-----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, S8dTo5OcGDJIjk2hZB78UJiT7LY0zV+FapQlBqsyFYWgdcJTJAwq4OZCfhM8nYh4 v13PsTwHKiQhP4cQ57ygGg== 0000950162-96-000331.txt : 19960607 0000950162-96-000331.hdr.sgml : 19960607 ACCESSION NUMBER: 0000950162-96-000331 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19960605 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHWESTERN PUBLIC SERVICE CAPITAL I CENTRAL INDEX KEY: 0001016160 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-05289 FILM NUMBER: 96577295 BUSINESS ADDRESS: STREET 1: TYLER AT SIXTH CITY: AMARILLO STATE: TX ZIP: 79101 BUSINESS PHONE: 8063782121 MAIL ADDRESS: STREET 1: TYLER AT SIXTH CITY: AMARILLO STATE: TX ZIP: 79170 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHWESTERN PUBLIC SERVICE CO CENTRAL INDEX KEY: 0000092521 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 750575400 STATE OF INCORPORATION: NM FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-05289-01 FILM NUMBER: 96577296 BUSINESS ADDRESS: STREET 1: SPS TOWER STREET 2: TYLER AT SIXTH ST CITY: AMARILLO STATE: TX ZIP: 79170 BUSINESS PHONE: 8063782121 MAIL ADDRESS: STREET 1: PO BOX 1261 CITY: AMARILLO STATE: TX ZIP: 79170 S-3 1 REGISTRATION STATEMENT As filed with the Securities and Exchange Commission on June 5, 1996 Registration No. 333-_____ ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM S-3 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 -------------------- SOUTHWESTERN PUBLIC SERVICE CAPITAL I SOUTHWESTERN PUBLIC SERVICE COMPANY (Exact name of Registrant as (Exact name of Registrant as specified in the Trust Agreement) specified in its charter) Delaware New Mexico (State or other jurisdiction of incorporation or organization) Applied for 75-0575400 (I.R.S. Employer Identification Number) Tyler at Sixth Amarillo, Texas 79101 (806) 378-2121 (Address, including zip code, and telephone number, including area code, of principal executive offices) Bill D. Helton Chairman of the Board and Chief Executive Officer Tyler at Sixth Amarillo, Texas 79101 (806) 378-2121 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: Gary W. Wolf, Esq. Cahill Gordon & Reindel 80 Pine Street New York, New York 10005 -------------------- Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement. -------------------- If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. /___/ If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. /_X_/ If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. /___/ If the Form is a post-effective amendment filed pursuant Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. /___/ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. /___/ --------------------
CALCULATION OF REGISTRATION FEE ================================================================================ : Proposed : : maximum : Title of each : aggregate : Amount of class of securities : offering : registration to be registered : price : fee - ------------------------------------------------------------------------------- : : Southwestern Public Service : : Capital I Preferred Securities : (1)(2) : N/A : : Southwestern Public Service : : Company Guarantees with : : respect to Preferred Securities : (1)(2) : N/A Southwestern Public Service : : Company Deferrable Interest : : Subordinated Debentures : (1)(2) : N/A - -------------------------------------------------------------------------------- Total $100,000,000 $34,482.76(3) - ------------------------------------------------------------------------------- (1) In no event will the aggregate maximum offering price of all securities issued pursuant to this Registration Statement exceed $100,000,000. (2) Subject to Footnote (1), there are being registered hereunder a presently indeterminate number of Preferred Securities of Southwestern Public Service Capital I, together with related Guarantees and Deferrable Interest Subordinated Debentures of Southwestern Public Service Company for which no separate consideration will be received by any of the Registrants. (3) Pursuant to Rule 457(o), the registration fee is calculated on the basis of the proposed maximum offering price of the securities.
-------------------- 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 the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. =============================================================================== -2- 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. Neither this prospectus supplement nor the prospectus to which it relates shall 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. SUBJECT TO COMPLETION DATED JUNE 5, 1996 PRELIMINARY PROSPECTUS SUPPLEMENT TO PRELIMINARY PROSPECTUS DATED JUNE 5, 1996 4,000,000 Preferred Securities Southwestern Public Service Capital I __% Cumulative Preferred Securities, Series A (Liquidation Amount $25 per Preferred Security) guaranteed to the extent that the Issuer has funds as set forth herein by SOUTHWESTERN PUBLIC SERVICE COMPANY ------------------ The ___% Cumulative Preferred Securities, Series A (the "Preferred Securities") offered hereby represent undivided preferred beneficial interests in Southwestern Public Service Capital I, a trust formed under the laws of the State of Delaware (the "Issuer" or the "Trust"). The preferred interests represented by the Preferred Secu rities will have a preference under certain circumstances with respect to cash distributions and amounts payable on liquidation, redemption or otherwise over the trust interests represented by the Common Securities (as defined) issued by the Issuer. See "Description of Preferred Securities -- Subordination of Common Securities" in the accompanying Prospectus. Southwestern Public Service Company, a New Mexico corporation (the "Company"), will be the owner of the trust interests represented by the common securities (the "Common Securities") issued by the Issuer. The Issuer exists for the sole purpose of issuing its trust interests and investing the proceeds thereof in the % Deferrable Interest Subordinated Debentures, Due (the "Junior Subordinated Debentures") issued by the Company. Holders of the Preferred Securities will be entitled to receive cumula- tive cash distributions accruing from the date of original issuance and pay- able quarterly in arrears on , , and of each year, commencing , 199 , at the rate of % per annum. The Company has the right to defer interest payments on the Junior Subordinated Debentures by extending the interest payment period thereon at any time for up to 20 consecutive quarters (each an "Extension Period"). If interest payments are so deferred, distributions on the Preferred Secu rities will also be deferred. During an Extension Period, distributions, as well as interest thereon to the extent permitted by law, will continue to accrue, and holders of Preferred Securities will be required to accrue interest income for United States Federal income tax purposes. See "Certain Terms of the Junior Subordinated Debentures -- Option to Extend Interest Payment Period" and "United States Taxation -- Potential Extension of Interest Payment Period and Original Issue Discount." The payment of distributions, out of moneys held by the Issuer, and payments upon liquidation of the Issuer or the redemption of Preferred Securities, as set forth below, are guaranteed to the extent set forth herein by the Company (the "Guarantee"). See "Certain Terms of the Guarantee." If the Company fails to make interest payments on the Junior Subordinated Debentures held by the Issuer, the Issuer will have insufficient funds to pay distributions on the Preferred Securities. The Guarantee does not cover payment of distributions when the Issuer does not have sufficient funds to pay such distributions. In such event, the remedy of a holder of Preferred Securities is to enforce the rights of the Issuer under the Junior Subordinated Debentures held by the Issuer. The Company's obligations under the Guarantee are subordinate and junior in right of payment to all other liabilities of the Company except trade credit and any liabilities that may be made pari passu with or subordinate to the Guarantee expressly by their terms ("Senior Indebtedness"). Wilmington Trust Company is the Property Trustee of the Issuer and the Guarantee Trustee of the Company. The Preferred Securities are subject to mandatory redemption upon repayment of the Junior Subordinated Debentures at maturity or their earlier redemption, in whole or in part. See "Description of Preferred Securities -- Redemption" in the accompanying Prospectus. The Company will have the option at any time on or after , , to redeem, in whole or in part, the Junior Subordinated Debentures, and will also have the right at any time, upon occurrence of a Special Event (as defined herein), to redeem, in whole but not in part, the Junior Subordinated Debentures. See "Description of Junior Subordinated Debentures -- Optional Redemption" in the accompanying Prospectus. The Junior Subordinated Debentures are subordinate and junior in right of payment to all Senior Indebtedness of the Company. As of February 29, 1996, the Company had approximately $765 million principal amount of Senior Indebtedness outstanding. The terms of the Junior Subordinated Debentures do not limit the Company's ability to incur additional Senior Indebtedness. See "Description of Junior Subordinated Debentures -- Subordination" in the accompanying Prospectus. In the event of the liquidation of the Issuer, the holders of the Preferred Securities will be entitled to receive for each Preferred Security a liquidation preference of $25 (the "Liquidation Amount") plus accrued and unpaid distributions thereon to the date of payment and interest thereon to the extent permitted by law, subject to certain limitations. See "Description of Preferred Securities -- Liquidation Distribution Upon Dissolution" in the accompanying Prospectus. Application will be made to have the Preferred Securities approved for listing on the New York Stock Exchange. The Preferred Securities will be represented by a global certificate registered in the name of The Depository Trust Company ("DTC") or its nominee. Beneficial inter ests in the Preferred Securities will be shown on, and transfers thereof will be effected only through, records maintained by Participants (as defined herein) in DTC. Except as described herein, Preferred Securities in certificated form will not be issued in exchange for the global certificate. See "Description of Preferred Securities -- Book-Entry-Only Issuance -- The Depository Trust Company" in the accompanying Prospectus. S-2 -------------------- SEE "RISK FACTORS" BEGINNING ON PAGE S-7 HEREOF FOR CERTAIN INFORMATION RELEVANT TO AN INVESTMENT IN THE PREFERRED SECURITIES, INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENT ON THE PREFERRED SECURITIES AND THE JUNIOR SUBORDINATED DEBENTURES MAY BE DEFERRED AND THE RELATED FEDERAL INCOME TAX CONSEQUENCES. -------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR 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. -------------------- S-3 - ------------------------------------------------------------------------------
Initial Public Under- Proceeds to Offering writing the Price Commission(1) Issuer(2)(3) -------- ------------- ------------ Per Preferred Security $25.00 (2) $ Total $100,000,000 (2) $ - ------------------------------------------------------------------------------- - -------------------- (1) The Issuer and the Company have agreed to indemnify the several Underwriters (as defined herein) against certain liabilities, including liabilities under the Securities Act of 1933, as amended. (2) In view of the fact that the proceeds of the sale of the Preferred Securities will be used to purchase the Junior Subordinated Debentures, the Underwriting Agreement provides that the Company will pay to the Underwriters, as compensation for their arranging the investment therein of such proceeds, $ per Preferred Security (or $ in the aggregate); or, in the case of certain institutions, $ per Preferred Security. Accordingly, the maximum aggregate amount of underwriting commission will be $___, but the actual amount of underwriting commission will be less than such amount to the extent that Preferred Securities are sold to such institutions. (3) Expenses of the offering, which are payable by the Company, are estimated to be $ .
-------------------- The Preferred Securities offered hereby are offered severally by the Underwriters, as specified herein, and subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part. It is expected that delivery of the Preferred Securities will be made only in book-entry form through the facilities of DTC on or about , 199_. -------------------- The date of this Prospectus Supplement is , 199_. -------------------- S-4 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE PREFERRED SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. S-5 PROSPECTUS SUMMARY The following summary information is qualified in its entirety by the detailed information and financial statements incorporated herein by reference. The Offering Securities Offered................. % Cumulative Preferred Securities, Series A Distribution Payment Dates......... , , and , commencing , 199 , subject to deferral as described herein Redemption......................... At the option of the Company at $25 per Preferred Security, in whole or in part, on or after , or, in whole, but not in part, upon the occurrence of a Special Event (as defined herein). Use of Proceeds.................... Proceeds from this offering will be used by the Company for the repayment of short- term debt and for general cor- porate purposes. S-6 RISK FACTORS PROSPECTIVE PURCHASERS OF PREFERRED SECURITIES SHOULD CARE- FULLY REVIEW THE INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS SUPPLEMENT AND IN THE ACCOMPANYING PROSPECTUS AND SHOULD PARTICULARLY CONSIDER THE FOLLOWING MATTERS: Subordination of Guarantee and Junior Subordinated Deben- tures. The Company's obligations under the Guarantee and under the Junior Subordinated Debentures are subordinate and junior in right of payment to all Senior Indebtedness other than indebtedness that may be made pari passu with or subordinate to the Guarantee and the Jun- ior Subordinated Debentures expressly by their terms. As of February 29, 1996, the Company had approximately $765 million princi- pal amount of indebtedness for borrowed money and other obligations constituting Senior Indebtedness outstanding. There are no terms of the Preferred Securities, the Junior Subordinated Debentures or the Guarantee that limit the Company's ability to incur additional Senior Indebtedness. See "Description of Guarantee -- Status of the Guaran- tee" and "Description of Junior Subordinated Debentures -- Subordination." The ability of the Issuer to pay amounts due on its Pre- ferred Securities is solely dependent upon the Company making pay- ments on the Junior Subordinated Debentures held by such Issuer as and when required. Option to Extend Interest Payment Period; Tax Consequences. The Company has the right under the Indenture (as defined herein) to extend, from time to time, the interest payment period on the Junior Subordinated Debentures for a period not exceeding 20 consecutive quarters. Upon the termination of any such extended interest payment period and the payment of all amounts then due, the Company may select a new extended interest payment period, subject to the requirements described herein and in the accompanying Prospectus. During any such extended interest payment period, quarterly distribu- tions on the Preferred Securities would be deferred (but would con- tinue to accrue with additional distributions thereon to the extent permitted by law) by the Issuer. In the event that the Company exer- cises this right, during such period it may not declare or pay divi- dends or distributions (other than dividends or distributions payable in capital stock of the Company or other securities ranking junior in right of payment to the Junior Subordinated Debentures) on, or redeem, purchase, acquire, or make a liquidation payment with respect to any of its capital stock or any security ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures, or make any guarantee payment with respect to the foregoing (other than pro rata payments under the Guarantee) or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company S-7 ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures (except for payments made on any series of Junior Subordinated Debentures upon the stated maturity of such Jun- ior Subordinated Debentures); provided that the Company may redeem, purchase, acquire or make a liquidation payment with respect to any of its capital stock, make any guarantee payment with respect to the foregoing or repurchase, or cause any of its subsidiaries to repur- chase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures with secu- rities (or the proceeds from the issuance of securities) having no higher ranking than the capital stock or the other securities which are to be redeemed, purchased, acquired, with respect to which a liquidation payment is to be made, to which a guarantee payment is to be made with respect to the foregoing or which are to be repurchased. Prior to the termination of any such extended interest payment period, the Company may further extend the interest payment period, provided that such extended interest payment period, together with all previous and further extensions thereof, may not exceed 20 con- secutive quarters and that such extended interest payment period may not extend beyond the maturity or redemption date of the Junior Sub- ordinated Debentures. Upon the termination of any extended interest payment period and the payment of all amounts then due, the Company may select a new extended interest payment period, subject to the foregoing requirements. If the Company should determine to exercise its extension right in the future, the market price of the Preferred Securities is likely to be affected. The Issuer and the Company believe that such an extension of an interest payment period on the Junior Subordinated Debentures is unlikely to occur. See "Certain Terms of the Preferred Securities -- Distributions" and "Certain Terms of the Junior Subordinated Debentures -- Option to Extend Interest Payment Period." Should an interest payment period be extended, Preferred Securities holders will continue to recognize interest income for United States Federal income tax purposes. As a result, such holders will be required to include accruing interest in gross income for United States Federal income tax purposes in advance of the actual receipt of such interest. Furthermore, such holders will not receive the related actual interest payments from the Issuer if they dispose of their Preferred Securities prior to the record date for payment of distributions. See "United States Taxation -- Potential Extension of Interest Payment Period and Original Issue Discount." Rights Under the Guarantee. The Guarantee will be quali- fied as an indenture under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). Wilmington Trust Company will act as indenture trustee under the Guarantee for the purposes of com- pliance with the Trust Indenture Act (the "Guarantee Trustee"). The Guarantee Trustee will hold the Guarantee for the benefit of the S-8 holders of the Preferred Securities and will also be the trustee for the Junior Subordinated Debentures and the Property Trustee (as defined herein). The Guarantee is limited to a guarantee, on a subordinated basis, to the holders of the Preferred Securities, of the payment (but not the collection) of (i) any accrued and unpaid distributions required to be paid on the Preferred Securities, if and only to the extent that the Issuer has funds sufficient to make payment therefor, (ii) the Redemption Price (as defined herein) with respect to Pre- ferred Securities called for redemption by the Issuer, if and only to the extent that the Issuer has funds sufficient to make payment therefor and (iii) upon a voluntary or involuntary dissolution, winding-up or termination of the Issuer (other than in connection with a redemption of all of the Preferred Securities), the lesser of (a) the aggregate Liquidation Amount and all accrued and unpaid dis- tributions on the Preferred Securities to the date of payment, to the extent the Issuer has funds sufficient to make such payment, and (b) the amount of assets of the Issuer remaining available for distribu- tion to holders of the Preferred Securities in liquidation of the Issuer. 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 Guarantee Trustee or to direct the exercise of any trust or power conferred upon the Guarantee Trustee under the Guarantee. If the Guarantee Trustee fails to enforce the Guarantee, any holder of Pre- ferred Securities may institute a legal proceeding directly against the Company to enforce such holder's rights under the Guarantee with- out first instituting a legal proceeding against the Issuer, the Guarantee Trustee or any other person or entity. If the Company were to default on its obligations under the Junior Subordinated Deben- tures, the Issuer would lack available funds for the payment of dis- tributions or amounts payable on redemption of the Preferred Securi- ties or otherwise, and in such event holders of the Preferred Securi- ties would not be able to rely upon the Guarantee for payment of such amounts. In such event, if both the Debenture Trustee and the Issuer, as the holder of the Junior Subordinated Debentures, fail to enforce the rights of the Issuer under the Junior Subordinated Deben- tures, the holders of at least 25% in aggregate Liquidation Amount of the Preferred Securities then outstanding shall have the right to enforce the rights of the Issuer under the Junior Subordinated Deben- tures. See "Description of Guarantee -- Status of the Guarantee" and "Description of Junior Subordinated Debentures -- Subordination" set forth in the accompanying Prospectus. Special Event Redemption. Upon the occurrence of a Special Event (as defined herein), the Company has the right to redeem the Junior Subordinated Debentures, in whole but not in part, in which event the Issuer will redeem the Preferred Securities. See "Certain S-9 Terms of the Preferred Securities -- Redemption" and "-- Special Event Redemption or Distribution." Limited Voting Rights. Holders of Preferred Securities will have limited voting rights, and, except upon the occurrence of an Event of Default (as defined herein) under the Trust Agreement, will not be entitled to vote to appoint, remove or replace the Prop- erty Trustee or the Administrative Trustees (as defined herein) or to increase or decrease the number of the Administrative Trustees. Such voting rights are vested exclusively in the Depositor, unless and until an Event of Default has occurred and is continuing. See "Description of Preferred Securities -- Events of Default; Notice" in the accompanying Prospectus. Trading Characteristics of Preferred Securities. Applica- tion will be made to have the Preferred Securities approved for list- ing on the New York Stock Exchange. If approved for listing, the Preferred Securities are expected to trade at a price that takes into account the value, if any, of accrued and unpaid distributions; thus, purchasers will not pay and sellers will not receive any accrued and unpaid interest with respect to their undivided interests in Junior Subordinated Debentures owned through the Preferred Securities that is not included in the trading price of the Preferred Securities. However, interest on the Junior Subordinated Debentures will be included in the gross income of U.S. Holders (as defined herein) of Preferred Securities as it accrues, rather than when it is paid. See "United States Taxation -- Income from Preferred Securities" and "-- Disposition of Preferred Securities." Because the Preferred Securities pay a dividend at a fixed rate based upon the fixed interest rate payable on the Junior Subor- dinated Debentures, the trading price of the Preferred Securities may decline if interest rates rise. SOUTHWESTERN PUBLIC SERVICE CAPITAL I Southwestern Public Service Capital I is a statutory busi- ness trust formed under the Delaware Business Trust Act pursuant to (i) a Trust Agreement executed by David M. Wilks, President and Chief Operating Officer of the Company, as depositor of the Issuer, and the Property Trustee and (ii) the filing of a Certificate of Trust with the Delaware Secretary of State on June 5, 1996. Such Trust Agree- ment will be amended and restated in its entirety (as so amended and restated, the "Trust Agreement") substantially in the form filed as an exhibit to the Registration Statement of which this Prospectus Supplement is a part. The Trust Agreement will be qualified as an indenture under the Trust Indenture Act. The Issuer exists for the exclusive purposes of (i) issuing the Preferred Securities and the S-10 Common Securities representing trust interests in the Issuer, (ii) purchasing the Junior Subordinated Debentures with the Common Securi- ties and the proceeds from the sale of the Preferred Securities and (iii) engaging only in those other activities necessary or incidental thereto. All of the Common Securities will be owned by the Company. The Common Securities will rank pari passu, and payments will be made thereon pro rata, with the Preferred Securities, except that upon the occurrence and continuance of an Event of Default under the Trust Agreement, the rights of the holders of the Common Securities to pay- ment in respect of distributions and payments upon liquidation, redemption and otherwise will be subordinate and junior to the rights of the holders of the Preferred Securities. The Company will acquire Common Securities having an aggregate Liquidation Amount equal to 3% of the total capital of the Issuer. The Issuer will terminate on , _____ unless earlier terminated as provided in the Trust Agreement. The Issuer's business and affairs will be conducted by the Property Trustee and the Administrative Trustees. The holder of the Common Securities, or if an Event of Default has occurred and is continuing, the holders of at least a majority in the aggregate Liquidation Amount of the then outstanding Preferred Securities, will be entitled to appoint, remove or replace the Trustees (as defined herein) of the Issuer. The duties and obligations of the Trustees shall be gov- erned by the Trust Agreement. David M. Wilks, Robert D. Dickerson and James D. Steinhilper, all employees of the Company, will be appointed as Administrative Trustees pursuant to the terms of the Trust Agreement. Under the Trust Agreement, the Administrative Trustees will have certain duties and powers including, but not lim- ited to, the delivery of certain notices to the holders of the Pre- ferred Securities, the appointment of the Paying Agent (as defined in the accompanying Prospectus) and the Registrar (as defined in the accompanying Prospectus) and the registering of transfers of the Pre- ferred Securities. Under the Trust Agreement, Wilmington Trust Com- pany, as the Property Trustee, will have certain duties and powers including, but not limited to, holding legal title to the Junior Sub- ordinated Debentures on behalf of the Trust, the collection of pay- ments in respect of the Junior Subordinated Debentures, maintenance of the Payment Account (as defined in the Trust Agreement), the send- ing of default notices with respect to the Preferred Securities and the distribution of the assets of the Trust in the event of a winding up of the Trust. See "Description of Preferred Securities" in the accompanying Prospectus. The Company has agreed to pay all fees and expenses related to the Issuer and the offering of the Preferred Securities. S-11 RECENT DEVELOPMENTS On March 19, 1996, President Clinton proposed certain tax law changes that would, among other things, generally deny corporate issuers a deduction for interest in respect of certain debt obliga- tions issued on or after December 7, 1995 (the "Proposed Legisla- tion") if such debt obligations have a maximum term of in excess of 20 years and are not shown as indebtedness on the issuer's applicable consolidated balance sheet. In addition, the Proposed Legislation would deny issuers an interest deduction on any debt instrument with a weighted average maturity of more than 40 years. 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 (the "Joint Statement") indicating their intent that cer- tain legislative proposals initiated by the Clinton administration, including the Proposed Legislation, 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." There can be no assurances, however, that the effective date guidance contained in the Joint Statement will be incorporated into the Proposed Legislation, if enacted, or that other legislation enacted after the date hereof will not otherwise adversely affect the ability of the Company to deduct the interest payable on the Junior Subordinated Debentures. If the tax law changed, as a result of the Proposed Legis- lation or otherwise, so that in the Company's judgment it would be precluded from deducting interest on the Junior Subordinated Deben- tures, the Company could, subject to receiving an Opinion of Counsel to the effect that a relevant tax law change (as described in the accompanying Prospectus) had occurred, redeem the Junior Subordinated Debentures in whole, thereby causing a mandatory redemption of the Preferred Securities in whole at a price of $25 per Preferred Secu- rity, plus accrued but unpaid distributions. The Company presently anticipates that, as permitted by the terms of the Junior Subordi- nated Debentures and subject to market and other conditions, it would cause such redemption of the Preferred Securities if the tax law changed, as a result of the Proposed Legis- lation or otherwise, in a manner that would not permit the interest deduction. The Company also has the option, subject to receiving an Opinion of Counsel, of distributing Junior Subordinated Debentures or the option of leaving the Preferred Securities outstanding should such a tax law change occur as described under "Certain Terms of the Preferred Securities -- Special Event Redemption or Distribution." S-12 USE OF PROCEEDS The Issuer will use the proceeds from this offering of $100,000,000 million, together with the Common Securities, to pur- chase the Junior Subordinated Debentures. The Company will use the cash proceeds from the sale of the Junior Subordinated Debentures, net of the Underwriters' compensation and the other expenses of this offering, for the repayment of short-term debt and for general corpo- rate purposes. As of ____________, 1996, approximately $_______ of such short-term indebtedness was outstanding and it had a weighted average interest rate of approximately _____% per annum and maturities within __________ of its date of issuance. CERTAIN TERMS OF THE PREFERRED SECURITIES General The following summary description of certain terms and pro- visions of the Preferred Securities sets forth certain portions of the description of the terms and provisions of the Preferred Securi- ties included in the accompanying Prospectus under the heading "Description of Preferred Securities," to which description reference is hereby made. This summary of certain 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 Trust Agree- ment. The form of the Trust Agreement has been filed as an exhibit to the Registration Statement of which this Prospectus Supplement and the accompanying Prospectus are a part. See "Description of Pre- ferred Securities" in the accompanying Prospectus. Distributions The Preferred Securities represent undivided preferred beneficial interests in the assets of the Issuer, and the distribu- tions on each Preferred Security are payable at the rate set forth on the cover page of this Prospectus Supplement, payable, except in the event of an extension, quarterly in arrears on , , and of each year, commencing ____________. Distributions in arrears after the payment date therefor will accumu- late additional distributions thereon (to the extent permitted by law) compounded quarterly at the rate per annum set forth on the cover page of this Prospectus Supplement. The term "distributions" as used herein shall include any such additional distributions to the extent permitted by law. Distributions will accrue from the date of original issuance of the Preferred Securities. The amount of distri- butions payable for any period will be computed on the basis of a 360-day year of twelve 30-day months and, for any period shorter than S-13 a full monthly period, shall be computed on the basis of the actual number of days elapsed in such period. So long as an Event of Default under the Indenture has not occurred and is continuing, the Company has the right at any time and from time to time to extend the interest payment period on the Junior Subordinated Debentures for not more than 20 consecutive quarters, provided that any such Extension Period shall not extend beyond the maturity date or redemption date of the Junior Subordinated Deben- tures. During any Extension Period quarterly distributions on the Preferred Securities would be deferred by the Issuer, would continue to accrue, and holders of Preferred Securities would be required to accrue interest income for United States Federal income tax purposes. See "Certain Terms of the Junior Subordinated Debentures -- Option to Extend Interest Payment Period" and "United States Taxation -- Poten- tial Extension of Interest Payment Period and Original Issue Dis- count." In the event that the Company exercises this right, during such period it may not declare or pay any dividends or distributions (other than dividends or distributions payable in common stock of the Company or other securities ranking junior in right of payment to the Junior Subordinated Debentures) on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of its capital stock or any security ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures, or make any guarantee payment with respect to the foregoing (other than pro rata payments under the Guarantee) or repurchase, or cause any of its subsidiaries to repur- chase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures (except for payments made on any series of Junior Subordinated Debentures upon the stated maturity of such Junior Subordinated Debentures); provided that the Company may redeem, purchase, acquire or make a liquidation payment with respect to any of its capital stock or any security ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures, make any guarantee payment with respect to the foregoing or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures with securities (or the proceeds from the issuance of securities) having no higher ranking than the capital stock or the other securities which are to be redeemed, purchased, acquired, with respect to which a liquidation payment is to be made, to which a guarantee payment is to be made with respect to the foregoing or which are to be repur- chased. This covenant effectively requires that an interest payment on the Junior Subordinated Debentures may be extended only if the interest periods on all other series of Junior Subordinated Deben- tures that may be outstanding at the time are likewise extended. Prior to the termination of any such extended interest payment period, the Company may further extend the interest payment period, provided that such Extension Period together with all such previous S-14 and further extensions thereof may not exceed 20 consecutive quarters or extend beyond the maturity or redemption date of the Junior Subor- dinated Debentures. Upon the termination of any Extension Period and the payment of all amounts then due, the Company may select a new extended interest payment period, subject to the above requirements. See "Certain Terms of the Junior Subordinated Debentures -- Option to Extend Interest Payment Period" and "United States Taxation -- Potential Extension of Interest Payment Period and Origi- nal Issue Discount." The Company has no current intention of exercising its right to defer payments of distributions on the Preferred Securities by extending the interest payment period on the Junior Subordinated Debentures. Redemption Upon the payment of the Junior Subordinated Debentures, whether at maturity or upon earlier redemption as provided in the Indenture, the proceeds from such payment will be applied by the Property Trustee to redeem a Like Amount (as defined below) of the Common Securities and the Preferred Securities, upon not less than 30 nor more than 90 days' notice, at a redemption price equal to the aggregate Liquidation Amount plus accumulated and unpaid distribu- tions, plus additional distributions thereon to the extent permitted by law, to the redemption date. See "Certain Terms of Junior Subor- dinated Debentures -- Redemption." The Company has the right to redeem the Junior Subordinated Debentures (a) on or after _____________, _____, in whole or in part, or (b) at any time, in whole but not in part, upon the occurrence of a Tax Event or an Investment Company Event (each as defined below, a "Special Event"), subject to the conditions described under "-- Special Event Redemption or Distribution," below. Special Event Redemption or Distribution If a Special Event shall occur and be continuing with respect to the Issuer or the Preferred Securities, the Company has the right to (i) redeem the Junior Subordinated Debentures in whole (but not in part) and thereby cause a mandatory redemption of the Preferred Securities in whole (but not in part) at the redemption price within 90 days following the occurrence of such Special Event, or (ii) terminate the Issuer and cause the Junior Subordinated Deben- tures to be distributed, subject to the receipt of an Opinion of Counsel experienced in such matters to the effect that the holders of the Preferred Securities will not recognize gain or loss for Untied States Federal income tax purposes as a result of such distribution, to the holders of the Preferred Securities in liquidation of the S-15 Issuer. If at any time the Issuer is not or will not be taxed as a grantor trust, but a Tax Event has not occurred, the Company has the right to terminate the Issuer and cause the Junior Subordinated Debentures to be distributed, subject to the receipt of an Opinion of Counsel experienced in such matters to the effect that the holders of the Preferred Securities will not recognize gain or loss for United States Federal income tax purposes as a result of such distribution, to the holders of the Preferred Securities in liquidation of the Issuer. Under current United States Federal income tax law and interpretations, if the Issuer is treated as a grantor trust at the time of the distribution, such a distribution should not be a taxable event to holders of the Preferred Securities. Should there be a change in law, a change in legal interpretation, a Special Event or other circumstances, however, the termination could be a taxable event to holders of the Preferred Securities. See "United States Taxation -- Receipt of Junior Subordinated Debentures Upon Liquida- tion of the Issuer." If the Company does not elect either option (i) or (ii) above, the Preferred Securities will remain outstanding. "Tax Event" means the receipt by the Issuer or the Company, as the case may be, of an Opinion of Counsel (which may be counsel to the Issuer, the Company or an affiliate, and which must be reasonably acceptable to the Property Trustee) experienced in such matters to the effect that a relevant tax law change has occurred after ___________, 1996. For purposes of the preceding sentence a relevant tax law change is any amendment or change to (or officially proposed amendment or change to) the laws (including regulations thereunder) of the United States or any political subdivision or taxing authority thereof, or the publication of any judicial opinion interpreting such laws (and regulations) or any written interpretation of such laws (or regulations) by any governmental authority having jurisdiction to enforce or administer such laws (or regulations) (including official and unofficial opinions purporting to apply such laws and regulations to other persons who have issued securities similar to the Junior Subordinated Debentures), which amendment, change, proposed amendment or change, opinion or interpretation could, if valid and enacted or applied to the Issuer or the Company, result in (i) the Issuer, either currently or within 90 days of the date thereof, becoming sub- ject to United States Federal income tax with respect to interest received on the Junior Subordinated Debentures, (ii) interest payable by the Company on the Junior Subordinated Debentures attributable to the Preferred Securities, either currently or within 90 days of the date thereof, becoming nondeductible for United States Federal income tax purposes or (iii) the Issuer, either currently or within 90 days of the date thereof, becoming subject to more than a de minimis amount of other taxes, duties or other governmental charges. "Investment Company Event" means the occurrence of a change in law or regulation or a change in the interpretation or application S-16 of any law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law") to the effect that the Issuer is or will be considered an "investment com- pany" that is required to be registered under the Investment Company Act of 1940, as amended, which Change in 1940 Act Law becomes effec- tive after ______________, 1996. "Like Amount" means (i) with respect to a redemption of the Preferred Securities and the Common Securities (together, the "Trust Securities"), Trust Securities having an aggregate Liquidation Amount equal to the principal amount of Junior Subordinated Debentures to be contemporaneously redeemed in accordance with the Indenture and the proceeds of which will be used to pay the redemption price of such Trust Securities and (ii) with respect to a distribution of Junior Subordinated Debentures to holders of Trust Securities in connection with a termination or liquidation of the Issuer upon the bankruptcy, dissolution or liquidation of a holder of Common Securities, the occurrence of a Special Event or in the event that the Issuer is not or will not be taxed as a grantor trust but a Tax Event has not occurred, Junior Subordinated Debentures having a principal amount equal to the aggregate Liquidation Amount of the Trust Securities in exchange for which such Junior Subordinated Debentures are distributed. Rights Under the Guarantee and the Junior Subordinated Debentures The Guarantee will be a full guarantee with respect to the Preferred Securities from the time of issuance of the Preferred Secu- rities, but will not apply to any payments of distributions or other amounts due to the extent the Issuer does not have sufficient avail- able funds to pay such distributions or other amounts due (which would occur in the event that the Company has failed to make a pay- ment of principal or interest on the Junior Subordinated Debentures). There are no preconditions to a holder of Preferred Securities insti- tuting a legal proceeding directly against the Company to enforce such holder's rights under the Guarantee. If the Guarantee Trustee fails to enforce the Guarantee, any holder of Preferred Securities may institute a legal proceeding directly against the Company to enforce such holder's rights under the Guarantee without first insti- tuting a legal proceeding against the Issuer, the Guarantee Trustee or any other person or entity. To the extent the Company was to default on its obligation to pay amounts payable on the Junior Subor- dinated Debentures, the Issuer would lack sufficient available funds for the payment of distributions on or amounts payable on redemption of the Trust Securities and, in such event, holders of the Preferred Securities would not be able to rely on the Guarantee for payment of such amounts. Instead, the remedy of a holder of Preferred Securi- ties would be to enforce the rights of the Issuer under the Junior Subordinated Debentures held by such Issuer. The above mechanisms S-17 and obligations relating to the Guarantee and the Junior Subordinated Debentures and the obligations of the Company under the Trust Agree- ment to pay certain obligations, costs and expenses of the Issuer (the "Expense Agreement"), taken together, are, in effect, a full and unconditional guarantee by the Company of payments due on the Pre- ferred Securities. See "Certain Terms of the Guarantee" and "Certain Terms of the Junior Subordinated Debentures." CERTAIN TERMS OF THE GUARANTEE General The following summary description of the Guarantee sets forth certain portions of the description of the terms and provisions of the Guarantee included in the accompanying Prospectus under the heading, "Description of Guarantee," to which description reference is hereby made. This summary of certain terms and provisions of the Guarantee does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Guarantee. The form of Guarantee has been filed as an exhibit to the Registration State- ment of which this Prospectus Supplement and the accompanying Pro- spectus are a part. The Company will fully and unconditionally guarantee, on a subordinated basis, the obligations of the Issuer with respect to the Preferred Securities; provided that the Guarantee will not apply to any payment of distributions if and to the extent that the Issuer does not have funds sufficient to make such payments. If the Company does not make interest payments on the Junior Subordinated Debentures held by the Issuer, it is expected that the Issuer will not pay dis- tributions on the Preferred Securities. The Guarantee will rank sub- ordinate and junior in right of payment to all liabilities of the Company (except trade credit and any liabilities that may be made pari passu with or subordinate to the Guarantee expressly by their terms). See "Description of the Guarantee -- Status of the Guaran- tee" in the accompanying Prospectus. Events of Default An event of default under the Guarantee will occur upon the failure of the Company to perform any of its payment obligations thereunder. If the Guarantee Trustee fails to enforce the Guarantee, any holder of Preferred Securities may institute a legal proceeding directly against the Company to enforce such holder's rights under the Guarantee without first instituting a legal proceeding against S-18 the Issuer, the Guarantee Trustee or any other person or entity. The Guarantee is a guarantee of payment, not of collection. Termination of the Guarantee The Guarantee will terminate and be of no further force and effect upon full payment of the Redemption Price of all Preferred Securities, the distribution of Junior Subordinated Debentures to holders of Preferred Securities in exchange for all of the Preferred Securities or upon payment in full of the amounts payable upon liqui- dation of the Issuer. CERTAIN TERMS OF THE JUNIOR SUBORDINATED DEBENTURES General The following summary description of the Junior Subordi- nated Debentures sets forth certain portions of the description of the terms and provisions of the Junior Subordinated Debentures included in the accompanying Prospectus under the heading "Descrip- tion of Junior Subordinated Debentures," to which description refer- ence is hereby made. This summary of certain terms and provisions of the Junior Subordinated Debentures does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Indenture, including the Supplemental Indenture. The forms of Inden- ture and Supplemental Indenture have been filed as exhibits to the Registration Statement of which this Prospectus Supplement and the accompanying Prospectus are a part. Concurrently with the issuance of the Preferred Securities, the Issuer will invest the proceeds thereof, together with the Common Securities, in the Junior Subordinated Debentures issued by the Com- pany to the Issuer. The Junior Subordinated Debentures will bear interest at the annual rate of %, payable quarterly in arrears, except in the event of an extension, on , , , and of each year, commencing _______. Interest which is accrued and unpaid after the quarterly payment date therefor will bear additional interest on the amount thereof (to the extent permitted by law) at the rate per annum of %, compounded quarterly. The term "Interest" as used herein shall include quar- terly interest payments, interest on quarterly interest payments in arrears and Additional Interest (as defined below), as applicable. The Junior Subordinated Debentures will be issued under the Indenture and the Supplemental Indenture. The Junior Subordinated Debentures will mature on , 20 . The Junior Subordi- nated Debentures will be unsecured and will rank junior and be subor- dinate in right of payment to all Senior Indebtedness of the Company. S-19 See "Description of Junior Subordinated Debentures -- Subordination" in the accompanying Prospectus. Option to Extend Interest Payment Period The Company has the right at any time and from time to time, so long as an Event of Default under the Indenture has not occurred and is continuing, to extend the interest payment period for the Junior Subordinated Debentures for up to 20 consecutive quarters; provided that no Extension Period shall extend beyond the stated maturity date or date of redemption of the Junior Subordinated Deben- tures. At the end of the Extension Period, the Company is obligated to pay all interest then accrued and unpaid (together with interest thereon to the extent permitted by law). During any Extension Period, the Company will not declare or pay any dividends or distri- butions (other than dividends or distributions payable in capital stock of the Company or other securities, including other indebted- ness, such as notes or debentures, ranking junior in right of payment to the Junior Subordinated Debentures) on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of its capital stock or any security ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures, or make any guarantee payment (other than pro rata payments under the Guarantee and other than payments upon redemptions of capital stock pursuant to any mandatory or optional sinking fund provisions) or repurchase, or cause any of its subsidiaries to repurchase, any security of the Com- pany ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures (except for payments made on any series of Junior Subordinated Debentures upon the stated maturity of such Junior Subordinated Debentures); provided that the Company may redeem, purchase, acquire or make a liquidation payment with respect to any of its capital stock, make any guarantee payment with respect to the foregoing or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures with securities (or the proceeds from the issuance of securities) having no higher ranking than the capital stock or the other securities which are to be redeemed, purchased, acquired, with respect to which a liquidation payment is to be made, to which a guarantee payment is to be made with respect to the foregoing or which are to be repur- chased. This covenant requires that an interest payment on the Jun- ior Subordinated Debentures may be extended only if the interest pay- ments on all other series of Junior Subordinated Debentures that may be outstanding at the time are likewise extended. Prior to the ter- mination of any Extension Period, the Company 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 or redemption date of the Junior Subordinated Debentures. Upon the S-20 termination of any Extension Period and the payment of all amounts then due, the Company may select a new Extension Period subject to the above requirements. So long as the Property Trustee shall be the sole holder of the Junior Subordinated Debentures, the Company is required to give the Property Trustee and the Debenture Trustee notice of its selec- tion of such Extension Period at least one Business Day prior to the date the Property Trustee or the Company is required to give notice to any national securities exchange on which any of the Preferred Securities are listed or to other applicable self-regulatory organi- zation or to holders of the Preferred Securities on the record date, but in any event not less than one Business Day prior to such record date. The Debenture Trustee will be required to give notice of the Company's selection of such Extension Period to the holders of the Preferred Securities and the Administrative Trustees. Redemption The Junior Subordinated Debentures are redeemable prior to maturity at the option of the Company (i) at any time on or after the date set forth on the cover page of this Prospectus Supplement, in whole or in part, and (ii) if a Special Event occurs and is continu- ing, in whole, but not in part, in each case at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the redemption date. The Junior Subordinated Debentures will be subject to optional redemption in whole, but not in part, upon the termination and liquidation of the Issuer pursuant to an order for the dissolution, termination or liquidation of the Issuer entered by a court of competent jurisdiction. For so long as the Trust is the holder of all Junior Subordinated Debentures outstanding, the pro- ceeds of any redemption described in this section shall be used by the Issuer to redeem the Preferred Securities and the Series A Common Securities in accordance with their terms. The Company shall not redeem the Junior Subordinated Deben- tures in part unless all accrued and unpaid interest (including any Additional Interest) has been paid in full on all Junior Subordinated Debentures outstanding for all quarterly interest periods on or prior to the Redemption Date. UNITED STATES TAXATION General The following is a summary of certain United States Federal income tax considerations that may be relevant to prospective pur- chasers of Preferred Securities and represents the opinion of Cahill S-21 Gordon & Reindel, counsel to the Company, insofar as it relates to matters of law and legal conclusions. This section is based upon current provisions of the Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed regulations thereunder and cur- rent administrative rulings and court decisions, all of which are subject to change. Subsequent changes may cause tax consequences to investors to vary substantially from the consequences described below. Unless otherwise stated, this summary deals only with Pre- ferred Securities held as capital assets and not with special classes of holders, such as dealers in securities or currencies, life insur- ance companies, persons holding Preferred Securities as a hedge against or which are hedged against currency risks or as a part of a straddle, or persons whose functional currency is not the United States dollar. POTENTIAL INVESTORS ARE ADVISED TO CONSULT THEIR TAX ADVI- SORS AS TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE, 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. While the Company believes, based upon the advice of its counsel, that the Junior Subordinated Debentures will be treated as indebtedness for United States Federal income tax purposes, holders of Preferred Securities should note that the Internal Revenue Service (the "IRS") may attempt to treat the Junior Subordinated Debentures as equity rather than indebtedness for tax purposes. If the IRS were successful in such attempt, the Junior Subordinated Debentures would be subject to redemption at the option of the Company as described under "Description of Preferred Securities -- Redemption." Income from Preferred Securities In connection with the issuance of the Preferred Securi- ties, Cahill Gordon & Reindel will render its opinion generally to the effect that under then current law, and assuming full compliance with the terms of the Trust Agreement and the Indenture (and certain other documents), the Issuer will be classified for United States Federal income tax purposes as a grantor trust and not as an associa- tion taxable as a corporation. As a consequence, each holder of Preferred Securities will be considered the owner of a pro rata portion of the Junior Subordi- nated Debentures held by the Issuer. As a further consequence, each holder of Preferred Securities will be required to include in gross income his or her pro rata share of the income accrued on the Junior Subordinated Debentures held by the Issuer. Such income should not exceed distributions received by the holders of Preferred Securities on the Preferred Securities except in the case of an extension of the S-22 interest payment period as described under "Description of Preferred Securities -- Distributions." No portion of such income will be eli- gible for the dividends-received deduction. Potential Extension of Interest Payment Period and Original Issue Discount Under the Indenture, the Company has the option to extend from time to time the interest payment period on the Junior Subordi- nated Debentures to a period not exceeding 20 consecutive quarters but not beyond the maturity date or redemption date of the Junior Subordinated Debentures. The Company's option to extend the interest payment period (even if not exercised) will cause the Junior Subordi- nated Debentures, from the date of issuance, to be treated as issued with "original issue discount" for United States Federal income tax purposes. Accordingly, a holder of Preferred Securities will accrue interest income (i.e., original issue discount) under a constant yield basis over the term of the Junior Subordinated Debentures (including any Extension Period), regardless of the receipt of cash with respect to the period to which such income is attributable. Holders of Preferred Securities during an Extension Period will include interest in gross income in advance of the receipt of cash, and any holders of Preferred Securities who dispose of Pre- ferred Securities prior to the record date for the payment of distri- butions will include such interest in gross income, but will not receive any cash related thereto from the Issuer. The tax basis of a Preferred Security will be increased by the amount of any original issue discount that is included in income without the receipt of cash, and will be decreased when and if such cash is subsequently received by the holder of the Preferred Security. Disposition of Preferred Securities Gain or loss will be recognized on a sale, including a redemption for cash, of Preferred Securities in an amount equal to the difference between the amount realized and the tax basis of a holder of the Preferred Securities in his or her Preferred Securi- ties. Gain or loss recognized by a holder of Preferred Securities on the sale or exchange of Preferred Securities held for more than one year generally will be taxable as long-term capital gain or loss. United States Alien Holders For purposes of this discussion, a "United States Alien Holder" is any holder or beneficial owner who or which is (i) a non- resident alien individual or (ii) a foreign corporation, foreign partnership, foreign estate or foreign trust, in any such case not S-23 subject to United States Federal income tax on a net income basis in respect of the Preferred Securities. Under present United States Federal income tax law, subject to the discussion below with respect to backup withholding: (i) Payments by the Issuer or any of its Paying Agents to any United States Alien Holder will not be subject to United States withholding tax provided that (a) the beneficial owner of the Preferred Securities does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of the Company, (b) the beneficial owner of the Preferred Securities is not a "controlled foreign corporation" for United States tax purposes that is related to the Company through stock ownership, and (c) either (1) the beneficial owner of the Pre- ferred Securities certifies to the Issuer or its agent, under penalties of perjury, that it is a United States Alien Holder and provides its name and address or (2) the holder of the Pre- ferred Securities is 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 such statement has been received from the beneficial owner by such financial institution or by a financial institution intermediary between it and the beneficial owner, and such financial institution furnishes the Issuer with a copy thereof; and (ii) a United States Alien Holder of the Preferred Securi- ties will not be subject to United States Federal income or withholding tax on any gain realized on the sale or exchange of the Preferred Securities unless (a) such person is present in the United States for 183 days or more in the taxable year of sale and (b) such person has a "tax home" in the United States or certain other requirements are met. Backup Withholding and Information Reporting In general, information requirements will apply to payments to noncorporate United States holders of the proceeds of the sale of the Preferred Securities within the United States, and "backup with- holding" at a rate of 31% will apply to such payments if the seller fails to provide a correct taxpayer identification number. Payments of the proceeds from the sale by a United States Alien Holder of Preferred Securities made to or through a foreign office of a broker will not be subject to information reporting or backup withholding, except that, if the broker is a United States person, a "controlled foreign corporation" for United States tax pur- poses or a foreign person 50% or more of whose gross income is S-24 effectively connected with a United States trade or business for a specified three-year period, information reporting may apply to such payments. Payments of the proceeds from the sale of Preferred Secu- rities to or through the United States office of a broker is subject to information reporting and backup withholding unless the holder or beneficial owner certifies as to its non-United States status or otherwise establishes an exemption from information reporting and backup withholding. The IRS has issued proposed regulations which, if enacted in their current form, would require backup withholding on payments with respect to the Junior Subordinated Debentures that are made out- side the United States if the payor has actual knowledge that the recipient is a United States Holder. The proposed regulations are proposed to be effective for payments made after December 31, 1997, and current law would remain in effect until then. United States Holders should consult with their tax advisors as to compliance with the new rules so as to avoid possible backup withholding on payments after 1997. Receipt of Junior Subordinated Debentures upon Liquidation of the Issuer Under certain circumstances as described in "Description of Preferred Securities -- Special Event Redemption or Distribution," the Company may cause the Issuer to be terminated and the Junior Sub- ordinated Debentures to be distributed to the holders of Preferred Securities in liquidation of such holders' interests in the Issuer. Under current United States Federal income tax law and interpreta- tions, if the Trust is treated as a grantor trust at the time of the distribution, such a distribution should not be treated as a taxable event to holders of the Preferred Securities. Such a tax-free trans- action would result in a holder of Preferred Securities retaining an aggregate tax basis in the Junior Subordinated Debentures equal to such holder's aggregate tax basis in the holder's pro rata share of the Junior Subordinated Debentures prior to the distribution. A holder's holding period for such Junior Subordinated Debentures would include the period for which the Preferred Securities were held by such holder. If the Trust were not treated as a grantor trust at the time of the distribution, the distribution could be a taxable event to holders of the Preferred Securities, in which case the principles discussed above under "-- Disposition of the Preferred Securities" would apply, and the holders would have a new tax basis and holding period in the Junior Subordinated Debentures. S-25 UNDERWRITING Subject to the terms and conditions of the Underwriting Agreement, the Company and the Issuer have agreed that the Issuer will issue and sell to each of the underwriters named below (collec- tively, the "Underwriters") and the Underwriters have severally agreed to purchase from the Issuer, the respective number of Pre- ferred Securities set forth opposite its name below: Number of Preferred Underwriter Securities Total ...................... 4,000,000 Subject to the terms and conditions of the Underwriting Agreement, the Underwriters are committed to take and pay for all the Preferred Securities offered hereby, if any are taken. The Underwriters propose to offer the Preferred Securities in part directly to the public at the initial public offering price set forth on the cover page of this Prospectus Supplement, and in part to certain securities dealers at such price less a concession of $ per Preferred Security. The Underwriters may allow, and such dealers may reallow, a concession not in excess of $ per Preferred Security to certain brokers and dealers. After the Pre- ferred Securities are released for sale to the public, the offering price and other selling terms may from time to time be varied by the representatives of the Underwriters. In view of the fact that the proceeds from the sale of the Preferred Securities (together with the delivery by the Issuer to the Company of the Common Securities) will be used to purchase the Junior Subordinated Debentures issued by the Company, the Underwriting Agreement provides that the Company will pay as Underwriters' compen- sation for the Underwriters arranging the investment therein of such proceeds, an amount of $ per Preferred Security or ($ per S-26 Preferred Security sold to certain institutions) for the accounts of the several Underwriters. The Company and the Issuer have agreed, during the period beginning from the date of the Underwriting Agreement and continuing to and including the earlier of (i) the date on which the distribu- tion of the Preferred Securities ceases, as determined by the Under- writers, or (ii) 30 days after the issuance of the Preferred Securi- ties, not to offer, sell, contract to sell or otherwise dispose of any Preferred Securities, any other interests of the Issuer or any other issuer of a series of Preferred Securities or the Company which are substantially similar to the Preferred Securities (including any Guarantee of such securities) or any securities convertible into or exchangeable for Preferred Securities, preferred stock or such sub- stantially similar securities of the Issuer or the Company, without the prior written consent of the representatives of the Underwriters. Prior to this offering, there has been no market for the Preferred Securities. Application will be made to have the Preferred Securities approved for listing on the New York Stock Exchange. In order to meet one of the requirements for listing the Preferred Secu- rities on the New York Stock Exchange, the Underwriters will under- take to sell lots of 100 or more Preferred Securities to a minimum of 400 beneficial holders. If approved for listing, trading of the Pre- ferred Securities on the New York Stock Exchange is expected to com- mence within a fourteen-day period after the initial delivery of the Preferred Securities. The representatives have advised the Company that they intend to make a market in the Preferred Securities prior to the commencement of trading on the New York Stock Exchange, but are not obligated to do so and may discontinue any such market-making at any time without notice. The Company and the Issuer have agreed to indemnify the several Underwriters against certain liabilities, including liabili- ties under the Securities Act of 1933, or to make contributions in respect thereof. Certain of the Underwriters engage in transactions with, and from time to time have performed services for, the Company in the ordinary course of business. S-27 SUBJECT TO COMPLETION, DATED June 5, 1996 PROSPECTUS $100,000,000 SOUTHWESTERN PUBLIC SERVICE CAPITAL I PREFERRED SECURITIES Guaranteed to the extent set forth herein by SOUTHWESTERN PUBLIC SERVICE COMPANY --------------------- Southwestern Public Service Capital I, a statutory business trust formed under the laws of the State of Delaware (the "Issuer"), may offer, from time to time, its preferred securities (the "Preferred Securities") representing preferred undivided beneficial interests in the assets of the Issuer. Southwestern Public Service Company, a New Mexico corporation (the "Company"), will be the sole owner of the beneficial interests represented by common securities (the "Common Securities") of the Issuer. The payment of periodic cash distributions with respect to the Preferred Securities and payments on liquidation or redemption with respect to such Preferred Securities, in each case out of funds held by the Issuer, are each guaranteed by the Company to the extent described herein (the "Guarantee"). The Company's obligations under the Guarantee will be subordinate and junior in right of payment to all Senior Indebtedness of the Company. Concurrently with the issuance by the Issuer of its Preferred Securities, such Issuer will invest the proceeds thereof and any contributions made in respect of the Common Securities in a corresponding series of the Company's junior subordinated deferrable interest debentures (the "Junior Subordinated Debentures") having terms corresponding to the Issuer's Preferred Securities. The Junior Subordinated Debentures will be unsecured and subordinate and junior in right of payment to the Senior Indebtedness of the Company. The Junior Subordinated Debentures held by the Issuer will be its sole asset and payments of principal and interest under such Junior Subordinated Debentures will be its only revenue. Upon the occurrence of certain events, the Company may redeem the Junior Subordinated Debentures or may terminate the Issuer and cause the Junior Subordinated Debentures to be distributed to the holders of the corresponding Preferred Securities in liquidation of their interest in such Issuer. The Preferred Securities may be offered in amounts, at prices and on terms to be determined at the time of offering; provided, that the aggregate initial public offering price of all Preferred Securities shall not exceed $100,000,000. Specific terms of the Preferred Securities in respect of which this Prospectus is being delivered will be set forth in an accompanying Prospectus Supplement with respect to such series, including, without limitation and where applicable, the specific title, aggregate amount, dividend rate or rates (or method of determining such rate or rates), the initial public offering price and any other rights, preferences, privileges, limitations and restrictions. The Prospectus Supplement relating to the Preferred Securities will contain information concerning certain United States Federal income tax considerations, if applicable to the Preferred Securities. The Preferred Securities may be sold to or through underwriters or dealers as designated from time to time. The names of such dealers or underwriters and any applicable commissions or discounts will be set forth in the Prospectus Supplement with respect to such Preferred Securities. See "Plan of Distribution." -------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. - -------------------- The date of this Prospectus is _______, 1996. INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRA- TION 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. -2- AVAILABLE INFORMATION Southwestern Public Service Company (the "Company") is sub- ject to the informational requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files reports and other information with the Securities and Exchange Com- mission (the "Commission") which may be inspected and copied at the offices of the Commission, Room 1024, 450 Fifth Street, N.W., Wash- ington, D.C. 20549; 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and Seven World Trade Center, Suite 1300, New York, New York 10048, and copies of such material can be obtained from the Public Reference Section of the Commission, Washington, D.C. 20549, at prescribed rates. Certain securities of the Company are listed on the New York, Chicago and Pacific Stock Exchanges. Reports, proxy and information statements, and other information concerning the Com- pany can be inspected at such exchanges. The Company and the Issuer have filed with the Commission a registration statement on Form S-3 (herein, together with all amend- ments and exhibits thereto, referred to as the "Registration State- ment") under the Securities Act of 1933, as amended (the "Securities Act"). This Prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which are omit- ted 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 Issuer are included herein. The Company considers that such financial statements would not be material to holders of the Preferred Securities because: (i) all of the Common Securities of the Issuer will be owned by the Com- pany, a reporting company under the Exchange Act; (ii) the Issuer have no independent operations, but exist for the sole purpose of issuing the Preferred Securities and investing the proceeds thereof (plus the Common Securities) in the Junior Subordinated Debentures; and (iii) the obligations of the Issuer under the Preferred Securi- ties, to the extent funds are available therefor, are fully and unconditionally guaranteed to the extent set forth herein by the Company. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company with the Com- mission (File No. 1-3789) pursuant to the the Exchange Act are incor- porated herein by reference as of their respective dates of filing and shall be deemed to be a part hereof: -3- 1. The Company's Annual Report on Form 10-K for the year ended August 31, 1995 (the "1995 Form 10-K"). 2. The Company's Quarterly Report on Form 10-Q for the quarters ended November 30, 1995 (the "November Quarterly Report") and February 29, 1996 (the "February Quarterly Report"). 3. The Company's Current Reports on Form 8-K filed February 2, 1996 and February 26, 1996. 4. Joint Proxy Statement/Prospectus for the Annual Meet- ing held January 31, 1996 included in the Registration Statement on Form S-4 of New Century Energies, Inc. (Registration No. 33-64951). All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of this offering shall also be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of filing of such documents. The Company hereby undertakes to provide without charge to each person, including any beneficial owner, to whom a copy of this Prospectus has been delivered, on the request of any such person, a copy of any or all documents referred to above which have been or may be incorporated by reference in this Prospectus (not including exhib- its to such incorporated information that are not specifically incor- porated by reference into such information). Requests for such cop- ies should be directed to Secretary, Southwestern Public Service Com- pany, Tyler at Sixth, Amarillo, Texas 79101. THE COMPANY The Company, incorporated under the laws of the State of New Mexico in 1921, is principally engaged in the generation, trans- mission, distribution and sale of electric energy in portions of Texas, New Mexico, Oklahoma and Kansas. The electric properties com- prise an interconnected system. A major portion of the Company's electric operating revenues is derived from operations in Texas. The Company has two wholly owned non-utility subsidiaries, Utility Engi- neering Corporation and Quixx Corporation. The principal executive offices of the Company are located at Tyler at Sixth, Amarillo, Texas 79101 (Tel: 806-378-2121). At the annual meeting of the Company's shareholders held on January 31, 1996, the shareholders approved the proposed "merger of equals" of the Company and Public Service Company of Colorado ("PSCo") (the "Merger Agreement"). Pursuant to the terms of the Merger Agreement, upon satisfaction or waiver of the terms and -4- conditions thereof, the Company and PSCo will become wholly owned subsidiaries of a new holding company called New Century Energies, Inc. The Company and PSCo will maintain their separate identities and continue to serve customers in their respective service areas. The Company's obligations, such as guarantees, debt and any preferred stock (including the Guarantee and the Junior Subordinated Deben- tures) of the Company outstanding at the time of effectiveness of the merger will remain outstanding obligations, debt and preferred stock of the Company and the terms and conditions thereof will not change. The transaction is subject to various conditions including the receipt of approvals from various state and federal regulators. THE ISSUER Southwestern Public Service Capital I is a statutory busi- ness trust formed under Delaware law pursuant to (i) a trust agree- ment executed by David M. Wilks, President and Chief Operating Offi- cer of the Company (together with his successors, the "Depositor"), as the depositor of the Issuer, and the Issuer Trustees (as defined herein) and (ii) the filing of a certificate of trust with the Dela- ware Secretary of State. Such trust agreement will be amended and restated in its entirety (as so amended and restated, the "Trust Agreement") substantially in the form filed as an exhibit to the Reg- istration Statement of which this Prospectus is a part. The Trust Agreement will be qualified as an indenture under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The Issuer exists for the exclusive purpose of (i) issuing its Preferred Securi- ties and Common Securities, (ii) purchasing the Junior Subordinated Debentures with the Common Securities and the proceeds from the sale of the Preferred Securities and (iii) engaging only in those other activities necessary or incidental thereto. All of the Common Secu- rities will be owned by the Company. The Common Securities will rank pari passu, and payments will be made thereon pro rata, with the Pre- ferred Securities, except that upon the occurrence and continuance of an Event of Default (as defined herein) under the Trust Agreement, the rights of the holders of the corresponding Common Securities to payment in respect of distributions and payments upon liquidation, redemption or other acquisition of Common Securities will be subordi- nated to the rights of the holders of Preferred Securities. The Com- pany will acquire Common Securities of the Issuer in an aggregate Liquidation Amount equal to 3% of the total capital of the Issuer and, at that time, also become the Depositor. The Issuer will have a term of more than 20 and not less than 50 years, as specified in the applicable Prospectus Supplement, but may terminate earlier as pro- vided in the Trust Agreement. The Issuer's business and affairs is conducted by its trustees, each appointed by the Company as holder of the Common Securities: Wilmington Trust Company (the "Property Trus- tee") and three individual trustees (the "Administrative Trustees") -5- who are employees or officers of or affiliated with the Company (collectively, the "Issuer Trustees"). The Depositor of the Issuer or the holders of a majority in Liquidation Amount of the Preferred Securities and Common Securities, if an event of default under the Trust Agreement has occurred and is continuing, will be entitled to appoint, remove or replace the Issuer Trustees. Unless an event of default under the Trust Agreement shall have occurred and is continu- ing, the holders of the Preferred Securities and Common Securities shall not have the right to vote to appoint, remove or replace the Administrative Trustees, which voting rights are vested exclusively in the Depositor of the Issuer. The duties and obligations of each of the Issuer Trustees are governed by the Trust Agreement. The Com- pany has agreed to pay all fees and expenses related to the Issuer and the offering of the Preferred Securities and has agreed to pay, directly or indirectly, all ongoing costs, expenses and liabilities, limited to the extent provided herein, of the Issuer. The principal executive office of the Issuer is Tyler at Sixth, Amarillo, Texas 79101, Attention: Secretary (Tel: (806) 378-2121). USE OF PROCEEDS The Issuer will use the proceeds from the Offering of its Preferred Securities, together with its Common Securities, to pur- chase Junior Subordinated Debentures. The proceeds received by the Company from the sale of the Junior Subordinated Debentures will be used as described in the Prospectus Supplement by which such securi- ties are offered. EARNINGS RATIOS The Company's Ratio of Earnings to Fixed Charges for each of the periods indicated is as follows:
Twelve Months Ended -------------------------------------------- February 29, August 31, 1996 1995 1994 1993 1992 1991 ------------ ---- ---- ---- ---- ---- Ratio of Earnings to Fixed Charges: 4.94 5.10 4.76 4.82 4.53 4.67
The Company's Ratios for future periods will be included in the Company's Reports on Form 10-K and 10-Q. Such Reports are incorporated by reference into this Prospectus at the time they are filed. -6- DESCRIPTION OF PREFERRED SECURITIES General An original trust agreement between David M. Wilks, President and Chief Operating Officer of the Company, as Depositor, and Wilmington Trust Company, as the Property Trustee, has been used to authorize and create the Issuer. The original trust agreement is filed as an exhibit to the Registration Statement of which this Prospectus is a part. The Pre- ferred Securities and the Common Securities of the Issuer (together, the "Issuer Securities") will be issued by the Administrative Trustees on behalf of the Issuer pursuant to the terms of the Trust Agreement (as amended and restated from the original trust agreement). The Preferred Securities represent undivided preferred beneficial interests in the assets of the Issuer and entitle the holders thereof to a preference over the Common Securities of such Issuer, in certain circumstances, with respect to distributions and amounts payable on redemption or liquidation as well as to other benefits as described in the Trust Agreement. The following summary of certain provisions of the Trust Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the provisions of the Trust Agreement and the Trust Inden- ture Act. Wherever particular sections or defined terms of the Trust Agreement are referred to, such sections or defined terms are incorporated herein by reference. Section references used herein are references to provisions of the Trust Agreement unless otherwise stated. All of the Common Securities of the Issuer will be owned by the Company. The Common Securities of the Issuer rank pari passu, and pay- ments will be made thereon pro rata, with the Preferred Securities of the such Issuer except as described under "-- Subordination of Common Securi- ties." (Section 4.03). Legal title to the Junior Subordinated Debentures will be held in the name of the Property Trustee and held in trust for the benefit of the holders of the Issuer Securities. (Section 2.09). The Guarantee is a full and unconditional guarantee on a subordinated basis with respect to the Preferred Securities but does not guarantee payment of distributions or amounts payable on redemption or liquidation of the Pre- ferred Securities when the Issuer does not have funds sufficient to make such payments. The Preferred Securities will initially be offered in denomina- tions of $25 (based on Liquidation Amount) and integral multiples of $25 in excess thereof. -7- Liquidation Amount The amount payable on the Preferred Securities in the event of any liquidation of the Issuer is $25 per Preferred Security (the "Liquidation Amount"), plus accumulated and unpaid distributions unless, in connection with such liquida- tion, the Junior Subordinated Debentures are distributed to the holders of the Preferred Securities. Distributions The distributions payable on the Preferred Securities will be fixed at the rate per annum set forth in the Prospectus Supplement. Distributions in arrears after the quarterly pay- ment date therefor will accumulate additional distributions thereon compounded quarterly at the same rate per annum, to the extent permitted by law. The term "distributions" as used herein includes any such additional distributions (the "Addi- tional Amounts"), unless otherwise stated, with respect to the Preferred Securities. The amount of distributions payable for any 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 month, shall be computed on the basis of the actual number of days elapsed in such period. (Section 4.01(b)). See "Descrip- tion of Junior Subordinated Debentures -- Additional Interest." Distributions on the Preferred Securities will be cumulative, will accrue from the date of the initial issuance thereof, and will be payable quarterly in arrears, on the pay- ment dates set forth in the applicable Prospectus Supplement of each year, except in the event of an extension of the interest payment period by the Company on the corresponding series of Junior Subordinated Debentures. In the event that any date on which distributions are otherwise payable on Preferred Securi- ties is not a Business Day, payment of the distributions pay- able 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 to any such delay) except that, if such Business Day is in the next succeeding calendar year, payment of such distribu- tion shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date (each date on which distributions are otherwise payable in accordance with the foregoing, a "Distribution Date"). A "Business Day" shall mean any day other than (x) a Saturday or a Sunday, (y) a day on which banks in New York are authorized or obligated by law or executive order to remain closed or (z) a day on which the Corporate Trust Office of the Property Trustee or the principal office of the Company is closed for business. (Section 1.01 and 4.01(a)). -8- So long as an Event of Default under the Deferrable Interest Subordinated Debenture Indenture (the "Indenture") has not occurred and is not continuing, the Company has the right under the Indenture, as supplemented by a supplemental inden- ture relating to the Junior Subordinated Debentures (a "Supple- mental Indenture"), to extend, at any time and from time to time, the interest payment period on each series of Junior Sub- ordinated Debentures issued thereunder for a period not exceed- ing 20 consecutive quarters, with the consequence that quar- terly distributions on the corresponding Preferred Securities would be deferred (but would continue to accrue distributions thereon, including additional distributions payable on unpaid distributions to the extent permitted by law at the rate per annum set forth in the Prospectus Supplement, compounded quar- terly) by the Issuer during any such extended interest payment period; provided that any such extension period shall not extend beyond the maturity date or redemption date of the Jun- ior Subordinated Debentures. During any extension period quar- terly distributions on the Preferred Securities would be deferred by the Issuer, would continue to accrue, and holders of Preferred Securities would be required to accrue interest income for United States Federal income tax purposes. See "Description of Junior Subordinated Debentures -- Option to Extend Interest Payment Period" herein and "United States Taxation -- Potential Extension of Interest Payment Period and Original Issue Discount" in the accompanying Prospectus Supple- ment. In the event the Company exercises this right, during such period the Company may not declare or pay any dividends or distributions (other than dividends or distributions payable in capital stock of the Company or other securities ranking junior in right of payment to the Junior Subordinated Debentures) on or redeem, purchase, acquire, or make a liquidation payment with respect to, any of its capital stock or any security rank- ing pari passu with or junior in right of payment to the Junior Subordinated Debentures, or make any guarantee payments with respect to the foregoing (other than pro rata payments under the Guarantee) or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures (except for payments made on any series of Junior Subordinated Debentures upon the stated maturity of such Junior Subordinated Debentures); provided that the Company may redeem, purchase, acquire or make a liquidation payment with respect to any of its capital stock or any security ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures, make any guarantee payment with respect to the foregoing or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated -9- Debentures with securities (or the proceeds from the issuance of securities) having no higher ranking than the capital stock or the other securities which are to be redeemed, purchased, acquired, with respect to which a liquidation payment is to be made, to which a guarantee payment is to be made with respect to the foregoing or which are to be repurchased. This covenant requires that an interest payment period on the Junior Subordi- nated Debentures may be extended only if the interest payment periods on all other series of Junior Subordinated Debentures that may be outstanding at the time are likewise extended. Prior to the termination of any such extended interest payment period, the Company may further extend the interest payment period, provided that such extended interest payment period, together with all previous and further extensions thereof, may not exceed 20 consecutive quarters or extend beyond the matur- ity or the redemption date of the series of the Junior Subordi- nated Debentures in question. Upon the termination of any extended interest payment period and the payment of all amounts then due, the Company may select a new extended interest pay- ment period subject to the foregoing requirements. See "Description of Junior Subordinated Debentures -- Interest" and "-- the Company's Option to Extend Interest Payment Periods" herein and "United States Taxation -- Potential Extension of Interest Payment Period and Original Issue Discount" in the accompanying Prospectus Supplement. It is anticipated that the income of the Issuer available for distribution to the holders of the Preferred Securities will be limited to the payments under the Junior Subordinated Debentures which the Issuer will purchase with the Common Securities and the proceeds from the issuance and sale of the Preferred Securities. See "Description of Junior Subor- dinated Debentures." If the Company does not make interest payments on the Junior Subordinated Debentures, the Property Trustee will not have funds available to pay distributions on the Preferred Securities. The payment of distributions (if and to the extent an Issuer has funds sufficient to make such pay- ments) is guaranteed on a subordinated basis by the Company to the extent set forth herein under "Description of Guarantee." Distributions on the Preferred Securities will be payable to the holders thereof as they appear on the register of the Issuer on the relevant record dates, which, as long as the Preferred Securities remain in book-entry-only form, will be one Business Day prior to the relevant Distribution Date. Subject to any applicable laws and regulations and the provi- sions of the Trust Agreement, each such payment will be made as described under "-- Book-Entry-Only Issuance -- The Depository Trust Company" below. In the event that the Preferred -10- Securities do not remain in book-entry-only form, the relevant record date shall be the date 15 days prior to the relevant Distribution Date. (Section 4.01(d)). Redemption Upon the repayment of any series of Junior Subordi- nated Debentures, whether at maturity or upon earlier redemp- tion as provided in the Indenture, the proceeds from such repayment shall be applied by the Property Trustee to redeem a Like Amount (as defined herein) of Issuer Securities, upon not less than 30 nor more than 90 days' notice, at a redemption price equal to the aggregate Liquidation Amount plus accumu- lated and unpaid distributions, plus additional distributions thereon, if any, to the extent permitted by law, to the redemp- tion date (the "Redemption Price"). See "Description of Junior Subordinated Debentures -- Optional Redemption." The Company will have the right to redeem the Junior Subordinated Debentures (a) on or after a date to be specified in the Prospectus Supplement, in whole or in part, or (b) at any time, in whole but not in part, upon occurrence of a Tax Event or an Investment Company Event (each as defined below, a "Special Event"), subject to the conditions described under "-- Special Event Redemption or Distribution" and "Description of Junior Subordinated Debentures -- Optional Redemption." Special Event Redemption or Distribution If a Special Event shall occur and be continuing with respect to the Issuer or the Preferred Securities of the Issuer, the Company has the right to (i) redeem the correspond- ing Junior Subordinated Debentures in whole, but not in part, and thereby cause a mandatory redemption of such Preferred Securities in whole, but not in part, at the Redemption Price within 90 days following the occurrence of such Special Event, or (ii) terminate the Issuer and cause the corresponding Junior Subordinated Debentures to be distributed, subject to the receipt of an Opinion of Counsel experienced in such matters to the effect that the holders of the Preferred Securities will not recognize gain or loss for United States Federal income tax purposes as a result of such distribution, to the holders of the Preferred Securities in liquidation of such Issuer. If at any time the Issuer is not or will not be taxed as a grantor trust, but a Tax Event has not occurred, the Depositor has the right to terminate such Issuer and cause the corresponding Jun- ior Subordinated Debentures to be distributed, subject to the receipt of an Opinion of Counsel experienced in such matters to the effect that the holders of the Preferred Securities will -11- not recognize gain or loss for United States Federal income tax purposes as a result of such distribution, to the holders of the Preferred Securities of such Issuer. Under current United States Federal income tax law and interpretations, if the Issuer is treated as a grantor trust at the time of the distri- bution, such a distribution should not be a taxable event to holders of the Preferred Securities. Should there be a change in law, a change in legal interpretation, a Special Event or other circumstances, however, the termination could be a tax- able event to holders of the Preferred Securities of an Issuer. See "United States Taxation -- Receipt of Junior Subordinated Debentures Upon Liquidation of the Issuer" in the accompanying Prospectus Supplement. If the Company does not elect either option (i) or (ii) above, the Preferred Securities will remain outstanding. "Tax Event" means the receipt by the Issuer or the Company, as the case may be, of an Opinion of Counsel (which may be counsel to the Issuer, the Company or an affiliate, and which must be reasonably acceptable to the Property Trustee) experienced in such matters to the effect that a relevant tax law change has occurred after a date specified in the accompa- nying Prospectus Supplement. For purposes of the preceding sentence, a relevant tax law change is any amendment or change to (or officially proposed amendment or change to) the laws (including regulations thereunder) of the United States or any political subdivision or taxing authority thereof, or the pub- lication of any judicial opinion interpreting such laws (and regulations) or any written interpretation of such laws (or regulations) by any governmental authority having jurisdiction to enforce or administer such laws (or regulations) (including official and unofficial opinions purporting to apply such laws and regulations to other persons who have issued securities similar to the Junior Subordinated Debentures), which amend- ment, change, proposed amendment or change, opinion or inter- pretation could, if valid and enacted or applied to an Issuer or the Company, result in (i) such Issuer, either currently or within 90 days of the date thereof, becoming subject to United States Federal income tax with respect to interest received on the Junior Subordinated Debentures, (ii) interest payable by the Company on the Junior Subordinated Debentures attributable to the Preferred Securities, either currently or within 90 days of the date thereof, becoming nondeductible for United States Federal income tax purposes or (iii) the Issuer, either cur- rently or within 90 days of the date thereof, becoming subject to more than a de minimis amount of other taxes, duties or other governmental charges. -12- "Investment Company Event" means the occurrence of a change in law or regulation or a change in the interpretation or application of any law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law") to the effect that the Issuer is or will be considered an "investment company" that 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 after a date specified in the accompanying Prospectus Supplement. "Like Amount" means (i) with respect to a redemption of Issuer Securities, Issuer Securities having an aggregate Liquidation Amount equal to the principal amount of correspond- ing Junior Subordinated Debentures to be contemporaneously redeemed in accordance with the Indenture and the proceeds of which will be used to pay the Redemption Price of such Issuer Securities and (ii) with respect to a distribution of Junior Subordinated Debentures to holders of the Preferred Securities in connection with the termination or liquidation of the Issuer upon the bankruptcy, dissolution or liquidation of a holder of the Common Securities, the occurrence of a Special Event or in the event that the Issuer is not or will not be taxed as a grantor trust but a Tax Event has not occurred, Junior Subordi- nated Debentures having a principal amount equal to the aggre- gate Liquidation Amount of the Preferred Securities of the holders to whom such series of Junior Subordinated Debentures is distributed. Redemption Procedures Preferred Securities redeemed on each date fixed for redemption (the "Redemption Date") shall be redeemed at the Redemption Price with the proceeds from the contemporaneous redemption of the corresponding Junior Subordinated Debentures. Redemptions of Preferred Securities shall be made, and the Redemption Price shall be deemed payable, on each Redemption Date only to the extent that an Issuer has funds sufficient for the payment of such Redemption Price. (Section 4.02(d)). See "-- Subordination of Common Securities." If the Property Trustee gives a notice of redemption in respect of Preferred Securities of a particular series (which notice will be conditioned upon the redemption of the related series of Junior Subordinated Debentures), then, by 12:00 noon, New York time, on the Redemption Date, the Property Trustee will, so long as such Preferred Securities are in book- entry-only form, irrevocably deposit with The Depository Trust Company ("DTC") funds sufficient to pay the applicable -13- Redemption Price and, at the direction of the Depositor, will give DTC irrevocable instructions and authority to pay the Redemption Price to the holders of such Preferred Securities. See "-- Book-Entry-Only Issuance -- The Depository Trust Com- pany." If such Preferred Securities are no longer in book- entry-only form, the Property Trustee will irrevocably deposit with the Paying Agent for such Preferred Securities funds suf- ficient to pay the applicable Redemption Price and will give such Paying Agent irrevocable instructions and authority to pay the Redemption Price to the holders thereof upon surrender of their certificates evidencing Preferred Securities. Notwith- standing the foregoing, distributions payable on or prior to the Redemption Date for any Preferred Securities called for redemption shall be payable to the holders of such Preferred Securities on the relevant record date for the related Distri- bution Date. If notice of redemption shall have been given and funds deposited as required, then upon the date of such deposit, all rights of holders of such Preferred Securities so called for redemption will cease, except the right of the hold- ers of such Preferred Securities to receive the Redemption Price, but without interest on such Redemption Price, and such Preferred Securities will cease to be outstanding. In the event that any date fixed for redemption of Preferred Securi- ties is not a Business Day, then payment of the Redemption Price 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 falls in the next calendar year, such payment will be made on the immediately preceding Business Day. In the event that payment of the Redemption Price in respect of Pre- ferred Securities called for redemption is not paid either by the Issuer or by the Company pursuant to the Guarantee described herein under "Description of Guarantee," distribu- tions on such Preferred Securities will continue to accrue at the rate set forth on the face of such securities, from the original Redemption Date 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. Failure to deposit the Redemption Price with the Property Trus- tee (and/or irrevocably direct the Property Trustee to apply money held by it to the redemption of Preferred Securities) in the case of an optional redemption shall not be an Event of Default but shall be deemed to be a rescission of the call for redemption. (Section 4.02(e)). Subject to applicable law (including, without limita- tion, United States Federal securities law), the Company or its subsidiaries may at any time and from time to time purchase -14- outstanding Preferred Securities by tender, in the open market or by private agreement. Payment of the Redemption Price on Preferred Securi- ties to holders of such Preferred Securities shall be made to the record holders thereof as they appear on the register for such Preferred Securities on the relevant record date, which shall be one Business Day prior to the relevant Redemption Date, provided, however, that in the event that such Preferred Securities do not remain in book-entry-only form, the relevant record date shall be the date 15 days prior to the Redemption Date. (Section 4.02(f)). If less than all the outstanding Issuer Securities are to be redeemed on a Redemption Date, then the aggregate amount payable shall be allocated 3% to the Common Securities and 97% to the Preferred Securities. The particular Preferred Securities to be redeemed shall be selected not more than 90 days prior to the Redemption Date by the Property Trustee from the outstanding Preferred Securities not previously called for redemption, by such method as the Property Trustee shall deem fair and appropriate and which may provide for the selec- tion for redemption of portions (equal to $25 and integral mul- tiples in excess thereof) of the aggregate Liquidation Amount of Preferred Securities of a denomination larger than $25. The Property Trustee shall promptly notify the Securities Registrar in writing of the Preferred Securities selected for partial redemption and, in the case of any such Preferred Securities selected for partial redemption, the aggregate Liquidation Amount thereof to be redeemed. For all purposes of the Trust Agreement, unless the context otherwise requires, all provi- sions relating to the redemption of a series of Preferred Secu- rities shall relate, in the case of any Preferred Securities redeemed or to be redeemed only in part, to the portion of the aggregate Liquidation Amount of the Preferred Securities that has been or is to be redeemed. (Section 4.02(g)). Subordination of Common Securities Payment of distributions (including Additional Amounts, if applicable) on, and the Redemption Price of, Issuer Securities, as applicable, shall be made pro rata based on the aggregate Liquidation Amount of both the Preferred Securities and the Common Securities; provided, however, that if on any Distribution Date or Redemption Date an Event of Default (as defined herein, see "-- Events of Default; Notice," below) under the Indenture shall have occurred and be continuing, with respect to the Preferred Securities, no payment of any distri- bution (including Additional Amounts, if applicable) on, or the -15- Redemption Price of, any Common Security corresponding thereto, and no other payment on account of the redemption, liquidation or other acquisition of the corresponding Common Securities shall be made unless payment in full in cash of all accumulated and unpaid distributions (including Additional Amounts, if applicable) on all outstanding Preferred Securities for all distribution periods terminating on or prior thereto, or in the case of payment of the Redemption Price the full amount of such Redemption Price on all such outstanding Preferred Securities called for redemption, shall have been made or provided for, and all funds available to the Property Trustee shall first be applied to the payment in full in cash of all distributions (including Additional Amounts, if applicable) on, or the Redemption Price of such Preferred Securities then due and pay- able. (Section 4.03(a)). In the case of any Event of Default under the Trust Agreement, the holder of the Common Securities will be deemed to have waived any right to act with respect to any such Event of Default under such Trust Agreement until the effect of all such Events of Default with respect to the Preferred Securities have been cured, waived or otherwise eliminated. Until all such Events of Default under the Trust Agreement have been so cured, waived or otherwise eliminated, the Property Trustee shall act solely on behalf of the holders of the Preferred Securities and not the holder of the Common Securities, and only the holders of such Preferred Securities will have the right to direct the Property Trustee to act on their behalf. (Section 4.03(b)). Liquidation Distribution Upon Dissolution Pursuant to the Trust Agreement, the Issuer shall be liquidated on the first to occur of: (i) the expiration of the term of the Trust; (ii) the bankruptcy, dissolution or liquida- tion of a holder of Common Securities; (iii) the Depositor has elected to cause the Trust to be dissolved after the occurrence of a Special Event or in the event that the Trust is not or will not be taxed as a grantor trust but a Tax Event has not occurred; (iv) the redemption of all of the Preferred Securi- ties; and (v) an order for dissolution of the Trust issued by a court of competent jurisdiction. (Section 9.01 and 9.02). If an early termination occurs as described in clause (iii) of the immediately preceding paragraph, the Issuer shall be liquidated as expeditiously as practicable by having the Property Trustee distribute, subject to the receipt of an Opinion of Counsel experienced in such matters to the effect that the holders of the Preferred Securities will not recognize -16- gain or loss for United States Federal income tax purposes as a result of such distribution, to each holder of Preferred Secu- rities and Common Securities a Like Amount of Junior Subordi- nated Debentures held by such Issuer (a "Final Distribution"). However, in the event that the Property Trustee determines that such Final Distribution is impractical, the holders of such Issuer Securities will be entitled to receive, out of the assets of the Issuer available for distribution to holders after satisfaction of all liabilities of creditors, an amount equal to the aggregate of the stated Liquidation Amount of $25 per Issuer Security plus accrued and unpaid distributions thereon to the date of payment (such amount being the "Liquida- tion Distribution"). If such Liquidation Distribution can be paid only in part because the Issuer has insufficient assets available to pay in full the aggregate Liquidation Distribu- tion, then the amounts payable directly by such Issuer on the Issuer Securities shall be paid on a pro rata basis. However, if an Event of Default has occurred and is continuing, the holders of the Common Securities will be entitled to receive distributions upon any such dissolution only after the holders of the Preferred Securities. If the Junior Subordinated Deben- tures are distributed to the holders of the corresponding Pre- ferred Securities, the Company will use reasonable efforts to have such Junior Subordinated Debentures listed on such stock exchanges, if any, on which the Preferred Securities are then listed. If an early termination occurs as described in clause (ii) of the immediately preceding paragraph, a liquidat- ing trustee (the "Liquidating Trustee") may be appointed by a majority of the aggregate Liquidation Amount of the Issuer Securities or by a court of competent jurisdiction. Any such Liquidating Trustee shall (unless otherwise instructed by a court of competent jurisdiction) make a Final Distribution or, if deemed appropriate by such Liquidating Trustee, make a Liquidation Distribution, in substantially the same manner as described above. (Section 9.04). Events of Default; Notice The occurrence of an "Event of Default" as defined in Section 501 of the Indenture (see "Description of Junior Subor- dinated Debentures -- Events of Default") constitutes an "Event of Default" under the Trust Agreement. Within five Business Days after the occurrence of any Event of Default actually known to the Property Trustee, the Property Trustee shall transmit notice of such Event of Default to the holders of the Preferred Securities, the Administrative Trustees and the Depositor, unless such Event of Default shall have been cured or waived. (Section 8.02). -17- Unless an Event of Default shall have occurred and be continuing, any Trustee with respect to the Issuer Securities may be removed at any time by act of the Depositor of the Issuer. If an Event of Default has occurred and is continuing, any Trustee with respect to the Issuer Securities may be removed at such time by act of the holders of a majority in aggregate Liquidation Amount of the outstanding Issuer Securi- ties, delivered to such Trustee (in its individual capacity and on behalf of the relevant Issuer). No resignation or removal of a Trustee and no appointment of a successor Trustee shall be effective until the acceptance of appointment by the successor Trustee in accordance with the provisions of the Trust Agree- ment. (Section 8.10). If an Event of Default has occurred and is continu- ing, the Preferred Securities shall have a preference over the corresponding Common Securities upon dissolution of the rele- vant Issuer as described above. See "-- Liquidation Distribu- tion Upon Dissolution." Merger or Consolidation of a Trustee Any corporation into which either the Property Trus- tee or any Administrative Trustee that is not a natural person may be merged or with which it may be consolidated or any cor- poration resulting from any merger, conversion or consolidation to which any such Trustee shall be a party shall be the succes- sor to such Trustee under the Trust Agreement, provided such corporation is otherwise qualified and eligible. (Section 8.12). Voting Rights Except as provided below and under "Description of Guarantee -- Amendments and Assignments" and as otherwise required by law, the holders of the Preferred Securities will have no voting rights. (Section 6.01(a)). So long as any Junior Subordinated Debentures are held by the Issuer, the Property Trustee shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Trustee, or executing any trust or power conferred on the Debenture Trustee with respect to the Junior Subordinated Debentures, (ii) waive any past default which is waivable under Section 513 of the Indenture, (iii) exercise any right to rescind or annul any declaration that the principal of all the Junior Subordinated Debentures shall be due and payable or (iv) consent to any amendment, mod- ification of termination of the Indenture or the Junior -18- Subordinated Debentures, where such consent shall be required, without, in each case, obtaining the prior approval of the holders of at least a majority in aggregate Liquidation Amount of the outstanding Issuer Securities; provided, however, that where a consent under the Indenture would require the consent of each holder of Junior Subordinated Debentures affected thereby, no such consent shall be given by the Property Trustee without the prior consent of each holder of the Issuer Securi- ties. The Property Trustee shall not revoke any action previ- ously authorized or approved by a vote of the holders of the Issuer Securities, except pursuant to a subsequent vote of the outstanding Issuer Securities. The Property Trustee shall notify all holders of Issuer Securities of any notice of default received from the Debenture Trustee. In addition to obtaining the foregoing approvals of the holders of the Issuer Securities, prior to taking any of the foregoing actions, the Property Trustee shall obtain an Opinion of Counsel experienced in such matters to the effect that the Issuer will not be clas- sified as an association taxable as a corporation for United States Federal income tax purposes on account of such action. (Section 6.01(b)). If any proposed amendment to the Trust Agreement pro- vides for, or the Trustees otherwise propose to effect, (i) any action that would adversely affect the powers, preferences or special rights of the holders of the Issuer Securities, whether by way of amendment to the Trust Agreement relating to such Issuer Securities or otherwise, or (ii) the dissolution, winding-up or termination of the Issuer, other than pursuant to the Trust Agreement, then the holders of the outstanding Issuer Securities will be entitled to vote on such amendment or pro- posal, and such amendment or proposal shall not be effective except with the approval of the holders of at least a majority in aggregate Liquidation Amount of such outstanding Issuer Securities. (Section 6.01(c)). No amendment to the Trust Agreement may be made if, as a result of such amendment, the Issuer would be classified as an association taxable as a corporation for United States Federal income tax purposes. (Section 6.01(c)). Any required approval of the holders of Issuer Secu- rities may be given at a meeting of the holders of Issuer Secu- rities convened for such purpose or pursuant to the written consent of such holders. The Administrative Trustees will cause a notice of any meeting at which holders of such Issuer Securities are entitled to vote, or of any matter upon which action by written consent of such holders is to be taken, to be -19- given to each holder of record of such Issuer Securities in the manner set forth in the Trust Agreement (Section 6.02). No vote or consent of the holders of Issuer Securi- ties will be required for the Issuer to redeem and cancel Issuer Securities in accordance with the Trust Agreement. Notwithstanding that holders of Issuer Securities are entitled to vote or consent under any of the circumstances described above, any of the Issuer Securities that are owned by the Company, any Trustee or any affiliate of the Company or any Trustee, shall, for purposes of such vote or consent, be treated as if they were not outstanding. Co-Property Trustees and Separate Property Trustees Unless an Event of Default under the Trust Agreement shall have occurred and be continuing, at any time or times, for the purpose of meeting the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part of the Trust Property (as defined in the Trust Agreement) may at the time be located, the Depositor and the Administrative Trustees shall have power to appoint, and upon the written request of the Administrative Trustees, the Depositor shall for such pur- pose join with the Administrative Trustees in the execution, delivery and performance of all instruments and agreements nec- essary or proper to appoint one or more persons approved by the Property Trustee either to act as co-property trustee, jointly with the Property Trustee, of all or any part of such Trust Property, or to act as separate trustee of any such Trust Prop- erty, in either case with such powers as may be provided in the instrument of appointment, and to vest in such person or per- sons in such capacity, any property, title, right or power deemed necessary or desirable, subject to the provisions of the Trust Agreement. If the Depositor does not join in such appointment within 15 days after the receipt by it of a request to do so, or in case an Event of Default under the Indenture has occurred and is continuing, the Administrative Trustees and the Property Trustee shall have power to make such appointment. (Section 8.09). Payment and Paying Agents Payments in respect of the Preferred Securities shall be made to DTC, which shall credit the relevant accounts at DTC on the applicable Distribution Dates or, if the Preferred Secu- rities are not held by DTC, such payments shall be made by check mailed to the address of the holder entitled thereto as such address shall appear on the securities register. The -20- Paying Agent shall initially be Wilmington Trust Company. The Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written notice to the Administrative Trustees, the Property Trustee and the Depositor. In the event that Wilmington Trust Company chooses no longer to be the Paying Agent, the Administrative Trustees shall appoint a successor acceptable to the Property Trustee and the Company to act as Paying Agent (which shall be a bank or trust company or the Company). (Section 4.04 and 5.08). Book-Entry-Only Issuance--The Depository Trust Company DTC will act as securities depository for the Pre- ferred Securities. The Preferred Securities will be issued only as fully-registered securities registered in the name of Cede & Co. (DTC's nominee). One or more fully-registered glo- bal Preferred Security certificates will be issued, represent- ing in the aggregate the total number of Preferred Securities, and will be deposited with Wilmington Trust Company, as custo- dian for DTC. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Fed- eral Reserve System, a "clearing corporation" within the mean- ing of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds the securities that its partici- pants ("Participants") deposit with it. DTC facilitates the settlement of securities transactions among Participants through electronic computerized book-entry changes in Partici- pants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers, securities dealers, banks, trust companies, clearing corporations and certain other organiza- tions ("Direct Participants"). DTC is owned by a number of its Direct Participants, as well as by the New York Stock Exchange, the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers, securities dealers, banks and trust companies that clear through or main- tain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The under- writers with respect to the Preferred Securities may be Direct or Indirect Participants. The rules applicable to DTC and its Participants are on file with the Commission. Purchases of Preferred Securities within the DTC sys- tem must be made by or through Direct Participants, which will -21- receive a credit for the Preferred Securities on DTC's records. The ownership interest of each actual purchaser of each Pre- ferred Security ("Beneficial Owner") is, in turn, recorded on a Direct or Indirect Participant's records, as the case may be. Beneficial Owners will not receive written confirmation from DTC of their purchases, but Beneficial Owners are expected to receive written confirmations providing details of the transac- tions, as well as periodic statements of their holdings, from the respective Direct or Indirect Participants through which the Beneficial Owners purchased Preferred Securities. Trans- fers of ownership interests in the Preferred Securities are also effected by entries made on the books of Participants act- ing on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Preferred Securities, except in the event that use of the book- entry system for the Preferred Securities is discontinued. DTC has no knowledge of the actual Beneficial Owners of the Preferred Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Pre- ferred Securities are credited, which may or may not be the Beneficial Owners. The Participants are responsible for keep- ing account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Par- ticipants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by the arrangements made among them, subject to any statutory or regulatory requirements as may be in effect from time time. Redemption notices, if any, will be sent to DTC. If less than all of the Preferred Securities of a particular series are being redeemed, DTC's practice is to determine by lot the amount of the Preferred Securities held by each Direct Participant in such series to be redeemed. Although voting with respect to the Preferred Securi- ties is limited to the holders of record of the Preferred Secu- rities, in those cases where a vote is required neither DTC nor Cede & Co. will itself consent or vote with respect to any Pre- ferred Securities. Under its usual procedures, DTC would mail an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants (identified in a listing attached to the Omnibus Proxy) to whose accounts the Preferred Securities are credited on the record date. -22- Distribution payments on the Preferred Securities will be made by the Issuer to DTC. DTC's practice is to credit Direct Participants' accounts on the relevant payment date in accordance with their respective holdings as shown on DTC's records, unless DTC has reason to believe that it will not receive payments on such payment date. Payments by Partici- pants to Beneficial Owners will be governed by standing instructions and customary practices and will be the responsi- bility of such Participants and not of DTC, the Issuer or the Company, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of distributions to DTC is the responsibility of the Issuer, disbursement of such payments to Direct Participants is the responsibility of DTC, and disbursement of such payments to the Beneficial Owners is the responsibility of the Direct or Indirect Participants in whose accounts the Preferred Securities are held, respectively. DTC may discontinue providing its services as securi- ties depositary with respect to the Preferred Securities at any time by giving reasonable notice to the Issuer. If DTC stops providing such services and a successor securities depositary is not obtained, Preferred Security certificates must be printed and delivered. Additionally, the Administrative Trust- ees (with the consent of the Company) could decide to discon- tinue use of the system of book-entry transfers through DTC (or a successor depositary). In that event, definitive certifi- cates for the Preferred Securities would be printed and delivered. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Company and the Issuer believe to be reliable. Neither the Company nor the Issuer have responsibility for the performance by DTC or its Participants of their respective obligations as described herein or under the rules and procedures governing their respective operations. Registrar and Transfer Agent Wilmington Trust Company will act as Securities Reg- istrar and transfer agent for the Issuer Securities. (Section 5.04). Registration of transfers of Issuer Securities will be effected without charge by or on behalf of the Issuer, but upon payment (with the giving of such indemnity as the Issuer or the Company may require) in respect of any tax or other gov- ernmental charges which may be imposed in connection therewith. (Section 5.04). -23- The Securities Registrar will not be required to reg- ister or cause to be registered any transfer of Issuer Securi- ties after they have been called for redemption. (Section 5.04). Information Concerning the Property Trustee The Property Trustee undertakes to perform only such duties as are specifically set forth in the Trust Agreement and, after an Event of Default under the Indenture, must exer- cise the same degree of care and skill as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the Property Trustee is under no obligation to exercise any of the powers vested in it by the Indenture at the request of any holder of Preferred Securities or Junior Subordinated Debentures unless the Property Trustee is offered reasonable indemnity against the costs, expenses and liabilities that might be incurred thereby. (Section 8.01). Modification of the Trust Agreement From time to time, the Company and the Trustees may, without the consent of any holders of the Preferred Securities, amend the Trust Agreement for specified purposes, including, among other things, (i) to cure ambiguities, correct or supple- ment any provision of the Trust Agreement which may be incon- sistent with any other provision thereof or to make any other provisions with respect to matters or questions arising under the Trust Agreement which shall not be inconsistent with the other provisions of the Trust Agreement, or (ii) to ensure that the Trust will not be classified for United States Federal income tax purposes as an association taxable as a corporation and will not be required to register as an "investment company" under the 1940 Act; provided, however, that such amendment or action shall not adversely affect the rights of any holder of the Issuer Securities. The Trust Agreement contains provisions permitting the Company and the Trustees, with the consent of the holders of not less than a majority in aggregate Liquida- tion Amount of the outstanding Issuer Securities related thereto and upon receipt of an appropriate Opinion of Counsel, to modify the Trust Agreement in a manner affecting the rights of the holders of such Issuer Securities; provided that no such modification may, without the consent of the holder of each such outstanding Issuer Security affected by the proposed modi- fication (i) change the amount or timing of any distribution on such Issuer Securities or otherwise adversely affect the amount of any distribution required to be made in respect of such Issuer Securities as of a specified date, (ii) restrict the right of any holder of such Issuer Securities to institute suit -24- for the enforcement of any payment under such Trust Agreement or (iii) change the percentage of Issuer Securities required to consent to any modification to the Trust Agreement. (Section 10.02). Governing Law The Trust Agreement will be governed by, and con- strued in accordance with, the laws of the State of Delaware. (Section 10.05). Miscellaneous The Administrative Trustees are authorized and directed to conduct the affairs of the Issuer and to operate the Issuer so that the Issuer will not be deemed to be an "investment company" required to be registered under the 1940 Act or be taxed as a corporation for United States Federal income tax purposes and so that the Junior Subordinated Deben- tures will be treated as indebtedness of the Company for United States Federal income tax purposes. In this connection, the Administrative Trustees are authorized to take any action, not inconsistent with applicable law, the certificate of trust of the Issuer or the Trust Agreement, that the Administrative Trustees determine in their discretion to be necessary or desirable for such purposes, as long as such action does not adversely affect the interest of the holders of the Preferred Securities. (Section 2.07). Holders of the Preferred Securities have no preemp- tive rights. DESCRIPTION OF GUARANTEE General Set forth below is certain information concerning the Guarantee that will be executed and delivered by the Company for the benefit of the holders from time to time of Preferred Securities. The Guarantee will be qualified as an indenture under the Trust Indenture Act. Wilmington Trust Company will act as indenture trustee (the "Guarantee Trustee") under the Guarantee for purposes of compliance with the Trust Indenture Act. The terms of the Guarantee will be those set forth in such Guarantee and those made part of such Guarantee by the Trust Indenture Act. This summary does not purport to be com- plete and is subject in all respects to the provisions of, and is qualified in its entirety by reference to, the Guarantee, -25- the form of which is filed as an exhibit to the Registration Statement of which this Prospectus is a part, and of the Trust Indenture Act. The Guarantee Trustee will hold the Guarantee for the benefit of the holders of the Preferred Securities. Whenever particular provisions of or defined terms in the Guar- antee are referred to, such sections or defined terms are incorporated herein by reference. Section references used herein are references to provisions of the Guarantee unless otherwise stated. The Company will agree, on a subordinated basis, to the extent set forth below, to make the Guarantee Payments (as defined below) in full to the holders of the Preferred Securi- ties (without duplication of amounts theretofore paid by the Issuer with respect thereto), as and when due, regardless of any defense, right of set-off or counterclaim that such Issuer may have or assert other than the defense of payment. (Section 5.1). The following payments with respect to the Preferred Securities, to the extent not paid by or on behalf of the Issuer (the "Guarantee Payments"), will be subject to the related Guarantee (without duplication): (i) any accrued and unpaid distributions required to be paid on the Preferred Secu- rities, if and only to the extent that the Issuer has funds sufficient to make such payment; (ii) the Redemption Price with respect to any such Preferred Securities called for redemption by the Issuer, if and only to the extent that the Issuer has funds sufficient to make such payment; and (iii) upon a volun- tary or involuntary dissolution, winding-up or termination of such Issuer (other than in connection with a redemption of all of the corresponding Preferred Securities), the lesser of (a) the aggregate Liquidation Amount and all accrued and unpaid distributions on such Preferred Securities to the date of pay- ment, to the extent the Issuer has funds sufficient to make such payment, and (b) such amount of assets of such Issuer remaining available for distribution to holders of such Pre- ferred Securities in liquidation of such Issuer. (Section 1.1). The Company's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Company to the holders of the Preferred Securities or by caus- ing the Issuer to pay such amounts to such holders. (Section 5.1). The Guarantee will be a guarantee on a subordinated basis with respect to the Preferred Securities from the time of the issuance of such Preferred Securities, but will not apply (i) to any payment of distributions if and to the extent that the Issuer does not have funds sufficient to make such payments or (ii) to the collection of payment. If the Company does not make interest payments on a series of Junior Subordinated -26- Debentures held by the Issuer, it is expected that such Issuer will not pay distributions on such Preferred Securities. The Guarantee will rank subordinate and junior in right of payment to all liabilities of the Company (except trade credit and any liabilities made pari passu with, or subordinate to, the Guar- antee by their terms). See "-- Status of the Guarantee." With respect to the Preferred Securities, the mecha- nisms and obligations relating to the Guarantee and the Junior Subordinated Debentures and the obligation of the Company under the Trust Agreement to pay certain obligations, costs and expenses of the Issuer (the "Expense Agreement") taken together, are a full and unconditional subordinated guarantee by the Company of payment due of such Preferred Securities. See "Description of Junior Subordinated Debentures" and "Rela- tionship Among the Preferred Securities, the Junior Subordi- nated Debentures and the Guarantee". Amendments and Assignments Except with respect to any changes that do not adversely affect the rights of the holders of Preferred Securi- ties (in which case no consent of such holders will be required), the terms of the Guarantee may be changed only with the prior approval of the holders of not less than a majority in aggregate Liquidation Amount of such outstanding Preferred Securities. All guarantees and agreements contained in the Guarantee will be binding upon the successors, assigns, receiv- ers, trustees and representatives of the Company, and shall inure to the benefit of the holders of the corresponding Pre- ferred Securities then outstanding. (Sections 8.1 and 8.2). Events of Default An event of default under the Guarantee will occur upon the failure of the Company to perform any of its payment obligations thereunder. (Section 1.1). The holders of a majority in aggregate Liquidation Amount of the Preferred Secu- rities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guar- antee Trustee in respect of the Guarantee or to direct the exercise of any trust or power conferred upon the Guarantee Trustee under the Guarantee. (Section 5.4). If the Guarantee Trustee fails to enforce the Guaran- tee, any holder of the Preferred Securities may institute a legal proceeding directly against the Company to enforce such holder's rights under the Guarantee without first instituting a -27- legal proceeding against the Issuer, the Guarantee Trustee or any other person or entity. (Section 5.4). Information Concerning the Guarantee Trustee The Guarantee Trustee, other than during the occur- rence and continuance of a default by the Company in the per- formance of the Guarantee, undertakes to perform only such duties as are specifically set forth in the Guarantee and, after default with respect to the Guarantee, must exercise the same degree of care and skill as a prudent person would exer- cise or use in the conduct of his or her own affairs. Subject to this provision, the Guarantee Trustee is under no obligation to exercise any of the powers vested in it by the Guarantee at the request of any holder of Preferred Securities unless the Guarantee Trustee is offered reasonable indemnity against the costs, expenses and liabilities that might be incurred thereby. (Sections 3.1 and 3.2). Termination of the Guarantee The Guarantee will terminate and be of no further force and effect upon full payment of the Redemption Price of all Preferred Securities, the distribution of Junior Subordi- nated Debentures to the holders of such Preferred Securities in exchange for all of such Preferred Securities or upon payment in full of the amounts payable upon liquidation of the Issuer. Notwithstanding the foregoing, the 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 restore pay- ment of any sums paid under such Preferred Securities or the Guarantee. (Section 7.1). Status of the Guarantee The Guarantee will constitute an unsecured obligation of the Company and will rank subordinate and junior in right of payment to all Senior Indebtedness (as defined below) of the Company. (Section 6.1). The Trust Agreement provides that each holder of Preferred Securities by acceptance thereof agrees to the subordination provisions and other terms of the Guarantee. The Guarantee will rank pari passu with any similar guarantees issued by the Guarantor on behalf of the holders of Preferred Securities issued by any other issuer holding Junior Subordinated Debentures issued under the Indenture. (Section 6.2). -28- The Guarantee will constitute a guarantee of payment and not of collection (i.e., the guaranteed party may institute a legal proceeding directly against the Guarantor to enforce its rights under the Guarantee without first instituting a legal proceeding against any other person or entity). (Section 5.5). Governing Law The Guarantee will be governed by and construed in accordance with the laws of the State of New York. (Section 8.5). DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES General Set forth below is a description of certain terms of the Junior Subordinated Debentures which the Issuer will pur- chase with its Common Securities and the proceeds of the issu- ance and sale of such Issuer's Preferred Securities. The fol- lowing summary does not purport to be complete and is subject in all respects to, and is qualified in its entirety by refer- ence to, the Indenture, as supplemented by a supplemental indenture creating the series of Junior Subordinated Debentures (the "Supplemental Indenture"), from the Company to Wilmington Trust Company, as trustee with respect to the Junior Subordi- nated Debentures (the "Debenture Trustee"), the forms of which are filed as exhibits to the Registration Statement of which this Prospectus is a part, and the Trust Indenture Act. When- ever particular provisions of or defined terms in the Indenture or the Supplemental Indenture are referred to, such sections or defined terms are incorporated herein by reference. Section references used herein are references to provisions of the Indenture unless otherwise stated. Concurrently with the issuance of Preferred Securi- ties, the Issuer will invest the proceeds thereof in a corre- sponding series of Junior Subordinated Debentures newly issued by the Company. The Junior Subordinated Debentures will mature on a date that is more than 20 and less than 50 years from the date of issuance, as specified in the Prospectus Supplement. The Junior Subordinated Debentures will be unsecured subordi- nated obligations of the Company issued under the Indenture. The Junior Subordinated Debentures will be in a principal amount equal to the aggregate stated Liquidation Amount of the Preferred Securities plus the Company's concurrent investment in the Common Securities and will rank pari passu with any -29- other series of Junior Subordinated Debentures that may be issued. The Indenture does not limit the aggregate principal amount of Junior Subordinated Debentures which may be issued thereunder. Optional Redemption The Company will have the right, at any time and from time to time, as set forth in the Supplemental Indenture, to redeem the Junior Subordinated Debentures, in whole or in part, at a redemption price as set forth in such Supplemental Inden- ture, together with any accrued but unpaid interest thereon, including any Additional Interest (as defined below) to the redemption date. If a Special Event shall occur and be continuing, the Company shall have the right to redeem any series of Junior Subordinated Debentures in whole but not in part, at 100% of the principal amount thereof plus any accrued and unpaid inter- est on such Junior Subordinated Debentures, including any Addi- tional Interest, if any, to the redemption date fixed for redemption for such series. (Section 102 of the Supplemental Indenture). For so long as the Issuer is the holder of all the outstanding Junior Subordinated Debentures, the proceeds of any such redemption will be used by such Issuer to redeem Preferred Securities and the Common Securities in accordance with their terms. The Company may not redeem Junior Subordinated Deben- tures in part unless all accrued and unpaid interest thereon (including any Additional Interest) has been paid in full on all outstanding Junior Subordinated Debentures for all interest periods terminating on or prior to the redemption date. (Sec- tion 102 of the Supplemental Indenture). Any optional redemption of Junior Subordinated Deben- tures shall be made upon not less than 30 nor more than 90 days' notice to the holders thereof. If at the time of mailing of any notice of redemption the Company shall not have depos- ited with the Debenture Trustee (and/or irrevocably directed the Debenture Trustee to apply, from money held by it available to be used for the redemption of Junior Subordinated Deben- tures) an amount in cash sufficient to redeem all of the Junior Subordinated Debentures to be redeemed, including accrued interest to such redemption date, such notice shall state that the proposed redemption to which such notice relates is subject to the deposit of such amount with the Debenture Trustee on or before the redemption date. Failure to have so deposited such amount (or directed such payment) shall not constitute an Event -30- of Default but shall be deemed to be a rescission of the call for redemption. (Section 1204). After notice of redemption is given and the Company having on or before the redemption date deposited with the Debenture Trustee (and/or having irrevocably directed the Debenture Trustee to apply, from money held by it available to be used for the redemption of Junior Subordinated Debentures) an amount in cash sufficient to redeem all of the Junior Subor- dinated Debentures to be redeemed, the Junior Subordinated Debentures so to be redeemed will, on the redemption date, become due and payable and from and after such date, such Jun- ior Subordinated Debentures will cease to bear interest. (Sec- tion 1206). The Junior Subordinated Debentures will be subject to optional redemption in whole, but not in part, upon the termi- nation and liquidation of the Issuer holding such series of Junior Subordinated Debentures pursuant to an order for the dissolution, termination or liquidation of such Issuer entered by a court of competent jurisdiction. For so long as the Issuer is the holder of all Junior Subordinated Debentures, the proceeds of any redemption described in this section shall be used by such Issuer to redeem its Preferred Securities and the Common Securities in accordance with their terms. The Company shall not redeem the Junior Subordinated Debentures in part unless all accrued and unpaid interest (including any Additional Interest) has been paid in full on all Junior Subordinated Debentures outstanding for all interest periods on or prior to the redemption date. Distributions of Debentures Under certain circumstances involving the termination of the Issuer, Junior Subordinated Debentures held by such Issuer may be distributed to the holders of the Preferred Secu- rities in liquidation of the Issuer, after satisfaction of all liabilities to creditors of the Issuer as provided by appli- cable law. If distributed to holders of Preferred Securities in liquidation, the Junior Subordinated Debentures will ini- tially be issued in the form of one or more global securities, and DTC, or any successor depositary for the Preferred Securi- ties, will act as depositary for the Junior Subordinated Deben- tures. It is anticipated that the depositary arrangements for the Junior Subordinated Debentures, if distributed, would be substantially identical to those in effect for the Preferred Securities. Neither the Company, the Debenture Trustee, any Paying Agent nor any other agent of the Company or the -31- Debenture Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of persons holding Junior Subordinated Debentures in the form of a global security for the Junior Subordinated Debentures or for maintaining, supervising or reviewing any records relating to such holders. A global security shall be exchangeable for Junior Subordinated Debentures registered in the names of persons other than DTC or its nominee only if (i) DTC notifies the Com- pany that it is unwilling or unable to continue as a depositary for such global security and no successor depositary shall have been appointed, or if at any time DTC ceases to be a clearing agency registered under the Exchange Act at a time when DTC is required to be so registered to act as such depositary, (ii) the Company in its sole discretion determines that such global security shall be so exchangeable, or (iii) there shall have occurred and be continuing an Event of Default with respect to such global security. Any global security that is exchangeable pursuant to the preceding sentence shall be exchangeable for definitive certificates registered in such names as DTC shall direct. It is expected that such instructions will be based upon directions received by DTC from its Participants with respect to the ownership of beneficial interests in such global security. In the event that Junior Subordinated Debentures are issued in definitive form, such Junior Subordinated Debentures will be issued in denominations of $25 and integral multiples thereof and may be transferred or exchanged at the offices described below. Payments on Junior Subordinated Debentures repre- sented by a global security will be made to DTC, as the deposi- tary for the Junior Subordinated Debentures. In the event Jun- ior Subordinated Debentures are issued in definitive form, principal and interest will be payable, the transfer of the Junior Subordinated Debentures will be registrable, and Junior Subordinated Debentures will be exchangeable for Junior Subor- dinated Debentures of other denominations of a like aggregate principal amount, at the corporate office of the Debenture Trustee in Wilmington, Delaware, or at the offices of any pay- ing or transfer agent appointed by the Company, provided that payment of interest may be made, at the option of the Company, by check mailed to the address of the persons entitled thereto or by wire transfer. In addition, if the Junior Subordinated Debentures are issued in certificated form, the record dates for payment of interest will be the 15th day preceding the end of each quarter. For a description of DTC and the terms of the depositary arrangements relating to payments, transfers, voting rights and other matters, see "Description of Preferred -32- Securities -- Book-Entry-Only Issuance -- The Depository Trust Company." If the Junior Subordinated Debentures are distributed to the holders of Preferred Securities upon the liquidation of the Issuer, the Company will use its best efforts to list the Junior Subordinated Debentures on such stock exchanges, if any, as the Preferred Securities are then listed. Interest The Junior Subordinated Debentures shall bear inter- est at the rate per annum set forth in the applicable Supple- mental Indenture and from the date specified therein. Such interest shall be payable in arrears on the dates of each year specified in the Supplemental Indenture (each, an "Interest Payment Date"), subject to certain exceptions, to the person in whose name such Junior Subordinated Debentures are registered, at the close of business on the Business Day next preceding such Interest Payment Date. (Section 307 of the Indenture and Section 101 of the Supplemental Indenture). It is anticipated that the Junior Subordinated Debentures issued with respect to an issue of Preferred Securities will be held in the name of the Property Trustee in trust for the benefit of the holders of the Issuer Securities. The amount of interest payable for any 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 monthly period, shall be computed on the basis of the actual number of days elapsed in such period. (Section 310). In the event that any date on which interest is payable on the Junior 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 the date the pay- ment was originally payable. (Section 101 of the Supplemental Indenture). Interest which is accrued and unpaid after the Inter- est Payment Date therefor will bear additional interest on the amount thereof (to the extent permitted by law) at the rate specified for the Junior Subordinated Debentures. The term "Interest" as used herein shall include interest payments, interest on interest payments in arrears and Additional Inter- est, as applicable. -33- The Company's Option to Extend Interest Payment Periods The Company shall have the right, at any time and from time to time while the Junior Subordinated Debentures are outstanding, so long as an Event of Default has not occurred or is continuing, to extend the interest payment period on such Junior Subordinated Debentures for a period not exceeding 20 consecutive quarters (the "Extension Period") during which period interest will compound quarterly. At the end of any such Extension Period, the Company must pay all interest then accrued and unpaid (together with interest thereon at the rate specified for such Junior Subordinated Debentures to the extent permitted by applicable law). During any such Extension Period, the Company may not declare or pay any dividends or distributions (other than dividends or distributions payable in capital stock of the Company or other securities ranking junior in right of payment to the Junior Subordinated Debentures) on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of its capital stock or any security rank- ing pari passu with or junior in right of payment to the Junior Subordinated Debentures, or make any guarantee payment with respect to the foregoing (other than pro rata payments under the Guarantee) or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures (except for payments made on any series of Junior Subordinated Debentures upon the stated maturity of such Junior Subordinated Debentures); provided that the Company may redeem, purchase, acquire or make a liquidation payment with respect to any of its capital stock or any security ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures, make any guarantee payment with respect to the foregoing or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Deben- tures with securities (or the proceeds from the issuance of securities) having no higher ranking than the capital stock or the other securities which are to be redeemed, purchased, acquired, with respect to which a liquidation payment is to be made, to which a guarantee payment is to be made with respect to the foregoing or which are to be repurchased. This covenant requires that an interest payment period on the Junior Subordi- nated Debentures may be extended only if the interest payment periods on all other series of Junior Subordinated Debentures that may be outstanding at the time are likewise extended. Prior to the termination of any Extension Period, the Company may further extend the interest payment period, provided that such Extension Period together with all such previous and fur- ther extensions thereof may not exceed 20 consecutive quarters -34- or extend beyond the maturity date or redemption date of such Junior Subordinated Debentures. Upon the termination of any such Extension Period and the payment of all amounts then due, the Company may select a new Extension Period, subject to the foregoing requirements. No interest shall be due and payable during an Extension Period, except at the end thereof. So long as the Property Trustee shall be the sole holder of the Junior Subordinated Debentures, the Company must give the Property Trustee, the Administrative Trustees and the Debenture Trustee notice of its selection of such Extension Period at least one Business Day prior to the earlier of (i) the date that the dis- tribution on the Preferred Securities is payable or (ii) the date the Administrative Trustees are required to give notice to the New York Stock Exchange or other applicable self-regulatory organization or to holders of the Preferred Securities of the record date for the payment of such distribution or the date such distribution is payable, but in any event not less than one Business Day prior to such record date. The Debenture Trustee will be required to give prompt notice of the Company's selection of such Extension Period to the holders of the Pre- ferred Securities and the Administrative Trustees. (Section 101 of the Supplemental Indenture). Right of Set-Off Notwithstanding anything to the contrary in the Indenture, the Company shall have the right to set-off any pay- ment it is otherwise required to make thereunder to the extent the Company has theretofore made, or is concurrently on the date of such payment making, a payment under the Guarantee. (Section 311). Additional Interest If at any time the Issuer shall be required to pay any interest on distributions in arrears in respect of the Pre- ferred Securities pursuant to the terms thereof, the Company will pay as interest to such Issuer, as the holder of the cor- responding Junior Subordinated Debentures, an amount of addi- tional interest ("Additional Interest Attributable to Defer- ral") equal to interest on distributions in arrears. Accord- ingly, in such circumstances the Company will, to the fullest extent permitted by applicable law, pay interest upon interest in order to provide for quarterly compounding on such Junior Subordinated Debentures. In addition, if the Issuer is 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 each case, the Company will also pay such amounts as -35- shall be required so that the net amounts received and retained by such Issuer after paying such taxes, duties, assessments or governmental charges will be not less than the amounts such Issuer would have received had no such taxes, duties, assess- ments or governmental charges been imposed ("Additional Inter- est Attributable to Taxes," and, together with Additional Interest Attributable to Deferral, "Additional Interest"). (Section 101 of the Indenture and Section 101 of the Supplemen- tal Indenture). Subordination The Junior Subordinated Debentures will be subordi- nate and junior in right of payment to the prior payment, in full in cash or cash equivalents, of all Senior Indebtedness (as defined below). (Sections 101 and 1101). In the event of (a) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relating to the Company or to its assets, or (b) any liquidation, dissolution or other winding-up of the Company, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or any other marshal- ling of assets and liabilities of the Company (except a distri- bution in connection with a consolidation of the Company with, or the merger of the Company into, another corporation or the liquidation or dissolution of the Company following conveyance, transfer or lease of its properties and assets substantially as an entirety to another corporation upon the terms and condi- tions described below under "--Consolidation, Merger and Sale"), the holders of all Senior Indebtedness will be entitled to receive payment in full in cash or cash equivalents of all amounts due or to become due thereon, before the holders of Junior Subordinated Debentures are entitled to receive any pay- ment on account of the principal of or interest on the Junior Subordinated Debentures; and any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, by set-off or otherwise, to which the holders of the Junior Subordinated Debentures or the Deben- ture Trustee would be entitled but for the provisions of the Indenture relating to subordination shall be paid by the liqui- dating trustee or agent or other person making such payment or distribution directly to the holders of Senior Indebtedness ratably according to the aggregate amounts remaining unpaid on account of the Senior Indebtedness to the extent necessary to make payment in full in cash or cash equivalents of all Senior Indebtedness remaining unpaid. In the event that, notwith- standing the foregoing, the Debenture Trustee or any holder of the Junior Subordinated Debentures shall have received payment -36- or distribution of assets of the Company of any kind or char- acter (excluding certain permitted subordinated securities) before all Senior Indebtedness is paid in full or payment thereof provided for, then such payment or distribution will be paid over or delivered to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other person making payment or distribution of the assets of the Company for application to the payment of all Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior Indebtedness in full in cash or cash equivalents. (Section 1102). The Company is prohibited from making payments on account of the principal of or interest on the Junior Subordi- nated Debentures or on account of the purchase or redemption or other acquisition of the Junior Subordinated Debentures if there shall have occurred and be continuing: (a) a default in any payment with respect to any Senior Indebtedness or (b) any other event of default with respect to any Senior Indebtedness resulting in the acceleration of the maturity thereof. (Section 1103). In the event that the Company makes any pay- ment to the Debenture Trustee or any holder of Junior Subordi- nated Debentures, which payment is prohibited by the foregoing, then such payment is required to be paid over to the represen- tative of the holders of the Senior Indebtedness then outstand- ing to the extent necessary to pay in full, in cash or cash equivalents, all Senior Indebtedness. (Section 1103). Subject to the payment in full of all Senior Indebt- edness, the holders of the Junior Subordinated Debentures shall be subrogated to the rights of the holders of Senior Indebted- ness to receive payments and distributions of assets of the Company applicable to the Senior Indebtedness until the Junior Subordinated Debentures are paid in full. (Section 1105). If the Company fails to make any payment on the Jun- ior Subordinated Debentures when due or within any applicable grace period, such failure will constitute an Event of Default under the Indenture. See "--Events of Default." As of February 29, 1996, the Senior Indebtedness of the Company was approximately $765 million. The term "Senior Indebtedness" shall mean the princi- pal of, interest on and any other payment due pursuant to any of the following, whether outstanding at the date of execution of any Supplemental Indenture or thereafter incurred, created or assumed: -37- (a) all indebtedness of the Company on a consoli- dated basis (other than any obligations to trade credi- tors) evidenced by notes, debentures, bonds or other secu- rities sold by the Company for money borrowed and capital- ized lease obligations; (b) all indebtedness of others of the kinds described in the preceding clause (a) assumed by or guar- anteed in any manner by the Company or in effect guaran- teed by the Company; (c) all obligations of the Company issued or assumed as the deferred purchase price of property, all condi- tional sale obligations of the Company and all obligations of the Company under any title retention agreement (but excluding trade accounts payable); (d) certain obligations of the Company for the reim- bursement of any obligor on any letter of credit, banker's acceptance, security purchase facility, surety bond or similar credit transaction entered into in the ordinary course of business of the Company; and (e) all renewals, extensions or refundings of indebtedness of the kinds described in any of the preced- ing clauses (a) through (d); unless, in the case of any particular indebtedness, capitalized lease obligation, guarantee, renewal, extension or refunding, the instrument creating or evidencing the same or the assump- tion or guarantee of the same expressly provides that such indebtedness, capitalized lease obligation, guarantee, renewal, extension or refunding is made pari passu with or subordinate to the Junior Subordinated Debentures. (Section 101). Notwithstanding the foregoing, the Junior Subordi- nated Debentures will rank pari passu with each other series of Junior Subordinated Debentures that may be issued under the Indenture. The Indenture does not limit the aggregate amount of Senior Indebtedness that may be issued. Certain Covenants The Junior Subordinated Debentures will not be secured by any properties or assets and will represent unse- cured debt of the Company. -38- Unless otherwise indicated in a Prospectus Supple- ment, the covenants contained in the Indenture and the Junior Subordinated Debentures do not afford holders of the Junior Subordinated Debentures special protection in the event of a highly leveraged or other transaction involving the Company that may adversely affect holders of the Junior Subordinated Debentures. In the Indenture, the Company covenants that it will not declare or pay any dividends or distributions (other than dividends or distributions payable in common stock of the Com- pany or other securities ranking junior in right of payment to the Junior Subordinated Debentures) on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock or any security ranking pari passu with or junior in right of payment to the Junior Subordinated Deben- tures, or make any guarantee payments with respect to the fore- going (other than pro rata payments under the Guarantee) or repurchase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures (except for payments made on any series of Junior Subordinated Deben- tures upon the stated maturity of such Junior Subordinated Debentures) if at such time (i) there shall have occurred any event of which the Company has actual knowledge that (a) with the giving of notice or the lapse of time, or both, would con- stitute an Event of Default with respect to such Junior Subor- dinated Debentures and (b) which the Company shall not have taken reasonable steps to cure, (ii) the Company shall have given notice of its selection of an Extension Period as pro- vided in the Indenture, and such Extension Period, or any extension thereof, shall have commenced and be continuing, or (iii) the Company shall be in default with respect to its pay- ment of any obligations under the Guarantee. Notwithstanding the foregoing, the Company may redeem, purchase, acquire or make a liquidation payment with respect to any of its capital stock or any security ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures, make any guarantee payment with respect to the foregoing or repur- chase, or cause any of its subsidiaries to repurchase, any security of the Company ranking pari passu with or junior in right of payment to the Junior Subordinated Debentures with securities (or the proceeds from the issuance of securities) having no higher ranking than the capital stock or the other securities which are to be redeemed, purchased, acquired, with respect to which a liquidation payment is to be made, to which a guarantee payment is to be made with respect to the foregoing or which are to be repurchased. (Section 1005). -39- The Company also covenants (i) not to transfer owner- ship of Common Securities of the Issuer to which Junior Subor- dinated Debentures have been issued to any person other than an affiliate of the Company as permitted under the Indenture; pro- vided that no such transfer will result in (x) such Issuer being considered an "investment company" that is required to be registered under the Investment Company Act of 1940, as amended, or (y) the Issuer not being taxed as a grantor trust for United States Federal income tax purposes, (ii) not to vol- untarily dissolve, wind up or terminate the Issuer, except in connection with the distribution of the Junior Subordinated Debentures to the holders of the Preferred Securities of such Issuer in liquidation of such Issuer or in connection with cer- tain mergers, consolidations or amalgamations permitted by the Trust Agreement and (iii) to use its reasonable efforts, con- sistent with the terms and provisions of the Trust Agreement, to cause such Issuer to remain a grantor trust and otherwise not to be classified as an association taxable as a corporation for United States Federal income tax purposes. (Section 1005). Events of Default The Indenture will provide that any one or more of the following described events with respect to Junior Subordi- nated Debentures that has occurred and is continuing consti- tutes an "Event of Default" with respect to the Junior Subordi- nated Debentures: (a) failure for 30 days to pay any interest on the Junior Subordinated Debentures, including any Additional Interest in respect thereof, when due (subject to the deferral of any due date in the case of an Extension Period); (b) failure to pay any principal on the Junior Sub- ordinated Debentures when due whether at maturity, upon redemption, by declaration of acceleration or otherwise; except that, in the case of an optional redemption, the failure to redeem any Junior Subordinated Debenture which is the result of the Company's failure to deposit on or before the redemption date with the Debenture Trustee (and/or having irrevocably directed the Debenture Trustee to apply, from money held by it available to be used for the redemption of Junior Subordinated Debentures) an amount in cash sufficient to redeem all of the Junior Sub- ordinated Debentures to be redeemed, shall not be an Event of Default, but shall be deemed a rescission of the call for redemption; -40- (c) failure to observe or perform in any material respect any other covenant relating to such series of Jun- ior Subordinated Debentures contained in the Indenture for 90 days after written notice to the Company from the Debenture Trustee or the holders of at least 25% in prin- cipal amount of the outstanding Junior Subordinated Deben- tures; or (d) certain events in bankruptcy, insolvency or reorganization of the Company. (Section 501). If an Event of Default has occurred and is continu- ing, the holders of a majority in outstanding principal amount of the Junior Subordinated Debentures have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Trustee. (Section 512). The Debenture Trustee or the holders of not less than 25% in aggre- gate outstanding principal amount of the Junior Subordinated Debentures may declare the principal and interest due and pay- able immediately upon an Event of Default, and, should the Debenture Trustee or such holders of the Junior Subordinated Debentures fail to make such declaration, the holders of at least 25% in aggregate Liquidation Amount of the Preferred Securities shall have such right. The holders of a majority in outstanding principal amount of the Junior Subordinated Deben- tures may annul such declaration and waive the default if the default has been cured and a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration and any Additional Interest has been deposited with the Debenture Trustee. (Section 502). The holders of a majority in outstanding principal amount of the Junior Subordinated Debentures may, on behalf of the holders of all the Junior Subordinated Debentures, waive any past default, except a default in the payment of principal or interest (unless such default has been cured and a sum suf- ficient to pay all matured installments of interest and princi- pal due otherwise than by acceleration has been deposited with the Debenture Trustee) or a default in respect of a covenant or provision which under the Indenture cannot be modified or amended without the consent of the holder of each outstanding Junior Subordinated Debenture. (Section 513). The Company is required to file annually with the Debenture Trustee a certifi- cate as to whether or not the Company is in compliance with all the conditions and covenants applicable to it under the Inden- ture. (Section 1004). Unless otherwise provided in a Prospectus Supplement, a voluntary or involuntary dissolution of the Issuer prior to -41- the redemption or maturity of the Junior Subordinated Deben- tures held by such Issuer will not constitute an Event of Default with respect to such Junior Subordinated Debentures. If the Issuer is dissolved, an event the possibility of which the Company and the Issuer consider to be remote, any of the following, among other things, could occur: (i) a distribution of the Junior Subordinated Debentures held by such Issuer to the holders of the Preferred Securities, (ii) a cash distribu- tion to the holders of such Preferred Securities out of the sale of assets of such Issuer, after satisfaction of all lia- bilities to creditors, or (iii) a permitted redemption at par of the Junior Subordinated Debentures, and a consequent redemp- tion of a like amount of such Preferred Securities, at the option of the Company under the circumstances described under "--Optional Redemption" or (iv) the rollover of Trust Property (as defined in the Trust Agreement) into another entity with similar characteristics. Form, Exchange and Transfer The Junior Subordinated Debentures, if issued in cer- tificated form, will be issuable only in registered form, with- out coupons and only in denominations of $25 and integral mul- tiples thereof. (Section 302). Subject to the terms of the Indenture, Junior Subor- dinated Debentures may be presented for registration of trans- fer or exchange (duly endorsed or accompanied by satisfactory instruments of transfer) at the office of the securities regis- trar or at the office of any transfer agent designated by the Company for such purpose. No service charge will be made for any registration of transfer or exchange of Junior Subordinated Debentures, but the Company may require payment of a sum suffi- cient to cover any tax or other governmental charge payable in connection therewith. Such transfer or exchange will be effected upon the securities registrar or such transfer agent, as the case may be, being satisfied with the documents of transfer, title and identity of the person making the request. The Company has appointed the Debenture Trustee as the initial securities registrar. (Section 305). The Company may at any time designate additional transfer agents, rescind the designa- tion of any transfer agent or approve a change in the office through which any transfer agent acts. (Section 1002). If the Junior Subordinated Debentures are to be redeemed in part, the Company will not be required to issue, register the transfer of or exchange any Junior Subordinated Debentures during a period beginning at the opening of business 15 days before the day of mailing of the notice of redemption -42- for such Junior Subordinated Debentures that may be selected for redemption and ending at the close of business on the day of such mailing. (Section 305). Payment and Paying Agents Payment of interest on a Junior Subordinated Deben- ture on any interest payment date will be made to the person in whose name such Junior Subordinated Debenture (or one or more predecessor Junior Subordinated Debentures) is registered at the close of business on the regular record date for such interest. (Section 307). Principal of and any interest on the Junior Subordi- nated Debentures will be payable at the office of such Paying Agent or Paying Agents as the Company may designate for such purpose from time to time, except that at the option of the Company, payment of any interest may be made by check mailed to the address of the person entitled thereto as such address appears in the securities register or by wire transfer. The corporate trust office of the Debenture Trustee in the City of Wilmington, Delaware is designated as the Company's initial sole Paying Agent for payments with respect to the Junior Sub- ordinated Debentures. The Company may at any time designate additional Paying Agents or rescind the designation of any Pay- ing Agent or approve a change in the office through which any Paying Agent acts. (Section 1002). Supplemental Indentures, Modification of the Indenture From time to time the Company and the Debenture Trus- tee may, without the consent of the holders of the Junior Sub- ordinated Debentures, amend, waive or supplement the Indenture for specified purposes, including, among other things, curing ambiguities, defects or inconsistencies, qualifying, or main- taining the qualification of, the Indenture under the Trust Indenture Act, or making any other change that does not adversely affect the rights of any holder of Junior Subordi- nated Debentures. (Section 901). The Indenture will contain provisions permitting the Company and the Debenture Trustee, with the consent of the holders of not less than a majority in principal amount of the Junior Subordinated Debentures, to mod- ify the Indenture in a manner affecting the rights of the hold- ers of such Junior Subordinated Debentures; provided that no such modification may, without the consent of the holder of each outstanding Junior Subordinated Debenture so affected, (i) change the fixed maturity of the Junior Subordinated Deben- tures, reduce the principal amount thereof, or reduce the rate or extend the time for payment of interest thereon (otherwise -43- than as permitted under the Indenture), (ii) reduce the per- centage of the principal amount of Junior Subordinated Deben- tures, the holders of which are required to consent to any such modification of the Indenture or (iii) modify certain provi- sions of the Indenture relating to the waiver of past defaults or compliance by the Company with certain covenants set forth therein. The Indenture also requires the consent of the hold- ers of the affected Preferred Securities, if any, in respect of certain amendments to or termination of the Indenture and in respect to compliance by the Company with certain covenants in the Indenture. (Section 902). In addition, the Company and the Debenture Trustee may execute, without the consent of any holders of Junior Subordinated Debentures, Supplemental Inden- tures for the purpose of creating new series of Junior Subordi- nated Debentures. (Section 901). Consolidation, Merger and Sale The Company may not consolidate with, merge into, or convey, transfer or lease its properties and assets substan- tially as an entirety to, any person (a "Successor Person"), and may not permit any person to merge into, or convey, trans- fer or lease its properties and assets substantially as an entirety to the Company, unless: (i) the Successor Person (if any) is a corporation, partnership, trust or other entity orga- nized and validly existing under the laws of any United States jurisdiction and assumes the Company's obligations on the Jun- ior Subordinated Debentures, the Indenture, the Guarantee and the Expense Agreement; (ii) immediately after giving effect to the transaction and treating any indebtedness which becomes an obligation of the Company or any subsidiary as a result of the transaction as having been incurred by it at the time of the transaction, no Event of Default, and no event which, after notice or lapse of time, would become an Event of Default, shall have occurred and be continuing; (iii) such transaction does not give rise to any breach or violation of the Trust Agreement or the Guarantee; and (iv) the Company has delivered to the Debenture Trustee an Officers' Certificate and an Opin- ion of Counsel as to certain matters. (Section 801). Satisfaction and Discharge Under the terms of the Indenture, the Company will be discharged from any and all obligations in respect of the Jun- ior Subordinated Debentures (except, in each case, for certain obligations to register the transfer or exchange of such Junior Subordinated Debentures, replace stolen, lost or mutilated Jun- ior Subordinated Debentures and hold moneys or U.S. Government Obligations (as defined in the Indenture) for payment in trust) -44- if the Company deposits with the Debenture Trustee, in trust, moneys or U.S. Government Obligations in an amount sufficient to pay all the principal of, and interest on, such Junior Sub- ordinated Debentures on the dates such payments are due in accordance with the terms of such Junior Subordinated Deben- tures. (Section 401). Governing Law The Indenture, any Supplemental Indenture and the Junior Subordinated Debentures will be governed by, and con- strued in accordance with, the laws of the State of New York. (Section 112). Miscellaneous The Company 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 the Company, provided that, in the event of any such assignment, the Company will remain liable for such obligations. Subject to the fore- going, the Indenture will be binding upon and inure to the benefit of the parties thereto and their respective successors and assigns. (Section 109). RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE As long as payments of interest and other payments are made when due on the Junior Subordinated Debentures, such payments will be sufficient to cover distributions and other payments due on the Preferred Securities because: (i) the aggregate principal amount of the Junior Subordinated Deben- tures will be equal to the sum of the aggregate stated Liquida- tion Amount of the Issuer Securities; (ii) the interest rate and interest and other payment dates on the Junior Subordinated Debentures will correspond to the distribution rate and distri- bution and other payment dates on the Preferred Securities; (iii) the Expense Agreement entered into by the Company pursu- ant to the Trust Agreement provide that the Company shall pay for all, and the Issuer shall not be obligated to pay, directly or indirectly, for any, costs, expenses or liabilities of such Issuer, including any income taxes, duties and other governmen- tal charges, and all costs and expenses with respect thereto, to which such Issuer may become subject, except for United States withholding taxes and such Issuer's payment obligations to holders of the Preferred Securities under such Preferred Securities; and (iv) the Trust Agreement further provides that -45- the Trustees shall not cause or permit the Issuer to, among other things, engage in any activity that is not consistent with the limited purposes of the Issuer. Payments of distributions and other amounts due on Preferred Securities (to the extent the Issuer has funds suffi- cient for the payment of such distributions) are guaranteed by the Company as and to the extent set forth under "Description of Guarantee." If and to the extent that the Company does not make payments on the Junior Subordinated Debentures, the Issuer will not pay distributions or other amounts due on the Preferred Securities. If the Guarantee Trustee fails to enforce the Guaran- tee, a holder of a Preferred Security to which such Guarantee applies may institute a legal proceeding directly against the Company to enforce such holder's rights under such Guarantee without first instituting a legal proceeding against the Issuer of such Preferred Security or any other person or entity. The Preferred Securities will evidence the rights of the holders thereof to the benefits of the Issuer, a trust that exists for the sole purpose of issuing its Issuer Securities and investing the proceeds of its Preferred Securities in the corresponding Junior Subordinated Debentures of the Company, while the Junior Subordinated Debentures represents indebted- ness of the Company. A principal difference between the rights of a holder of a Preferred Security and a holder of a Junior Subordinated Debenture is that a holder of a Junior Subordi- nated Debenture will accrue, and (subject to the permissible extensions of the interest payment period) is entitled to receive, interest on the principal amount of Junior Subordi- nated Debentures held, while a holder of Preferred Securities is only entitled to receive distributions if and to the extent the Issuer has funds sufficient for the payment of such distributions. Upon any voluntary or involuntary dissolution, winding-up or termination of the Issuer involving the distribu- tion of Junior Subordinated Debentures, the holders of Pre- ferred Securities will be entitled to receive, out of assets legally available for distribution to such holders, the Final Distribution or a Liquidation Distribution; provided, however, that if an Event of Default under the Trust Agreement shall have occurred and be continuing, the holders of the Common Securities shall be entitled to receive, out of assets legally available for distribution to such holders, distributions only after the holders of the Preferred Securities. See "Descrip- tion of the Preferred Securities -- Liquidation Distribution -46- Upon Dissolution." Upon any voluntary or involuntary liquida- tion or bankruptcy of the Company, the Issuer, as a holder of Junior Subordinated Debentures, would be a subordinated credi- tor of the Company, subordinated in right of payment to all Senior Indebtedness, but entitled to receive payment in full of principal and interest before any stockholders of the Company receive any payments or distributions. Since the Company has agreed to pay for all costs, expenses and liabilities of the Issuers (other than United States withholding taxes and other than the Issuers' obligations to the holders of Preferred Secu- rities under the Preferred Securities, which obligations are independently covered by the Guarantee), the positions of a holder of Preferred Securities and a holder of Junior Subordi- nated Debentures relative to other creditors and to stockhold- ers of the Company in the event of a liquidation or bankruptcy of the Company would be substantially the same. A default or event of default under any Senior Indebtedness will not constitute a default or Event of Default under the Junior Subordinated Debentures. However, in the event of payment defaults under, or acceleration of, Senior Indebtedness, the subordination provisions of the Junior Subor- dinated Debentures provide that no payments may be made in respect of the Junior Subordinated Debentures until such Senior Indebtedness has been paid in full or any payment default thereunder has been cured or waived. Failure to make required payments on the Junior Sub- ordinated Debentures would constitute an Event of Default under the Indenture. PLAN OF DISTRIBUTION The Preferred Securities may be sold in a public offering to or through underwriters or dealers designated from time to time. The Issuer may sell its Preferred Securities as soon as practicable after the effectiveness of the Registration Statement of which this Prospectus is a part. The names of any underwriters or dealers involved in the sale of the Preferred Securities in respect of which this Prospectus is delivered, the number of Preferred Securities to be purchased by any such underwriters or dealers and the applicable commissions or dis- counts will be set forth in the applicable Prospectus Supplement. Underwriters may offer and sell Preferred Securities at a fixed price or prices, which may be changed, or from time to time at market prices prevailing at the time of sale, at -47- prices related to such prevailing market prices or at negoti- ated prices. In connection with the sale of Preferred Securi- ties, underwriters will be deemed to have received compensation from the Company and the Issuer in the form of underwriting discounts or commissions. Underwriters may sell Preferred Securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commis- sions from the underwriters. Any underwriting compensation paid by the Company to underwriters in connection with the offering of the Preferred Securities, and any discounts, concessions or commissions allowed by such underwriters to participating dealers, will be set forth in the applicable Prospectus Supplement. Underwrit- ers and dealers participating in the distribution of Preferred Securities may be deemed to be underwriters, and any discounts and commissions received by them, and any profit realized by them on resale of such Preferred Securities, may be deemed to constitute underwriting discounts and commissions under the Securities Act. Underwriters and dealers may be entitled, pur- suant to their agreement with the Company and the Issuer, to indemnification against and contribution toward certain civil liabilities, including liabilities under the Securities Act, and to reimbursement by the Company for certain expenses. In connection with the offering of the Preferred Securities, the Issuer thereof may grant to the underwriters an option to purchase additional Preferred Securities to cover over-allotments, if any, at the initial public offering price (with an additional underwriting commission), as set forth in the applicable Prospectus Supplement. Underwriters and dealers may engage in transactions with, or perform services for, the Company, the Issuer and any of their respective affiliates. The Issuer's Preferred Securities will be a new issue of securities and will have no established trading market. Any underwriters to whom the Issuer's Preferred Securities are sold by such Issuer for public offering and sale may make a market in such Preferred Securities, but such underwriters will not be obligated to do so and may discontinue any market-making at any time without notice. Such Preferred Securities may or may not be listed on a national securities exchange. No assurance can be given as to the liquidity of or the existence of meaningful trading markets for any Preferred Securities. -48- LEGAL OPINIONS Certain legal matters in connection with the Pre- ferred Securities are being passed upon for the Company and the Issuer by Hinkle, Cox, Eaton, Coffield & Hensley, L.L.P., Ama- rillo, Texas, and Cahill Gordon & Reindel, a partnership including a professional corporation, New York, New York, and for the Issuer by Richards, Layton & Finger, special Delaware counsel to the Company and the Issuers. Cahill Gordon & Reindel and Richards, Layton & Finger are not passing upon the incorporation of the Company and are relying upon the opinions of Hinkle, Cox, Eaton, Coffield & Hensley, L.L.P. as to matters of New Mexico and Texas law; Rainey, Ross, Rice & Binns, Okla- homa City, Oklahoma as to matters of Oklahoma law; and Foulston & Siefkin, Topeka, Kansas as to matters of Kansas law. Gary W. Wolf, a partner in the law firm of Cahill Gordon & Reindel, is a director of the Company. EXPERTS The consolidated financial statements of Southwestern Public Service Company and subsidiaries as of August 31, 1995 and 1994 and for the years then ended included in the Company's 1995 Form 10-K, which is incorporated herein by reference, have been audited by Deloitte & Touche LLP ("Deloitte & Touche"), independent certified public accountants, as stated in their report, which is also incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. With respect to any unaudited interim financial information included in the Company's quarterly reports on Form 10-Q that are or will be incorporated herein by reference, Deloitte & Touche applies limited procedures in accordance with professional standards for reviews of such information. As stated in any of its reports that are included in the Company's quarterly reports on Form 10-Q that are or will be incorporated herein by reference, Deloitte & Touche did not audit and did not express an opinion on such interim financial information. Accordingly, the degree of reliance on any of Deloitte & Tou- che's reports on such information should be restricted in light of the limited nature of the review procedures applied. Deloitte & Touche is not subject to the liability provisions of Section 11 of the Securities Act for any of its reports on such unaudited interim financial information because those reports are not "reports" or a "part" of the Registration Statement filed under the Securities Act with respect to the Preferred -49- Securities or the Junior Subordinated Debentures prepared or certified by an accountant within the meaning of Sections 7 and 11 of the Securities Act. The consolidated financial statements of Southwestern Public Service Company and subsidiaries for the year ended August 31, 1993 included in the Company's 1995 Form 10-K, which is incorporated herein by reference, are incorporated herein in reliance upon the report of KPMG Peat Marwick LLP, independent certified public accountants, included in the 1995 Form 10-K, and upon the authority of that firm as experts in accounting and auditing. To the extent that a firm of certified public accoun- tants audits and reports on the financial statements of the Company issued at future dates, and consents to the use of their report thereon, such financial statements also will be incorporated by reference herein in reliance upon their report and said authority. The statements and legal conclusions as to all mat- ters of law in the Company's 1995 Form 10-K, the November Quar- terly Report, the February Quarterly Report and this Prospectus (except as to matters of Kansas and Oklahoma law and United States Federal income tax matters in such documents) have been reviewed by Hinkle, Cox, Eaton, Coffield & Hensley, L.L.P. Statements and legal conclusions as to matters of Oklahoma law in such documents have been reviewed by Rainey, Ross, Rice & Binns. Statements and legal conclusions as to matters of Kan- sas law in such documents have been reviewed by Foulston & Siefkin. Statements and legal conclusions in the accompanying Prospectus Supplement as to United States Federal income tax matters have been reviewed by Cahill Gordon & Reindel. All such statements and legal conclusions are set forth in such documents and incorporated by reference herein or set forth herein in reliance upon said firms, respectively, as experts. -50- No dealer, salesman, or any other person has been authorized to give 4,000,000 any information or to make any PREFERRED SECURITIES representations other than those contained in this Prospectus, in- cluding any prospectus supplement in connection with the offer con- tained in this Prospectus, and, if given or made, such information or SOUTHWESTERN PUBLIC representations must not be relied SERVICE CAPITAL I upon as having been authorized by the Company or any underwriter, (Liquidation Amount dealer, or agent. This Prospectus $25 per Preferred does not constitute an offer to Security) sell or a solicitation of an offer to buy any of these securities in ___% Cumulative any jurisdiction to any person to Preferred Securities, whom it is unlawful to make such Series A offer or solicitation in such juris- diction. Neither the delivery of Guaranteed to the this Prospectus nor any sale made extent that the hereunder shall, under any circum- Issuer has funds as stances, create any implication set forth herein by that there has been no change in the affairs of the Company since SOUTHWESTERN PUBLIC the date hereof. SERVICE COMPANY _______________ TABLE OF CONTENTS Prospectus Supplement Page Prospectus Summary.................. S-6 Risk Factors ....................... S-7 Southwestern Public Service Capital I.......................... S-10 Recent Developments................. S-12 Use of Proceeds..................... S-13 Certain Terms of the Preferred Securities ............. S-13 Certain Terms of the Guarantee ........................ S-18 Certain Terms of the Debentures ....................... S-19 United States Taxation ............. S-21 Underwriting ....................... S-26 Prospectus Available Information............... 3 -51- Incorporation of Certain Documents by Reference............ 3 The Company......................... 4 The Issuer.......................... 5 Use of Proceeds..................... 6 Earnings Ratios..................... 6 Description of Preferred Securities........................ 7 Description of Guarantee............ 25 Description of Junior Subordinated Debentures........... 29 Relationship Among the Preferred Securities, the Junior Subordinated Debentures and the Guarantee................. 45 Plan of Distribution................ 47 Legal Opinions...................... 49 Dated , 1996 Experts............................. 49 -52- PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. Set forth below is an estimate (except for the Secu- rities and Exchange Commission registration fee) of the fees and expenses payable by the Company in connection with the dis- tribution of the Preferred Securities. Securities and Exchange Commission Registration Fee ....................... $ 34,482.76 Listing Fee .............................. 50,000.00 Counsel Fees and Expenses ................ 220,000.00 Services of Independent Accountants ...... 40,000.00 Trustee's Fees and Expenses .............. 25,000.00 Printing Expenses, including Engraving ... 150,000.00 Rating Agency Fees........................ 100,000.00 Blue Sky Fees and Expenses ............... 10,000.00 Miscellaneous Expenses ................... 10,517.24 ----------- Total .......................... $640,000.00 =========== Item 15. Idemnification of Directors and Officers. Section 53-11-4.1 of the New Mexico Business Corpora- tion Act (the "NMBCA") empowers a corporation to indemnify any officer or director against judgments, penalties, fines, set- tlements, and reasonable expenses actually incurred by the per- son in connection with any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, adminis- trative, or investigative, if the person acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to a criminal proceeding, had no reasonable cause to believe the person's conduct was unlawful. This section empowers a corpo- ration to maintain insurance or furnish similar protection, including, but not limited to, providing a trust fund, a letter of credit, or self-insurance, on behalf of any officer or director against any liability asserted against the person in such capacity whether or not the corporation would have the power to indemnify the person against such liability under the provisions of this section. II-1 The indemnification authorized by Section 53-11-4.1 is not exclusive of any other rights to which an officer or director may be entitled under the articles of incorporation, the bylaws, an agreement, a resolution of shareholders or directors or otherwise. Article Sixth of the Restated Articles of Incorpora- tion of the Company provides that a director of the Company shall not be personally liable to the Company or to the share- holders for monetary damages for a breach of fiduciary duty as a director unless such director has breached or failed to per- form the duties of his or her office in accordance with the NMBCA, and the breach or failure to perform constitutes negli- gence, willful misconduct, or recklessness. Article IV of the Bylaws of the Company requires the Company, to the fullest extent permitted by the NMBCA, to pay or reimburse expenses, liabilities, and losses incurred by an officer or director involved in any action, suit, or proceed- ing, whether civil, criminal, administrative, or investigative by reason of the fact that such person is or was serving as an officer or director of the Company. The Bylaws also require the Company to pay or reim- burse all covered expenses to an officer or director promptly upon receipt of a written claim and, where the claimant seeks an advancement of expenses, an undertaking by or on behalf of the person to repay such amounts if it should ultimately be determined by a court of final jurisdiction that such person is not entitled to indemnification. The Company has entered into indemnity agreements with each officer and director of the Company. These contracts provide for the advancement of expenses (including attorneys' fees) incurred or to be incurred by an officer or director in connection with a proceeding. The contracts also provide for indemnification of such persons against expenses, liabilities, and losses. Pursuant to each director's indemnity agreement, the Company keeps in effect a letter of credit in the face amount of $5,000,000 obtained from a commercial bank for the benefit of all directors who are a party to an indemnity agreement. A director who has incurred or may incur expenses in connection with a proceeding prior to the final disposition of such a pro- ceeding for any reason may request an independent trustee to draw upon the letter of credit for the payment or advancement II-2 of such expenses. Upon such request, the trustee will draw upon the letter of credit and deliver such funds to such director. The Company is insured up to $25,000,000 against loss in excess of $200,000 because of any claim made against the Company or its officers or directors and alleged to have been caused by any negligent act, error, omission, or breach of duty by its officers or directors. The insurance is subject to cer- tain exclusions. Item 16. Exhibits. Reference is made to the Exhibit Index filed as part of this Registration Statement. Item 17. Undertakings. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Sec- tion 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act"); (ii) To reflect in the prospectus any facts or events arising after the effective date of the Regis- tration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; notwithstanding the foregoing, any increase or decrease in volume of securities being offered (if the total dollar value of securities offered would not exceed that which was registered) and any devia- tion from the low or high end of the estimated maxi- mum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effec- tive registration statement; II-3 (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any mate- rial change to such information in the Registration Statement. Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the Registration Statement is on Form S-3 or Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 (the "1934 Act") that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any lia- bility under the Securities Act, each such post-effective amendment shall be deemed to be a new Registration State- ment relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post- effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of Registrant's annual report pursuant to Sec- tion 13(a) or Section 15(d) of the 1934 Act that is incorpo- rated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the secu- rities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, offic- ers and controlling persons of the Registrant pursuant to the provisions described under Item 15 above, or otherwise, the Registrant has been advised that in the opinion of the Securi- ties and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, there- fore, unenforceable. In the event that a claim for indemnifi- cation against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such II-4 director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by control- ling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against pub- lic policy as expressed in the Securities Act and will be gov- erned by the final adjudication of such issue. II-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, Southwestern Public Service Company, the Reg- istrant, certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunder duly authorized, in the City of Amarillo, and the State of Texas, on the 5th day of June, 1996. SOUTHWESTERN PUBLIC SERVICE COMPANY (Registrant) By: * ----------------------------- Bill D. Helton Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. Signature Title Date Principal Executive and Chairman of the June 5, 1996 Financial Officer and Board and Chief Director: Executive Officer * - --------------------------- Bill D. Helton Principal Accounting Officer: Executive Vice June 5, 1996 President, Accounting and Corporate Development /s/ Doyle R. Bunch II - --------------------------- Doyle R. Bunch II Directors: Gene H. Bishop* ) C. Coney Burgess* ) J. C. Chambers* ) Danny H. Conklin* ) Giles M. Forbess* ) Directors June 5, 1996 R. R. Hemminghaus* ) Don Maddox* ) J. Howard Mock* ) Shirley Bird Perry* ) David M. Wilks* ) Gary W. Wolf* ) *The undersigned, by signing his name hereto, does sign and execute this Registration Statement pursuant to the Powers of Attorney executed by the above-named officers and directors of the Company and which are being filed herewith with the Securities and Exchange Commission on behalf of such officers and directors. By: /s/ Doyle R. Bunch II ----------------------- Doyle R. Bunch II Attorney-in-Fact Pursuant to the requirements of the Securities Act of 1933, as amended, Southwestern Public Service Capital I, the Registrant, certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Amarillo, and the State of Texas, on the 5th day of June, 1996. SOUTHWESTERN PUBLIC SERVICE CAPITAL I (Registrant) By: /s/David M. Wilks --------------------------- David M. Wilks, President and Chief Operating Officer of Southwestern Public Service Company, as Depositor INDEX TO EXHIBITS Exhibit Number Exhibit - ------- ------- ** 1(a) - Form of Standard Purchase Provisions relating to the Preferred Securities. ** 4(a) - Form of Indenture. ** 4(b) - Form of Supplemental Indenture. 4(c) - Form of Debenture (included in Exhibit 4(a)). 4(d) - Form of Preferred Security (included as Exhibit E to Exhibit 4(h)). ** 4(e) - Form of Guarantee Agreement. * 4(f) - Certificate of Trust for Southwestern Public Service Capital I. * 4(g) - Trust Agreement for Southwestern Public Service Capital I. ** 4(h) - Form of Amended and Restated Trust Agreement. ** 5(a) - Opinion of Hinckle, Cox, Eaton, Coffield & Hensley, L.L.P. relating to the legality of the Debentures and the Guarantee. ** 5(b) - Opinion of Richards, Layton & Finger, special Delaware counsel, relating to the legality of the Preferred Securities of Southwestern Public Service Capital I. ** 8 - Opinion of Cahill Gordon & Reindel, as to tax matters. **10 - Form of Expense Agreement (included as Exhibit D in Exhibit 4(h)). 12 - Statements re Computation of Ratios of Earnings to Fixed Charges (incorporated by reference to exhibit 12 Form 10-K for 1995 and exhibit 12 Form 10-Q for quarter ended February 29, 1996). * 15 - Letter re Unaudited Interim Financial Information. **23(a) - Consent of Hinkle, Cox, Eaton, Coffield & Hensley, L.L.P. (included in Exhibit 5(a)). **23(b) - Consent of Richards, Layton & Finger (included in Exhibit 5(b)). **23(c) - Consent of Cahill Gordon & Reindel (included in Exhibit 8). **23(d) - Consent of Foulston & Siefkin. **23(e) - Consent of Rainey, Ross, Rice & Binns. * 23(f) - Consent of Deloitte & Touche LLP, independent certified public accountants. Exhibit Number Exhibit - ------- ------- * 23(g) - Consent of KPMG Peat Marwick LLP, independent certified public accountants. * 24 - Powers of Attorney. **25(a) - Statement of Eligibility under the Trust Inden- ture Act of 1939 (on Form T-1) of Debenture Trustee. **25(b) - Statement of Eligibility under the Trust Inden- ture Act of 1939 (on Form T-1) of Property Trustee. **25(c) - Statement of Eligibility under the Trust Inden- ture Act of 1939 (on Form T-1) of Guarantee Trustee. - ---------------------- * Filed herewith. ** To be filed by amendment. -2- EX-4.F 2 CERTIFICATE OF TRUST Exhibit 4(f) CERTIFICATE OF TRUST OF SOUTHWESTERN PUBLIC SERVICE CAPITAL I THIS CERTIFICATE OF TRUST of Southwestern Public Service Capital I (the "Trust"), dated June 5, 1996, is being duly executed and filed by the undersigned, as trustee, to form a business trust under the Delaware Business Trust Act (12 Del. C. Sections 3801 et seq.). 1. Name. The name of the business trust being formed hereby is Southwestern Public Service Capital I. 2. Delaware Trustee. The name and business address of the trustee of the Trust with a principal place of business in the State of Delaware is Wilmington Trust Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust Administration. 3. Effective Date. This Certificate of Trust shall be effective as of its filing. IN WITNESS WHEREOF, the undersigned, being the trustee of the Trust, has executed this Certificate of Trust as of the date first above written. WILMINGTON TRUST COMPANY, as Trustee By: /s/ Don MacKelcan _____________________________ Name: Don MacKelcan Title: Assistant Vice President EX-4.G 3 TRUST AGREEMENT Exhibit 4(g) SOUTHWESTERN PUBLIC SERVICE CAPITAL I TRUST AGREEMENT This TRUST AGREEMENT, dated as of June 5, 1996, among David M. Wilks, President and Chief Operating Officer of Southwestern Public Service Company, as "Depositor", Wilmington Trust, a Delaware banking corporation, not in its individual capacity but solely as Trustee. The Depositor and the Trustee hereby agree as follows: 1. The trust created hereby shall be known as "Southwestern Public Service Capital I," in which name the Trustee, or the Depositor to the extent provided herein, may conduct the business of the Trust, make and execute contracts, and sue and be sued. 2. The Depositor hereby assigns, transfers, conveys and sets over to the Trustee the sum of $10. The Trustee hereby acknowledges receipt of such amount in trust from the Depositor, which amount shall constitute the initial trust estate. The Trustee hereby declares that it will hold the trust estate in trust for the Depositor. It is the intention of the parties hereto that the Trust created hereby constitute a business trust under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Section 3801 et seq. (the "Business Trust Act"), and that this document constitutes the governing instrument of the Trust. The Trustee is hereby authorized and directed to execute and file a certificate of trust with the Delaware Secretary of State in accordance with the provisions of the Business Trust Act. 3. The Depositor and the Trustee will enter into an Amended and Restated Trust Agreement, satisfactory to each such party and substantially in the form to be included as an Exhibit to the 1933 Act Registration Statement referred to below, to provide for the contemplated operation of the Trust created hereby and the issuance of the Preferred Securities and Common Securities referred to therein. Prior to the execution and delivery of such Amended and Restated Trust Agreement, the Trustee shall not have any duty or obligation hereunder or with respect to the trust estate, except as otherwise required by applicable law or as may be necessary to obtain prior to such execution and delivery any licenses, consents or approvals required by applicable law or otherwise. 4. The Depositor and the Trustee hereby authorize and direct the Depositor, as the sponsor of the Trust, (i) to file with the Securities and Exchange Commission (the "Commission") and execute, in each case on behalf of the Trust, (a) the Registration Statement on Form S-3 (the "1933 Act Registration Statement"), including any pre-effective or post-effective amendments to such 1933 Act Registration Statement, relating to the registration under the Securities Act of 1933, as amended, of the Preferred Securities of the Trust and certain other securities and (b) a Registration Statement on Form 8-A (the "1934 Act Registration Statement") (including all pre-effective and post-effective amendments thereto) relating to the registration of the Preferred Securities of the Trust under Section 12(b) of the Securities Exchange Act of 1934, as amended; (ii) to file with the New York Stock Exchange (the "Exchange") and execute on behalf of the Trust a listing application and all other applications, statements, certificates, agreements and other instruments as shall be necessary or desirable to cause the Preferred Securities to be listed on the Exchange; (iii) to file and execute on behalf of the Trust such applications, reports, surety bonds, irrevocable consents, appointments of attorney for service of process and other papers and documents as shall be necessary or desirable to register the Preferred Securities under the securities or "Blue Sky" laws of such jurisdictions as the Depositor, on behalf of the Trust, may deem necessary or desirable and (iv) to execute on behalf of the Trust that certain Underwriting Agreement relating to the Preferred Securities, among the Trust, the Depositor and the several Underwriters named therein, substantially in the form to be included as an Exhibit to the 1933 Act Registration Statement. In connection with all of the foregoing, the Depositor hereby constitutes and appoints Robert D. Dickerson and James D. Steinhilper, and each of them, as its true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for the Depositor or in the Depositor's name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to the 1933 Act Registration Statement and the 1934 Act Registration Statement and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as the Depositor might or could do in person, thereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their respective substitute or substitutes, shall do or cause to be done by virtue hereof. 5. This Trust Agreement may be executed in one or more counterparts. 6. The number of Trustees initially shall be one (1) and thereafter the number of Trustees shall be such number as shall be fixed from time to time by a written instrument signed by the Depositor which may increase or decrease the number of Trustees; provided, however, that to the extent required by the Business Trust Act, one Trustee shall either be a natural person who is a resident of the State of Delaware or, if not a natural person, an entity which has its principal place of business in the State of Delaware and otherwise meets the requirements of applicable Delaware law. Subject to the foregoing, the Depositor is entitled to appoint or remove without cause any Trustee at any time. Any Trustee may resign upon thirty days prior notice to the Depositor. 7. This Trust Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware (without regard to conflict of laws principles). IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to be duly executed as of the day and year first above written. David M. Wilks, President and Chief Operating Officer of Southwestern Public Service Company, as Depositor /s/ David M. Wilks --------------------------------- WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Don MacKelcan _____________________________ Name: Don MacKelcan Title: Assistant Vice President EX-15 4 LETTER RE UNAUDITED INTERIM FINANCIAL INFORMATION EXHIBIT 15 Southwestern Public Service Company We have reviewed, in accordance with standards established by the American Institute of Certified Public Accountants, the unaudited condensed consolidated interim financial information of Southwestern Public Service Company for the periods ended February 29, 1996 and February 28, 1995, and November 30, 1995 and 1994, as indicated in our reports dated April 12, 1996, and January 12, 1996, respectively; because we did not perform an audit, we expressed no opinion on that information. We are aware that our reports referred to above, which were included in your Quarterly Reports on Form 10-Q for the quarters ended February 29, 1996, and November 30, 1995, are being used in this Registration Statement. We also are aware that the aforementioned reports, pursuant to Rule 436(c) under the Securities Act of 1933, are not considered a part of the Registration Statement prepared or certified by an accountant or reports prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act. DELOITTE & TOUCH LLP Dallas, Texas June 4, 1996 EX-23.F 5 CONSENT OF DELOITTE & TOUCHE LLP EXHIBIT 23(f) INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Southwestern Public Service Company on Form S-3 of our report dated October 10, 1995, appearing in the Annual Report on Form 10-K of Southwestern Public Service Company for the year ended August 31, 1995, and to the reference to us as experts. DELOITTE & TOUCHE LLP Dallas, Texas June 4, 1996 EX-23.G 6 CONSENT OF KPMG PEAT MARWICK EXHIBIT 23(g) Independent Auditors' Consent ----------------------------- The Board of Directors Southwestern Public Service Company: We consent to the use of our report incorporated herein by reference and to the reference to our firm under the heading "Experts" in the prospectus. KPMG Peat Marwick LLP Fort Worth, Texas June 4, 1996 EX-24 7 POWERS OF ATTORNEY Exhibit 24 The undersigned, Robert D. Dickerson, Secretary and Treasurer of SOUTHWESTERN PUBLIC SERVICE COMPANY ("Southwest- ern"), a New Mexico corporation, which is to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1933, as amended, registration statements (a) for the registration of Southwestern's First Mortgage Bonds to be issued pursuant to the Indenture of Mortgage and Deed of Trust dated August 1, 1946, as supplemented and amended, between Southwestern's and Chemical Bank, as Trustee, (b) for the registration of Southwestern's Common Stock, $1 par value, (c) for the registration of Southwestern's Preferred Stock, $1 par value, and (d) for any other equity or long-term debt, on behalf of Southwestern acting pursuant to resolutions of the Board of Directors duly adopted, hereby constitutes and appoints Bill D. Helton, David M. Wilks, Doyle R. Bunch II, and Robert D. Dickerson of SPS Tower, Tyler at Sixth, Amarillo, Texas, and each of them Southwestern's attorney-in-fact, with full power of substitution and resubstitution in the premises, for Southwestern and in its name, place and stead to sign with or without the other in any and all capacities and file such registration statements and any and all amendments and other documents related thereto, granting unto said attorneys-in-fact full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises as fully to all intents and purposes might or could do, hereby ratifying and approving the acts of said attorneys- in-fact. IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 31st day of January, 1996. /s/ Robert D. Dickerson ----------------------- Robert D. Dickerson The undersigned, Bill D. Helton, Director, Chairman of the Board and Chief Executive Officer of SOUTHWESTERN PUBLIC SERVICE COMPANY ("Southwestern"), a New Mexico corporation, which is to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1933, as amended, registration statements (a) for the registration of Southwest- ern's First Mortgage Bonds to be issued pursuant to the Inden- ture of Mortgage and Deed of Trust dated August 1, 1946, as supplemented and amended, between Southwestern's and Chemical Bank, as Trustee, (b) for the registration of Southwestern's Common Stock, $1 par value, (c) for the registration of South- western's Preferred Stock, $1 par value, and (d) for any other equity or long-term debt, on behalf of Southwestern acting pur- suant to resolutions of the Board of Directors duly adopted, hereby constitutes and appoints David M. Wilks, Doyle R. Bunch II, and Robert D. Dickerson of SPS Tower, Tyler at Sixth, Amarillo, Texas, and each of them Southwestern's attorney-in- fact, with full power of substitution and resubstitution in the premises, for Southwestern and in its name, place and stead to sign with or without the other in any and all capacities and file such registration statements and any and all amendments and other documents related thereto, granting unto said attorneys-in-fact full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises as fully to all intents and purposes might or could do, hereby ratifying and approving the acts of said attorneys-in-fact. IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 31st day of January, 1996. /s/ Bill D. Helton ------------------ Bill D. Helton The undersigned, David M. Wilks, Director, President and Chief Operating Officer of SOUTHWESTERN PUBLIC SERVICE COM- PANY ("Southwestern"), a New Mexico corporation, which is to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1933, as amended, registra- tion statements (a) for the registration of Southwestern's First Mortgage Bonds to be issued pursuant to the Indenture of Mortgage and Deed of Trust dated August 1, 1946, as supple- mented and amended, between Southwestern's and Chemical Bank, as Trustee, (b) for the registration of Southwestern's Common Stock, $1 par value, (c) for the registration of Southwestern's Preferred Stock, $1 par value, and (d) for any other equity or long-term debt, on behalf of Southwestern acting pursuant to resolutions of the Board of Directors duly adopted, hereby con- stitutes and appoints Bill D. Helton, Doyle R. Bunch II, and Robert D. Dickerson of SPS Tower, Tyler at Sixth, Amarillo, Texas, and each of them Southwestern's attorney-in-fact, with full power of substitution and resubstitution in the premises, for Southwestern and in its name, place and stead to sign with or without the other in any and all capacities and file such registration statements and any and all amendments and other documents related thereto, granting unto said attorneys-in-fact full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises as fully to all intents and purposes might or could do, hereby ratifying and approving the acts of said attorneys- in-fact. IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 31st day of January, 1996. /s/ David M. Wilks ------------------ David M. Wilks The undersigned, Gene H. Bishop a Director of SOUTH- WESTERN PUBLIC SERVICE COMPANY ("Southwestern"), a New Mexico corporation, which is to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1933, as amended, registration statements (a) for the registration of Southwestern's First Mortgage Bonds to be issued pursuant to the Indenture of Mortgage and Deed of Trust dated August 1, 1946, as supplemented and amended, between Southwestern and Chemical Bank, as Trustee, (b) for the registration of South- western's Common Stock, $1 par value, (c) for the registration of Southwestern's Preferred Stock, $1 par value, and (d) for any other equity or long-term debt, hereby constitutes and appoints Bill D. Helton, David M. Wilks, Doyle R. Bunch II, and Robert D. Dickerson of SPS Tower, Tyler at Sixth, Amarillo, Texas, and each of them Southwestern's attorney-in-fact, with full power of substitution and resubstitution in the premises, for him and in his name, place and stead to sign with or with- out the other in any and all capacities and file such registra- tion statements and any and all amendments and other documents related thereto, granting unto said attorneys-in-fact full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the prem- ises as fully to all intents and purposes as he might or could do in person, hereby ratifying and approving the acts of said attorneys-in-fact. IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 31st day of January, 1996. /s/ Gene H. Bishop ------------------ Gene H. Bishop The undersigned, C. Coney Burgess a Director of SOUTHWESTERN PUBLIC SERVICE COMPANY ("Southwestern"), a New Mexico corporation, which is to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1933, as amended, registration statements (a) for the regis- tration of Southwestern's First Mortgage Bonds to be issued pursuant to the Indenture of Mortgage and Deed of Trust dated August 1, 1946, as supplemented and amended, between Southwest- ern and Chemical Bank, as Trustee, (b) for the registration of Southwestern's Common Stock, $1 par value, (c) for the regis- tration of Southwestern's Preferred Stock, $1 par value, and (d) for any other equity or long-term debt, hereby constitutes and appoints Bill D. Helton, David M. Wilks, Doyle R. Bunch II, and Robert D. Dickerson of SPS Tower, Tyler at Sixth, Amarillo, Texas, and each of them Southwestern's attorney-in-fact, with full power of substitution and resubstitution in the premises, for him and in his name, place and stead to sign with or with- out the other in any and all capacities and file such registra- tion statements and any and all amendments and other documents related thereto, granting unto said attorneys-in-fact full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the prem- ises as fully to all intents and purposes as he might or could do in person, hereby ratifying and approving the acts of said attorneys-in-fact. IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 31st day of January, 1996. /s/ C. Coney Burgess -------------------- C. Coney Burgess The undersigned, J. C. Chambers a Director of SOUTH- WESTERN PUBLIC SERVICE COMPANY ("Southwestern"), a New Mexico corporation, which is to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1933, as amended, registration statements (a) for the registration of Southwestern's First Mortgage Bonds to be issued pursuant to the Indenture of Mortgage and Deed of Trust dated August 1, 1946, as supplemented and amended, between Southwestern and Chemical Bank, as Trustee, (b) for the registration of South- western's Common Stock, $1 par value, (c) for the registration of Southwestern's Preferred Stock, $1 par value, and (d) for any other equity or long-term debt, hereby constitutes and appoints Bill D. Helton, David M. Wilks, Doyle R. Bunch II, and Robert D. Dickerson of SPS Tower, Tyler at Sixth, Amarillo, Texas, and each of them Southwestern's attorney-in-fact, with full power of substitution and resubstitution in the premises, for him and in his name, place and stead to sign with or with- out the other in any and all capacities and file such registra- tion statements and any and all amendments and other documents related thereto, granting unto said attorneys-in-fact full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the prem- ises as fully to all intents and purposes as he might or could do in person, hereby ratifying and approving the acts of said attorneys-in-fact. IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 31st day of January, 1996. /s/ J. C. Chambers ------------------ J. C. Chambers The undersigned, Danny H. Conklin a Director of SOUTHWESTERN PUBLIC SERVICE COMPANY ("Southwestern"), a New Mexico corporation, which is to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1933, as amended, registration statements (a) for the regis- tration of Southwestern's First Mortgage Bonds to be issued pursuant to the Indenture of Mortgage and Deed of Trust dated August 1, 1946, as supplemented and amended, between Southwest- ern and Chemical Bank, as Trustee, (b) for the registration of Southwestern's Common Stock, $1 par value, (c) for the regis- tration of Southwestern's Preferred Stock, $1 par value, and (d) for any other equity or long-term debt, hereby constitutes and appoints Bill D. Helton, David M. Wilks, Doyle R. Bunch II, and Robert D. Dickerson of SPS Tower, Tyler at Sixth, Amarillo, Texas, and each of them Southwestern's attorney-in-fact, with full power of substitution and resubstitution in the premises, for him and in his name, place and stead to sign with or with- out the other in any and all capacities and file such registra- tion statements and any and all amendments and other documents related thereto, granting unto said attorneys-in-fact full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the prem- ises as fully to all intents and purposes as he might or could do in person, hereby ratifying and approving the acts of said attorneys-in-fact. IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 31st day of January, 1996. /s/ Danny H. Conklin -------------------- Danny H. Conklin The undersigned, Giles M. Forbess a Director of SOUTHWESTERN PUBLIC SERVICE COMPANY ("Southwestern"), a New Mexico corporation, which is to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1933, as amended, registration statements (a) for the regis- tration of Southwestern's First Mortgage Bonds to be issued pursuant to the Indenture of Mortgage and Deed of Trust dated August 1, 1946, as supplemented and amended, between Southwest- ern and Chemical Bank, as Trustee, (b) for the registration of Southwestern's Common Stock, $1 par value, (c) for the regis- tration of Southwestern's Preferred Stock, $1 par value, and (d) for any other equity or long-term debt, hereby constitutes and appoints Bill D. Helton, David M. Wilks, Doyle R. Bunch II, and Robert D. Dickerson of SPS Tower, Tyler at Sixth, Amarillo, Texas, and each of them Southwestern's attorney-in-fact, with full power of substitution and resubstitution in the premises, for him and in his name, place and stead to sign with or with- out the other in any and all capacities and file such registra- tion statements and any and all amendments and other documents related thereto, granting unto said attorneys-in-fact full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the prem- ises as fully to all intents and purposes as he might or could do in person, hereby ratifying and approving the acts of said attorneys-in-fact. IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 31st day of January, 1996. /s/ Giles M. Forbess -------------------- Giles M. Forbess The undersigned, R. R. Hemminghaus a Director of SOUTHWESTERN PUBLIC SERVICE COMPANY ("Southwestern"), a New Mexico corporation, which is to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1933, as amended, registration statements (a) for the regis- tration of Southwestern's First Mortgage Bonds to be issued pursuant to the Indenture of Mortgage and Deed of Trust dated August 1, 1946, as supplemented and amended, between Southwest- ern and Chemical Bank, as Trustee, (b) for the registration of Southwestern's Common Stock, $1 par value, (c) for the regis- tration of Southwestern's Preferred Stock, $1 par value, and (d) for any other equity or long-term debt, hereby constitutes and appoints Bill D. Helton, David M. Wilks, Doyle R. Bunch II, and Robert D. Dickerson of SPS Tower, Tyler at Sixth, Amarillo, Texas, and each of them Southwestern's attorney-in-fact, with full power of substitution and resubstitution in the premises, for him and in his name, place and stead to sign with or with- out the other in any and all capacities and file such registra- tion statements and any and all amendments and other documents related thereto, granting unto said attorneys-in-fact full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the prem- ises as fully to all intents and purposes as he might or could do in person, hereby ratifying and approving the acts of said attorneys-in-fact. IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 31st day of January, 1996. /s/ R. R. Hemminghaus --------------------- R. R. Hemminghaus The undersigned, Don Maddox a Director of SOUTHWEST- ERN PUBLIC SERVICE COMPANY ("Southwestern"), a New Mexico cor- poration, which is to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1933, as amended, registration statements (a) for the registration of Southwestern's First Mortgage Bonds to be issued pursuant to the Indenture of Mortgage and Deed of Trust dated August 1, 1946, as supplemented and amended, between Southwestern and Chemical Bank, as Trustee, (b) for the registration of South- western's Common Stock, $1 par value, (c) for the registration of Southwestern's Preferred Stock, $1 par value, and (d) for any other equity or long-term debt, hereby constitutes and appoints Bill D. Helton, David M. Wilks, Doyle R. Bunch II, and Robert D. Dickerson of SPS Tower, Tyler at Sixth, Amarillo, Texas, and each of them Southwestern's attorney-in-fact, with full power of substitution and resubstitution in the premises, for him and in his name, place and stead to sign with or with- out the other in any and all capacities and file such registra- tion statements and any and all amendments and other documents related thereto, granting unto said attorneys-in-fact full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the prem- ises as fully to all intents and purposes as he might or could do in person, hereby ratifying and approving the acts of said attorneys-in-fact. IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 31st day of January, 1996. /s/ Don Maddox -------------- Don Maddox The undersigned, J. Howard Mock a Director of SOUTH- WESTERN PUBLIC SERVICE COMPANY ("Southwestern"), a New Mexico corporation, which is to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1933, as amended, registration statements (a) for the registration of Southwestern's First Mortgage Bonds to be issued pursuant to the Indenture of Mortgage and Deed of Trust dated August 1, 1946, as supplemented and amended, between Southwestern and Chemical Bank, as Trustee, (b) for the registration of South- western's Common Stock, $1 par value, (c) for the registration of Southwestern's Preferred Stock, $1 par value, and (d) for any other equity or long-term debt, hereby constitutes and appoints Bill D. Helton, David M. Wilks, Doyle R. Bunch II, and Robert D. Dickerson of SPS Tower, Tyler at Sixth, Amarillo, Texas, and each of them Southwestern's attorney-in-fact, with full power of substitution and resubstitution in the premises, for him and in his name, place and stead to sign with or with- out the other in any and all capacities and file such registra- tion statements and any and all amendments and other documents related thereto, granting unto said attorneys-in-fact full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the prem- ises as fully to all intents and purposes as he might or could do in person, hereby ratifying and approving the acts of said attorneys-in-fact. IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 31st day of January, 1996. /s/ J. Howard Mock ------------------ J. Howard Mock The undersigned, Shirley Bird Perry a Director of SOUTHWESTERN PUBLIC SERVICE COMPANY ("Southwestern"), a New Mexico corporation, which is to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1933, as amended, registration statements (a) for the regis- tration of Southwestern's First Mortgage Bonds to be issued pursuant to the Indenture of Mortgage and Deed of Trust dated August 1, 1946, as supplemented and amended, between Southwest- ern and Chemical Bank, as Trustee, (b) for the registration of Southwestern's Common Stock, $1 par value, (c) for the regis- tration of Southwestern's Preferred Stock, $1 par value, and (d) for any other equity or long-term debt, hereby constitutes and appoints Bill D. Helton, David M. Wilks, Doyle R. Bunch II, and Robert D. Dickerson of SPS Tower, Tyler at Sixth, Amarillo, Texas, and each of them Southwestern's attorney-in-fact, with full power of substitution and resubstitution in the premises, for him and in his name, place and stead to sign with or with- out the other in any and all capacities and file such registra- tion statements and any and all amendments and other documents related thereto, granting unto said attorneys-in-fact full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the prem- ises as fully to all intents and purposes as he might or could do in person, hereby ratifying and approving the acts of said attorneys-in-fact. IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 31st day of January, 1996. /s/ Shirley Bird Perry ---------------------- Shirley Bird Perry The undersigned, Gary W. Wolf a Director of SOUTH- WESTERN PUBLIC SERVICE COMPANY ("Southwestern"), a New Mexico corporation, which is to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1933, as amended, registration statements (a) for the registration of Southwestern's First Mortgage Bonds to be issued pursuant to the Indenture of Mortgage and Deed of Trust dated August 1, 1946, as supplemented and amended, between Southwestern and Chemical Bank, as Trustee, (b) for the registration of South- western's Common Stock, $1 par value, (c) for the registration of Southwestern's Preferred Stock, $1 par value, and (d) for any other equity or long-term debt, hereby constitutes and appoints Bill D. Helton, David M. Wilks, Doyle R. Bunch II, and Robert D. Dickerson of SPS Tower, Tyler at Sixth, Amarillo, Texas, and each of them Southwestern's attorney-in-fact, with full power of substitution and resubstitution in the premises, for him and in his name, place and stead to sign with or with- out the other in any and all capacities and file such registra- tion statements and any and all amendments and other documents related thereto, granting unto said attorneys-in-fact full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the prem- ises as fully to all intents and purposes as he might or could do in person, hereby ratifying and approving the acts of said attorneys-in-fact. IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 31st day of January, 1996. /s/ Gary W. Wolf ---------------- Gary W. Wolf -----END PRIVACY-ENHANCED MESSAGE-----