Public
offering
price(1)
|
Underwriting
discount
|
Proceeds
to
us
|
|
Per
Note
|
%
|
%
|
%
|
Total
|
$
|
$
|
$
|
(1)
|
Plus
accrued interest from July 24, 2006, the date of original issuance
of the
Original Notes, to the date of issuance of the Notes,
which is expected to be on or about August ,
2006.
|
Citigroup
|
JPMorgan
|
Page
|
|
Risk
Factors
|
S-3
|
Our
Company
|
S-3
|
Recent
Developments
|
S-4
|
Selected
Financial Data
|
S-6
|
Capitalization
|
S-7
|
Ratio
of Earnings to Fixed Charges
|
S-7
|
Use
of Proceeds
|
S-8
|
Description
of the Notes
|
S-8
|
Underwriting
|
S-12
|
Legal
Matters
|
S-13
|
Experts
|
S-13
|
Incorporation
of Certain Documents by Reference
|
S-13
|
|
|
Prospectus
|
|
|
|
About
This Prospectus
|
3
|
Where
You Can Find More Information
|
3
|
Cautionary
Statement Regarding Forward-Looking Statements
|
5
|
Energy
East Corporation
|
6
|
Recent
Developments
|
7
|
The
Trust
|
8
|
Use
of Proceeds
|
8
|
Ratio
of Earnings to Fixed Charges and Ratio of Earnings to Fixed Charges
and
Preferred Stock Dividends
|
9
|
Description
of Securities
|
10
|
Plan
of Distribution
|
46
|
Experts
|
47
|
Legal
Matters
|
47
|
·
|
Connecticut
Energy’s wholly-owned subsidiary, The Southern Connecticut Gas Company,
is
a regulated utility primarily engaged in the retail distribution
of
natural gas in Connecticut.
|
·
|
CMP
Group’s wholly-owned subsidiary, Central Maine Power Company, is a
regulated utility primarily engaged in transmitting and distributing
electricity generated by others to retail customers in Maine. Central
Maine Power Company sold its generation assets in
1999.
|
·
|
CTG
Resources’ wholly-owned subsidiary, Connecticut Natural Gas Corporation,
is a regulated utility primarily engaged in the retail distribution
of
natural gas in Connecticut.
|
·
|
Berkshire
Energy’s wholly-owned subsidiary, The Berkshire Gas Company, is a
regulated utility primarily engaged in the distribution of natural
gas in
western Massachusetts.
|
·
|
RGS
Energy’s wholly-owned subsidiaries are NYSEG and Rochester Gas and
Electric Corporation ("RG&E"). NYSEG is a regulated utility primarily
engaged in purchasing and delivering electricity and natural gas
in the
central, eastern and western parts of the state of New York. NYSEG
sold a
majority of its generation assets in 1999 and the bulk of the remaining
generation assets in 2002. RG&E is a regulated utility primarily
engaged in generating, purchasing and delivering electricity and
purchasing and delivering natural gas in an area centered around
the city
of Rochester, New York. RG&E sold its largest generation station, the
Robert E. Ginna Nuclear Power Plant, in 2004, and plans to shut down
its
largest remaining generating facility, Russell Station, in 2007 upon
the
completion of a transmission upgrade required to assure reliable
delivery.
|
•
|
A
decrease in delivery rates of $37 million. NYSEG’s most recent update in
the proceeding requested a $58 million increase in delivery
rates.
|
•
|
A
9.3% return on common equity ("ROE"). NYSEG had requested an 11%
ROE.
|
•
|
A
significant modification to NYSEG’s commodity options program,
including:
|
o
|
Use
of the variable rate supply option as the default for all customers
not
making a supply election, as opposed to the current fixed price option
default.
|
o
|
A
reduction in the allowance, from 35% to 22%, used to set the supply
rate
to cover the costs of providing fixed price electricity at
retail.
|
o
|
The
use of an earnings collar for supply of plus/minus $5 million with
80/20
(customers/shareholders) sharing outside the collar. NYSEG currently
can
earn 300 basis points ROE on supply (approximately $21 million) after
which earnings are shared 50/50.
|
Six
Months
Ended
June 30,(1)
|
Year
Ended December 31,
|
|||||||||||||||||||||
2006
|
2005
|
2005
|
2004
|
2003
|
2002(2)
|
2001
|
||||||||||||||||
(Thousands,
except per share amounts)
|
|
|||||||||||||||||||||
Operating
Revenues
|
$
|
2,808,436
|
$
|
2,717,232
|
$
|
5,298,543
|
$
|
4,756,692
|
$
|
4,514,490
|
$
|
3,778,026
|
$
|
3,681,613
|
||||||||
Net
Income
|
$
|
161,525
|
$
|
171,731
|
$
|
256,833
|
$
|
229,337
|
$
|
210,446
|
$
|
188,603
|
(3)
|
$
|
187,607
|
(4)(5)
|
||||||
Earnings
Per Share, basic
|
$
|
1.10
|
$
|
1.17
|
$
|
1.75
|
$
|
1.57
|
$
|
1.45
|
$
|
1.44
|
(3)
|
$
|
1.61
|
(4)
|
||||||
Earnings
Per Share, diluted
|
$
|
1.09
|
$
|
1.17
|
$
|
1.74
|
$
|
1.56
|
$
|
1.44
|
$
|
1.44
|
(3)
|
$
|
1.61
|
(4)
|
||||||
Dividends
Per Share
|
$
|
.58
|
$
|
.55
|
$
|
1.115
|
$
|
1.055
|
$
|
1.00
|
$
|
.96
|
$
|
.92
|
||||||||
Total
Assets
|
$
|
11,063,067
|
$
|
10,831,989
|
$
|
11,487,708
|
$
|
10,796,622
|
$
|
11,330,441
|
$
|
10,944,347
|
$
|
7,269,232
|
(6)
|
|||||||
Long-Term
Obligations, Capital Leases and Redeemable Preferred Stock
(7)
|
$
|
3,585,473
|
$
|
3,813,807
|
$
|
3,667,065
|
$
|
3,797,685
|
$
|
4,017,846
|
$
|
3,721,959
|
$
|
2,816,278
|
(1)
|
Due
to the seasonal nature of our operations, financial results for interim
periods are not necessarily indicative of trends for a 12-month
period.
|
(2)
|
Due
to the completion of our merger transaction with RGS Energy during
2002,
the consolidated financial statements include RGS Energy’s results
beginning with July 2002.
|
(3)
|
Includes
the writedown of an investment in NEON Communications, Inc. that
decreased
net income $7 million and earnings per share 6 cents and the effect
of
restructuring expenses that decreased net income $24 million and
earnings
per share 19 cents.
|
(4)
|
Includes
the writedown of an investment in NEON Communications, Inc. that
decreased
net income $46 million and earnings per share 39
cents.
|
(5)
|
Includes
goodwill amortization of $25
million.
|
(6)
|
Does
not reflect the reclassification of accrued removal costs from accumulated
depreciation to a regulatory
liability.
|
(7)
|
Not
including current maturities.
|
As
of June 30, 2006
|
As
Adjusted
|
||||||||||||
(Thousands,
except amounts expressed as percentages)
|
|||||||||||||
Notes
Payable
|
$
|
12,000
|
$
|
107,000
|
|||||||||
Long-term
Debt(1)
|
$
|
3,634,543
|
52.9
|
%
|
$
|
3,902,193
|
57.5
|
%
|
|||||
Debt
Owed to Subsidiary Holding Solely Parent Debentures(1)
|
355,670
|
5.1
|
--
|
--
|
|||||||||
Preferred
Stock of Subsidiaries
|
24,631
|
0.4
|
24,631
|
0.4
|
|||||||||
Common
Stock Equity
|
2,858,059
|
41.6
|
2,851,459
|
42.1
|
|||||||||
Total
Capitalization(1)
|
$
|
6,872,903
|
100.0
|
%
|
$
|
6,778,283
|
100.0
|
%
|
(1)
|
Includes
current maturities.
|
|
Year
Ended December 31,
|
||||||||||||||||||
Six
Months Ended
June
30, 2006(1)
|
2005
|
2004
|
2003
|
2002(2)
|
2001
|
||||||||||||||
Ratio
of Earnings to Fixed Charges
(3)
|
2.69
|
2.43
|
2.69
|
2.08
|
1.98(4)
|
|
2.44(4)
|
|
(1)
|
Due
to the seasonal nature of our operations, financial results for interim
periods are not necessarily indicative of trends for a 12-month
period.
|
(2)
|
Due
to the completion of our merger transaction with RGS Energy during
2002,
the consolidated financial statements include RGS Energy’s results
beginning with July 2002.
|
(3)
|
The
ratio of earnings to fixed charges is calculated by dividing earnings
by
fixed charges. For this purpose earnings means income from continuing
operations before income taxes and fixed charges. Fixed charges means
all
interest charges, the interest component of rentals and preferred
stock
dividends of subsidiaries.
|
(4)
|
The
ratio of earnings to fixed charges in 2002 includes a $12 million
writedown of an investment in NEON Communications and a $41 million
effect from restructuring expenses. Excluding those two amounts,
the ratio
of earnings to fixed charges for 2002 would have been 2.15. The ratio
of
earnings to fixed charges in 2001 includes a $78 million writedown of
an investment in NEON Communications. Excluding the $78 million, the
ratio of earnings to fixed charges for 2001 would have been 2.77.
We
provide information on our ratio of earnings to fixed charges exclusive
of
nonrecurring items because we believe this information may be helpful
to
investors in assessing our ratio of earnings to fixed charges from
ongoing
operations. We caution investors that our view of nonrecurring items
may
differ from that of other companies and our ratio of earnings to
fixed
charges exclusive of nonrecurring items should not be used as a surrogate
for our reported ratio of earnings to fixed charges prepared in accordance
with generally accepted accounting
principles.
|
·
|
100%
of the principal amount of the Notes to be redeemed,
or
|
·
|
the
sum of the present values of the remaining scheduled payments of
principal
and interest thereon from the redemption date to the maturity date
computed by discounting such payments to the redemption date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at a rate equal to the sum of (1) 25 basis points plus (2)
the
Adjusted Treasury Rate on the third Business Day prior to the redemption
date, as calculated by an Independent Investment
Banker,
|
·
|
the
yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical
release designated "H.15(519)" or any successor publication which
is
published weekly by the Board of Governors of the Federal Reserve
System
and which establishes yields on actively traded U.S. Treasury securities
adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Comparable Treasury
Issue (if no maturity is within three months before or after the
Remaining
Life, yields for the two published maturities most closely corresponding
to the Comparable Treasury Issue will be determined and the Adjusted
Treasury Rate will be interpolated or extrapolated from such yields
on a
straight line basis, rounding to the nearest month);
or
|
·
|
if
such release (or any successor release) is not published during the
week
preceding the calculation date or does not contain such yields, the
rate
per annum equal to the semi-annual equivalent yield to maturity of
the
Comparable Treasury Issue, calculated using a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount)
equal
to the Comparable Treasury Price for such redemption
date.
|
Underwriter
|
Principal
Amount
of Notes
|
|||
Citigroup
Global Markets Inc.
|
$
|
87,500,000
|
||
J.P.
Morgan Securities Inc.
|
87,500,000
|
|||
Banc
of America Securities LLC
|
25,000,000
|
|||
Sovereign
Securities Corporation, LLC
|
25,000,000
|
|||
Wachovia
Capital Markets, LLC
|
25,000,000
|
|||
Total
|
$
|
250,000,000
|
•
|
Our
Annual Report on Form 10-K for the year ended December 31,
2005.
|
•
|
Our
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2006
and
June 30, 2006.
|
•
|
Our
Current Reports on Form 8-K dated January 10, 2006, February 9, 2006
(only
with respect to Item 1.01), April 6, 2006, June 9, 2006 and July
24,
2006.
|
|
Page
|
|
ABOUT
THIS PROSPECTUS
|
3
|
|
WHERE
YOU CAN FIND MORE INFORMATION
|
3
|
|
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
|
5
|
|
ENERGY
EAST CORPORATION
|
6
|
|
RECENT
DEVELOPMENTS
|
7
|
|
THE
TRUST
|
8
|
|
USE
OF PROCEEDS
|
8
|
|
RATIO
OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO FIXED CHARGES
AND
PREFERRED STOCK DIVIDENDS
|
9
|
|
DESCRIPTION
OF SECURITIES
|
10
|
|
Capital
Stock
|
10
|
|
Common
Stock
|
10
|
|
Preferred
Stock
|
11
|
|
Anti-Takeover
Effects of Our Charter and By-Laws and Certain Provisions of
Law
|
12
|
|
Senior
Debt Securities
|
13
|
|
Junior
Subordinated Debt Securities
|
22
|
|
Trust
Preferred Securities
|
32
|
|
Guarantee
|
41
|
|
Agreement
as to Expenses and Liabilities
|
45
|
|
Relationship
Among the Trust Preferred Securities, the Guarantee and the Junior
Subordinated Debt Securities held by the Trust
|
45
|
|
Accounting
Treatment
|
45
|
|
PLAN
OF DISTRIBUTION
|
46
|
|
EXPERTS
|
47
|
|
LEGAL
MATTERS
|
47
|
•
|
Our
Annual Report on Form 10-K for the year ended December 31,
2002.
|
•
|
Our
Annual Reports on Form 11-K for the year ended December 31,
2002.
|
•
|
Our
Quarterly Report on Form 10-Q for the quarter ended March 31,
2003.
|
•
|
Our
Current Reports on Form 8-K dated March 5, 2003, April 25, 2003 and
April
29, 2003.
|
•
|
the
deregulation and continued regulatory unbundling of a vertically
integrated industry;
|
•
|
our
ability to compete in the rapidly changing and increasingly competitive
electricity and/or natural gas utility
markets;
|
•
|
regulatory
uncertainty in a politically-charged environment of changing energy
prices;
|
•
|
operation
of the New York Independent System Operator and ISO New England,
Inc.;
|
•
|
operation
of a regional transmission
organization;
|
•
|
our
ability to recover nonutility generator and other
costs;
|
•
|
changes
in fuel supply or cost and the success of strategies to satisfy power
requirements now that most generation assets have been
sold;
|
•
|
our
ability to integrate the operations of Berkshire Energy Resources,
CMP
Group, Inc., Connecticut Energy Corporation, CTG Resources, Inc.
and RGS
Energy Group, Inc. with our operations and to achieve enterprise-wide
integration synergies;
|
•
|
market
risk;
|
•
|
our
ability to obtain adequate and timely rate
relief;
|
•
|
nuclear
or environmental incidents;
|
•
|
legal
or administrative proceedings;
|
•
|
changes
in the cost or availability of
capital;
|
•
|
the
effect of the volatility in the equity markets on pension benefit
costs;
|
•
|
growth
in the areas in which we are doing
business;
|
•
|
weather
variations affecting customer energy
usage;
|
•
|
authoritative
accounting guidance;
|
•
|
acts
of terrorists; and
|
•
|
other
considerations that may be disclosed from time to time in our publicly
disseminated documents or filings.
|
•
|
issuing
two classes of trust securities—trust preferred securities and trust
common securities—which together represent undivided beneficial interests
in the assets of the trust;
|
•
|
investing
the gross proceeds of the trust securities in our junior subordinated
debt
securities;
|
•
|
making
distributions; and
|
•
|
engaging
in only those other activities necessary, advisable or incidental
to the
purposes listed above.
|
Three
Months
Ended
|
Year
Ended December 31,
|
||||||||||||||||||
March
31,
|
|
||||||||||||||||||
2003(2)
|
2002(3)
|
2001(4)
|
2000
|
1999(5)
|
1998
|
||||||||||||||
Ratio
of earnings to fixed charges(1)
|
3.83
|
1.96
|
2.43
|
3.47
|
4.20
|
3.34
|
|||||||||||||
Ratio
of earnings to fixed charges and preferred stock dividends(1)(6)
|
3.83
|
1.96
|
2.43
|
3.47
|
4.20
|
3.34
|
(1)
|
The
ratio of earnings to fixed charges is calculated by dividing earnings
by
fixed charges. The ratio of earnings to fixed charges and preferred
stock
dividends is calculated by dividing earnings by fixed charges and
preferred stock dividends. For this purpose, earnings means income
from
continuing operations before income taxes and fixed charges. Fixed
charges
means all interest charges, the interest component of rentals and
preferred stock dividends of
subsidiaries.
|
(2)
|
Financial
results for interim periods are not necessarily indicative of trends
for a
12-month period.
|
(3)
|
Our
earnings for 2002 includes a $12 million writedown of an investment
in
NEON Communications, Inc. and a $41 million effect from restructuring
expenses. Excluding those two amounts, these earnings ratios for
the
period would have been 2.13.
|
(4)
|
Our
earnings for 2001 includes a $78 million writedown of an investment
in
NEON Communications, Inc. Excluding the $78 million, these earnings
ratios
for the period would have been
2.76.
|
(5)
|
Our
earnings for 1999 includes $84 million that we paid in federal income
taxes as a result of the sale of our coal-fired generation assets.
Excluding the $84 million, these earnings ratios for the period would
have
been 3.59.
|
(6)
|
We
have not previously issued preferred stock and we therefore have
never
declared any preferred stock
dividends.
|
•
|
the
serial designation;
|
•
|
the
number of shares included;
|
•
|
the
dividend rate and dividend periods, and whether dividends will be
cumulative;
|
•
|
the
relative rights in the event of our voluntary or involuntary liquidation,
dissolution or winding-up;
|
•
|
any
redemption provisions;
|
•
|
any
sinking fund provisions;
|
•
|
any
conversion or exchange provisions;
|
•
|
any
voting rights in addition to those provided by law;
and
|
•
|
any
other relative rights, preferences, or
limitations.
|
•
|
enhance
the likelihood of continuity and stability in the composition of
our board
of directors and in the policies formulated by our board of
directors;
|
•
|
discourage
certain types of transactions which may involve an actual or threatened
change in control of our company;
|
•
|
discourage
certain tactics that may be used in proxy
fights;
|
•
|
encourage
persons seeking to acquire control of our company to consult first
with
our board of directors to negotiate the terms of any proposed business
combination or offer; and
|
•
|
reduce
our vulnerability to an unsolicited proposal for a takeover that
does not
contemplate the acquisition of all of our outstanding shares of common
stock or that is otherwise unfair to our
shareholders.
|
•
|
title
of the senior debt securities;
|
•
|
any
limit on the aggregate principal amount of the senior debt
securities;
|
•
|
the
person to whom any interest on the senior debt securities shall be
payable, if other than the person in whose name those securities
are
registered at the close of business on the regular record
date;
|
•
|
the
date or dates on which the principal of the senior debt securities
will be
payable or how the date or dates will be
determined;
|
•
|
the
rate or rates at which the senior debt securities will bear interest,
or
how the rate or rates will be determined and the date or dates from
which
interest will accrue;
|
•
|
the
dates on which interest will be
payable;
|
•
|
the
record dates for payments of
interest;
|
•
|
the
place or places, if any, in addition to the office of the senior
indenture
trustee, where the principal of, and premium, if any, and interest,
if
any, on the senior debt securities will be
payable;
|
•
|
the
period or periods within which, the price or prices at which, and
the
terms and conditions upon which, the senior debt securities may be
repaid,
in whole or in part, at the option of the holder
thereof;
|
•
|
any
sinking fund or other provisions or options held by holders of the
senior
debt securities that would obligate us to repurchase or redeem those
securities;
|
•
|
the
percentage, if less than 100%, of the principal amount of the senior
debt
securities that will be payable if the maturity of those securities
is
accelerated;
|
•
|
any
changes or additions to the events of default under the senior indenture
or changes or additions to our covenants under that
indenture;
|
•
|
any
collateral, security, assurance or guarantee for the senior debt
securities; and
|
•
|
any
other specific terms applicable to the senior debt
securities.
|
•
|
we
will first propose to the senior indenture trustee a payment date
for the
defaulted interest. Next, the senior indenture trustee will choose
a
special record date for determining which registered holders are
entitled
to the payment. The special record date will be between 10 and 15
days
before the payment date we propose. Finally, we will pay the defaulted
interest on the payment date to the registered holder of the senior
debt
security as of the close of business on the special record date;
or
|
•
|
we
can propose to the senior indenture trustee any other lawful manner
of
payment that is consistent with the requirements of any securities
exchange on which the senior debt securities may be listed for trading.
If
the senior indenture trustee thinks the proposal is practicable,
payment
will be made as proposed.
|
•
|
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 Federal Reserve
System;
|
•
|
a
“clearing corporation” within the meaning of the New York Uniform
Commercial Code; and
|
•
|
a
“clearing agency” registered pursuant to the provisions of Section 17A of
the Securities Exchange Act of
1934.
|
•
|
DTC
notifies us that it is unwilling or unable to continue as depository
or if
DTC ceases to be a clearing agency registered under applicable
law;
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we
instruct the senior indenture trustee that the global note is now
exchangeable; or
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an
event of default has occurred and is
continuing.
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the
successor is an entity organized and existing under the laws of the
United
States of America or any State or the District of
Columbia;
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the
successor expressly assumes by a supplemental indenture the due and
punctual payment of the principal of, and premium, if any, and interest
on
all the outstanding senior debt securities and the performance of
every
covenant of the senior indenture that we would otherwise have to
perform;
and
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immediately
after giving effect to the transactions, no event of default and
no event
which after notice or lapse of time or both would become an event
of
default, will have occurred and be continuing. (See section 801 of
the
senior indenture.)
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we
secure all Benefitted Securities then outstanding equally and ratably
with
the Secured Debt; or
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we
deliver to the senior indenture trustee bonds, notes or other evidences
of
indebtedness secured by a Lien (as defined below) which secures the
Secured Debt in an aggregate principal amount equal to the aggregate
principal amount of the Benefitted Securities then outstanding and
meeting
certain other requirements in the senior
indenture.
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indebtedness
for borrowed money evidenced by a bond, debenture, note or other
written
instrument or agreement by which we are obligated to repay such borrowed
money; and
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any
guaranty by us of any such indebtedness of another
person.
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change
the fixed date upon which the principal of or the interest on any
senior
debt security is due and payable, or reduce the principal amount
thereof
or the rate of interest thereon or any premium payable upon the redemption
thereof, or reduce the amount of the principal of an original issue
discount senior debt security that would be payable upon a declaration
of
acceleration of the maturity thereof, or change any place of payment
where, or the currency in which, any senior debt security or any
premium,
if any, or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any payment on or after the
date
such payment is due or, in the case of redemption, on or after the
date
fixed for such redemption;
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reduce
the stated percentage of senior debt securities, the consent of the
holders of which is required for any modification of the senior indenture
or for waiver by the holders of certain of their rights;
or
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modify
certain provisions of the senior indenture. (See section 902 of the
senior
indenture.)
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failure
to pay interest on the senior debt securities of that series for
30 days
after payment is due;
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failure
to pay principal of, or premium, if any, on, the senior debt securities
of
that series when due;
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failure
to perform other covenants in the senior indenture for 60 days after
we
are given written notice from the senior indenture trustee or the
senior
indenture trustee receives written notice from the registered owners
of at
least 25% in principal amount of the senior debt securities of that
series;
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failure
to pay any sinking fund installment when
due;
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default
occurs under any bond, note, debenture or other instrument evidencing
any
indebtedness for money borrowed by us, excluding any of our subsidiaries
(including a default with respect to any other series of senior debt
securities issued under the senior indenture), or under any mortgage,
indenture or other instrument under which there may be issued or
by which
there may be secured or evidenced any indebtedness for money borrowed
by
us (or the payment of which is guaranteed by us), excluding any of
our
subsidiaries, whether such indebtedness or guarantee exists on the
date of
the senior indenture or is issued or entered into following the date
of
the senior indenture, if:
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either:
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such
default results from failure to pay any such indebtedness when due;
or
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as
a result of such default the maturity of such indebtedness has been
accelerated prior to its expressed maturity;
and
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the
principal amount of such indebtedness, together with the principal
amount
of any other such indebtedness in default for failure to pay any
such
indebtedness when due or the maturity of which has been so accelerated,
aggregates at least $40 million;
and
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certain
events of bankruptcy, insolvency, reorganization, receivership or
liquidation relating to us. (See section 501 of the senior
indenture.)
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we
deposit with the senior indenture trustee, in trust, money, or in
certain
cases, U.S. government obligations sufficient to pay and discharge
(i) the
principal of, and premium, if any, and interest, if any, on the
outstanding senior debt securities on the dates such payments are
due, in
accordance with the terms of those securities and (ii) any mandatory
sinking fund payments applicable to the senior debt securities on
the day
on which payments are due and payable in accordance with the terms
of the
senior indenture and of those
securities;
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no
event of default or event which with notice or lapse of time would
become
an event of default, including by reason of such deposit, with respect
to
the senior debt securities shall have occurred and be continuing
on the
date of such deposit;
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we
deliver to the senior indenture trustee an opinion of counsel to
the
effect that the holders will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and defeasance
of
certain obligations; and
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we
have delivered to the senior indenture trustee an officers’ certificate
and an opinion of counsel, each stating that all conditions precedent
provided for in the senior indenture relating to the satisfaction
and
discharge of the senior debt securities have been complied with.
(See
sections 403 and 1009 of the senior
indenture.)
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the
title;
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any
limit on the aggregate principal
amount;
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the
maturity date on which principal is
payable;
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the
interest rate or rates and date or dates from which interest shall
accrue;
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the
interest payment dates;
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•
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the
record dates for each corresponding interest payment
date;
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our
right to defer or extend an interest payment
date;
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the
place where (i) principal, any premium and any interest are payable,
(ii)
junior subordinated debt securities may be presented for registration
of
transfer or exchange, and (iii) notices and demands to us may be
made;
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the
terms and conditions of redemption;
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issuable
denominations;
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the
portion (if less than all) of the principal amount payable upon
acceleration of maturity;
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•
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the
currency or currencies in which the principal, any premium and any
interest are payable or in which the junior subordinated debt securities
will be denominated;
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•
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any
additions, modifications or deletions to the events of default or
covenants in the subordinated
indenture;
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•
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the
index or indices and applicable calculations used to determine the
amount
of principal, premium, if any, or interest
payments;
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the
terms and conditions for issuance of a temporary global security
representing all such junior subordinated debt securities and the
exchange
of a temporary global security for definitive junior subordinated
debt
securities;
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•
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whether
issuance will be in the form of one or more global securities and
the
depositary for global securities;
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appointment
of any paying agent or agents;
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•
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the
form of trust agreement and guarantee;
and
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•
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any
other terms not inconsistent with the subordinated
indenture.
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•
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by
the depositary for such global junior subordinated debt security
to a
nominee of such depositary;
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•
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by
a nominee of such depositary to such depositary or another nominee
of such
depositary; or
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•
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by
the depositary or any nominee to a successor depositary or any nominee
of
such successor. (See section 2.5 of the subordinated
indenture.)
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shorten
the maturity of the junior subordinated debt securities of any series
at
any time to a date no earlier than the first date on which we may
redeem
those securities; or
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extend
the maturity of the junior subordinated debt securities of any series
at
any time to a date no later than the forty-ninth anniversary of the
first
interest payment date following the original issue date of those
securities.
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declare
or pay any dividends or distributions on, or redeem, purchase, acquire
or
make a liquidation payment with respect to, any of our capital
stock,
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make
any payment of principal, any premium or any interest on or repay,
repurchase or redeem any of our debt securities (including other
series of
junior subordinated debt securities) that rank equally with or junior
in
interest to the junior subordinated debt securities,
or
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make
any guarantee payments on any guarantee by us of the debt securities
of
any subsidiary if the guarantee ranks equally with or junior in interest
to the junior subordinated debt
securities
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we
have actual knowledge of the occurrence of any event (i) that with
the
giving of notice or the lapse of time or both would constitute an
event of
default under the subordinated indenture with respect to the junior
subordinated debt securities of any series and (ii) that we have
not taken
reasonable steps to cure,
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if
such junior subordinated debt securities are held by a trust of a
series
of related trust preferred securities and we have defaulted on the
payment
of any obligations under the guarantee relating to such related trust
preferred securities, or
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we
have given notice of our election of an extension period as provided
in
the subordinated indenture with respect to the junior subordinated
debt
securities of such series and have not rescinded such notice, or
such
extension period, or any extension thereof, is
continuing.
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dividends
or distributions in our common
stock,
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any
declaration of a dividend in connection with the implementation of
a
shareholders’ rights plan, or the issuance of capital stock under any such
plan in the future, or the redemption or repurchase of any such rights
pursuant to such plan,
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payments
under any guarantee with respect to the series of related trust preferred
securities, and
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purchases
of common stock related to the issuance of common stock under any
of our
benefit plans for our directors, officers or employees or our dividend
reinvestment plan. (See section 4.9 of the subordinated
indenture.)
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failure
for 30 days by us to pay any interest when due (subject to the deferral
of
any due date in the case of an extension period under the subordinated
indenture); or
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•
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failure
by us to pay any principal when due at maturity, upon redemption,
by
declaration or otherwise; or
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failure
by us to observe or perform any other covenant contained in the junior
subordinated debt securities or the subordinated indenture (other
than
those specifically relating to another series) for 60 days after
written
notice to us from the subordinated indenture trustee or the holders
of at
least 25% in principal amount of such series of junior subordinated
debt
securities; or
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certain
events of bankruptcy, insolvency or reorganization by us. (See section
6.1
of the subordinated indenture.)
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either
(i) we are the successor person or (ii) the successor person is organized
under the laws of the United States or any state or the District
of
Columbia, and such successor person expressly assumes our obligations
on
the junior subordinated debt securities and under the subordinated
indenture;
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immediately
after the consolidation, merger, sale or conveyance, no default in
the
performance of any covenant or condition under the subordinated indenture
has occurred; and
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in
the case the trust is the holder of any series of junior subordinated
debt
securities, such consolidation, merger, sale or conveyance is permitted
and does not cause a breach or violation under the related trust
agreement
and guarantee. (See section 11.1 of the subordinated
indenture.)
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all
outstanding junior subordinated debt securities are delivered to
the
subordinated indenture trustee for cancellation
or
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all
outstanding junior subordinated debt securities are due and payable
or
will become due and payable or will be called for redemption within
one
year, and we deposit with the subordinated indenture trustee funds
in
trust in an amount sufficient to pay at maturity or upon redemption
all of
such outstanding junior subordinated debt securities, including principal
and any interest to the date of maturity or redemption (as applicable)
and
we have paid all other amounts payable under the subordinated indenture.
(See section 12.1 of the subordinated
indenture.)
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remaining
rights of registration of transfer, substitution and exchange and
our
optional redemption right,
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rights
of holders to receive principal and interest and other amounts deposited
with the subordinated indenture trustee,
and
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the
rights, obligations and immunities of the subordinated indenture
trustee
under the subordinated indenture. (See sections 7.6 and 12.1 of the
subordinated indenture.)
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any
indebtedness of ours for borrowed or purchased money, whether or
not
evidenced by bonds, debentures, notes or other written
instruments;
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obligations
of ours for reimbursement under letters of credit, banker’s acceptances,
security purchase facilities or similar facilities issued for our
account;
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•
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any
indebtedness or other obligations of ours with respect to commodity
contracts, interest rate commodity and currency swap agreements,
cap,
floor and collar agreements, currency spot and forward contracts,
and
other similar agreements or arrangements;
and
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any
guarantees, endorsements (other than by endorsement of negotiable
instruments for collection in the ordinary course of business) or
other
similar contingent obligations in respect of obligations of others
of a
type described above, whether or not such obligation is classified
as a
liability on a balance sheet prepared in accordance with generally
accepted accounting principles;
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to
maintain directly or indirectly 100% ownership of the trust common
securities of the trust to which such junior subordinated debt securities
have been issued, provided that certain successors which are permitted
pursuant to the subordinated indenture may succeed to our ownership
of the
trust common securities,
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not
to voluntarily terminate, wind up or liquidate the trust, except
(a) in
connection with a prepayment in full or a distribution of junior
subordinated debt securities to you as a holder of the trust preferred
securities in exchange for trust preferred securities on liquidation
of
the trust, or (b) in connection with certain mergers, consolidations
or
amalgamations permitted by the trust agreement,
and
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to
use our reasonable efforts, consistent with the terms and provisions
of
the trust agreement, to cause the trust to remain classified as a
grantor
trust and not as an association taxable as a corporation for U.S.
federal
income tax purposes. (See section 4.9 of the subordinated
indenture.)
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two
of our employees, officers or affiliates acting as administrative
trustees;
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JPMorgan
Chase Bank will act as property trustee and as indenture trustee
for
purposes of the Trust Indenture Act, under the terms set forth in
the
applicable prospectus supplement;
and
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one
trustee with its principal place of business or who resides in the
State
of Delaware and who will act under the terms set forth in the applicable
prospectus supplement.
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the
name of the trust preferred
securities;
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the
liquidation amount and number of trust preferred securities
issued;
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•
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the
annual distribution rate(s) or method of determining such rate(s),
the
payment date(s) and the record dates used to determine the holders
who are
to receive distributions;
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•
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the
date or dates from which distributions will be cumulative or the
method of
determining such date or dates;
|
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the
optional redemption provisions, if any, including the prices, time
periods
and other terms and conditions on which the trust preferred securities
will be purchased or redeemed, in whole or in
part;
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the
terms and conditions, if any, upon which the related junior subordinated
debt securities and guarantee may be distributed to holders of trust
preferred securities;
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whether
the trust preferred securities are to be issued in book-entry form
and
represented by one or more global certificates, and if so, the depositary
for those global certificates and the specific terms of the depositary
arrangements; and
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any
other relevant rights, preferences, privileges, limitations or
restrictions of the trust preferred securities. (See article 7 of
the
amended trust agreement.)
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the
laws or regulations of the United States or any of its political
subdivisions or taxing authorities,
or
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any
official administrative pronouncement, action or judicial decision
interpreting or applying those laws or
regulations,
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the
trust is, or within 90 days would be, subject to U.S. federal income
tax
with respect to income accrued or received on the junior subordinated
debt
securities held by the trust,
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interest
payable to the trust on such junior subordinated debt securities
is not or
within 90 days would not be, deductible, in whole or in part, by
us for
U.S. federal income tax purposes,
or
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the
trust is, or within 90 days would be, subject to a material amount
of
other taxes, duties or other governmental
charges.
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upon
our bankruptcy;
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•
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upon
the filing of a certificate of dissolution or its equivalent with
respect
to us;
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•
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after
obtaining the consent of at least a majority entitled to receive
the
liquidation amount of the trust preferred securities, voting together
as a
single class;
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90
days after the revocation of our charter, but only if the charter
is not
reinstated during that 90-day
period;
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upon
the distribution of the junior subordinated debt securities held
by the
trust directly to the holders of its trust
securities;
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upon
the redemption of all of the trust securities of the trust;
or
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•
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upon
entry of a court order for the dissolution of us or the trust. (See
section 8.1 of the amended trust
agreement.)
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cash
equal to the total liquidation amount of each such related trust
preferred
security specified in an accompanying prospectus supplement, plus
accumulated and unpaid distributions to the date of payment,
or
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junior
subordinated debt securities in a total principal amount equal to
the
total liquidation amount of such trust preferred
securities.
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•
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the
distribution of the junior subordinated debt securities to holders
of the
trust securities of the trust,
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the
redemption of all of the trust securities of the trust,
and
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•
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mergers,
consolidations or amalgamations permitted by the amended trust agreement
relating to the trust.
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the
successor entity either: assumes all of the obligations of the trust
relating to its trust securities, or substitutes other securities
for the
trust securities that are substantially similar to the trust securities,
so long as the successor securities rank the same as the trust securities
for distributions and payments upon liquidation, redemption and
otherwise;
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we
acknowledge a trustee of the successor entity who has the same powers
and
duties as the property trustee of the trust, as the holder of the
junior
subordinated debt securities;
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the
trust preferred securities of the trust are listed, or any successor
securities will be listed, upon notice of issuance, on any national
securities exchange or the same securities exchange or other organization
that the trust preferred securities are then
listed;
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the
Merger Event does not cause the trust preferred securities or successor
securities of the trust to be downgraded by any nationally recognized
rating agency;
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the
Merger Event does not adversely affect the rights, preferences and
privileges of the holders of the trust preferred securities or successor
securities of the trust in any material
respect;
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the
successor entity has a purpose identical to that of the
trust;
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prior
to the Merger Event, we have received an opinion of counsel stating
that:
the Merger Event does not adversely affect the rights of the holders
of
the trust preferred securities or any successor securities of the
trust in
any material respect, and following the Merger Event, neither the
trust
nor the successor entity will be required to register as an investment
company under the Investment Company
Act;
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we
own all of the trust common securities and guarantee the obligations
of
the successor entity under the successor securities at least to the
same
extent provided by the guarantee;
and
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the
successor entity expressly assumes all of the obligations of the
trust
owed to the trustee of the trust.
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•
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any
action that would adversely affect the powers, preferences or special
rights of the trust securities of the trust, whether by way of amendment
to the amended trust agreement or otherwise,
or
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•
|
the
dissolution, winding-up or termination of the trust other than under
the
terms of its amended trust
agreement,
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•
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cause
the trust to be characterized as other than a grantor trust for U.S.
federal income tax purposes;
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•
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reduce
or otherwise adversely affect the powers of the property trustee;
or
|
•
|
cause
the trust to be deemed to be an investment company which is required
to be
registered under the Investment Company Act. (See section 11.1 of
the
amended trust agreement.)
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direct
the time, method and place of conducting any proceeding for any remedy
available to the property trustee for the trust;
or
|
•
|
direct
the exercise of any power conferred upon such property trustee under
the
amended trust agreement, including the right to direct such property
trustee, as the holder of the junior subordinated debt securities,
to:
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•
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exercise
the remedies available under the subordinated indenture with respect
to
the junior subordinated debt securities held by the
trust;
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•
|
consent
to any amendment of the subordinated indenture with respect to the
junior
subordinated debt securities held by the trust or of such securities
where
consent is required;
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•
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waive
any event of default under the subordinated indenture that is waivable;
or
|
•
|
cancel
an acceleration of the principal of the junior subordinated debt
securities held by the trust.
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•
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we
and any of our affiliates will not be able to vote on or consent
to
matters requiring the vote or consent of holders of trust preferred
securities of the trust; and
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•
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any
trust preferred securities of the trust owned by us or any of our
affiliates will not be counted in determining whether the required
percentage of votes or consents has been obtained. (See section 7.5
of the
amended trust agreement.)
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will
not cause the trust to be deemed to be an investment company required
to
be registered under the Investment Company
Act;
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•
|
will
cause the trust to be classified as a grantor trust for U.S. federal
income tax purposes; and
|
•
|
will
cause the junior subordinated debt securities that the trust holds
to be
treated as our indebtedness for U.S. federal income tax
purposes.
|
•
|
any
accumulated and unpaid distributions required to be paid on the trust
preferred securities, but only to the extent that the trust has funds
legally and immediately available for those
distributions;
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•
|
the
redemption price for any trust preferred securities, including all
accumulated and unpaid distributions to the redemption date, but
only to
the extent that the trust has funds legally and immediately available
for
the payment; and
|
•
|
upon
a dissolution, winding-up or termination of the trust, other than
in
connection with the distribution of junior subordinated debt securities
to
the holders of trust securities of the trust or the redemption of
all the
trust preferred securities of the trust, the lesser
of:
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•
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the
sum of the liquidation amount and all accumulated and unpaid distributions
on the trust preferred securities of the trust to the payment date,
to the
extent that the trust has funds legally and immediately available
for the
payment, and
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•
|
the
amount of assets of the trust remaining available for distribution
to
holders of the trust preferred securities in liquidation of the
trust.
|
•
|
subordinate
and junior in right of payment to all of our other liabilities, other
than
obligations or liabilities that rank equal in priority with or subordinate
to the guarantee by their terms;
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•
|
equal
in priority with the junior subordinated debt securities that we
may issue
and similar guarantees; and
|
•
|
senior
to our common stock.
|
•
|
the
redemption price of the trust preferred securities is fully
paid;
|
•
|
we
distribute the related junior subordinated debt securities to the
holders
of the trust preferred securities;
or
|
•
|
the
amounts payable upon liquidation of the trust are fully paid. (See
section
7.1 of the guarantee.)
|
•
|
we
will not make distributions related to our debt securities that rank
equally with or junior to the junior subordinated debt securities,
including any payment of interest, principal or premium, or repayments,
repurchases or redemptions; and
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•
|
we
will not make distributions related to our capital stock, including
dividends, redemptions, repurchases, liquidation payments, or guarantee
payments.
|
•
|
dividends
paid in common stock;
|
•
|
dividends
in connection with the implementation of a shareholders’ rights
plan:
|
•
|
payments
to a trust holding securities of the same series under a guarantee;
and
|
•
|
purchases
of our common stock in connection with the issuance of our common
stock or
rights under any benefit plan or other similar arrangement with or
for the
benefit of employees, officers or directors or our dividend reinvestment
plan. (See section 6.1 of the
guarantee.)
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•
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the
total principal amount of the junior subordinated debt securities
will be
equal to the sum of the total liquidation amount of the trust preferred
securities;
|
•
|
the
interest rate and interest and other payment dates on the junior
subordinated debt securities will match the distribution rate and
distribution and other payment dates for the trust preferred
securities;
|
•
|
we
will pay for any and all costs, expenses and liabilities of the trust
except its obligations under its trust securities;
and
|
•
|
the
amended trust agreement will provide that the trust will not engage
in any
activity that is not consistent with the limited purposes of the
trust.
|
•
|
through
negotiation with one or more
underwriters;
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•
|
through
one or more agents or dealers designated from time to
time;
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•
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directly
to purchasers; or
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•
|
through
any combination of the above.
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