT TO ACT AS DEALER MANAGER. (a) The Company and the Trust intend to commence the Exchange Offer as soon as practicable after the Registration Statement becomes effective under the Securities Act by publicly announcing its commencement and by mailing, or causing to be mailed on its behalf, copies of the Prospectus, the related Letters of Transmittal and such of the other Offering Materials as is required or as the Company elects to each holder of Target Securities (the date of the commencement of such distribution being herein called the "Commencement Date"). 3 3 (b) The Company and the Trust hereby retain the Dealer Manager to advise them with respect to the terms and timing of the Exchange Offer and to assist them in the preparation of the Offering Materials and retain and authorize the Dealer Manager to act as dealer manager and to assist the Company and the Trust with the solicitation of Exchanges (each a "Solicitation" and collectively the "Solicitations"). On the basis of the representations and warranties and agreements of the Company and the Trust herein contained and subject to and in accordance with the terms and conditions hereof and of the Offering Materials, the Dealer Manager agrees to advise the Company and the Trust with respect to the terms and timing of the Exchange Offer and to act as Dealer Manager in connection with the Exchange Offer and to assist the Company and the Trust with the Solicitations. The Dealer Manager agrees to use its reasonable best efforts to solicit Exchanges. (c) The Company shall furnish the Dealer Manager, or cause the transfer agent or registrar for the Target Securities (respectively, the "Transfer Agent" and "Registrar") to furnish the Dealer Manager, as soon as practicable after the date hereof (to the extent not previously furnished), with cards or lists in reasonable quantities or copies thereof showing the names of persons who were the holders of record or, to the extent available to the Company, the beneficial owners of the Target Securities as of a recent date, together with their addresses, and the number of shares of Target Securities held by them. Additionally, the Company shall use its best efforts to update, or to cause the Transfer Agent or Registrar to update, such information from time to time during the term of this Agreement as may be reasonably requested by the Dealer Manager. Except as otherwise provided herein, the Dealer Manager agrees to use such information only in connection with the Solicitations. The Dealer Manager shall act hereunder as an independent contractor and nothing herein contained shall make the Dealer Manager an agent of the Trust, the Company or any of its subsidiaries in connection with any Solicitation. Nothing contained in this Agreement shall constitute the Dealer Manager to be a partner of or joint venturer with the Trust, the Company or any of its subsidiaries. (d) The Trust and the Company authorize the Dealer Manager to use the Offering Materials in connection with the Solicitations and for such period of time as any Offering Materials are required by law to be delivered in connection therewith. The Dealer Manager shall not have any obligation to cause any Offering Materials to be transmitted generally to the holders of the Target Securities. The Dealer Manager agrees not to give any written information and not to make any representations to holders of the Target Securities in 4 4 connection with any Solicitation other than as contained in the Offering Materials. (e) The Trust and the Company authorize the Dealer Manager to communicate with any information agent (the "Information Agent") or exchange agent (the "Exchange Agent") appointed by the Company to act in such capacity in connection with the Exchange Offer with respect to matters relating to the Exchange Offer. (f) The Trust and the Company agree that any reference to the Dealer Manager in any Offering Materials or in any newspaper announcement or press release or other document or communication is subject to the Dealer Manager's prior consent, which consent shall not be unreasonably withheld. 3. COMPENSATION. (a) The Company hereby agrees to pay to the Dealer Manager for services rendered and to be rendered by them in connection with the Exchange Offer a fee (the "Management Fee") equal to $__ per share of Target Securities accepted in the Exchange Offer. The Management Fee shall be paid only if the Exchange Offer is consummated, and shall be paid within one week of the consummation of the Exchange Offer. In addition, the Company agrees to reimburse the Dealer Manager directly for all of its reasonable out-of-pocket expenses, including, without limitation, the reasonable fees and expenses of the law firm acting as legal counsel for the Dealer Manager. (b) The Company agrees to pay, or cause to be paid to, each soliciting dealer (including the Dealer Manager acting as a soliciting dealer) whose name has been inserted in the space provided in the Letter of Transmittal for that purpose a fee (the "Soliciting Dealer Fee") equal to $__ per share of Target Securities validly tendered, accepted by the Company and exchanged for Preferred Securities pursuant to the Exchange Offer; PROVIDED, HOWEVER, that no such fee shall be paid with respect to Target Securities tendered, directly or indirectly, by soliciting dealers for their own account and such fee shall not be remitted, in whole or in part, to the beneficial owner of such Target Securities. The Soliciting Dealer Fee shall be payable to the soliciting dealers within one week of the consummation of the Exchange Offer. 4. CERTAIN COVENANTS OF THE TRUST AND THE COMPANY. Each of the Company and the Trust jointly and severally covenants with the Dealer Manager: (a) To use its best efforts to cause the Registration Statement, including any post-effective amendment thereto, to become effective and to notify the Dealer Manager 5 5 immediately and, if requested by the Dealer Manager, to confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall have become effective, or any supplement to the Prospectus or any amended Prospectus or any amended or additional Offering Materials shall have been filed, (ii) of the receipt of any comments from the Commission relating to the Exchange Offer, (iii) of any request by the Commission to amend the Registration Statement or amend or supplement the Prospectus or the other Offering Materials or for additional information relating to the Exchange Offer and (iv) of (A) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or (B) the issuance by the Commission of any order preventing or suspending the use of any of the Offering Materials or (C) the suspension of the qualification of the Preferred Securities for offering or sale in connection with the Exchange Offer in any jurisdiction, (D) the institution or threatening of any proceedings for any of such purposes or (E) the occurrence of any event which could cause the Company to withdraw, rescind, terminate or modify the Exchange Offer or would permit the Company to exercise any right not to accept the Target Securities tendered pursuant to the Exchange Offer. The Company and the Trust will make every reasonable effort to prevent the issuance of any such stop order, the issuance of any order preventing or suspending such use and the suspension of any such qualification and, if any such order is issued or qualification suspended, to obtain the lifting of such order or suspension at the earliest practicable time. (b) Prior to the termination of the Exchange Offer, before amending or supplementing the Registration Statement or the Prospectus, to furnish copies of such proposed amendments or supplements to the Dealer Manager and its counsel within a reasonable time in advance of filing with the Commission of any such amendment or supplement to the Registration Statement, the Prospectus or the other Offering Materials. (c) To furnish promptly to the Dealer Manager, without charge, one signed copy of the Registration Statement, all amendments thereto and any other filing with the Commission in connection with the Exchange Offer, whether filed before or after the Registration Statement becomes effective. (d) To furnish promptly to the Dealer Manager, without charge, as soon as the Registration Statement shall have become effective and during the period mentioned in the second sentence of paragraph (e) below such number of copies of the Prospectus and the other Offering Materials (as supplement or amended) as the Dealer Manager may reasonably request and to cause all amendments and supplements filed with the Commission to be distributed to holders of the 6 6 Target Securities as may be required by the Securities Act and the Exchange Act. (e) To comply in all material respects with the Securities Act, the Exchange Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), in connection with the Offering Materials, the Exchange Offer and the transactions contemplated hereby and thereby, as applicable. If at any time when the Prospectus is required by the Securities Act or Exchange Act to be delivered in connection with any Solicitation or Exchange any event shall occur or condition shall exist as a result of which it is necessary to amend the Registration Statement or amend or supplement the Prospectus or any other Offering Materials in order that the Prospectus or such other Offering Materials will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements in the Prospectus or such other Offering Materials, in the light of the circumstances under which they were made, not misleading or if it shall be necessary to amend the Registration Statement or amend or supplement the Prospectus or any other Offering Materials to comply with the requirements of the Securities Act or Exchange Act, the Trust will promptly prepare, file with or electronically transmit for filing to, the Commission, subject to Section 4(b) of this Agreement, and furnish, at its own expense, to the Dealer Manager and to the dealers (whose names and address will be furnished to the Company by the Dealer Manager) to which Preferred Securities may have been exchanged, such amendment or supplement as may be necessary to correct such untrue statement or omission or to make the Registration Statement or the Prospectus or such other Offering Materials comply with such requirements. (f) To endeavor, in cooperation with the Dealer Manager, to qualify the Preferred Securities for offering and sale in connection with the Exchange Offer under the applicable securities or Blue Sky laws of such jurisdictions as the Company and the Trust may elect and to maintain such qualifications in effect for such time as may be required for the consummation of the Exchange Offer; PROVIDED, HOWEVER, that neither the Company nor the Trust shall be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. The Company and the Trust will file such statements and reports as may be required by the laws of each jurisdiction in which the Preferred Securities have been qualified as above provided. (g) To make generally available to its security holders and to the Dealer Manager as soon as practicable an 7 7 earning statement covering a twelve-month period beginning on the first day of the first full fiscal quarter after the date of this Agreement, which earning statement shall satisfy the provisions of Section 11(a) of the Securities Act. (h) To use its best efforts to effect the listing of the Preferred Securities on the New York Stock Exchange ("NYSE"), subject to official notice of issuance, as soon as practicable after the date hereof. (i) To pay all costs and expenses incurred in connection with the performance of its obligations in connection with this Agreement and the Solicitations including, without limitation, (i) the preparation, printing and filing of the Registration Statement (including financial statements and exhibits), as originally filed and as amended, the Prospectus and the other Offering Materials and any amendments or supplements to any of the foregoing, and the cost of furnishing copies thereof to the Dealer Manager, (ii) the preparation and distribution of this Agreement, certificates for the Preferred Securities and any Blue Sky surveys, (iii) the distribution of the Offering Materials to the holders of the Target Securities, (iv) the fees and disbursements of counsel to the Company and the Trust, counsel to the Dealer Manager and the Company's and the Trust's accountants, (v) the qualification of the Preferred Securities under the applicable securities laws in accordance with Section 4(f) and any filing for review of the Exchange Offer with the NASD (including filing fees and fees and disbursements of counsel for the Dealer Manager in connection with such filing with the NASD), (vi) the fees and expenses of the Transfer Agent, the Registrar, the Trustees of the Trust (the "Trustees"), the Indenture Trustee (as defined herein), the Information Agent and the Exchange Agent and (vii) all other costs and expenses incident to the Solicitations incurred by the Trust and the Company and its subsidiaries. The Company agrees to pay all of the aforementioned costs and expenses whether or not the Exchange Offer is consummated. (j) To advise or cause the Exchange Agent to advise the Dealer Manager at 5:00 P.M., New York City time, or as promptly as practicable thereafter, daily (or more frequently if requested), by telephone or facsimile transmission, as of 4:00 P.M on such day with respect to Target Securities tendered as follows: (i) the number of shares of Target Securities validly tendered represented by certificates physically held by the Exchange Agent (or for which the Exchange Agent has received confirmation or receipt of book-entry transfer of such Target Securities into the Exchange Agent's account at a Book-Entry Transfer 8 8 Facility (as defined in the Prospectus) pursuant to the procedures set forth in the Exchange Offer) on such day; (ii) the number of shares of Target Securities represented by Notices of Guaranteed Delivery on such day; (iii) the number of shares of Target Securities properly withdrawn on such day; and (iv) the cumulative number of shares of Target Securities in categories (i) through (iii) above. On the day following such oral communication, the Company shall furnish or cause the Exchange Agent to furnish to the Dealer Manager a written report confirming the above information which has been communicated orally. The Company shall furnish or cause the Exchange Agent to furnish to the Dealer Manager such reasonable information on the tendering holders of Targeted Securities as may be requested from time to time. (k) To give the Dealer Manager notice of any change of the expiration time of the Exchange Offer (the "Expiration Time"). (l) During the period beginning on the date of this Agreement and continuing to and including the Exchange Date, not to offer, sell, contract to sell or otherwise dispose of any (A) securities of the Company or the Trust substantially similar to the Debentures or the Preferred Securities or (B) other beneficial interests of the Trust, in each case without the consent of the Dealer Manager. (m) In the case of the Company, to issue the Guarantee concurrently with the transfer of the Preferred Securities as contemplated herein. 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE TRUST. Each of the Company and the Trust jointly and severally represents and warrants to and agrees with the Dealer Manager that: (a) Each preliminary prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 of the Securities Act, will comply when so filed, in all material respects, as to form with the Securities Act and the Exchange Act; the Registration Statement at the time it becomes effective and the Prospectus and any other Offering Materials, on the Commencement Date and on the date on which the Company commences delivery of the Preferred Securities for exchange of the Target Securities pursuant to the Exchange Offer (such date, the "Exchange Date"), will comply, in all material respects, as to form with the Securities Act and the Exchange Act; each part of the Registration Statement when such part becomes effective will not contain and each such part, as amended, if applicable, 9 9 will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and as of the Commencement Date and Exchange Date, none of the Prospectus or the other Offering Materials or any amendments or supplements to such Offering Materials will contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this Section 5(a) do not apply (A) to statements or omissions made based upon and in conformity with information supplied in writing by the Dealer Manager expressly for use in the Registration Statement, Prospectus, any other Offering Materials or any amendments or supplements to any of the foregoing or (B) to that part of the Registration Statement that constitutes the Statements of Eligibility and Qualification on Form T-1 (the "Forms T-1") under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). (b) The Company has the corporate power and authority to execute, deliver and perform its obligations under this Agreement, the Declaration, the Indenture and the Guarantee; and this Agreement has been duly authorized, executed and delivered by the Company. The Trust has the business trust power and authority to execute, deliver and perform its obligations under this Agreement; and this Agreement has been duly authorized, executed and delivered by the Trust. (c) The Preferred Securities to be issued pursuant to the Exchange Offer will be duly authorized by the Declaration and, when issued in exchange for Target Securities pursuant to the Exchange Offer, will be validly issued and (subject to the terms of the Declaration) fully paid and non-assessable undivided beneficial interests in the assets of the Trust, not subject to any preemptive or similar rights, and will conform to all statements relating thereto contained in the Prospectus. Holders of Preferred Securities will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit. (d) The Declaration and the Guarantee have been duly authorized by the Company and, as of the Exchange Date, will have been duly executed and delivered by the Company. Assuming due authorization, execution and delivery of the Declaration by the Trustees thereunder, the Declaration will, as of the Exchange Date, be a valid and binding obligation of the Company and the Trustees, enforceable against the Company and the Trustees in accordance with its terms, subject to the effect of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting the enforcement of 10 10 creditors' rights generally, by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law) and by an implied covenant of good faith and fair dealing. As of the Exchange Date, the Guarantee will be a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the effect of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting the enforcement of creditors' rights generally, by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law) and by an implied covenant of good faith and fair dealing. (e) The Indenture will be duly qualified under the Trust Indenture Act and, assuming due authorization, execution and delivery of the Indenture by the Debenture Trustee and upon execution and delivery by the Company, will be enforceable against the Company in accordance with its terms, subject to the effect of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting the enforcement of creditors' rights generally, by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law) and by an implied covenant of good faith and fair dealing. (f) The Debentures to be deposited in the Trust as trust assets in connection with the Exchange Offer have been duly and validly authorized, and, assuming due authorization, execution and delivery of the Indenture by the Indenture Trustee, when executed and authenticated in accordance with the provisions of the Indenture and delivered to the Trust pursuant to the terms of the Exchange Offer will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Company enforceable against the Company in accordance with their terms, subject to the effect of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting the enforcement of creditors' rights generally, by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law) and by an implied covenant of good faith and fair dealing. (g) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Ohio and has corporate power and authority to conduct its business as described in the Prospectus. (h) The Trust has been duly created and is validly existing in good standing as a business trust under the Delaware Act, is and will be treated as a "grantor trust" 11 11 for federal income tax purposes under existing law, has the business trust power and authority to conduct its business as presently conducted and as described in the Prospectus, and is not required to be authorized to do business in any other jurisdiction. 6. INDEMNIFICATION AND CONTRIBUTION. (a) Each of the Company and the Trust agrees jointly and severally: (A) to indemnify and hold the Dealer Manager harmless against any loss, damage, expense, liability or claim (i) which is caused by any untrue statement or alleged untrue statement of a material fact contained in the Offering Materials (including documents incorporated by reference therein), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such loss damage, expense, liability or claim is caused by any such untrue statement or omission or alleged untrue statement or omission based upon the information furnished in writing to the Company or the Trust by the Dealer Manager expressly for use therein; provided, however, that the foregoing indemnification with respect to any preliminary prospectus shall not inure to the benefit of the Dealer Manager, if a copy of the Prospectus (other than documents incorporated by reference therein) as then amended or supplemented or modified (if the Company shall have furnished any amendments, supplements or modifications thereto) had not been sent or given by or on behalf of the Dealer Manager to the person asserting any such loss, damage, expense, liability or claim at or prior to the written confirmation to such person of the acceptance for exchange of such person's Target Securities, or (ii) which arises out of or is based upon a withdrawal, rescission or modification of or a failure to make or consummate the Exchange Offer; and (B) to indemnify and hold the Dealer Manager harmless against any other loss, damage, expense, liability or claim which otherwise arises out of or is related to this Agreement or the Exchange Offer or the services provided by the Dealer Manager in connection with this Agreement or the Exchange Offer, except to the extent any such loss, damage, expense, liability or claim referred to in this clause (B) is found by a final judgment of a court of competent jurisdiction to have resulted from the Dealer Manager's gross negligence, bad faith or willful misconduct. The Company and the Trust each jointly and severally agrees to indemnify and hold the Dealer Manager harmless against and reimburse the Dealer Manager for any and all reasonable expenses (including reasonable legal fees and expenses) as such expenses are incurred by the Dealer Manager in connection with investigating, preparing for or defending against any such loss, damage, expense, liability or claim, whether or not resulting in any liability, whether 12 12 or not the Dealer Manager is a named party in connection therewith and whether or not such loss, damage, expense, liability or claim results from action initiated or brought by or on behalf of the Company or the Trust, and any amount paid in settlement of any litigation, commenced or threatened, or of any claim whatsoever as set forth herein if such settlement is effected with the prior written consent of the Company and the Trust; PROVIDED, HOWEVER, with respect to clause (B) above, that neither the Company nor the Trust shall be liable for any of the foregoing expenses and any amounts previously paid shall be promptly repaid to the extent that any loss, damage, liability or claim is found by a final judgment of a court of competent jurisdiction to have resulted from the Dealer Manager's gross negligence, bad faith or willful misconduct. The Company and the Trust also agree that the Dealer Manager shall not have any liability (whether direct or indirect, in tort, contract or otherwise) to the Company or the Trust or its or their security holders or creditors related to or arising out of this Agreement or the Exchange Offer or the services provided by the Dealer Manager in connection with this Agreement or the Exchange Offer, except to the extent such liability is found by a final judgment of a court of competent jurisdiction to have resulted from the Dealer Manager's gross negligence, bad faith or willful misconduct and except as expressly provided in the next succeeding paragraph. The Dealer Manager agrees to indemnify and hold harmless the Company and the Trust to the same extent as the foregoing indemnity from the Company and the Trust to the Dealer Manager contained in Section 6(a)(A)(i) above, but only with reference to information relating to the Dealer Manager furnished to the Company in writing by the Dealer Manager expressly for use in the Offering Materials. (b) Promptly after receipt by a person indemnified under this Section 6 of notice of any suit, action, proceeding or investigation with respect to which an indemnified party may be entitled to indemnification hereunder, such indemnified person shall notify the person against whom such indemnity may be sought in writing of the commencement or the written assertion thereof. Following such notification, such indemnifying person may elect in writing to assume the defense of such suit, action, proceeding or investigation and, upon such election, such indemnifying person shall not be liable for any legal costs subsequently incurred by such indemnified person (other than reasonable costs of investigation and providing evidence) in connection therewith, unless (i) such indemnifying person has failed to provide counsel reasonably satisfactory to such indemnified person in a timely manner, (ii) counsel which has been provided by such indemnifying person reasonably determines that its representation of such 13 13 indemnified person would present it with a conflict of interest or (iii) the named parties to such suit, action, proceeding or investigation (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to a conflict of interest between them. In the event of a determination pursuant to clause (i), (ii) or (iii) above, such indemnifying person may not assume such defense and such indemnified person shall be entitled to retain separate counsel of their choice and the fees and expenses of such separate counsel shall be borne by such indemnifying person. Whether or not such indemnifying person shall have assumed the defense of any suit, action, proceeding or investigation, the Company, the Trust and the Dealer Manager agree to cooperate in the defense thereof and shall furnish such records, information, testimony, and attend such conferences, discovery proceedings, hearings, trials and appeals, as may be reasonably requested in connection therewith. (c) If the indemnification provided for in this Section 6 is unavailable to or insufficient to hold harmless an indemnified party under paragraph (a) hereof in respect to any losses, claims, damages or liabilities referred to therein, then each indemnifying party in lieu of indemnifying such indemnified party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect the relative fault of the Company and the Trust on the one hand and of the Dealer Manager on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations, including relative benefit. The relative fault of the Company and the Trust on the one hand and of the Dealer Manager on the other (i) in the case of any untrue or alleged untrue statement of a material fact, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Trust or by the Dealer Manager and the parties' relevant intent, knowledge, access to information and opportunity to correct or prevent such statement or omission and (ii) in the case of any other action or omission, shall be determined by reference to, among other things, whether such action or omission was taken or omitted to be taken by the Company or the Trust or their affiliates or by the Dealer Manager, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action or omission. The Company and the Trust and the Dealer Manager agree that it would not be just and equitable if contribution pursuant to this Section 6 14 14 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this paragraph (c). The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in this Section 6 shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 7. CONDITIONS TO DEALER MANAGER'S OBLIGATIONS. The obligations of the Dealer Manager hereunder are subject as of the Commencement Date and as of the Exchange Date to the accuracy of the representations and warranties of the Company and the Trust contained herein or in certificates of any officer of the Company or the Trust delivered pursuant to the provisions hereof, to the performance, in all material respects, by the Company and the Trust of their obligations hereunder to be performed, and the following additional conditions: (a) On the Commencement Date and the Exchange Date, the Registration Statement shall have become effective under the Securities Act; no stop order suspending the effectiveness of the Registration Statement shall be in effect, and no proceedings for such purpose shall be pending before or, to the Company's or the Trust's knowledge, threatened by the Commission. (b) On the Commencement Date and the Exchange Date, since the respective dates as of which information is given in the Prospectus as amended or supplemented, there shall not have occurred (i) any change, or any development involving a prospective change, in the condition, financial or other, or in the earnings, business or operations, of the Company and its subsidiaries taken as a whole, from that set forth in the Registration Statement, that in the Dealer Manager's judgment is material and adverse and which makes it, in the Dealer Manager's judgment, impracticable to solicit Exchanges; or (ii) any downgrading in the rating accorded any of the Company's securities by any "nationally recognized statistical rating organization" as such term is defined for purposes of Rule 436 (g)(2) under the Securities Act (a "Rating"); and subsequent to the execution and delivery of this Agreement and prior to the Exchange Date, no notice shall have been given of an intended or potential downgrading of the Rating of any of the Company's securities. 15 15 (c) On the Commencement Date and the Exchange Date, the Dealer Manager shall have received a certificate, dated such date and signed by an executive officer of the Company, to the effect set forth in clause (b) above and to the effect that the representations and warranties of the Company contained in this Agreement are true and correct in all material respects as of such date and that the Company has complied in all material respects with all of the agreements and satisfied in all material respects all of the conditions on its part to be performed or satisfied on or before such date. The officer signing and delivering such certificate may rely upon the best of such officer's knowledge as to proceedings threatened. (d) On the Commencement Date and the Exchange Date, there shall not have been since the respective dates as of which information is given in the Registration Statement any material adverse change, or any development involving a prospective material adverse change, in the financial condition or results of operations of the Trust; (e) On the Commencement Date and the Exchange Date, the Dealer Manager shall have received a certificate, dated such date and signed by an Administrative Trustee (as defined in the Declaration) to the effect set forth in clause (d) above and to the effect that the representations and warranties of the Trust contained in this Agreement are true and correct in all material respects as of such date and that the Trust has complied in all material respects with all of the agreements and satisfied in all material respects all of the conditions on its part to be performed or satisfied on or before such date. The officer signing and delivering such certificate may rely upon the best of such officer's knowledge as to proceedings threatened. (f) On the Commencement Date and the Exchange Date, the Dealer Manager shall have received a signed opinion of Anthony J. Alexander, Esq., Senior Vice President and General Counsel of the Company, dated as of such date, to the effect that: (i) The Company was duly organized and is validly existing under the laws of the State of Ohio, is duly qualified to do business in the Commonwealth of Pennsylvania as a foreign corporation, and has due corporate authority to carry on the public utility business in which it is engaged and to own and operate the properties owned and used by it in such business; (ii) The Trust was duly created and is validly existing in good standing as a business trust under the Delaware Act, and under the Delaware Act and the Declaration, has the power and authority to own 16 16 property and conduct its business as described in the Prospectus; (iii) The summary of the terms of the Preferred Securities and the Debentures contained in the Prospectus fairly describes the provisions thereof required to be described by the registration statement form; (iv) The Preferred Securities have been duly authorized by the Declaration, and, when issued and delivered in exchange for Target Securities pursuant to the Exchange Offer, will be validly issued, and subject to the qualifications set forth in such opinion, fully paid and nonassessable undivided beneficial interests in the assets of the Trust, not subject to any preemptive or similar rights; the certificates for the Preferred Securities are in due and proper form; neither the Company as holder of the Common Securities nor any holder of outstanding shares of capital stock of the Company is entitled to preemptive or other rights to subscribe for the Preferred Securities; (v) The Debentures have been duly authorized, executed, authenticated and delivered and constitute valid and binding obligations of the Company enforceable against the Company in accordance with the terms thereof, subject to the effect of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting the enforcement of creditors' rights generally, by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law) and by an implied covenant of good faith and fair dealing; (vi) All legally required proceedings in connection with the authorization, issue and validity of the Preferred Securities and the Debentures and the Exchange of the Preferred Securities by the Trust and the sale of the Debentures by the Company to the Trust in accordance with this Agreement have been taken and all legally required orders, consents or other authorizations or approvals of the Commission, of the Public Utilities Commission of Ohio and of any other public boards or bodies (other than in connection with or in compliance with the provisions of the securities or Blue Sky laws of any jurisdiction, as to which such counsel need not express an opinion) have been obtained; (vii) The Indenture, the Declaration and the Guarantee have been duly qualified under the Trust Indenture Act; the Registration Statement has become 17 17 effective under the Securities Act, and, to the best of the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the Securities Act; (viii) This Agreement has been duly authorized, executed and delivered by the Company and the Trust; (ix) The execution, delivery and performance by the Company of the Declaration, the Indenture and the Guarantee have been duly authorized by all necessary corporate action on the part of the Company; the Declaration, the Indenture and the Guarantee have been duly executed and delivered by the Company and constitute valid and legally binding instruments of the Company, enforceable against the Company in accordance with the terms thereof, subject to the effect of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting the enforcement of creditors' rights generally, by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law) and by an implied covenant of good faith and fair dealing; (x) The Registration Statement, the Prospectus and any supplements or amendments thereto (except for the financial statements and other financial and statistical data therein, as to which such counsel need not express an opinion), as of their respective effective or issue dates, complied as to form in all material respects with the requirements of the Securities Act and the Trust Indenture Act and the applicable rules and regulations of the Commission thereunder; (xi) Each document incorporated by reference in the Prospectus, as such document was originally filed pursuant to the Securities Act or the Exchange Act (except for the financial statements and other financial and statistical data therein, as to which such counsel need not express an opinion), complied as to form when so filed in all material respects with the requirements of the Securities Act or the Exchange Act pursuant to which it was filed and the applicable rules and regulations of the Commission thereunder; (xii) To the best knowledge of such counsel, no order directed to the adequacy of any document incorporated by reference in the Prospectus has been issued by the Commission, and no challenge by the 18 18 Commission has been made to the adequacy of any such document; and (xiii) The descriptions in the Registration Statement and Prospectus of franchises, regulations, statutes, legal and governmental proceedings and contracts and other documents are accurate as to legal matters, and such counsel does not know of any legal or governmental proceedings required to be described in the Registration Statement or the Prospectus which are not so described (or the descriptions of which are not incorporated by reference therein) as required, nor of any contracts or documents of a character required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement which are not so described (or the descriptions of which are not incorporated by reference therein) or filed as required. In rendering such opinion, such counsel may (i) rely as to matters of Pennsylvania law upon the opinion of Robert P. Wushinske, Esq., Vice President, Secretary and General Counsel of the Company's subsidiary, or of such other member or members of the bar of the Commonwealth of Pennsylvania who may be designated for that purpose by the Company and who shall not be unsatisfactory to counsel for the Dealer Manager and (ii) rely as to matters of Delaware law upon the opinion referred to in paragraph (h) of this Section 7. In addition, such counsel shall state that nothing has come to the attention of such counsel which would lead such counsel to believe that the Registration Statement or any post-effective amendment thereto (except for the financial and statements and other financial and statistical data included therein, as to which such counsel need express no opinion), at the time such Registration Statement or any amendment became effective, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus, as amended or supplemented or modified by the filing of a document incorporated by reference therein (except for the financial statements and other financial and statistical data therein, as to which such counsel need express no opinion), contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (g) On the Commencement Date and the Exchange Date, the Dealer Manager shall have received the favorable opinion of Winthrop, Stimson, Putnam & Roberts, counsel for the Company and the Trust, covering the matters in paragraph (f) of this Section 7, except subdivision (xiii) thereof and stating that the Trust will not be classified as an 19 19 association taxable as a corporation for Federal income tax purposes. In rendering such opinion, such counsel may (i) rely as to all matters of Ohio and Pennsylvania law upon the opinion referred to in paragraph (f) of this Section 7 and (ii) rely as to all matters of Delaware law upon the opinion provided in paragraph (h) of this Section 7. In addition, such counsel shall state that nothing has come to the attention of such counsel which would lead such counsel to believe that the Registration Statement or any post-effective amendment thereto (except for the financial statements and other financial and statistical data therein, as to which such counsel need express no opinion), at the time such Registration Statement or any amendment became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus, as amended or supplemented or modified by the filing of a document incorporated by reference therein (except for the financial statements and other financial and statistical data therein, as to which such counsel need express no opinion), contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (h) On the Commencement Date and the Exchange Date, the Dealer Manager shall have received the favorable opinion of Richards, Layton & Finger, Delaware counsel to the Company and the Trust, to the effect that (i) the Trust was duly created and is validly existing in good standing as a business trust under the Delaware Act, and under the Delaware Act and the Declaration, has the business trust power and authority to own property and conduct its business as described in the Prospectus; (ii) the Preferred Securities have been duly authorized by the Declaration and, when issued and delivered against payment therefor as provided herein, will be validly issued, and subject to the qualifications set forth in such opinion and described below, fully paid and nonassessable undivided beneficial interests in the assets of the Trust, not subject to any preemptive rights; certificates for the Preferred Securities are in due and proper form; (iii) this Agreement has been duly authorized by the Trust; and (iv) no authorization, approval, consent or order of any Delaware court or governmental authority or agency is required to be obtained by the Trust solely in connection with the issuance and Exchange of the Preferred Securities. Such counsel may note that the holders of the Preferred Securities, as beneficial owners of the Trust, will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. Such counsel may also note that the holders of the Preferred Securities may 20 20 be obligated, pursuant to the Declaration, to (i) provide indemnity and/or security in connection with and pay taxes or governmental charges arising from transfers or exchanges of Preferred Security Certificates and the issuance of replacement Preferred Security Certificates, and (ii) provide security and indemnity in connection with requests of or directions to the Property Trustee to exercise its rights and remedies under the Declaration. (i) On the Commencement Date and the Exchange Date, the Dealer Manager shall have received the favorable opinion of Simpson Thacher & Bartlett, counsel for the Dealer Manager, with respect to the issue and exchange of the Preferred Securities. In rendering such opinion, such counsel may (i) rely as to all matters of Ohio and Pennsylvania law upon the opinion referred to in paragraph (f) of this Section 7 and (ii) rely as to all matters of Delaware law upon the opinion provided in paragraph (h) of this Section 7. In addition, such counsel shall state that nothing has come to the attention of such counsel which would lead such counsel to believe that the Registration Statement or any post-effective amendment thereto (except for the financial statements or other financial data therein, as to which such counsel need express no opinion), at the time such Registration Statement or any amendment became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus, as amended or supplemented or modified by the filing of a document incorporated by reference therein (except for the financial statements and other financial data therein, as to which such counsel need express no opinion), contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (j) On the Commencement Date and the Exchange Date, the Dealer Manager shall have received from Arthur Andersen LLP, independent public accountants, in form and substance satisfactory to the Dealer Manager and dated as of such date, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in or incorporated by reference into the Registration Statement or Prospectus. (k) By the Exchange Date, the Company shall have entered into appropriate agreements with the Information Agent and the Exchange Agent for purposes of the Exchange Offer. 21 21 (l) On the Commencement Date and the Exchange Date, the joint and several obligations of the Company and the Trust and the obligations of the Dealer Manager hereunder are subject to the condition that the order or orders of the Public Utilities Commission of Ohio permitting the issuance and Exchange of the Preferred Securities as contemplated hereby and containing no provision unacceptable to the Dealer Manager (it being understood that no order known to the Dealer Manager and in effect on the date hereof contains any such unacceptable provision) shall have been entered not later than the close of business on the day when the public offering price shall be determined and shall be in full force and effect as of the Exchange Date. 8. TERMINATION. (a) This Agreement shall terminate upon the earliest to occur of (i) the Exchange Date, (ii) the date on which the Dealer Manager give notice to the Company and the Trust that any of the conditions specified in Section 7 have not been fulfilled as of any date such conditions are required to be fulfilled pursuant to Section 7 or (iii) the date on which the Company terminates or withdraws the Exchange Offer for any reason (the earliest to occur of clauses (i), (ii) or (iii) being referred to as the "Termination Date"). (b) Notwithstanding termination of this Agreement pursuant to subsection (a) of this Section 8, the obligations of the Company to compensate the Dealer Manager pursuant to Section 3, the representations and warranties contained in Section 5 and the provisions of Section 6 shall survive any termination of this Agreement. 9. NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered, mailed or transmitted by any standard form of telecommunication. Notices to the Dealer Manager shall be directed to Merrill Lynch & Co., World Financial Center, North Tower, New York, New York 10281-1307, attention: Mr. Richard Vaccari, with a copy to Vincent Pagano Jr., Esq., Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017, and notices to the Company and the Trust shall be directed to either of them c/o Ohio Edison Company, 76 South Main Street, Akron, Ohio 44308, attention: Treasurer or Trustees (as the case may be). Any notice under Section 6 hereof may be made by telex or telephone, but if so made, shall be subsequently confirmed promptly in writing. 10. TOMBSTONE. The Company and the Trust acknowledge that the Dealer Manager may, with the prior review and approval of the Company, which approval shall not be unreasonably withheld, place an announcement in such newspapers and periodicals as the Dealer Manager may choose, stating that the Dealer Manager is or was acting as Dealer Manager and financial advisor to the Company and the Trust in connection with the 22 22 Exchange Offer. The costs relating to any such tombstone shall be borne by the Dealer Manager. 11. SURVIVAL OF CERTAIN PROVISIONS. The representations, warranties, indemnities and agreements of the Company and the Trust will remain operative and in full force and effect regardless of any investigation made by or on behalf of any Dealer Manager or any affiliate or controlling person thereof and, subject to Section 8(b), will survive the consummation of the Exchange Offer. 12. GOVERNING LAW. This Agreement shall be construed in accordance with and governed by the laws of the State of New York, without giving effect to principles of conflicts of laws. 13. COUNTERPARTS. This Agreement may be executed in one or more counterparts, and by different parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute one and the same Agreement. 14. SUCCESSORS. This Agreement is made solely for the benefit of the Dealer Manager, the Company and the Trust, and to the extent expressed, the parties indemnified pursuant to Section 6, and no other persons shall acquire or have any right under or by virtue of this Agreement. Nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties hereto or their respective successors and assigns, and, to the extent expressly set forth herein, the parties indemnified pursuant to Section 6 hereof, any rights or remedies under or by reason of this Agreement. Without limiting the generality of the foregoing, the parties acknowledge that nothing in this Agreement, expressed or implied, is intended to confer on holders of the securities of the Trust, the Company or any of its subsidiaries or creditors of the Company or any of its subsidiaries or the respective successors and assigns of such creditors, any rights or remedies under or by reason of this Agreement. If the foregoing is in accordance with your understanding of our agreement, please sign and return to us a counterpart hereof, whereupon this instrument will become a 23 23 binding agreement among the Company, the Trust and the Dealer Manager in accordance with its terms. Very truly yours, OHIO EDISON COMPANY By: _____________________________ Name: Title: OHIO EDISON FINANCING TRUST II By: Ohio Edison Company, as Sponsor By: ____________________________ Name: Title: Confirmed and accepted as of the date first above written: MERRILL LYNCH & CO. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: _______________________________ Name: Title: EX-8 3 TAX OPINION OF WINTHROP, STIMSON, PUTNAM & ROBERTS 1 EXHIBIT 8 April 12, 1996 Ohio Edison Company 76 South Main Street Akron, Ohio 44308 Ohio Edison Financing Trust II c/o Ohio Edison Company 76 South Main Street Akron, Ohio 44308 Re: Ohio Edison Financing Trust II ___% Trust Originated Preferred Securities Ladies and Gentlemen: As counsel to Ohio Edison Company (the "Company") and Ohio Edison Financing Trust II (the "Issuer"), we have assisted in the preparation of the prospectus (the "Prospectus") that forms a part of the registration statement on Form S-4 (File No. 333-01489 and 333-01489-01) under the Securities Act of 1933 (the "Act"), as amended by Amendment No. 1 thereto, as filed with the Securities and Exchange Commission on the date hereof (as so amended, the "Registration Statement"), in connection with the Issuer's offer (the "Offer") to exchange up to 3,600,000 of its __% Trust Originated Preferred Securities (the "Preferred Securities") for a like number of shares of its outstanding 7.75% Class A Preferred Stock, $25 par value (the "Class A Shares"), and the issuance of a like aggregate principal amount of ___% Junior Subordinated Debentures Due 2016, by the Company to the Issuer. Unless otherwise defined herein, all terms used herein shall have the meanings ascribed to them in the Prospectus. We have examined and relied upon the Registration Statement and, in each case as filed as an exhibit to the Registration Statement, (i) the form of Amended and Restated Declaration of Trust among the Company, as Sponsor, and the several trustees named therein, (ii) the form of Indenture between the Company and The Bank of New York, as Trustee, and (iii) the form of Preferred Securities Guarantee Agreement 2 between the Company, as Guarantor, and The Bank of New York, as Preferred Guarantee Trustee. Based on the foregoing and on our consideration of such other information as we have deemed necessary and appropriate, we hereby confirm, subject to the qualifications contained therein, our opinion as set forth in the Prospectus under the caption "Taxation." We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm under the heading "Taxation" in the Prospectus. In giving such consent, we do not thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Act. Very truly yours, Winthrop, Stimson, Putnam & Roberts EX-23.1 4 CONSENT OF ARTHUR ANDERSEN LLP 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Registration Statement of our report dated February 8, 1996, incorporated by reference or included in Ohio Edison Company's Annual Report on Form 10-K for the year ended December 31, 1995, and to all references to our Firm included in this Registration Statement. ARTHUR ANDERSEN LLP Cleveland, Ohio April 12, 1996 -----END PRIVACY-ENHANCED MESSAGE-----