corresp
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-148513
This Preliminary
Prospectus Supplement and the accompanying Prospectus relate to
an effective registration statement under the Securities Act of
1933, as amended, but are not complete and may be changed. This
Preliminary Prospectus Supplement and the accompanying
Prospectus are not an offer to sell these securities and are not
soliciting an offer to buy these securities in any jurisdiction
where the offer or sale is not permitted.
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SUBJECT TO COMPLETION, DATED
SEPTEMBER 27, 2010
PRELIMINARY PROSPECTUS SUPPLEMENT
(To Prospectus dated
January 8, 2008)
$
Series 2010A %
Senior Notes
due
This is a public offering by Alabama Power Company of
$ of
Series 2010A % Senior Notes
due .
Interest on the Series 2010A Senior Notes is payable
semi-annually in arrears on April 1 and October 1 of
each year, beginning April 1, 2011.
Alabama Power Company may redeem the Series 2010A Senior
Notes, in whole or in part, at any time and from time to time,
at a make-whole redemption price as described under the caption
Description of the Series 2010A Senior
Notes Optional Redemption.
The Series 2010A Senior Notes are unsecured and
unsubordinated and rank equally with all of Alabama Power
Companys other unsecured and unsubordinated indebtedness
from time to time outstanding and will be effectively
subordinated to all secured indebtedness of Alabama Power
Company.
See RISK FACTORS on page S-3 for a
description of certain risks associated with investing in the
Series 2010A Senior Notes.
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Per Series
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2010A Senior Note
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Total
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Public Offering Price (1)
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%
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$
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Underwriting Discount
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%
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$
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Proceeds, before expenses, to Alabama Power Company
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%
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$
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(1)
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Plus accrued interest, if any, from
the date of original issuance of the Series 2010A Senior
Notes, which is expected to
be ,
2010.
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Neither the Securities and Exchange Commission nor any other
regulatory body has approved or disapproved of these securities
or passed upon the accuracy or adequacy of this Prospectus
Supplement or the accompanying Prospectus. Any representation to
the contrary is a criminal offense.
The Series 2010A Senior Notes should be delivered on or
about ,
2010 through the book-entry facilities of The Depository Trust
Company.
Joint Book-Running Managers
BNY Mellon Capital Markets,
LLC J.P. Morgan Morgan
Keegan & Company, Inc.
Co-Managers
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SunTrust Robinson Humphrey
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CastleOak Securities, L.P. |
September , 2010
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this
Prospectus Supplement, the accompanying Prospectus or any
written communication from Alabama Power Company or the
underwriters specifying the final terms of the offering. Neither
Alabama Power Company nor any underwriter takes any
responsibility for, and can provide no assurance as to the
reliability of, any other information that others may give you.
This Prospectus Supplement, the accompanying Prospectus and any
written communication from Alabama Power Company or the
underwriters specifying the final terms of the offering is an
offer to sell only the Series 2010A Senior Notes offered
hereby, and only under circumstances and in jurisdictions where
it is lawful to do so. The information incorporated by reference
or contained in this Prospectus Supplement, the accompanying
Prospectus and any written communication from Alabama Power
Company or the underwriters specifying the final terms of the
offering is current only as of its respective date.
TABLE OF
CONTENTS
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Page
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Prospectus Supplement
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S-3
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S-3
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S-3
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S-4
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S-5
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S-9
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S-10
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Page
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Prospectus
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2
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2
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2
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3
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4
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4
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5
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5
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7
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8
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11
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14
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20
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20
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20
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S-2
RISK
FACTORS
Investing in the Series 2010A Senior Notes involves risk.
Please see the risk factors in Alabama Power Companys
Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009 (the Form
10-K) and Alabama Power Companys Quarterly Reports
on
Form 10-Q
for the quarters ended March 31, 2010 and June 30,
2010, which are incorporated by reference in this Prospectus
Supplement and the accompanying Prospectus. Before making an
investment decision, you should carefully consider these risks
as well as other information contained or incorporated by
reference in this Prospectus Supplement and the accompanying
Prospectus. The risks and uncertainties not presently known to
Alabama Power Company or that Alabama Power Company currently
deems immaterial may also impair its business operations, its
financial results and the value of the Series 2010A Senior
Notes.
THE
COMPANY
Alabama Power Company (the Company) is a corporation
organized under the laws of the State of Alabama on
November 10, 1927, by the consolidation of a predecessor
Alabama Power Company, Gulf Electric Company and Houston Power
Company. The Company has its principal office at 600 North
18th Street, Birmingham, Alabama 35291, telephone
(205) 257-1000. The Company is a wholly owned subsidiary of
The Southern Company.
The Company is a regulated public utility engaged in the
generation, transmission, distribution and sale of electric
energy within an approximately 44,500 square mile service area
comprising most of the State of Alabama.
SELECTED
FINANCIAL INFORMATION
The following selected financial data for the years ended
December 31, 2005 through December 31, 2009 has been
derived from the Companys audited financial statements and
related notes and the unaudited selected financial data,
incorporated by reference in this Prospectus Supplement and the
accompanying Prospectus. The following selected financial data
for the six months ended June 30, 2010 has been derived
from the Companys unaudited financial statements and
related notes, incorporated by reference in this Prospectus
Supplement and the accompanying Prospectus. The information set
forth below is qualified in its entirety by reference to and,
therefore, should be read together with managements
discussion and analysis of results of operations and financial
condition, the financial statements and related notes and other
financial information incorporated by reference in this
Prospectus Supplement and the accompanying Prospectus. The
information set forth below does not reflect the issuance of the
Series 2010A Senior Notes offered hereby or the use of
proceeds therefrom. See Use of Proceeds.
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For the Six Months
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Ended
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Year Ended December 31,
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June 30,
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2005
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2006
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2007
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2008
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2009
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2010(1)
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(Millions, except ratios)
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Operating Revenues
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$
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4,648
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$
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5,015
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$
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5,360
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$
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6,077
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$
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5,529
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$
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2,957
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Earnings Before Income Taxes
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817
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873
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967
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1,023
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1,093
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654
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Net Income After Dividends on Preferred and Preference Stock
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508
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518
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580
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616
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670
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393
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Ratio of Earnings to Fixed Charges(2)
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4.67
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4.34
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4.30
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4.41
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4.29
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5.10
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Capitalization
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As of June 30, 2010
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(Millions, except Percentages)
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Common Stockholders Equity
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$
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5,375
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45.0
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%
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Cumulative Preferred Stock
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342
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2.8
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Non-Cumulative Preference Stock
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343
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2.9
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Senior Notes
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4,525
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37.9
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Other Long-term Debt
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1,358
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11.4
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Total, excluding amounts due within one year
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$
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11,943
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100.0
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%
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(1) |
Due to the seasonal variations in the demand for energy,
operating results for the six months ended June 30, 2010 do
not necessarily indicate operating results for the entire year.
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S-3
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(2) |
This ratio is computed as follows: (i) Earnings
have been calculated by adding to Earnings Before Income
Taxes Interest expense, net of amounts
capitalized and the debt portion of allowance for funds
used during construction; and (ii) Fixed
Charges consist of Interest expense, net of amounts
capitalized and the debt portion of allowance for funds
used during construction.
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USE OF
PROCEEDS
The net proceeds from the sale of the Series 2010A Senior
Notes will be used by the Company for the proposed redemption of
$150,000,000 aggregate principal amount of the Companys
Series AA
55/8%
Senior Notes due April 15, 2034 and for other general
corporate purposes, including the Companys continuous
construction program. The Company plans to deliver a notice of
redemption, if any, for such senior notes in connection with the
issuance of the Series 2010A Senior Notes.
S-4
DESCRIPTION
OF THE SERIES 2010A SENIOR NOTES
Set forth below is a description of the specific terms of the
Series 2010A % Senior Notes
due
(the Series 2010A Senior Notes). This
description supplements, and should be read together with, the
description of the general terms and provisions of the senior
notes set forth in the accompanying Prospectus under the caption
Description of the Senior Notes. The following
description does not purport to be complete and is subject to,
and is qualified in its entirety by reference to, the
description in the accompanying Prospectus and the Senior Note
Indenture (the Senior Note Indenture) dated as of
December 1, 1997, as supplemented, between the Company and
The Bank of New York Mellon (as successor to JPMorgan Chase
Bank, N.A. (formerly known as The Chase Manhattan Bank)), as
trustee (the Senior Note Indenture Trustee).
General
The Series 2010A Senior Notes will be issued as a series of
senior notes under the Senior Note Indenture. The
Series 2010A Senior Notes will be initially issued in the
aggregate principal amount of
$ . The Company may,
without the consent of the holders of the Series 2010A
Senior Notes, issue additional notes having the same ranking and
interest rate, maturity and other terms as the Series 2010A
Senior Notes (except for the issue price and issue date and the
initial interest accrual date and initial Interest Payment Date
(as defined below), if applicable). Any additional notes having
such similar terms, together with the Series 2010A Senior
Notes, will constitute a single series of senior notes under the
Senior Note Indenture.
The entire principal amount of the Series 2010A Senior
Notes will mature and become due and payable, together with any
accrued and unpaid interest thereon,
on , .
The Series 2010A Senior Notes are not subject to any
sinking fund provision. The Series 2010A Senior Notes are
available for purchase in denominations of $1,000 and any
integral multiple thereof.
Interest
Each Series 2010A Senior Note will bear interest at the
rate of % per year (the
Securities Rate) from the date of original issuance,
payable semi-annually in arrears on April 1 and
October 1 of each year (each, an Interest Payment
Date) to the person in whose name such Series 2010A
Senior Note is registered at the close of business on the
fifteenth calendar day prior to such Interest Payment Date
(whether or not a Business Day). The initial Interest Payment
Date is April 1, 2011. The amount of interest payable will
be computed on the basis of a
360-day year
of twelve
30-day
months. In the event that any date on which interest is payable
on the Series 2010A Senior Notes 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),
with the same force and effect as if made on such date.
Business Day means a day other than (i) a
Saturday or Sunday, (ii) a day on which banks in New York,
New York are authorized or obligated by law or executive order
to remain closed or (iii) a day on which the Senior Note
Indenture Trustees corporate trust office is closed for
business.
Ranking
The Series 2010A Senior Notes will be direct, unsecured and
unsubordinated obligations of the Company and will rank equally
with all other unsecured and unsubordinated obligations of the
Company. The Series 2010A Senior Notes will be effectively
subordinated to all secured debt of the Company, aggregating
approximately $153,000,000 outstanding at June 30, 2010.
The Senior Note Indenture contains no restrictions on the amount
of additional indebtedness that may be incurred by the Company.
Optional
Redemption
The Series 2010A Senior Notes will be subject to redemption
at the option of the Company in whole or in part at any time and
from time to time upon not less than 30 nor more than
60 days notice at a redemption price equal to the
greater of (i) 100% of the principal amount of the
Series 2010A Senior Notes to be redeemed and (ii) the
sum of the present values of the remaining scheduled payments of
principal and interest on the Series 2010A Senior Notes
being redeemed (not including any portion of such payments of
interest accrued to the redemption date) discounted (for
purposes of determining present value) to the redemption date on
a semiannual basis (assuming a
360-day year
consisting of twelve
30-day
months) at a discount rate equal to the Treasury Yield (as
defined below) plus basis
points (each, a Redemption Price), plus, in each
case, accrued interest on the Series 2010A Senior Notes
being redeemed to the redemption date.
S-5
Treasury Yield means, with respect to any redemption
date, the rate per annum equal to the semiannual equivalent
yield to maturity of the Comparable Treasury Issue, assuming 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.
Comparable Treasury Issue means the United States
Treasury security selected by an Independent Investment Banker
as having a maturity comparable to the remaining term of the
Series 2010A Senior Notes to be redeemed that would be
utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of
the Series 2010A Senior Notes.
Comparable Treasury Price means, with respect to any
redemption date, (i) the average of the Reference Treasury
Dealer Quotations for such redemption date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations or
(ii) if the Company obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such quotations.
Independent Investment Banker means an independent
investment banking institution of national standing appointed by
the Company.
Reference Treasury Dealer means a primary
U.S. Government securities dealer appointed by the Company.
Reference Treasury Dealer Quotation means, with
respect to each Reference Treasury Dealer and any redemption
date, the average, as determined by the Company, of the bid and
asked prices for the Comparable Treasury Issue (expressed in
each case as a percentage of its principal amount and quoted in
writing to the Company by such Reference Treasury Dealer at
5:00 p.m. on the third Business Day in New York City
preceding such redemption date).
If notice of redemption is given as aforesaid, the
Series 2010A Senior Notes so to be redeemed shall, on the
redemption date, become due and payable at the Redemption Price
together with any accrued interest thereon, and from and after
such date (unless the Company shall default in the payment of
the Redemption Price and accrued interest) such
Series 2010A Senior Notes shall cease to bear interest. If
any Series 2010A Senior Note called for redemption shall
not be paid upon surrender thereof for redemption, the principal
shall, until paid, bear interest from the redemption date at the
Securities Rate. See Description of the Senior
Notes Events of Default in the accompanying
Prospectus.
Subject to the foregoing and to applicable law (including,
without limitation, United States federal securities laws), the
Company or its affiliates may, at any time and from time to
time, purchase outstanding Series 2010A Senior Notes by
tender, in the open market or by private agreement.
Book-Entry
Only Issuance The Depository Trust Company
The Depository Trust Company (DTC) will act as the
initial securities depository for the Series 2010A Senior
Notes. The Series 2010A Senior Notes will be issued only as
fully registered securities registered in the name of Cede
& Co., DTCs partnership nominee, or such other name
as may be requested by an authorized representative of DTC. One
or more fully registered global Series 2010A Senior Notes
certificates will be issued, representing in the aggregate the
total principal amount of the Series 2010A Senior Notes,
and will be deposited with the Senior Note Indenture Trustee on
behalf of 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 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, as amended (the 1934 Act). DTC holds and
provides asset servicing for over 3.5 million issues of
U.S. and
non-U.S.
equity issues, corporate and municipal debt issues and money
market instruments from over 100 countries that DTCs
participants (Direct Participants) deposit with DTC.
DTC also facilitates the post-trade settlement among Direct
Participants of sales and other securities transactions in
deposited securities, through electronic computerized book-entry
transfers and pledges between Direct Participants
accounts. This eliminates the need for physical movement of
securities
S-6
certificates. Direct Participants include both U.S. and
non-U.S.
securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is a
wholly-owned subsidiary of The Depository Trust &
Clearing Corporation (DTCC). DTCC is the holding
company for DTC, National Securities Clearing Corporation and
Fixed Income Clearing Corporation, all of which are registered
clearing agencies. DTCC is owned by the users of its regulated
subsidiaries. Access to the DTC system is also available to
others such as both U.S. and
non-U.S.
securities brokers and dealers, banks, trust companies and
clearing corporations that clear through or maintain a custodial
relationship with a Direct Participant, either directly or
indirectly (Indirect Participants). The DTC rules
applicable to its Direct and Indirect Participants are on file
with the Securities and Exchange Commission. More information
about DTC can be found at www.dtcc.com and www.dtc.org. The
contents of such websites do not constitute part of this
Prospectus Supplement.
Purchases of Series 2010A Senior Notes under the DTC system
must be made by or through Direct Participants, which will
receive a credit for the Series 2010A Senior Notes on
DTCs records. The ownership interest of each actual
purchaser of Series 2010A Senior Notes (Beneficial
Owner) is in turn to be recorded on the Direct and
Indirect Participants records. Beneficial Owners will not
receive written confirmation from DTC of their purchases.
Beneficial Owners are, however, expected to receive written
confirmations providing details of the transactions, as well as
periodic statements of their holdings, from the Direct or
Indirect Participants through which the Beneficial Owners
purchased Series 2010A Senior Notes. Transfers of ownership
interests in the Series 2010A Senior Notes are to be
accomplished by entries made on the books of Direct and Indirect
Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their
ownership interests in Series 2010A Senior Notes, except in
the event that use of the book-entry system for the
Series 2010A Senior Notes is discontinued.
To facilitate subsequent transfers, all Series 2010A Senior
Notes deposited by Direct Participants with DTC are registered
in the name of DTCs partnership nominee, Cede &
Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of Series 2010A Senior
Notes with DTC and their registration in the name of
Cede & Co. or such other DTC nominee do not effect any
changes in beneficial ownership. DTC has no knowledge of the
actual Beneficial Owners of the Series 2010A Senior Notes.
DTCs records reflect only the identity of the Direct
Participants to whose accounts such Series 2010A Senior
Notes are credited, which may or may not be the Beneficial
Owners. The Direct and Indirect Participants will remain
responsible for keeping 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 Participants,
and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in
effect from time to time.
Redemption notices shall be sent to DTC. If less than all of the
Series 2010A Senior Notes are being redeemed, DTCs
practice is to determine by lot the amount of interest of each
Direct Participant in such Series 2010A Senior Notes to be
redeemed.
Although voting with respect to the Series 2010A Senior Notes is
limited, in those cases where a vote is required, neither DTC
nor Cede & Co. (nor any other DTC nominee) will consent or
vote with respect to the Series 2010A Senior Notes unless
authorized by a Direct Participant in accordance with DTCs
procedures. Under its usual procedures, DTC mails an Omnibus
Proxy to the Company as soon as possible after the record date.
The Omnibus Proxy assigns Cede & Co.s consenting or
voting rights to those Direct Participants to whose accounts
Series 2010A Senior Notes are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Payments on the Series 2010A Senior Notes will be made to
Cede & Co., or such other nominee as may be requested by an
authorized representative of DTC. DTCs practice is to
credit Direct Participants accounts upon DTCs
receipt of funds and corresponding detail information from the
Company or the Senior Note Indenture Trustee on the relevant
payment date in accordance with their respective holdings shown
on DTCs records. Payments by Direct or Indirect
Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with
securities held for the account of customers registered in
street name, and will be the responsibility of such
Direct or Indirect Participant and not of DTC or the Company,
subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment to Cede & Co. (or such
other nominee as may be requested by an authorized
representative of DTC) is the responsibility of the Company,
S-7
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 Direct and Indirect
Participants.
Except as provided herein, a Beneficial Owner of a global
Series 2010A Senior Note will not be entitled to receive
physical delivery of Series 2010A Senior Notes.
Accordingly, each Beneficial Owner must rely on the procedures
of DTC to exercise any rights under the Series 2010A Senior
Notes. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of securities in
definitive form. Such laws may impair the ability to transfer
beneficial interests in a global Series 2010A Senior Note.
DTC may discontinue providing its services as securities
depository with respect to the Series 2010A Senior Notes at
any time by giving reasonable notice to the Company. Under such
circumstances, in the event that a successor securities
depository is not obtained, Series 2010A Senior Notes
certificates will be required to be printed and delivered to the
holders of record. Additionally, the Company may decide to
discontinue use of the system of book-entry transfers through
DTC (or a successor securities depository) with respect to the
Series 2010A Senior Notes. The Company understands,
however, that under current industry practices, DTC would notify
its Direct and Indirect Participants of the Companys
decision, but will only withdraw beneficial interests from a
global Series 2010A Senior Note at the request of each
Direct or Indirect Participant. In that event, certificates for
the Series 2010A Senior Notes will be printed and delivered
to the applicable Direct or Indirect Participant.
The information in this section concerning DTC and DTCs
book-entry system has been obtained from sources that the
Company believes to be reliable, but neither the Company nor any
Underwriter takes any responsibility for the accuracy thereof.
Neither the Company nor any underwriter has any responsibility
for the performance by DTC or its Direct or Indirect
Participants of their respective obligations as described herein
or under the rules and procedures governing their respective
operations.
S-8
UNDERWRITING
Subject to the terms and conditions of an underwriting agreement
(the Underwriting Agreement), the Company has agreed
to sell to each of the underwriters named below (the
Underwriters) for whom BNY Mellon Capital Markets,
LLC, J.P. Morgan Securities LLC and Morgan Keegan &
Company, Inc. are acting as representatives (the
Representatives) and each of the Underwriters has
severally agreed to purchase from the Company the principal
amount of the Series 2010A Senior Notes set forth opposite
its name below:
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Principal Amount
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of Series
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2010A Senior
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Underwriters
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Notes
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BNY Mellon Capital Markets, LLC
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$
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J.P. Morgan Securities LLC
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Morgan Keegan & Company, Inc.
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SunTrust Robinson Humphrey, Inc.
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CastleOak Securities, L.P.
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$
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In the Underwriting Agreement, the Underwriters have agreed,
subject to the terms and conditions set forth therein, to
purchase all of the Series 2010A Senior Notes offered
hereby, if any of the Series 2010A Senior Notes are
purchased.
The Underwriters propose to offer the Series 2010A Senior
Notes directly to the public at the public offering price set
forth on the cover page of this Prospectus Supplement and may
offer them to certain securities dealers at such price less a
concession not in excess of % of
the principal amount per Series 2010A Senior Note. The
Underwriters may allow, and such dealers may reallow, a
concession not in excess of % of
the principal amount per Series 2010A Senior Note to
certain brokers and dealers. After the initial public offering,
the offering price and other selling terms may from time to time
be varied by the Underwriters.
The Series 2010A Senior Notes are a new issue of securities
with no established trading market. The Series 2010A Senior
Notes will not be listed on any securities exchange or on any
automated dealer quotation system. The Underwriters may make a
market in the Series 2010A Senior Notes after completion of
the offering, but will not be obligated to do so and may
discontinue any market-making activities at any time without
notice. No assurance can be given as to the liquidity of the
trading market for the Series 2010A Senior Notes or that an
active public market for the Series 2010A Senior Notes will
develop. If an active public trading market for the
Series 2010A Senior Notes does not develop, the market
price and liquidity of the Series 2010A Senior Notes may be
adversely affected.
The Company has agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities
Act of 1933, as amended.
The Companys expenses associated with the offer and sale
of the Series 2010A Senior Notes are estimated to be
$ .
The Company has agreed with the Underwriters that, during the
period 15 days from the date of the Underwriting Agreement,
it will not sell, offer to sell, grant any option for the sale
of, or otherwise dispose of any Series 2010A Senior Notes,
any security convertible into, exchangeable into or exercisable
for the Series 2010A Senior Notes or any debt securities
substantially similar to the Series 2010A Senior Notes
(except for the Series 2010A Senior Notes issued pursuant
to the Underwriting Agreement), without the prior written
consent of the Representatives. This agreement does not apply to
issuances of commercial paper or other debt securities with
scheduled maturities of less than one year.
In order to facilitate the offering of the Series 2010A
Senior Notes, the Underwriters may engage in transactions that
stabilize, maintain or otherwise affect the price of the
Series 2010A Senior Notes. Specifically, the Underwriters
may over-allot in connection with the offering, creating short
positions in the Series 2010A Senior Notes for their own
accounts. In addition, to cover over-allotments or to stabilize
the price of the Series 2010A
S-9
Senior Notes, the Underwriters may bid for, and purchase,
Series 2010A Senior Notes in the open market. The
Underwriters may reclaim selling concessions allowed to an
Underwriter or dealer for distributing Series 2010A Senior
Notes in the offering, if the Underwriters repurchase previously
distributed Series 2010A Senior Notes in transactions to
cover short positions, in stabilization transactions or
otherwise. Any of these activities may stabilize or maintain the
market price of the Series 2010A Senior Notes above
independent market levels. The Underwriters are not required to
engage in these activities, and may end any of these activities
at any time without notice.
In general, purchases of a security for the purpose of
stabilization or to reduce a short position could cause the
price of the security to be higher than it might be in the
absence of such purchases. The imposition of a penalty bid might
also have an effect on the price of a security to the extent
that it were to discourage resales of the security.
Neither the Company nor any Underwriter makes any representation
or prediction as to the direction or magnitude of any effect
that the transactions described above may have on the price of
the Series 2010A Senior Notes. In addition, neither the
Company nor any Underwriter makes any representation that the
Underwriters will engage in such transactions or that such
transactions once commenced will not be discontinued without
notice.
It is expected that delivery of the Series 2010A Senior
Notes will be made, against payment for the Series 2010A
Senior Notes, on or
about , ,
which will be the
business day following the pricing of the Series 2010A
Senior Notes. Under
Rule 15c6-1
under the 1934 Act, purchases or sales of securities in the
secondary market generally are required to settle within three
business days (T+3), unless the parties to any such transactions
expressly agree otherwise. Accordingly, purchasers of the
Series 2010A Senior Notes who wish to trade the
Series 2010A Senior Notes on the date of this Prospectus
Supplement or the next
succeeding business day(s) will be required, because the
Series 2010A Senior Notes initially will settle
within business days
(T+ ), to specify an alternate
settlement cycle at the time of any such trade to prevent a
failed settlement. Purchasers of the Series 2010A Senior
Notes who wish to trade on the date of this Prospectus
Supplement or the
next succeeding business
day(s) should consult their own legal advisors.
Certain of the Underwriters and their affiliates have engaged
and may in the future engage in transactions with, and, from
time to time, have performed and may perform corporate trust,
investment banking and/or commercial banking services for, the
Company and certain of its affiliates in the ordinary course of
business, for which they have received and will receive
customary compensation.
Certain officers and directors of the Company are directors of
one or more of the Underwriters or the corporate parents of the
Underwriters. Certain officers and directors of the Underwriters
are directors of the Company. Additional information regarding
such relationships is included in the
Form 10-K.
EXPERTS
The financial statements and related financial statement
schedule incorporated in this Prospectus Supplement and the
accompanying Prospectus by reference from the Companys
Annual Report on Form 10-K for the year ended December 31,
2009 have been audited by Deloitte & Touche LLP, an
independent registered public accounting firm, as stated in
their reports, which are incorporated herein by reference. Such
financial statements and financial statement schedule have been
so incorporated in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing.
S-10
PROSPECTUS
Alabama Power Company
Class A Preferred
Stock
Cumulative, Par Value $1 Per Share
Preference Stock
Depositary Preference
Shares,
each representing a fraction of a share of Preference
Stock
Senior Notes
Junior Subordinated
Notes
We will provide the specific terms of these securities in
supplements to this Prospectus. You should read this Prospectus
and the applicable Prospectus Supplement carefully before you
invest.
See Risk Factors on page 2 for information on
certain risks related to the purchase of these securities.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this Prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
This Prospectus is dated
January 8, 2008
ABOUT
THIS PROSPECTUS
This Prospectus is part of a registration statement filed with
the Securities and Exchange Commission (the
Commission) using a shelf registration
process under the Securities Act of 1933, as amended (the
1933 Act). Under the shelf process, Alabama Power
Company (the Company) may sell, in one or more
transactions,
class A preferred stock (the Class A
Preferred Stock)
preference stock (the Preference Stock)
depositary preference shares, each representing a
fraction of a share of Preference Stock (the Depositary
Shares)
senior notes (the Senior Notes)
junior subordinated notes (the Junior
Subordinated Notes)
in one or more offerings. This Prospectus provides a general
description of those securities. Each time the Company sells
securities, the Company will provide a prospectus supplement
that will contain specific information about the terms of that
offering (Prospectus Supplement). The Prospectus
Supplement may also add, update or change information contained
in this Prospectus. You should read this Prospectus and the
applicable Prospectus Supplement together with additional
information under the heading Available Information.
RISK
FACTORS
Investing in the Companys securities involves risk. Please
see the risk factors described in the Companys Annual
Report on
Form 10-K
for the fiscal year ended December 31, 2006, along with the
disclosure related to risk factors contained in the
Companys Quarterly Reports on
Form 10-Q
for the quarters ended March 31, 2007, June 30, 2007
and September 30, 2007, which are incorporated by reference
in this Prospectus. Before making an investment decision, you
should carefully consider these risks as well as other
information contained or incorporated by reference in this
Prospectus. The risks and uncertainties described are not the
only ones facing the Company. Additional risks and uncertainties
not presently known to the Company or that the Company deems
immaterial may also impair its business operations, its
financial results and the value of its securities.
AVAILABLE
INFORMATION
The Company has filed with the Commission a registration
statement on
Form S-3
(the Registration Statement, which term encompasses
any amendments of and exhibits to the Registration Statement)
under the 1933 Act. As permitted by the rules and
regulations of the Commission, this Prospectus does not contain
all of the information set forth in the Registration Statement
and the exhibits and schedules to the Registration Statement, to
which reference is made.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the 1934
Act), and in accordance with the 1934 Act files reports
and other information with the Commission. Such reports and
other information can be inspected and copied at the Public
Reference Room of the Commission at 100 F. Street, N.E., Room
1580, Washington, D.C. 20549. Information on the operation of
the Public Reference Room may be obtained by calling the
Commission at
1-800-SEC-0330.
The Commission maintains a Web site that contains reports, proxy
and information statements and other information regarding
registrants including the Company that file electronically at
http://www.sec.gov. In addition, reports and other material
concerning the Company can be inspected at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York
10005, on which Exchange certain of the Companys
outstanding securities are listed.
2
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission
pursuant to the 1934 Act and are incorporated by reference in
this Prospectus and made a part of this Prospectus:
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(a)
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the Companys Annual Report on Form 10-K for the
fiscal year ended December 31, 2006;
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(b)
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the Companys Quarterly Reports on
Form 10-Q
for the quarters ended March 31, 2007, June 30, 2007
and September 30, 2007; and
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(c)
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the Companys Current Reports on
Form 8-K
dated January 26, 2007, January 30, 2007,
March 6, 2007, April 3, 2007, April 4, 2007,
May 1, 2007, September 12, 2007, October 9, 2007,
October 11, 2007, October 11, 2007, October 15,
2007, November 26, 2007, December 4, 2007 and
December 21, 2007.
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All documents filed by the Company with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act
subsequent to the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated
in this Prospectus by reference and made a part of this
Prospectus from the date of filing of such documents; provided,
however, the Company is not incorporating any information
furnished under Items 2.02 or 7.01 of any Current Report on
Form 8-K unless specifically stated otherwise. Any
statement contained in a document incorporated or deemed to be
incorporated by reference in this Prospectus shall be deemed to
be modified or superseded for purposes of this Prospectus to the
extent that a statement contained in this Prospectus or in any
other subsequently filed document which also is or is deemed to
be incorporated by reference in this Prospectus modifies or
supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to
whom this Prospectus is delivered, on the written or oral
request of any such person, a copy of any or all documents
incorporated in this Prospectus by reference (other than the
exhibits to such documents unless such exhibits are specifically
incorporated by reference). Such requests should be directed to
William E. Zales, Jr., Vice President and Corporate Secretary,
Alabama Power Company, 600 North 18th Street, Birmingham,
Alabama 35291, telephone:
(205) 257-2714.
3
ALABAMA
POWER COMPANY
The Company is a corporation organized under the laws of the
State of Alabama on November 10, 1927, by the consolidation
of the predecessor Alabama Power Company, Gulf Electric Company
and Houston Power Company. The predecessor Alabama Power Company
had a continuous existence since its incorporation in 1906. The
principal executive offices of the Company are located at
600 North 18th Street, Birmingham, Alabama 35291, and
the telephone number is (205) 257-1000.
The Company is a wholly owned subsidiary of The Southern
Company. The Company is engaged, within the State of Alabama, in
the generation and purchase of electricity and the distribution
and sale of such electricity at retail in over 1,000 communities
(including Anniston, Birmingham, Gadsden, Mobile, Montgomery and
Tuscaloosa), and at wholesale to 15 municipally-owned
electric distribution systems, 11 of which are served
indirectly through sales to the Alabama Municipal Electric
Authority, and two rural distributing cooperative associations.
The Company also supplies steam service in downtown Birmingham.
The Company owns coal reserves near its Gorgas Steam Electric
Generating Plant and uses the output of coal from the reserves
in its generating plants. It also sells, and cooperates with
dealers in promoting the sale of, electric appliances.
The Company and one of its affiliates, Georgia Power Company
(GEORGIA), each own 50% of the common stock of
Southern Electric Generating Company (SEGCO). SEGCO
owns generating units with an aggregate capacity of 1,019,680
kilowatts at the Ernest C. Gaston Steam Plant (Plant
Gaston) on the Coosa River near Wilsonville, Alabama. The
Company and GEORGIA are each entitled to one-half of the
capacity and energy of these units. The Company acts as
SEGCOs agent in the operation of SEGCOs units and
furnishes coal to SEGCO as fuel for its units. SEGCO also owns
three 230,000 volt transmission lines extending from Plant
Gaston to the Georgia state line.
SELECTED
INFORMATION
The following material, which is presented in this Prospectus
solely to furnish limited introductory information regarding the
Company, has been selected from, or is based upon, the detailed
information and financial statements appearing in the documents
incorporated in this Prospectus by reference or elsewhere in
this Prospectus, is qualified in its entirety by reference to
such documents and, therefore, should be read together with
those documents.
Alabama
Power Company
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Business
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Generation, transmission, distribution and sale of electric
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Service Area
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Approximately 45,000 square miles comprising most of the State
of Alabama |
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Customers at December 31, 2006
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1,415,935 |
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Generating Capacity at December 31, 2006 (kilowatts)
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12,221,687 |
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Sources of Generation during 2006 (kilowatt-hours)
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Coal (68%), Nuclear (19%), Gas (9%), Hydro (4%) |
4
Certain
Ratios
The following table sets forth the Ratios of Earnings to Fixed
Charges and Earnings to Fixed Charges Plus Preferred and
Preference Dividend Requirements (Pre-Income Tax Basis) for the
periods indicated.
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Nine
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Months
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Ended
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Year Ended December 31,
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September 30,
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2002
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2003
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2004
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2005
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2006
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2007(1)
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Ratio of Earnings to Fixed Charges (2)
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3.98
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4.29
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4.76
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4.67
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4.34
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4.87
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Ratio of Earnings to Fixed Charges Plus
Preferred and Preference Dividend Requirements
(Pre-Income Tax Basis) (3)
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3.66
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3.83
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4.06
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4.01
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3.77
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4.13
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(1)
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Due to seasonal variations in the demand for energy, operating
results for the nine months ended September 30, 2007 do not
necessarily indicate operating results for the entire year.
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(2)
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This ratio is computed as follows: (i) Earnings
have been calculated by adding to Earnings Before Income
Taxes Interest expense, net of amounts
capitalized, Interest expense to affiliate
trusts, Distributions on mandatorily redeemable
preferred securities and the debt portion of allowance for
funds used during construction; and (ii) Fixed
Charges consist of Interest expense, net of amounts
capitalized, Interest expense to affiliate
trusts, Distributions on mandatorily redeemable
preferred securities and the debt portion of allowance for
funds used during construction. For the nine months ended
September 30, 2007, this ratio includes interest related to
Financial Accounting Standards Board (FASB)
Interpretation No. 48, Accounting for Uncertainty in Income
Taxes.
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(3)
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In computing this ratio, Preferred and Preference Dividend
Requirements represent the before-tax earnings necessary
to pay such dividends, computed at the effective tax rates for
the applicable periods. For the nine months ended September 30,
2007, this ratio includes interest related to FASB
Interpretation No. 48, Accounting for Uncertainty in Income
Taxes.
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USE OF
PROCEEDS
Except as may be otherwise described in an applicable Prospectus
Supplement, the net proceeds received by the Company from the
sale of the Class A Preferred Stock, Preference Stock,
Depositary Shares, Senior Notes or Junior Subordinated Notes
will be used in connection with its ongoing construction
program, to pay scheduled maturities and/or refundings of its
securities, to repay short-term indebtedness to the extent
outstanding and for other general corporate purposes.
DESCRIPTION
OF THE CLASS A PREFERRED STOCK
Set forth below is a description of the general terms of the
Class A Preferred Stock. The statements in this Prospectus
concerning the Class A Preferred Stock are an outline and
do not purport to be complete. Such statements make use of
defined terms and are qualified in their entirety by express
reference to the cited provisions of the charter of the Company,
as amended (the charter), a copy of which is filed
as an exhibit to the Registration Statement of which this
Prospectus forms a part. The general provisions which apply to
all series of the Class A Preferred Stock, which are now or
may at a later time be authorized or created, are set forth in
the charter.
General
Each series of the Class A Preferred Stock is to be
established by resolutions of the Board of Directors of the
Company, a copy of which is an exhibit to the Registration
Statement (or incorporated by reference). In such resolutions,
the Board of Directors will set the stated capital, among other
terms, of such series of Class A Preferred Stock.
At September 30, 2007, the Company had 27,500,000
authorized shares of Class A Preferred Stock, of which
12,000,000 shares of Class A Preferred Stock with a stated
capital of $25 per share and 1,250 shares of Class A
5
Preferred Stock with a stated capital of $100,000 per share were
outstanding. Additionally, at September 30, 2007, the
Company had outstanding 475,115 shares of Preferred Stock
which have a par value of $100 per share. The Class A
Preferred Stock ranks on a parity as to dividends and assets
with the outstanding Preferred Stock and has the same general
rights and preferences as the outstanding Preferred Stock. On
all matters submitted to a vote of the holders of the Preferred
Stock and the Class A Preferred Stock (other than a change
in the rights and preferences of only one, but not the other,
such kind of stock), both kinds of stock vote together as a
single class, and each share of Preferred Stock and Class A
Preferred Stock shall have the relative voting rights described
in Voting Rights in this Prospectus.
The Class A Preferred Stock will not be subject to further
calls or to assessment by the Company.
Any proposed listing of the Class A Preferred Stock on a
securities exchange will be described in the applicable
Prospectus Supplement.
Transfer
Agent and
Registrar
Unless otherwise indicated in the applicable Prospectus
Supplement, the transfer agent for the Class A Preferred
Stock will be Southern Company Services, Inc., 30 Ivan
Allen Jr. Blvd., N.W., Atlanta, Georgia 30308, which will also
serve as the registrar.
Dividend
Rights
The holders of the Preferred Stock and Class A Preferred
Stock of each class are entitled to receive cumulative
dividends, payable when and as declared by the Board of
Directors, at the rates determined for the respective classes,
before any dividends may be declared or paid on the Preference
Stock or the Common Stock. Dividends on the Preferred Stock and
Class A Preferred Stock must have been or be
contemporaneously declared and set apart for payment, or paid,
on the Preferred Stock and Class A Preferred Stock of all
classes for all dividend periods terminating on the same or an
earlier date (Charter A. Preferred
Stock 2. General Provisions a and
b).
The applicable Prospectus Supplement will set forth the dividend
rate provisions of the Class A Preferred Stock, including
the payment dates and the rate or rates, or the method of
determining the rate or rates (which may involve periodic
dividend rate settings through remarketing or auction procedures
or pursuant to one or more formulae, as described in the
Prospectus Supplement). Dividends payable on the Class A
Preferred Stock will be cumulative from the date of original
issue.
Redemption
Provisions
Any redemption provisions applicable to the Class A
Preferred Stock will be described in the applicable Prospectus
Supplement.
The charter provides that the Company shall not redeem, purchase
or otherwise acquire any shares of Preferred Stock or
Class A Preferred Stock if, at the time of such redemption,
purchase or other acquisition, dividends payable on the
Preferred Stock or Class A Preferred Stock of any class
shall be in default in whole or in part unless, prior to or
concurrently with such redemption, purchase or other
acquisition, all such defaults shall be cured or unless such
action has been ordered, approved or permitted under the Public
Utility Holding Company Act of 1935, as amended, by the
Commission or any successor commission or regulatory authority
of the United States of America (Charter A.
Preferred Stock 2. General Provisions d).
Voting
Rights
The voting rights applicable to the Preferred Stock and
Class A Preferred Stock will be described in the applicable
Prospectus Supplement.
Liquidation
Rights
Upon voluntary or involuntary liquidation, the holders of the
Preferred Stock and Class A Preferred Stock of each class,
without preference between classes, will be entitled to receive
the amounts specified to be payable on the shares of such class
(which, in the case of the Class A Preferred Stock, is an
amount equal to the stated capital per
6
share on involuntary liquidation, or an amount equal to the then
current regular redemption price per share on voluntary
liquidation, plus accrued dividends in each case) before any
distribution of assets may be made to the holders of the
Preference Stock or the Companys Common Stock. Available
assets, if insufficient to pay such amounts to the holders of
the Preferred Stock and Class A Preferred Stock, are to be
distributed pro rata to the payment, first, of the amount per
share payable in the event of involuntary liquidation, second,
of accrued dividends, and third, of any premium
(Charter A. Preferred Stock 2.
General Provisions c.).
Sinking
Fund
The terms and conditions of a sinking fund or purchase fund, if
any, for the benefit of the holders of the Class A
Preferred Stock will be set forth in the applicable Prospectus
Supplement.
Other
Rights
The holders of the Class A Preferred Stock do not have any
preemptive or conversion rights unless otherwise indicated in
the applicable Prospectus Supplement.
DESCRIPTION
OF THE PREFERENCE STOCK
Set forth below is a description of the general terms of the
Preference Stock. The statements in this Prospectus concerning
the Preference Stock are an outline and do not purport to be
complete. Such statements make use of defined terms and are
qualified in their entirety by reference to the charter and the
amendments thereto, a copy of which is filed as an exhibit to
the Registration Statement of which this Prospectus forms a
part. The general provisions which apply to all series of the
Preference Stock, which are now or may at a later time be
authorized or created, are set forth in the charter.
General
Each series of Preference Stock is to be established
by resolutions of the Board of Directors of the Company, a copy
of which is an exhibit to the Registration Statement (or
incorporated by reference). In such resolutions, the Board of
Directors will set the stated capital, among other terms, of
such series of Preference Stock.
As of September 30, 2007, the Company had 40,000,000 authorized
shares of Preference Stock, of which 12,000,000 shares with a
stated capital of $25 per share were outstanding. Subsequent to
September 30, 2007, the Company issued 2,000,000 additional
shares of Preference Stock with a stated capital of $25 per
share. The Preference Stock ranks junior to the Preferred Stock
and the Class A Preferred Stock with respect to dividends
and amounts payable upon liquidation, dissolution or winding up
of the Company. The Preference Stock ranks senior to the
Companys Common Stock and to any other securities the
Company may issue in the future that by their terms rank junior
to the Preference Stock with respect to dividends and amounts
payable upon liquidation, dissolution or winding up of the
Company. All shares of the Preference Stock will rank on a
parity with respect to dividends and amounts payable upon
liquidation, dissolution or winding up of the Company.
The Preference Stock will not be subject to further calls or
assessment by the Company.
Any proposed listing of the Preference Stock on a securities
exchange will be described in the applicable Prospectus
Supplement.
Transfer
Agent and
Registrar
Unless otherwise indicated in the applicable Prospectus
Supplement, the transfer agent for the Preference Stock will be
Southern Company Services, Inc., 30 Ivan Allen Jr. Blvd., N.W.,
Atlanta, Georgia 30308, which will also serve as the registrar.
Dividend
Rights
Dividends on the Preference Stock are payable, when, as and if
declared by the Board of Directors, at the rate per annum
determined for each respective series. Unless otherwise
indicated in the applicable Prospectus
7
Supplement, dividends will be payable to holders of record of
the Preference Stock as they appear on the books of the Company
on the record dates fixed by the Board of Directors.
The applicable Prospectus Supplement will set forth the dividend
rate provisions of the Preference Stock, including the payment
dates and the rate or rates, or the method of determining the
rate or rates (which may involved periodic dividend rate
settings through remarketing or auction procedures or pursuant
to one or more formulae, as described in the applicable
Prospectus Supplement), and whether dividends shall be
cumulative and, if so, from which date or dates.
Redemption
Provisions
Any redemption provisions applicable to the Preference Stock
will be described in the applicable Prospectus Supplement.
Voting
Rights
The applicable Prospectus Supplement will describe the voting
rights for each series of the Preference Stock.
Liquidation
Rights
Upon voluntary or involuntary liquidation, the holders of the
Preference Stock of each series, without preference among
series, are entitled to receive the amount specified to be
payable on the shares of such series following the satisfaction
of all claims ranking senior to the Preference Stock (including
the claims of holders of any outstanding shares of Preferred
Stock and Class A Preferred Stock) and before any
distribution of assets may be made to the holders of the
Companys Common Stock. Available assets, if insufficient
to pay such amounts to the holders of the Preference Stock, are
to be distributed pro rata to the payment, first of the amount
per share payable in the event of involuntary liquidation,
second of accrued dividends, if any, and third of any premium.
Sinking
Fund
The terms and conditions of a sinking or purchase fund, if any,
for the benefit of the holders of the Preference Stock will be
set forth in the applicable Prospectus Supplement.
Other
Rights
The holders of the Preference Stock do not have any pre-emptive
or conversion rights, except as otherwise described in the
applicable Prospectus Supplement.
DESCRIPTION
OF THE DEPOSITARY SHARES
Set forth below is a description of the general terms of the
Depositary Shares. The statements in this Prospectus concerning
the Depositary Shares and the Deposit Agreement (as defined
below) are an outline and do not purport to be complete. Such
statements make use of defined terms and are qualified in their
entirety by express reference to the Deposit Agreement (which
contains the form of Depositary Receipt (as defined below)), a
form of which is an exhibit to the Registration Statement of
which this Prospectus forms a part or incorporated by reference
to the Registration Statement.
General
The Company may, at its option, elect to offer Depositary
Shares. Each Depositary Share will represent a fraction of a
share of Preference Stock as described in the Prospectus
Supplement. The shares of Preference Stock represented by the
Depositary Shares will be deposited under a Deposit Agreement
(the Deposit Agreement), among the Company, the
Depositary named in the Deposit Agreement (the
Depositary) and all holders from time to time of the
depositary receipts (the Depositary Receipts) issued
under the Deposit Agreement. Subject to the terms of the Deposit
Agreement, each owner of a Depositary Share is entitled,
proportionately, to all the rights, preferences and privileges
of the Preference Stock (including dividend, voting and
liquidation rights) and subject,
8
proportionately, to all of the limitations of the Preference
Stock contained in the charter summarized under
Description of the Preference Stock in this
Prospectus. The Depositary Shares are evidenced by Depositary
Receipts issued pursuant to the Deposit Agreement.
Any proposed listing of the Depositary Shares on a securities
exchange will be described in the Prospectus Supplement.
Issuance
of Depositary Receipts
Immediately following the issuance of the Preference Stock, the
Company will deposit the Preference Stock with the Depositary,
which will then execute and deliver the Depositary Receipts to
the Company. The Company will, in turn, deliver the Depositary
Receipts to the underwriters or purchasers. Depositary Receipts
will be issued evidencing only whole Depositary Shares.
Withdrawal
of Preference Stock
Upon surrender of Depositary Receipts at the corporate trust
office of the Depositary, the owner of the Depositary Shares
evidenced by such Depositary Receipts is entitled to delivery at
such office of certificates evidencing the number of shares of
Preference Stock (but only in whole shares of Preference Stock)
represented by such Depositary Shares. If the Depositary
Receipts delivered by the holder evidence a number of Depositary
Shares in excess of the number of whole shares of Preference
Stock to be withdrawn, the Depositary will deliver to such
holder at the same time a new Depositary Receipt evidencing such
excess number of Depositary Shares. The Company does not expect
that there will be any public trading market for the Preference
Stock, except as represented by the Depositary Shares.
Redemption
of Depositary Shares
The Depositary Shares will be redeemed, upon not less than 15
nor more than 60 days notice, using the cash proceeds
received by the Depositary resulting from the redemption, in
whole or in part, at the Companys option, but subject to
the applicable terms and conditions, of shares of Preference
Stock held by the Depositary. The redemption price per
Depositary Share will be equal to the fraction of the redemption
price per share applicable to the Preference Stock. Whenever the
Company redeems shares of the Preference Stock held by the
Depositary, the Depositary will redeem as of the same redemption
date the number of Depositary Shares representing the shares of
Preference Stock so redeemed. If less than all the outstanding
Depositary Shares are to be redeemed, the Depositary Shares to
be redeemed will be selected pro rata (as nearly as may be) or
by lot or by such other equitable method as the Depositary may
determine.
Dividends
and Other Distributions
The Depositary will distribute all cash dividends or other cash
distributions received in respect of Preference Stock to the
record holders of Depositary Receipts in proportion, insofar as
practicable, to the number of Depositary Shares owned by such
holders. In the event of a distribution other than in cash, the
Depositary will distribute property received by it to the record
holders of Depositary Receipts entitled to such property, unless
the Depositary determines that it is not feasible to make such
distribution, in which case the Depositary may, with the
approval of the Company, adopt such method as it deems equitable
and practicable for the purpose of effecting such distribution,
including the sale (at public or private sale) of such property
and distribution of the net proceeds from such sale to such
holders. The amount distributed in any of the foregoing cases
will be reduced by any amounts required to be withheld by the
Company or the Depositary on account of taxes or otherwise
required pursuant to law, regulation or court process.
Record
Date
Whenever (i) any cash dividend or other cash distribution
shall become payable, any distribution other than cash shall be
made, or any rights, preferences or privileges shall be offered
with respect to the Preference Stock or (ii) the Depositary
shall receive notice of any meeting at which holders of
Preference Stock are entitled to vote or of which holders of
Preference Stock are entitled to notice, the Depositary shall in
each such instance fix a record date
9
(which shall be the record date fixed by the Company with
respect to the Preference Stock) for the determination of the
holders of Depositary Receipts who shall be entitled to
(y) receive such dividend, distribution, rights,
preferences or privileges or the net proceeds of such sale or
(z) give instructions for the exercise of voting rights at
such meeting or receive notice of such meeting.
Voting
Preference Stock
Upon receipt of notice of any meeting at which the holders of
Preference Stock are entitled to vote, the Depositary will mail
the information contained in such notice of meeting to the
record holders of Depositary Receipts. The record holders of
Depositary Receipts on the record date (which will be the same
date as the record date for the Preference Stock) will be
entitled to instruct the Depositary as to the exercise of the
voting rights pertaining to the amount of Preference Stock
represented by their respective Depositary Receipts. The
Depositary will endeavor insofar as practicable to vote or cause
to be voted the amount of Preference Stock represented by such
Depositary Receipts in accordance with such instructions, and
the Company has agreed to take all action which may be deemed
necessary by the Depositary in order to enable the Depositary to
do so. The Depositary will abstain from voting the Preference
Stock to the extent it does not receive specific instructions
from the holders of the Depositary Receipts.
Amendment
and Termination of Deposit Agreement
The form of the Depositary Receipts and any provisions of the
Deposit Agreement may at any time and from time to time be
amended or modified in any respect by agreement between the
Company and the Depositary. Any amendment which imposes any fees
or charges (other than taxes, fees and charges provided for in
the Deposit Agreement) on the holders of Depositary Receipts, or
which otherwise prejudices any substantial existing right of
holders of Depositary Receipts, will not become effective as to
outstanding Depositary Receipts until the expiration of
90 days after notice of such amendment shall have been
given to the record holders of outstanding Depositary Receipts.
Every holder of an outstanding Depositary Receipt at the time
any such amendment becomes effective shall be deemed, by
continuing to hold such Depositary Receipt, to consent and agree
to such amendment and to be bound by the Deposit Agreement as
amended. In no event may any amendment impair the right of the
holder of any Depositary Receipt, subject to the conditions of
the Deposit Agreement, to surrender such Depositary Receipt and
receive the Preference Stock represented by such Depositary
Receipt, except in order to comply with mandatory provisions of
applicable law.
Whenever so directed by the Company, the Depositary will
terminate the Deposit Agreement by mailing notice of such
termination to the record holders of all Depositary Receipts
then outstanding at least 30 days prior to the date fixed
in such notice for such termination. The Depositary may likewise
terminate the Deposit Agreement if at any time 60 days
shall have expired after the Depositary shall have delivered to
the Company a written notice of its election to resign and a
successor depositary shall not have been appointed and accepted
its appointment. If any Depositary Receipts remain outstanding
after the date of termination, the Depositary will discontinue
the transfer of Depositary Receipts, will suspend the
distribution of dividends to the holders of Depositary Receipts
and will not give any further notices (other than notice of such
termination) or perform any further acts under the Deposit
Agreement except that the Depositary will continue to collect
dividends and other distributions pertaining to the Preference
Stock and deliver Preference Stock together with such dividends
and distributions and the net proceeds of any sale of any
rights, preferences, privileges or other property in exchange
for Depositary Receipts surrendered. At any time after the
expiration of two years from the date of termination, the
Depositary may sell the Preference Stock then held by it at
public or private sale at such place or places and upon such
terms as its deems proper and may thereafter hold the net
proceeds of any such sale, together with any other cash then
held by it, without liability for interest, for the pro rata
benefit of the holders of Depositary Receipts which have not
been surrendered. Any such moneys unclaimed by the holders of
Depositary Receipts more than two years from the date of
termination of the Deposit Agreement will, upon request of the
Company, be paid to it, and after such payment, the holders of
Depositary Receipts entitled to the funds so paid to the Company
shall look only to the Company for payment without interest. The
Company does not intend to terminate the Deposit Agreement or to
permit the resignation of the Depositary without appointing a
successor depositary.
10
Charges
of Depositary
The Company will pay all charges of the Depositary including
charges for the initial deposit of the Preference Stock and
delivery of Depositary Receipts and withdrawals of Preference
Stock by the holders of Depositary Receipts, except for taxes
(including transfer taxes, if any) and such charges as are
expressly provided in the Deposit Agreement to be at the expense
of the persons depositing Preference Stock or holders of
Depositary Receipts.
Miscellaneous
The Depositary will make available for inspection by holders of
Depositary Receipts at its corporate trust office any reports
and communications received from the Company which are made
generally available to the holders of Preference Stock by the
Company.
Neither the Depositary nor the Company will be liable if it is
prevented or delayed by law or any circumstance beyond its
control in performing its obligations under the Deposit
Agreement. The obligations of the Depositary and the Company
under the Deposit Agreement are limited to performance in good
faith of their duties under the Deposit Agreement, and they are
not obligated to prosecute or defend any legal proceeding in
respect of the Preference Stock, the Depositary Receipts or the
Depositary Shares unless satisfactory indemnity is furnished.
The Depositary and the Company may rely upon advice of or
information from counsel, accountants or other persons believed
to be competent and on documents believed to be genuine.
The Depositary may at any time resign or be removed by the
Company, effective upon the acceptance by its successor of its
appointment.
DESCRIPTION
OF THE SENIOR NOTES
Set forth below is a description of the general terms of the
Senior Notes. The following description does not purport to be
complete and is subject to, and is qualified in its entirety by
reference to, the Senior Note Indenture, dated as of
December 1, 1997, between the Company and The Bank of New
York (as successor to JPMorgan Chase Bank, N.A. (formerly known
as The Chase Manhattan Bank)), as trustee (the Senior Note
Indenture Trustee), as to be supplemented by a
supplemental indenture establishing the Senior Notes of each
series (the Senior Note Indenture, as supplemented, is referred
to as the Senior Note Indenture), the forms of which
are filed as exhibits to the Registration Statement of which
this Prospectus forms a part. The terms of the Senior Notes will
include those stated in the Senior Note Indenture and those made
a part of the Senior Note Indenture by reference to the Trust
Indenture Act of 1939, as amended (the 1939 Act).
Certain capitalized terms used in this Prospectus are defined in
the Senior Note Indenture.
General
The Senior Notes will be issued as unsecured senior debt
securities under the Senior Note Indenture and will rank equally
with all other unsecured and unsubordinated debt of the Company.
The Senior Notes will be effectively subordinated to all secured
debt of the Company aggregating approximately $153,000,000
outstanding at September 30, 2007. The Senior Note
Indenture does not limit the aggregate principal amount of
Senior Notes that may be issued under the Senior Note Indenture
and provides that Senior Notes may be issued from time to time
in one or more series pursuant to an indenture supplemental to
the Senior Note Indenture. The Senior Note Indenture gives the
Company the ability to reopen a previous issue of Senior Notes
and issue additional Senior Notes of such series, unless
otherwise provided.
Reference is made to the Prospectus Supplement that will
accompany this Prospectus for the following terms of the series
of Senior Notes being offered by such Prospectus Supplement:
(i) the title of such Senior Notes; (ii) any limit on
the aggregate principal amount of such Senior Notes;
(iii) the date or dates on which the principal of such
Senior Notes is payable; (iv) the rate or rates at which
such Senior Notes shall bear interest, if any, or any method by
which such rate or rates will be determined, the date or dates
from which such interest will accrue, the interest payment dates
on which such interest shall be payable, and the regular record
date for the interest payable on any interest payment date;
(v) the place or places where the principal of (and
premium, if any) and interest, if any, on such Senior Notes
shall be payable; (vi) the period or periods within which,
the price or prices at which and the
11
terms and conditions on which such Senior Notes may be redeemed,
in whole or in part, at the option of the Company or at the
option of the holder prior to their maturity; (vii) the
obligation, if any, of the Company to redeem or purchase such
Senior Notes; (viii) the denominations in which such Senior
Notes shall be issuable; (ix) if other than the principal
amount of such Senior Notes, the portion of the principal amount
of such Senior Notes which shall be payable upon declaration of
acceleration of the maturity of such Senior Notes; (x) any
deletions from, modifications of or additions to the Events of
Default or covenants of the Company as provided in the Senior
Note Indenture pertaining to such Senior Notes;
(xi) whether such Senior Notes shall be issued in whole or
in part in the form of a Global Security; and (xii) any
other terms of such Senior Notes.
The Senior Note Indenture does not contain provisions that
afford holders of Senior Notes protection in the event of a
highly leveraged transaction involving the Company.
Events of
Default
The Senior Note Indenture provides that any one or more of the
following described events with respect to the Senior Notes of
any series, which has occurred and is continuing, constitutes an
Event of Default with respect to the Senior Notes of
such series:
(a) failure for 10 days to pay interest on the Senior
Notes of such series, when due on an interest payment date other
than at maturity or upon earlier redemption; or
(b) failure to pay principal or premium, if any, or
interest on the Senior Notes of such series when due at maturity
or upon earlier redemption; or
(c) failure for three Business Days to deposit any sinking
fund payment when due by the terms of a Senior Note of such
series; or
(d) failure to observe or perform any other covenant or
warranty of the Company in the Senior Note Indenture (other than
a covenant or warranty which has expressly been included in the
Senior Note Indenture solely for the benefit of one or more
series of Senior Notes other than such series) for 90 days
after written notice to the Company from the Senior Note
Indenture Trustee or the holders of at least 25% in principal
amount of the outstanding Senior Notes of such series; or
(e) certain events of bankruptcy, insolvency or
reorganization of the Company.
The holders of not less than a majority in aggregate outstanding
principal amount of the Senior Notes of any series have the
right to direct the time, method and place of conducting any
proceeding for any remedy available to the Senior Note Indenture
Trustee with respect to the Senior Notes of such series. If a
Senior Note Indenture Event of Default occurs and is continuing
with respect to the Senior Notes of any series, then the Senior
Note Indenture Trustee or the holders of not less than 25% in
aggregate outstanding principal amount of the Senior Notes of
such series may declare the principal amount of the Senior Notes
due and payable immediately by notice in writing to the Company
(and to the Senior Note Indenture Trustee if given by the
holders), and upon any such declaration such principal amount
shall become immediately due and payable. At any time after such
a declaration of acceleration with respect to the Senior Notes
of any series has been made and before a judgment or decree for
payment of the money due has been obtained as provided in
Article Five of the Senior Note Indenture, the holders of not
less than a majority in aggregate outstanding principal amount
of the Senior Notes of such series may rescind and annul such
declaration and its consequences if the default has been cured
or waived and the Company has paid or deposited with the Senior
Note Indenture Trustee a sum sufficient to pay all matured
installments of interest and principal due otherwise than by
acceleration and all sums paid or advanced by the Senior Note
Indenture Trustee, including reasonable compensation and
expenses of the Senior Note Indenture Trustee.
The holders of not less than a majority in aggregate outstanding
principal amount of the Senior Notes of any series may, on
behalf of the holders of all the Senior Notes of such series,
waive any past default with respect to such series, except
(i) a default in the payment of principal or interest or
(ii) a default in respect of a covenant or provision which
under Article Nine of the Senior Note Indenture cannot be
modified or amended without the consent of the holder of each
outstanding Senior Note of such series affected.
12
Registration
and Transfer
The Company shall not be required to (i) issue, register
the transfer of or exchange Senior Notes of any series during a
period of 15 days immediately preceding the date notice is given
identifying the Senior Notes of such series called for
redemption, or (ii) issue, register the transfer of or
exchange any Senior Notes so selected for redemption, in whole
or in part, except the unredeemed portion of any Senior Note
being redeemed in part.
Payment
and Paying Agent
Unless otherwise indicated in an applicable Prospectus
Supplement, payment of principal of any Senior Notes will be
made only against surrender to the Paying Agent of such Senior
Notes. Principal of and interest on Senior Notes will be
payable, subject to any applicable laws and regulations, at the
office of such Paying Agent or Paying Agents as the Company may
designate from time to time, except that, at the option of the
Company, payment of any interest may be made by wire transfer or
by check mailed to the address of the person entitled to an
interest payment as such address shall appear in the Security
Register with respect to the Senior Notes. Payment of interest
on Senior Notes on any interest payment date will be made to the
person in whose name the Senior Notes (or predecessor security)
are registered at the close of business on the record date for
such interest payment.
Unless otherwise indicated in an applicable Prospectus
Supplement, the Senior Note Indenture Trustee will act as Paying
Agent with respect to the Senior Notes. The Company may at any
time designate additional Paying Agents or rescind the
designation of any Paying Agents or approve a change in the
office through which any Paying Agent acts.
All moneys paid by the Company to a Paying Agent for the payment
of the principal of or interest on the Senior Notes of any
series which remain unclaimed at the end of two years after such
principal or interest shall have become due and payable will be
repaid to the Company, and the holder of such Senior Notes from
that time forward will look only to the Company for payment of
such principal and interest.
Modification
The Senior Note Indenture contains provisions permitting the
Company and the Senior Note Indenture Trustee, with the consent
of the holders of not less than a majority in principal amount
of the outstanding Senior Notes of each series that is affected,
to modify the Senior Note Indenture or the rights of the holders
of the Senior Notes of such series; provided, that no such
modification may, without the consent of the holder of each
outstanding Senior Note that is affected, (i) change the
stated maturity of the principal of, or any installment of
principal of or interest on, any Senior Note, or reduce the
principal amount of any Senior Note or the rate of interest on
any Senior Note or any premium payable upon the redemption of
any Senior Note, or change the method of calculating the rate of
interest on any Senior Note, or impair the right to institute
suit for the enforcement of any such payment on or after the
stated maturity of any Senior Note (or, in the case of
redemption, on or after the redemption date), or
(ii) reduce the percentage of principal amount of the
outstanding Senior Notes of any series, the consent of whose
holders is required for any such supplemental indenture, or the
consent of whose holders is required for any waiver (of
compliance with certain provisions of the Senior Note Indenture
or certain defaults under the Senior Note Indenture and their
consequences) provided for in the Senior Note Indenture, or
(iii) modify any of the provisions of the Senior Note
Indenture relating to supplemental indentures, waiver of past
defaults, or waiver of certain covenants, except to increase any
such percentage or to provide that certain other provisions of
the Senior Note Indenture cannot be modified or waived without
the consent of the holder of each outstanding Senior Note that
is affected.
In addition, the Company and the Senior Note Indenture Trustee
may execute, without the consent of any holders of Senior Notes,
any supplemental indenture for certain other usual purposes,
including the creation of any new series of senior notes.
Consolidation,
Merger and Sale
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any person, unless
(1) such other corporation or person is a corporation
organized and existing under the laws of the United States, any
state in the United States or the District
13
of Columbia and such other corporation or person expressly
assumes, by supplemental indenture executed and delivered to the
Senior Note Indenture Trustee, the payment of the principal of
(and premium, if any) and interest on all the Senior Notes and
the performance of every covenant of the Senior Note Indenture
on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transactions,
no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have
happened and be continuing; and (3) the Company has
delivered to the Senior Note Indenture Trustee an officers
certificate and an opinion of counsel, each stating that such
transaction complies with the provisions of the Senior Note
Indenture governing consolidation, merger, conveyance, transfer
or lease and that all conditions precedent to the transaction
have been complied with.
Information
Concerning the Senior Note Indenture Trustee
The Senior Note Indenture Trustee, prior to an Event of Default
with respect to Senior Notes of any series, undertakes to
perform, with respect to Senior Notes of such series, only such
duties as are specifically set forth in the Senior Note
Indenture and, in case an Event of Default with respect to
Senior Notes of any series has occurred and is continuing, shall
exercise, with respect to Senior Notes of such series, the same
degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provision,
the Senior Note Indenture Trustee is under no obligation to
exercise any of the powers vested in it by the Senior Note
Indenture at the request of any holder of Senior Notes of any
series, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities which might be
incurred by the Senior Note Indenture Trustee. The Senior Note
Indenture Trustee is not required to expend or risk its own
funds or otherwise incur any financial liability in the
performance of its duties if the Senior Note Indenture Trustee
reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
The Bank of New York, the Senior Note Indenture Trustee, also
serves as Subordinated Note Indenture Trustee. The Company and
certain of its affiliates maintain deposit accounts and banking
relationships with The Bank of New York. The Bank of New York
also serves as trustee under other indentures pursuant to which
securities of the Company and affiliates of the Company are
outstanding.
Governing
Law
The Senior Note Indenture and the Senior Notes will be governed
by, and construed in accordance with, the internal laws of the
State of New York.
Miscellaneous
The Company will have the right at all times to assign any of
its rights or obligations under the Senior Note 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 primarily liable for all such obligations. Subject
to the foregoing, the Senior Note Indenture will be binding upon
and inure to the benefit of the parties to the Senior Note
Indenture and their respective successors and assigns.
DESCRIPTION
OF THE JUNIOR SUBORDINATED NOTES
Set forth below is a description of the general terms of the
Junior Subordinated Notes. The following description does not
purport to be complete and is subject to, and is qualified in
its entirety by reference to, the Subordinated Note Indenture,
dated as of January 1, 1997, between the Company and The
Bank of New York (as successor to JPMorgan Chase Bank, N.A.
(formerly known as The Chase Manhattan Bank)), as trustee (the
Subordinated Note Indenture Trustee), as to be
supplemented by a supplemental indenture to the Subordinated
Note Indenture establishing the Junior Subordinated Notes of
each series (the Subordinated Note Indenture, as so
supplemented, is referred to as the Subordinated Note
Indenture), the forms of which are filed as exhibits to
the Registration Statement of which this Prospectus forms a
part. The terms of the Junior Subordinated Notes will include
those stated in the Subordinated Note Indenture and those made a
part of the Subordinated Note Indenture by reference to the 1939
Act. Certain capitalized terms used in this Prospectus are
defined in the Subordinated Note Indenture.
14
General
The Junior Subordinated Notes will be issued as unsecured junior
subordinated debt securities under the Subordinated Note
Indenture. The Subordinated Note Indenture does not limit the
aggregate principal amount of Junior Subordinated Notes that may
be issued under the Subordinated Note Indenture and provides
that Junior Subordinated Notes may be issued from time to time
in one or more series pursuant to an indenture supplemental to
the Subordinated Note Indenture. The Subordinated Note Indenture
gives the Company the ability to reopen a previous issue of
Junior Subordinated Notes and issue additional Junior
Subordinated Notes of such series, unless otherwise provided.
Reference is made to the Prospectus Supplement that will
accompany this Prospectus for the following terms of the series
of Junior Subordinated Notes being offered by such Prospectus
Supplement: (i) the title of such Junior Subordinated
Notes; (ii) any limit on the aggregate principal amount of
such Junior Subordinated Notes; (iii) the date or dates on
which the principal of such Junior Subordinated Notes is
payable; (iv) the rate or rates at which such Junior
Subordinated Notes shall bear interest, if any, or any method by
which such rate or rates will be determined, the date or dates
from which such interest will accrue, the interest payment dates
on which such interest shall be payable, and the regular record
date for the interest payable on any interest payment date;
(v) the place or places where the principal of (and
premium, if any) and interest, if any, on such Junior
Subordinated Notes shall be payable; (vi) the period or
periods within which, the price or prices at which and the terms
and conditions on which such Junior Subordinated Notes may be
redeemed, in whole or in part, at the option of the Company or
at the option of the holder prior to their maturity;
(vii) the obligation, if any, of the Company to redeem or
purchase such Junior Subordinated Notes; (viii) the
denominations in which such Junior Subordinated Notes shall be
issuable; (ix) if other than the principal amount of the
Junior Subordinated Notes, the portion of the principal amount
of such Junior Subordinated Notes which shall be payable upon
declaration of acceleration of the maturity of the Junior
Subordinated Notes; (x) any deletions from, modifications
of or additions to the Events of Default or covenants of the
Company as provided in the Subordinated Note Indenture
pertaining to such Junior Subordinated Notes; (xi) whether
such Junior Subordinated Notes shall be issued in whole or in
part in the form of a Global Security; (xii) the right, if
any, of the Company to extend the interest payment periods of
such Junior Subordinated Notes; and (xiii) any other terms
of such Junior Subordinated Notes. The terms of each series of
Junior Subordinated Notes issued to a Trust will correspond to
those of the related Preferred Securities of such Trust as
described in the Prospectus Supplement relating to such
Preferred Securities.
The Subordinated Note Indenture does not contain provisions that
afford holders of Junior Subordinated Notes protection in the
event of a highly leveraged transaction involving the Company.
Subordination
The Junior Subordinated Notes are subordinated and junior in
right of payment to all Senior Indebtedness (as defined below)
of the Company. No payment of principal of (including redemption
payments, if any), or premium, if any, or interest on (including
Additional Interest (as defined below)) the Junior Subordinated
Notes may be made if (a) any Senior Indebtedness is not
paid when due and any applicable grace period with respect to
such default has ended with such default not being cured or
waived or otherwise ceasing to exist, or (b) the maturity
of any Senior Indebtedness has been accelerated because of a
default, or (c) notice has been given of the exercise of an
option to require repayment, mandatory payment or prepayment or
otherwise. Upon any payment or distribution of assets of the
Company to creditors upon any liquidation, dissolution,
winding-up, reorganization, assignment for the benefit of
creditors, marshalling of assets or liabilities, or any
bankruptcy, insolvency or similar proceedings of the Company,
the holders of Senior Indebtedness shall be entitled to receive
payment in full of all amounts due or to become due on or in
respect of all Senior Indebtedness before the holders of the
Junior Subordinated Notes are entitled to receive or retain any
payment or distribution. Subject to the prior payment of all
Senior Indebtedness, the rights of the holders of the Junior
Subordinated Notes will be subrogated to the rights of the
holders of Senior Indebtedness to receive payments and
distributions applicable to such Senior Indebtedness until all
amounts owing on the Junior Subordinated Notes are paid in full.
The term Senior Indebtedness means, with respect to
the Company, (i) any payment due in respect of indebtedness
of the Company, whether outstanding at the date of execution of
the Subordinated Note Indenture or
15
incurred, created or assumed after such date, (a) in
respect of money borrowed (including any financial derivative,
hedging or futures contract or similar instrument) and
(b) evidenced by securities, debentures, bonds, notes or
other similar instruments issued by the Company that, by their
terms, are senior or senior subordinated debt securities
including, without limitation, all obligations under its
indentures with various trustees; (ii) all capital lease
obligations; (iii) all obligations issued or assumed as the
deferred purchase price of property, all conditional sale
obligations and all obligations of the Company under any title
retention agreement (but excluding trade accounts payable
arising in the ordinary course of business and long-term
purchase obligations); (iv) all obligations for the
reimbursement of any letter of credit, bankers acceptance,
security purchase facility or similar credit transaction; (v)
all obligations of the type referred to in clauses (i)
through (iv) above of other persons the payment of which the
Company is responsible or liable as obligor, guarantor or
otherwise; and (vi) all obligations of the type referred to
in clauses (i) through (v) above of other persons secured
by any lien on any property or asset of the Company (whether or
not such obligation is assumed by the Company), except for
(1) any such indebtedness that is by its terms subordinated
to or that ranks equally with the Junior Subordinated Notes and
(2) any unsecured indebtedness between or among the Company
or its affiliates. Such Senior Indebtedness shall continue to be
Senior Indebtedness and be entitled to the benefits of the
subordination provisions contained in the Subordinated Note
Indenture irrespective of any amendment, modification or waiver
of any term of such Senior Indebtedness.
The Subordinated Note Indenture does not limit the aggregate
amount of Senior Indebtedness that may be issued by the Company.
As of September 30, 2007, Senior Indebtedness of the
Company aggregated approximately $5,039,000,000.
Additional
Interest
Additional Interest is defined in the Subordinated
Note Indenture as (i) such additional amounts as may be
required so that the net amounts received and retained by a
holder of Junior Subordinated Notes (if the holder is a Trust)
after paying taxes, duties, assessments or governmental charges
of whatever nature (other than withholding taxes) imposed by the
United States or any other taxing authority will not be less
than the amounts the holder would have received had no such
taxes, duties, assessments, or other governmental charges been
imposed; and (ii) any interest due and not paid on an
interest payment date, together with interest from such interest
payment date to the date of payment, compounded quarterly, on
each interest payment date.
Certain
Covenants
The Company covenants in the Subordinated Note Indenture, for
the benefit of the holders of each series of Junior Subordinated
Notes, that, (i) if at such time the Company shall have
given notice of its election to extend an interest payment
period for such series of Junior Subordinated Notes and such
extension shall be continuing, (ii) if at such time the
Company shall be in default with respect to its payment or other
obligations under the Guarantee with respect to the Trust
Securities, if any, related to such series of Junior
Subordinated Notes, or (iii) if at such time an Event of
Default under the Subordinated Note Indenture with respect to
such series of Junior Subordinated Notes shall have occurred and
be continuing, (a) the Company shall not declare or pay any
dividend or make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to,
any of its capital stock, and (b) the Company shall not
make any payment of interest, principal or premium, if any, on
or repay, repurchase or redeem any debt securities (including
guarantees other than the Guarantees) issued by the Company
which rank equally with or junior to the Junior Subordinated
Notes. None of the foregoing, however, shall restrict
(i) any of the actions described in the preceding sentence
resulting from any reclassification of the Companys
capital stock or the exchange or conversion of one class or
series of the Companys capital stock for another class or
series of the Companys capital stock, or (ii) the
purchase of fractional interests in shares of the Companys
capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or
exchanged.
The Subordinated Note Indenture further provides that, for so
long as the Trust Securities of any Trust remain outstanding,
the Company covenants (i) to directly or indirectly
maintain 100% ownership of the Common Securities of such Trust;
provided, however, that any permitted successor of the Company
under the Subordinated Note Indenture may succeed to the
Companys ownership of such Common Securities, and
(ii) to use its reasonable efforts to cause such Trust
(a) to remain a statutory trust, except in connection with
the distribution of Junior
16
Subordinated Notes to the holders of Trust Securities in
liquidation of such Trust, the redemption of all of the Trust
Securities of such Trust, or certain mergers, consolidations or
amalgamations, each as permitted by the related Trust Agreement,
and (b) to otherwise continue to be classified as a grantor
trust for United States federal income tax purposes.
Events of
Default
The Subordinated Note Indenture provides that any one or more of
the following described events with respect to the Junior
Subordinated Notes of any series, which has occurred and is
continuing, constitutes an Event of Default with
respect to the Junior Subordinated Notes of such series:
(a) failure for 10 days to pay interest on the Junior
Subordinated Notes of such series, including any Additional
Interest (as defined in clause (ii) of the definition of
Additional Interest in the Subordinated Note Indenture) on such
unpaid interest, when due on an interest payment date other than
at maturity or upon earlier redemption; provided, however, that
a valid extension of the interest payment period by the Company
shall not constitute a default in the payment of interest for
this purpose; or
(b) failure for 10 days to pay Additional Interest (as
defined in clause (i) of the definition of Additional
Interest in the Subordinated Note Indenture); or
(c) failure to pay principal or premium, if any, or
interest, including Additional Interest (as defined in clause
(ii) of the definition of Additional Interest in the
Subordinated Note Indenture), on the Junior Subordinated Notes
of such series when due at maturity or upon earlier redemption;
or
(d) failure for three Business Days to deposit any sinking
fund payment when due by the terms of a Junior Subordinated Note
of such series; or
(e) failure to observe or perform any other covenant or
warranty of the Company in the Subordinated Note Indenture
(other than a covenant or warranty which has expressly been
included in the Subordinated Note Indenture solely for the
benefit of one or more series of Junior Subordinated Notes other
than such series) for 90 days after written notice to the
Company from the Subordinated Note Indenture Trustee or the
holders of at least 25% in principal amount of the outstanding
Junior Subordinated Notes of such series; or
(f) certain events of bankruptcy, insolvency or
reorganization of the Company.
The holders of not less than a majority in aggregate outstanding
principal amount of the Junior Subordinated Notes of any series
have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the
Subordinated Note Indenture Trustee with respect to the Junior
Subordinated Notes of such series. If a Subordinated Note
Indenture Event of Default occurs and is continuing with respect
to the Junior Subordinated Notes of any series, then the
Subordinated Note Indenture Trustee or the holders of not less
than 25% in aggregate outstanding principal amount of the Junior
Subordinated Notes of such series may declare the principal
amount of the Junior Subordinated Notes due and payable
immediately by notice in writing to the Company (and to the
Subordinated Note Indenture Trustee if given by the holders),
and upon any such declaration such principal amount shall become
immediately due and payable. At any time after such a
declaration of acceleration with respect to the Junior
Subordinated Notes of any series has been made and before a
judgment or decree for payment of the money due has been
obtained as provided in Article Five of the Subordinated Note
Indenture, the holders of not less than a majority in aggregate
outstanding principal amount of the Junior Subordinated Notes of
such series may rescind and annul such declaration and its
consequences if the default has been cured or waived and the
Company has paid or deposited with the Subordinated Note
Indenture Trustee a sum sufficient to pay all matured
installments of interest (including any Additional Interest) and
principal due otherwise than by acceleration and all sums paid
or advanced by the Subordinated Note Indenture Trustee,
including reasonable compensation and expenses of the
Subordinated Note Indenture Trustee.
A holder of Preferred Securities may institute a legal
proceeding directly against the Company, without first
instituting a legal proceeding against the Property Trustee or
any other person or entity, for enforcement of payment to such
holder of principal of or interest on the Junior Subordinated
Notes of the related series having a principal
17
amount equal to the aggregate stated liquidation amount of the
Preferred Securities of such holder on or after the due dates
specified in the Junior Subordinated Notes of such series.
The holders of not less than a majority in aggregate outstanding
principal amount of the Junior Subordinated Notes of any series
may, on behalf of the holders of all the Junior Subordinated
Notes of such series, waive any past default with respect to
such series, except (i) a default in the payment of
principal or interest or (ii) a default in respect of a
covenant or provision which under Article Nine of the
Subordinated Note Indenture cannot be modified or amended
without the consent of the holder of each outstanding Junior
Subordinated Note of such series affected.
Registration
and Transfer
The Company shall not be required to (i) issue, register
the transfer of or exchange Junior Subordinated Notes of any
series during a period of 15 days immediately preceding the date
notice is given identifying the Junior Subordinated Notes of
such series called for redemption, or (ii) issue, register
the transfer of or exchange any Junior Subordinated Notes so
selected for redemption, in whole or in part, except the
unredeemed portion of any Junior Subordinated Note being
redeemed in part.
Payment
and Paying Agent
Unless otherwise indicated in an applicable Prospectus
Supplement, payment of principal of any Junior Subordinated
Notes will be made only against surrender to the Paying Agent of
such Junior Subordinated Notes. Principal of and interest on
Junior Subordinated Notes will be payable, subject to any
applicable laws and regulations, at the office of such Paying
Agent or Paying Agents as the Company may designate from time to
time, except that, at the option of the Company, payment of any
interest may be made by wire transfer or by check mailed to the
address of the person entitled to an interest payment as such
address shall appear in the Security Register with respect to
the Junior Subordinated Notes. Payment of interest on Junior
Subordinated Notes on any interest payment date will be made to
the person in whose name the Junior Subordinated Notes (or
predecessor security) are registered at the close of business on
the record date for such interest payment.
Unless otherwise indicated in an applicable Prospectus
Supplement, the Subordinated Note Indenture Trustee will act as
Paying Agent with respect to the Junior Subordinated Notes. The
Company may at any time designate additional Paying Agents or
rescind the designation of any Paying Agents or approve a change
in the office through which any Paying Agent acts.
All moneys paid by the Company to a Paying Agent for the payment
of the principal of or interest on the Junior Subordinated Notes
of any series which remain unclaimed at the end of two years
after such principal or interest shall have become due and
payable will be repaid to the Company, and the holder of such
Junior Subordinated Notes will from that time forward look only
to the Company for payment of such principal and interest.
Modification
The Subordinated Note Indenture contains provisions permitting
the Company and the Subordinated Note Indenture Trustee, with
the consent of the holders of not less than a majority in
principal amount of the outstanding Junior Subordinated Notes of
each series affected, to modify the Subordinated Note Indenture
or the rights of the holders of the Junior Subordinated Notes of
such series; provided, that no such modification may, without
the consent of the holder of each outstanding Junior
Subordinated Note affected, (i) change the stated maturity
of the principal of, or any installment of principal of or
interest on, any Junior Subordinated Note, or reduce the
principal amount of any Junior Subordinated Note or the rate of
interest (including Additional Interest) on any Junior
Subordinated Note or any premium payable upon the redemption of
any Junior Subordinated Note, or change the method of
calculating the rate of interest on any Junior Subordinated
Note, or impair the right to institute suit for the enforcement
of any such payment on or after the stated maturity of any
Junior Subordinated Note (or, in the case of redemption, on or
after the redemption date), or (ii) reduce the percentage
of principal amount of the outstanding Junior Subordinated Notes
of any series, the consent of whose holders is required for any
such supplemental indenture, or the consent of whose holders is
required for any waiver (of compliance with certain provisions
of the Subordinated Note Indenture or certain defaults under the
Subordinated Note Indenture and their consequences) provided for
in the Subordinated Note Indenture, or (iii) modify any of
the provisions of the Subordinated Note Indenture relating to
supplemental indentures, waiver of past defaults, or waiver of
certain covenants, except to
18
increase any such percentage or to provide that certain other
provisions of the Subordinated Note Indenture cannot be modified
or waived without the consent of the holder of each outstanding
Junior Subordinated Note affected thereby, or (iv) modify
the provisions of the Subordinated Note Indenture with respect
to the subordination of the Junior Subordinated Notes in a
manner adverse to such holder.
In addition, the Company and the Subordinated Note Indenture
Trustee may execute, without the consent of any holders of
Junior Subordinated Notes, any supplemental indenture for
certain other usual purposes, including the creation of any new
series of junior subordinated notes.
Consolidation,
Merger and Sale
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any person, unless
(1) such other corporation or person is a corporation
organized and existing under the laws of the United States, any
state in the United States or the District of Columbia and such
other corporation or person expressly assumes, by supplemental
indenture executed and delivered to the Subordinated Note
Indenture Trustee, the payment of the principal of (and premium,
if any) and interest (including Additional Interest) on all the
Junior Subordinated Notes and the performance of every covenant
of the Subordinated Note Indenture on the part of the Company to
be performed or observed; (2) immediately after giving
effect to such transactions, no Event of Default, and no event
which, after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing; and
(3) the Company has delivered to the Subordinated Note
Indenture Trustee an officers certificate and an opinion
of counsel, each stating that such transaction complies with the
provisions of the Subordinated Note Indenture governing
consolidation, merger, conveyance, transfer or lease and that
all conditions precedent to the transaction have been complied
with.
Information
Concerning the Subordinated Note Indenture Trustee
The Subordinated Note Indenture Trustee, prior to an Event of
Default with respect to Junior Subordinated Notes of any series,
undertakes to perform, with respect to Junior Subordinated Notes
of such series, only such duties as are specifically set forth
in the Subordinated Note Indenture and, in case an Event of
Default with respect to Junior Subordinated Notes of any series
has occurred and is continuing, shall exercise, with respect to
Junior Subordinated Notes of such series, the same degree of
care as a prudent individual would exercise in the conduct of
his or her own affairs. Subject to such provision, the
Subordinated Note Indenture Trustee is under no obligation to
exercise any of the powers vested in it by the Subordinated Note
Indenture at the request of any holder of Junior Subordinated
Notes of any series, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might
be incurred by the Subordinated Note Indenture Trustee. The
Subordinated Note Indenture Trustee is not required to expend or
risk its own funds or otherwise incur any financial liability in
the performance of its duties if the Subordinated Note Indenture
Trustee reasonably believes that repayment or adequate indemnity
is not reasonably assured to it.
The Bank of New York, the Subordinated Note Indenture Trustee,
also serves as Senior Note Indenture Trustee. The Company and
certain of its affiliates maintain deposit accounts and banking
relationships with The Bank of New York. The Bank of New York
also serves as trustee under other indentures pursuant to which
securities of the Company and affiliates of the Company are
outstanding.
Governing
Law
The Subordinated Note Indenture and the Junior Subordinated
Notes will be governed by, and construed in accordance with, the
internal laws of the State of New York.
Miscellaneous
The Company will have the right at all times to assign any of
its rights or obligations under the Subordinated Note 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 primarily liable for all such obligations. Subject
to the foregoing, the Subordinated Note Indenture will be
binding upon and inure to the benefit of the parties to the
Subordinated Note Indenture and their respective successors and
assigns.
19
PLAN OF
DISTRIBUTION
The Company may sell the Class A Preferred Stock, the
Preference Stock, the Depositary Shares, the Senior Notes and
the Junior Subordinated Notes in one or more of the following
ways from time to time: (i) to underwriters for resale to
the public or to institutional investors; (ii) directly to
institutional investors; or (iii) through agents to the
public or to institutional investors. The Prospectus Supplement
with respect to each series of Class A Preferred Stock,
Preference Stock, Depositary Shares, Senior Notes or Junior
Subordinated Notes will set forth the terms of the offering of
such Class A Preferred Stock, Preference Stock, Depositary
Shares, Senior Notes or Junior Subordinated Notes, including the
name or names of any underwriters or agents, the purchase price
of such Class A Preferred Stock, Preference Stock,
Depositary Shares, Senior Notes or Junior Subordinated Notes and
the proceeds to the Company from such sale, any underwriting
discounts or agency fees and other items constituting
underwriters or agents compensation, any initial
public offering price, any discounts or concessions allowed or
reallowed or paid to dealers and any securities exchange on
which such Class A Preferred Stock, Preference Stock,
Depositary Shares, Senior Notes or Junior Subordinated Notes may
be listed.
If underwriters participate in the sale, such Class A
Preferred Stock, Preference Stock, Depositary Shares, Senior
Notes or Junior Subordinated Notes will be acquired by the
underwriters for their own accounts and may be resold from time
to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying
prices determined at the time of sale.
Unless otherwise set forth in the Prospectus Supplement, the
obligations of the underwriters to purchase any series of
Class A Preferred Stock, Preference Stock, Depositary
Shares, Senior Notes or Junior Subordinated Notes will be
subject to certain conditions precedent and the underwriters
will be obligated to purchase all of such series of Class A
Preferred Stock, Preference Stock, Depositary Shares, Senior
Notes or Junior Subordinated Notes, if any are purchased.
Underwriters and agents may be entitled under agreements entered
into with the Company to indemnification against certain civil
liabilities, including liabilities under the 1933 Act.
Underwriters and agents may engage in transactions with, or
perform services for, the Company in the ordinary course of
business.
Each series of Class A Preferred Stock, Preference Stock,
Depositary Shares, Senior Notes or Junior Subordinated Notes
will be a new issue of securities and will have no established
trading market. Any underwriters to whom Class A Preferred
Stock, Preference Stock, Depositary Shares, Senior Notes or
Junior Subordinated Notes are sold for public offering and sale
may make a market in such Class A Preferred Stock,
Preference Stock, Depositary Shares, Senior Notes or Junior
Subordinated Notes, but such underwriters will not be obligated
to do so and may discontinue any market making at any time
without notice. The Class A Preferred Stock, the Preference
Stock, the Depositary Shares, the Senior Notes or the Junior
Subordinated Notes may or may not be listed on a national
securities exchange.
LEGAL
MATTERS
The validity of the Class A Preferred Stock, the Preference
Stock, the Depositary Shares, the Senior Notes, the Junior
Subordinated Notes and certain matters relating to such
securities will be passed upon on behalf of the Company by Balch
& Bingham LLP, Birmingham, Alabama, and by Troutman
Sanders LLP, Atlanta, Georgia. Certain legal matters will
be passed upon for the underwriters by Dewey & LeBoeuf LLP,
New York, New York. From time to time Dewey & LeBoeuf LLP
acts as counsel to affiliates of the Company for some matters.
EXPERTS
The financial statements and the related financial statement
schedule incorporated in this Prospectus by reference from the
Companys Annual Report on Form 10-K have been audited
by Deloitte & Touche LLP, an independent registered
public accounting firm, as stated in their reports, which are
incorporated by reference (which report on the financial
statements expresses an unqualified opinion and includes an
explanatory paragraph referring to the Companys change in
method of accounting for the funded status of defined benefit
pension and postretirement plans), and have been so incorporated
in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
20
$
Series 2010A %
Senior Notes
due ,
PROSPECTUS SUPPLEMENT
September , 2010
Joint Book-Running Managers
BNY Mellon Capital Markets,
LLC J.P. Morgan Morgan
Keegan & Company, Inc.
Co-Managers
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SunTrust Robinson Humphrey |
CastleOak Securities, L.P. |