As filed with the Securities and Exchange Commission on April 7, 2003 |
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Registration No. 333- |
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Washington, DC 20549 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 PEPCO HOLDINGS, INC. (Exact name of registrant as specified in its charter) |
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DELAWARE |
52-2297449 |
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701 Ninth Street, N.W. of registrant's principal executive offices) ELLEN SHERIFF ROGERS Vice President, Secretary and Assistant Treasurer Pepco Holdings, Inc. 701 Ninth Street, N.W. Washington, D.C. 20068 (202) 872-3526 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copy to: D. MICHAEL LEFEVER Covington & Burling 1201 Pennsylvania Avenue, N.W. Washington, D.C. 20004 (202) 662-6000 |
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Approximate date of commencement of proposed sale to the public: |
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If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box: [ ] |
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Title of Each Class |
Proposed Maximum Aggregate |
Amount of |
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Debt Securities |
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Total |
$700,000,000 |
$56,630 |
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(1) |
Includes an indeterminate principal amount or number of debt securities and shares of common stock, provided that in no event will the aggregate initial price of all debt securities and common stock sold under this registration statement
exceed $700,000,000. If any such securities are issued at an original issue discount,
then the aggregate initial offering price as so discounted shall not exceed $700,000,000
notwithstanding that the stated principal amount of such securities may exceed such amount.
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(2) |
Estimated solely for the purpose of determining the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. The proposed maximum initial offering price per security will be determined from time to time by the registrant in connection with the issuance of the securities. |
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(3) |
Exclusive of accrued interest on debt securities, if any. |
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Pursuant to Rule 429 under the Securities Act of 1933, the prospectus filed as part of this Registration Statement may be used as a combined prospectus in connection with the securities registered under this Registration Statement and unsold securities having an aggregate offering price of $90,000,000 previously registered under Registration Statement No. 333-100478. |
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The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. |
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. |
SUBJECT TO COMPLETION, DATED APRIL 7, 2003 |
PROSPECTUS |
Common Stock Debt Securities |
By this prospectus, we may offer these securities from time to time in one or more series with an aggregate offering price not to exceed $790,000,000. We will provide you with specific information about the offering and the terms of these securities in supplements to this prospectus. You should read this prospectus and the relevant prospectus supplement carefully before you invest. This prospectus may not be used to sell securities unless accompanied by a prospectus supplement. |
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Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. |
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TABLE OF CONTENTS |
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Page |
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About This Prospectus |
i |
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Where You Can Find More Information |
i |
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Forward-Looking Statements |
ii |
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Pepco Holdings, Inc. |
1 |
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Use of Proceeds |
4 |
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Ratio of Earnings to Fixed Charges |
4 |
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Description of Debt Securities |
4 |
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Description of Common Stock |
15 |
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Plan of Distribution |
17 |
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Legal Matters |
19 |
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Experts |
20 |
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This prospectus is a part of registration statements we filed with the Securities and Exchange Commission. You should rely only on the information we have provided or incorporated by reference in this prospectus or any prospectus supplement. We have not authorized anyone to provide you with additional or different information. We are not making an offer of these securities in any jurisdiction where the offer is not permitted. You should assume that the information in this prospectus or any prospectus supplement is accurate only as of the date on the front of the document and that any information we have incorporated by reference is accurate only as of the date of the document incorporated by reference. |
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ABOUT THIS PROSPECTUS |
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This prospectus is a part of registration statements that we filed with the Securities and Exchange Commission utilizing a "shelf" registration process. Under this shelf process, we may from time to time sell any combination of the securities described in this prospectus in one or more offerings up to a total dollar amount of $790,000,000. This prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and any prospectus supplement together with additional information described under the heading "Where You Can Find More Information." |
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WHERE YOU CAN FIND MORE INFORMATION |
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We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the internet at the SEC's web site at http://www.sec.gov. You may also read and copy any document we file at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can obtain further information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. Our common stock is listed on the New York Stock Exchange under the ticker symbol "POM." You can obtain information about us at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. about us and the securities. Statements contained in this prospectus concerning the provisions of any document filed as an exhibit to the registration statements or otherwise filed with the SEC highlight selected information, and in each instance reference is made to the copy of the document filed. The SEC allows us to "incorporate by reference" the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will automatically update and may supersede this information. We incorporate by reference the documents listed below that we have filed with the SEC and any future filing that we make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 from the date of filing of the initial registration statement until we sell all of the securities. |
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Our Annual Report on Form 10-K for the year ended December 31, 2002; |
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The description of our common stock included in our Registration Statement on Form 8-A, filed on July 23, 2002, registering the common stock under Section 12(b) of the Securities Exchange Act, and any amendment or report subsequently filed for the purpose of updating such description; and |
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Our Current Reports on Form 8-K filed January 13, 2003, January 17, 2003, February 11, 2003, March 3, 2003 and March 6, 2003. |
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If you request copies of any of the documents incorporated by reference, we will send you the copies you requested at no charge. However, we will not send exhibits to such documents, unless such exhibits are specifically incorporated by reference in such documents. You should direct requests for such copies to Pepco Holdings, Inc., 701 Ninth Street, N.W., Washington, D.C. 20068, attention: Corporate Secretary. The telephone number is (202) 872-2900. |
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FORWARD-LOOKING STATEMENTS |
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Some of the statements contained in this prospectus and incorporated by reference into this prospectus are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act and are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. These statements include declarations regarding our or our management's intents, beliefs and current expectations. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of such terms or other comparable terminology. Any forward-looking statements are not guarantees of future performance, and actual results could differ materially from those indicated by the forward-looking statements. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. |
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Prevailing governmental policies and regulatory actions affecting the energy industry, including with respect to allowed rates of return, industry and rate structure, acquisition and disposal of assets and facilities, operation and construction of plant facilities, recovery of purchased power expenses, and present or prospective wholesale and retail competition (including but not limited to retail wheeling and transmission costs); |
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Changes in and compliance with environmental and safety laws and policies; |
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Weather conditions; |
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Population growth rates and demographic patterns; |
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Competition for retail and wholesale customers; |
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General economic conditions; |
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Growth in demand, sales and capacity to fulfill demand; |
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Changes in tax rates or policies or in rates of inflation; |
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Changes in project costs; |
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Unanticipated changes in operating expenses and capital expenditures; |
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Capital market conditions; |
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Restrictions imposed by the Public Utility Holding Company Act of 1935 ("PUHCA"); |
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Competition for new energy development opportunities and other opportunities; |
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Legal and administrative proceedings (whether civil or criminal) and settlements that influence our business and profitability; |
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Pace of entry into new markets; |
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Success in marketing services; |
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Trading counterparty credit risk; |
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Ability to secure electric and natural gas supply to fulfill sales commitments at favorable prices; |
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Volatility in market demand and prices for energy, capacity and fuel; |
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Operating performance of power plants; |
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Interest rate fluctuations and credit market concerns; and |
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Effects of geopolitical events, including the threat of domestic terrorism. |
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Any forward-looking statements speak only as of the date of this prospectus or any prospectus supplement, and we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statements are made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict all of such factors, nor can we assess the impact of any such factor on our business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. |
PEPCO HOLDINGS, INC. |
We are a registered holding company under PUHCA. We were incorporated in Delaware on February 9, 2001 and became a holding company on August 1, 2002, in connection with the merger of Potomac Electric Power Company ("Pepco") and Conectiv. As a result of this merger, Pepco and Conectiv are now our wholly owned subsidiaries. We are engaged, through our subsidiaries, principally in regulated electric and gas utility distribution operations in competitive markets. The utility operations of our subsidiary companies serve more than 1.8 million customers in Delaware, the District of Columbia, Maryland, New Jersey and Virginia. We are one of the largest owners of transmission in the Pennsylvania/New Jersey/Maryland power pool ("PJM"), serving a 10,000 square-mile service territory in a growing region with a population of approximately 4 million. Our electric and gas delivery businesses are complemented by a portfolio of mid-merit generating assets and related marketing and risk management capabilities. Through our other non-regulated subsidiaries, we operate competitive retail energy businesses and manage a portfolio of financial investments. |
ACE is engaged in the transmission and distribution of electricity in southern New Jersey. As of December 31, 2002, ACE delivered electricity to approximately 514,300 customers. ACE has default service obligations, known as Basic Generation Service, for approximately 20% of the electricity supply to its customers. We expect ACE to fulfill these obligations through the generation output from fossil-fuel fired generating plants discussed below and through existing purchase power agreements with non-utility generators. ACE currently owns fossil fuel-fired electric generating plants with 740 MW of capacity. In May 2002, Conectiv initiated a competitive bidding process to sell the ACE plants. On January 13, 2003, we announced that ACE had terminated the competitive bidding process because conditions in the electric energy market prevented ACE from reaching agreements for the sale of these assets. ACE remains interested in selling these assets on acceptable terms, but cannot predict whether or not any or all of the plants will be sold, whether the New Jersey Board of Public Utilities will grant the required approval of any sales agreements, or any related impacts upon recoverable stranded costs. |
Other Non-Regulated PCI PCI manages a portfolio of financial investments and strategic operating businesses that are designed to provide us with supplemental earnings and cash flow. PCI has been redirecting its investment operations to focus on investments that are related to the energy industry, such as energy leveraged leases. These transactions involve PCI's purchase and leaseback of utility assets, located outside of the United States, that are designed to provide a long-term, stable stream of cash flow and earnings. PCI has reduced its previous concentration of investments in the aircraft industry from 33 aircraft in 1995 to three aircraft currently. PCI also owns a ten-story, 360,000 square foot office building in downtown Washington, D.C., which is leased to Pepco and serves as our and Pepco's corporate headquarters. PCI's utility industry products and services are provided through various operating companies. Its underground electric services company, W.A. Chester, provides high voltage construction and maintenance services to utilities and to other customers throughout the United States. PCI also owns Severn Cable, which provides low voltage electric and telecommunication construction and maintenance services in the Washington, D.C. area. Pepcom Pepcom owns a 50% interest in Starpower Communications, LLC, a joint venture with RCN Corporation which provides cable and telecommunications services to households in the Washington, D.C. area. Our headquarters are located at 701 Ninth Street, N.W., Washington, D.C. 20068, and our telephone number is (202) 872-2000. |
USE OF PROCEEDS |
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Unless otherwise set forth in a prospectus supplement, we will use the net proceeds from the sale of the securities offered by this prospectus for general corporate purposes, which may include the repayment of debt. |
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RATIO OF EARNINGS TO FIXED CHARGES |
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Set forth below is our ratio of earnings to fixed charges for each year in the five year period ended December 31, 2002. |
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Twelve Months Ended |
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2002 |
2001 |
2000 |
1999 |
1998 |
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Ratio of Earnings to Fixed Charges |
2.28x |
2.44x |
3.78x |
2.59x |
2.53x |
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PHI became the parent of Pepco and Conectiv on August 1, 2002. Because Pepco is the predecessor of PHI, PHI's historical ratios for each year in the four year period ended December 31, 2001 are the same as Pepco's historical ratios for such years. For purposes of calculating the Ratio of Earnings to Fixed Charges, earnings consist of net income, plus taxes based on income, plus fixed charges, which consist of interest expense, distributions of Company Obligated Mandatorily Redeemable Preferred Securities of Subsidiary Trust and interest factor in rentals, less subsidiary capitalized interest. |
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DESCRIPTION OF DEBT SECURITIES |
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The following description of the debt securities sets forth certain general terms and provisions of the debt securities to which any prospectus supplement may relate. The particular terms of any debt securities and the extent, if any, to which these general provisions will not apply to such debt securities will be described in the prospectus supplement relating to the debt securities. |
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the title of the debt securities; |
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any limit on the aggregate principal amount of the debt securities; |
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the date or dates on which the principal of the debt securities will be payable; |
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the rate or rates at which the debt securities will bear interest, if any; |
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the currency or currency unit of payment if other than United States dollars; |
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the date from which interest, if any, on the debt securities will accrue, the dates on which interest, if any, will be payable, the date on which payment of interest, if any, will commence, and the record dates for any interest payments; |
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our right, if any, to extend interest payment periods and the duration of any extension; |
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any redemption, repayment or sinking fund provisions; |
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the place or places where the principal of and any premium and interest on the debt securities will be payable; |
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the denominations in which the debt securities will be issuable; |
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the index, if any, with reference to which the amount of principal of or any premium or interest on the debt securities will be determined; |
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any addition to or change in the events of default set forth in the Indenture applicable to the debt securities and any change in the right of the trustee or the holders to declare the principal amount of the debt securities due and payable; |
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any addition to or change in the covenants set forth in the Indenture; and |
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any other terms of the debt securities not inconsistent with the provisions of the Indenture. |
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Conversion or Exchange Structural Subordination We are a holding company that conducts all of our operations through subsidiaries. Because the claims of our subsidiaries' creditors, including debtholders, and preferred stock holders are superior to our claims, as the direct or indirect holder of the common stock of our subsidiaries, with respect to the assets of our subsidiaries, the debt securities will be subordinated to all existing and future preferred stock and liabilities, including indebtedness, trade payables, guarantees, lease obligations and letter of credit obligations, of our subsidiaries. Most of our subsidiaries have outstanding indebtedness, and Pepco, DPL and ACE have outstanding shares of preferred stock. The provisions of the Indenture do not limit the amount of indebtedness or preferred stock issuable by our subsidiaries. Global Securities We may issue registered debt securities of a series in the form of one or more fully registered global debt securities, each of which we refer to in this prospectus as a registered global security, that we will deposit with a depositary (or with a nominee of a depositary) identified in the prospectus supplement relating to such series and registered in the name of the depositary (or a nominee). In such a case, we will issue one or more registered global securities. The face of such registered global securities, will set forth the aggregate principal amount of the series of debt securities that such global registered securities represent. The depositary (or its nominee) will not transfer any registered global security unless and until it is exchanged in whole or in part for debt securities in definitive registered form, except that: |
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the depositary may transfer the whole registered global security to a nominee; |
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the depositary's nominee may transfer the whole registered global security to the depositary; |
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the depositary's nominee may transfer the whole registered global security to another of the depositary's nominees; and |
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the depositary (or its nominee) may transfer the whole registered global security to its (or its nominee's) successor. |
We expect that the depositary for any debt securities represented by a registered global security, upon receipt of any payment of principal, premium, if any, or any interest in respect of such registered global security, will immediately credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in such registered global security as shown on the depositary's records. We also expect that payments by participants to owners of beneficial interests in such registered global security held through such participants will be governed by standing customer instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such participants. |
No service charge will be made for any transfer or exchange of the debt securities. However, we may require payment to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange. We will not be required to register the transfer of, or to exchange, the debt securities of any series during the 15 days prior to the date on which notice of redemption of any debt securities of that series is mailed or any debt security that is selected for redemption. (Indenture, Section 305.) |
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(i) |
irrevocably depositing in trust with the trustee money or Eligible Obligations (as defined in the Indenture) or a combination of money and Eligible Obligations, which will be sufficient to pay when due the principal of, and any premium and interest on, the debt securities, and |
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(ii) |
satisfying certain other conditions specified in the Indenture. |
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We may not effect a legal defeasance or a covenant defeasance unless we deliver to the trustee an opinion of counsel to the effect that the holders of the affected debt securities will |
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not recognize income, gain or loss for United States federal income tax purposes as a result of the legal defeasance or the covenant defeasance and |
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be subject to United States federal income tax on the same amounts, in the same manner and at the same times as if the legal defeasance or covenant defeasance had not occurred. |
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In the case of legal defeasance, such opinion must be based upon a change in law or a ruling of the Internal Revenue Service. (Indenture, Article 7.) |
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(i) |
any mortgage, pledge, security interest, lien or encumbrance (collectively, "lien") upon any capital stock created at the time it is acquired by us or any Significant Subsidiary or within 360 days after that time to secure all or any portion of the purchase price for the capital stock; |
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(ii) |
any lien upon any capital stock existing at the time it (or any corporation or other legal entity that directly, or indirectly, owns such capital stock) is acquired by us or any Significant Subsidiary, whether or not the secured obligations are
assumed by us or such Significant Subsidiary; |
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any judgment, levy, execution, attachment or other similar lien arising in connection with court proceedings, provided that: |
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(a) |
the execution or enforcement of the lien is effectively stayed within 60 days after entry of the corresponding judgment or the corresponding judgment has been discharged within that 60-day period and the claims secured by the lien are being contested in good faith by appropriate proceedings timely commenced and diligently prosecuted; or |
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(b) |
the payment of the lien is covered in full by insurance (except for the applicable deductibles) and the insurance company has not denied or contested coverage thereof; or |
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(c) |
so long as the lien is adequately bonded, any appropriate and duly initiated legal proceedings for the review of the corresponding judgment, decree or order shall not have been fully terminated or the period within which these proceedings may be initiated shall not have expired; or |
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(iv) |
any lien related to the financing of any property of any Significant Subsidiary, the obligee in respect of which has no recourse to us and recourse only to the assets of such Significant Subsidiary financed in whole or in part with the proceeds of the Indebtedness secured by such lien and the capital stock of such Significant Subsidiary; provided that the only property of such Significant Subsidiary is the property financed in whole or in part with the proceeds of the Indebtedness secured by such lien; provided further that the obligee referenced herein shall be deemed not to have recourse to us to the extent that we have entered into obligations to provide equity contributions (or credit support for such equity contributions or subordinated loans in lieu of equity contributions) or performance guarantees with respect to engineering, procurement or construction contracts or other project documents (excluding loan documents or other debt instruments) related to the assets being financed, or similar obligations, which obligations are, in nature and amount, then customary for project sponsors in connection with financings of the type contemplated in this clause (iv). |
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We refer to the liens permitted by clauses (i) through (iv) above as "Permitted Liens." |
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(i) |
all indebtedness created or assumed by us or any Subsidiary for the repayment of money borrowed; |
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(ii) |
all indebtedness for money borrowed secured by a lien upon property owned by us or any Subsidiary and upon which indebtedness for money borrowed we, or any Subsidiary, customarily pay interest, although we, or such Subsidiary, have not assumed or become liable for the payment of the indebtedness for money borrowed; and |
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(iii) |
all indebtedness of others for money borrowed which is guaranteed as to payment of principal by us or any Subsidiary or in effect guaranteed by us or such Subsidiary through a contingent agreement to purchase the indebtedness for money borrowed, but excluding from this definition any other contingent obligation of us or any Subsidiary in respect of indebtedness for money borrowed or other obligations incurred by others. |
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"Subsidiary" means a corporation in which more than 50% of the outstanding voting stock is owned, directly or indirectly, by us or by one or more other Subsidiaries. For the purposes of this definition, "voting stock" means stock that ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has
that voting power by reason of any contingency. |
"Significant Subsidiary" means any Subsidiary, the Assets of which constitute five percent or more of the total Assets of us and our Consolidated Subsidiaries as of the time that any lien upon the capital stock of such Subsidiary is effected. |
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(i) |
Consolidated Shareholders' Equity; |
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(ii) |
Consolidated Indebtedness for money borrowed, which is total indebtedness as shown on the consolidated balance sheet of us and our Consolidated Subsidiaries, inclusive of any that is due and payable within one year of the date the sum is determined; |
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(iii) |
any preference or preferred stock of us or any Consolidated Subsidiary which is subject to mandatory redemption or sinking fund provisions; and, without duplication, |
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(iv) |
Company Obligated Mandatorily Redeemable Preferred Securities of Subsidiary Trust. |
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The term "Consolidated Shareholders' Equity" means the total Assets of us and our Consolidated Subsidiaries less all liabilities of us and our Consolidated Subsidiaries that would, in accordance with generally accepted accounting principles in the United States, be classified on a balance sheet as liabilities, including without limitation: |
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(i) |
indebtedness secured by property of us or any Consolidated Subsidiary, whether or not we or such Consolidated Subsidiary is liable for the payment of the indebtedness, unless, in the case that we or such Consolidated Subsidiary is not so liable, the property has not been included among the Assets of us or such Consolidated Subsidiary on the balance sheet; |
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(ii) |
deferred liabilities; |
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(iii) |
indebtedness of us or any Consolidated Subsidiary that is expressly subordinated in right and priority of payment to other liabilities of us or such Consolidated Subsidiary; and |
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(iv) |
Company Obligated Mandatorily Redeemable Preferred Securities of Subsidiary Trust. |
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As used in this definition, "liabilities" includes preference or preferred stock of us or any Consolidated Subsidiary only to the extent of any preference or preferred stock that is subject to mandatory redemption or sinking fund provisions. |
Consolidation, Merger and Sale of Assets |
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(i) |
The surviving or successor entity is organized and validly existing under the laws of any domestic jurisdiction and it expressly assumes our obligations on all debt securities under the Indenture; |
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(ii) |
Immediately after giving effect to the transaction, no Event of Default under the Indenture or no event which, after notice or lapse of time or both, would become an Event of Default shall have occurred and be continuing; and |
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(iii) |
We shall have delivered to the trustee an officer's certificate and an opinion of counsel as provided in the Indenture. |
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Event of Default |
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(i) |
Failure to pay interest on such debt securities within 30 days after it is due; |
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(ii) |
Failure to pay the principal of or any premium on any such debt securities when due; |
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(iii) |
Failure to perform any other covenant in the Indenture, other than a covenant that does not relate to such series of debt securities, that continues for 90 days after we receive written notice from the trustee, or we and the trustee receive a written notice from the holders of a majority in aggregate principal amount of the debt securities of that series; provided, however, that the 90 day period will be extended if we initiate corrective action within such period and diligently pursue such action; or |
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(iv) |
Events of our bankruptcy, insolvency or reorganization specified in the Indenture. (Indenture, Section 801.) |
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An Event of Default for a particular series of debt securities does not necessarily constitute an Event of Default for any other series of debt securities issued under the Indenture. The trustee may withhold notice to the holders of debt securities of any default, except default in the payment of principal or interest, if it considers the withholding of notice to be in the interests of the holders. |
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(i) |
We have paid or deposited with the trustee a sum sufficient to pay: |
(a) |
all matured installments of interest on all debt securities of the series; |
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(b) |
the principal of and premium, if any, on any debt securities of the series which have become due otherwise than by acceleration; |
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(c) |
interest on overdue interest (to the extent allowed by law) and on principal and any premium which have become due otherwise than by acceleration at the prescribed rates, if any, set forth in such debt securities; and |
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(d) |
all amounts due to the trustee under the Indenture; and |
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(ii) |
Any other Event of Default under the Indenture with respect to the debt securities of that series (other than the nonpayment of principal that has become due solely by declaration of acceleration) has been cured or waived as provided in the Indenture. |
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There is no automatic acceleration, even in the event of our bankruptcy, insolvency or reorganization. (Indenture, Section 802.) |
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(i) |
The holder has previously given to the trustee written notice of a continuing Event of Default under the Indenture; |
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(ii) |
The holders of a majority in aggregate principal amount of the outstanding debt securities of all series in respect of which an Event of Default under the Indenture shall have occurred and be continuing have made a written request to the trustee, and have offered reasonable indemnity to the trustee, to institute proceedings; and |
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(iii) |
The trustee has failed to institute any proceeding for 60 days after notice. |
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In addition, no holder of debt securities will have any right to institute any action under the Indenture to disturb or prejudice the rights of any other holder of debt securities. (Indenture, Section 807.) |
(i) |
To evidence the assumption by any permitted successor of our covenants in the Indenture and in the debt securities; |
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(ii) |
To add to our covenants or to surrender any of our rights or powers under the Indenture; |
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(iii) |
To add additional events of default under the Indenture; |
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(iv) |
To change, eliminate or add any provision to the Indenture; provided, however, that, if the change will adversely affect the interests of the holders of debt securities of any series in any material respect, the change, elimination or addition will become effective only: |
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(a) |
when the consent of the holders of debt securities of such series has been obtained in accordance with the Indenture; or |
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(b) |
when no debt securities of the affected series remain outstanding under the Indenture; |
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(v) |
To provide collateral security for all but not part of the debt securities; |
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(vi) |
To establish the form or terms of debt securities of any series as permitted by the Indenture; |
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(vii) |
To provide for the authentication and delivery of bearer securities; |
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(viii) |
To evidence and provide for the acceptance of appointment of a successor trustee; |
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(ix) |
To provide for the procedures required for use of a noncertificated system of registration for the debt securities of all or any series; |
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(x) |
To change any place where principal, premium, if any, and interest shall be payable, debt securities may be surrendered for registration of transfer or exchange, and notices to us may be served; |
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(xi) |
To cure any ambiguity or inconsistency or to make any other provisions with respect to matters and questions arising under the Indenture; provided that the action does not adversely affect the interests of the holders of debt securities of any series in any material respect; or |
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(xii) |
To modify, eliminate or add to the provisions of the Indenture to such extent as shall be necessary to effect the qualification of the Indenture under the Trust Indenture Act of 1939 and to add to the Indenture such other provisions as may be expressly required under the Trust Indenture Act. (Indenture, Section 1201.) |
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The holders of at least a majority in aggregate principal amount of the debt securities of all series then outstanding may waive our compliance with some restrictive provisions of the Indenture. (Indenture, Section 607.) The holders of not less than a majority in principal amount of the outstanding debt securities of any series may waive any past default under the Indenture with respect to that series, except a default in the payment of principal, premium, if any, or interest and certain covenants and provisions of the Indenture that cannot be modified or be amended without the consent of the holder of each outstanding debt security of the series affected. (Indenture, Section 813.) principal amount of all series or tranches, as the case may be, that are directly affected will be required. No such amendment or modification may: |
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(i) |
Change the stated maturity of the principal of, or any installment of principal of or interest on, any debt security, or reduce the principal amount of any debt security or its rate of interest or change the method of calculating the interest rate or reduce any premium payable upon redemption, or change the currency in which payments are made, or impair the right to institute suit for the enforcement of any payment on or after the stated maturity of any debt security, without the consent of the holder; |
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(ii) |
Reduce the percentage in principal amount of the outstanding debt securities of any series the consent of the holders of which is required for any supplemental indenture or any waiver of compliance with a provision of the Indenture or any default thereunder and its consequences without the consent of all the holders of the series; or |
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(iii) |
Modify certain of the provisions of the Indenture relating to supplemental indentures, waivers of some covenants and waivers of past defaults with respect to the debt securities of any series, without the consent of the holder of each outstanding debt security affected thereby. (Indenture, Section 1202.) |
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A supplemental indenture which changes the Indenture solely for the benefit of one or more particular series of debt securities, or modifies the rights of the holders of debt securities of one or more series, will not affect the rights under the Indenture of the holders of the debt securities of any other series. |
Notices Title We, the trustee and any agent of us or the trustee may treat the person in whose name debt securities are registered as the absolute owner thereof, whether or not the debt securities may be overdue, for the purpose of making payments and for all other purposes irrespective of notice to the contrary. (Indenture, Section 308.) Governing Law The Indenture and the debt securities are governed by, and construed in accordance with, the laws of the State of New York. (Indenture, Section 112.) Information about the Trustee The trustee under the Indenture is The Bank of New York. In addition to acting as trustee under the Indenture, The Bank of New York acts, and may act, as trustee and paying agent under various other indentures, trusts and guarantees of us and our affiliates. We and our affiliates maintain deposit accounts and credit and liquidity facilities and conduct other banking transactions with the trustee in the ordinary course of our businesses. |
DESCRIPTION OF COMMON STOCK |
The following description of the terms of the common stock sets forth certain general terms and provisions of the common stock to which any prospectus supplement may relate. This section also summarizes certain relevant provisions of the Delaware General Corporation Law, which we refer to as "Delaware law." The terms of our certificate of incorporation and bylaws, as well as the terms of Delaware law, are more detailed than the general information provided below. Therefore, you should carefully consider the actual provisions of these documents. |
Liquidation Rights Transfer Agent and Registrar Mellon Investor Services LLC, New York, N.Y., and one of our subsidiaries each serves as a transfer agent and registrar for the common stock. Delaware Business Combination Statute Under the business combination statute of Delaware law, a corporation is prohibited from engaging in any business combination with a stockholder who, together with its affiliates or associates, owns (or who is an affiliate or associate of the corporation and within a three-year period did own) 15% or more of the corporation's voting stock (which we refer to as an "interested stockholder") for a three-year period following the time the stockholder became an interested stockholder, unless: |
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prior to the time the stockholder became an interested stockholder, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; |
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the interested stockholder owned at least 85% of the voting stock of the corporation, excluding specified shares, upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder; or |
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at or subsequent to the time the stockholder became an interested stockholder, the business combination is approved by the board of directors of the corporation and authorized by the affirmative vote, at an annual or special meeting, and not by written consent, of at least 66 2/3% of the outstanding voting shares of the corporation, excluding shares held by that interested stockholder. |
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A business combination generally includes: |
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mergers and consolidations with or caused by an interested stockholder; |
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sales or other dispositions of 10% or more of the assets of a corporation to an interested stockholder; |
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specified transactions resulting in the issuance or transfer to an interested stockholder of any capital stock of the corporation or its subsidiaries; and |
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other transactions resulting in a disproportionate financial benefit to an interested stockholder. |
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The provisions of the Delaware business combination statute do not apply to a corporation if, subject to certain requirements, the certificate of incorporation or bylaws of the corporation contain a provision expressly electing not to be governed by the provisions of the statute or the corporation does not have voting stock listed on a national securities exchange, authorized for quotation on the Nasdaq Stock Market or held of record by more than 2,000 stockholders. |
Staggered Board of Directors Our staggered board of directors and the Delaware business combination statute may delay, deter or prevent a tender offer or takeover attempt that a holder of shares of our common stock might consider in his or her best interest, including those attempts that might result in a premium over the market price of the shares our common stock. |
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PLAN OF DISTRIBUTION |
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We may sell the securities directly to purchasers or indirectly through underwriters, dealers or agents. The names of any such underwriters, dealers or agents will be set forth in the relevant prospectus supplement. We will also set forth in the relevant prospectus supplement: |
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the terms of the offering of the securities; |
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the proceeds we will receive from such a sale; |
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any underwriting discounts, sales commissions and other items constituting underwriters' compensation; |
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any initial public offering price; |
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any commissions payable to agents; |
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· |
any discounts or concessions allowed or reallowed or paid to dealers; and |
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any securities exchanges on which we may list the securities. |
We may distribute the securities from time to time in one or more transactions at: |
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a fixed price; |
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prices that may be changed; |
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market prices at the time of sale; |
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· |
prices related to prevailing market prices; and |
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· |
negotiated prices. |
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We will describe the method of distribution in the relevant prospectus supplement. |
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the name of the managing underwriter, if any; |
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the name of any other underwriters; and |
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the terms of the transaction, including any underwriting discounts and other items constituting compensation of the underwriters and dealers, if any. |
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The underwriters will acquire any securities for their own accounts and they may resell the securities 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. |
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entitle the underwriters to indemnification by us against certain civil liabilities under the Securities Act, or to contribution with respect to payments that the underwriters may be required to make related to any such civil liability; |
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subject the obligations of the underwriters to certain conditions precedent; and |
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obligate the underwriters to purchase all securities offered in a particular offering if any such securities are purchased. |
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In connection with an offering of the securities, underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the securities. Specifically, underwriters may: |
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overallot in connection with the offering, creating a short position; |
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bid for, and purchase, the securities in the open market to cover short positions; |
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bid for, and purchase, the securities in the open market to stabilize the price of the securities; and |
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reclaim selling concessions allowed for distributing the securities in the offering if the underwriter repurchases previously distributed securities in covering transactions, in stabilization transactions or otherwise. |
Any of these activities may stabilize or maintain the market price of the securities above independent market levels. Underwriters are not required to engage in these activities, and may end any of these activities at any time. |
LEGAL MATTERS |
Certain legal matters with respect to the securities offered hereby will be passed upon for us by William T. Torgerson, Esq., our Executive Vice President and General Counsel, and by Covington & Burling, Washington, D.C. |
EXPERTS |
The financial statements and financial statement schedule incorporated in this prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2002 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. |
PART II |
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ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. |
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Registration fee |
$ 56,630* |
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Fees of rating agencies |
186,000 |
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Stock exchange listing fees |
45,000 |
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Printing |
175,000 |
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Accounting fees |
91,000 |
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Legal fees |
126,000 |
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Trustee's fees and expenses |
14,000 |
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Blue sky expenses |
20,000 |
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Miscellaneous, including traveling, telephone, copying, shipping and other out-of-pocket expenses |
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Total |
$ 769,630 |
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* All items are estimated except the registration fee. |
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ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Under Delaware law, a corporation is permitted to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that the person is or was an officer, director, employee or agent of the corporation or is or was serving at the request of the corporation as an officer, director, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such proceeding: (i) if the person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation; and (ii) in the case of a criminal proceeding, the person had no reasonable cause to believe that his conduct was unlawful. A corporation also is permitted to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to obtain a judgment in its favor by reason of the fact that the person is or was an officer, director, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorney's fees) actually and reasonably incurred in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, provided that no such indemnification is permitted with respect to any claim, issue or matter as to which the person is found liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which the action or suit is brought determines the person is fairly and reasonably entitled to indemnification for such expenses as the court shall deem proper. Under Delaware law, a corporation must indemnify any present or former director or officer of the corporation who is successful on the merits or otherwise in the defense of any action, suit or proceeding against expenses actually and reasonably incurred by such person. Expenses incurred by an officer or director in defending civil, criminal, administrative or investigative proceedings may be paid by the corporation in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that the person is not entitled to be indemnified by the corporation. Expenses incurred by former officers or directors or other employees or agents in defending such proceedings may be paid upon terms deemed appropriate by the corporation. The Registrant's certificate of incorporation provides that the Registrant shall indemnify and advance expenses to any director, officer or employee of the Registrant, and may indemnify, or advance expenses to any other persons, who is or was or is threatened to be made a party to an action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of his or her service as a director, officer, employee or agent of the Registrant or his or her service as a director, officer, employee or agent director of another enterprise at the request of the Registrant, to the fullest extent permitted by applicable law; provided that in the case of an advancement of expenses, if required by the Delaware General Corporation Law, an undertaking is first delivered to the Registrant, by or on behalf of such director, officer, employee or agent, to repay all amounts so advanced if it is ultimately determined that the director, officer, employee or agent is not entitled to be indemnified under the Bylaws. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the Registrant pursuant to the foregoing provisions, the Registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and therefore is unenforceable. ITEM 16. EXHIBITS. |
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1.01 |
Form of Underwriting Agreement relating to debt securities.* |
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1.02 |
Form of Underwriting Agreement relating to common stock.* |
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1.03 |
Form of Sales Agency Agreement relating to common stock.* |
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4.01 |
Certificate of Incorporation of the Company. (Filed as Exhibit 3.1 to the Company's Current Report on Form 8-K Report dated August 1, 2002 and incorporated by reference herein) |
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4.02 |
Bylaws of the Company. (Filed as Exhibit 3.2 to the Company's Current Report on Form 8-K Report dated August 1, 2002 and incorporated by reference herein) |
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4.03 |
Indenture, dated September 6, 2002, between the Company and The Bank of New York, as Trustee. (Filed as Exhibit 4.03 to the Company's Registration Statement on Form S-3 No. 333-100478 and incorporated by reference herein) |
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4.04 |
Specimen of certificate representing common stock of the Company. (Filed as Exhibit 4.04 to the Company's Registration Statement on Form S-3 No. 333-100478 and incorporated by reference herein) |
4.05 |
Form of pledge agreement.* |
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4.08 |
Form of debt security.* |
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5.01 |
Opinion of William T. Torgerson, Esq. |
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12.01 |
Statement of computation of ratio of earnings to fixed charges of the Company. (Filed as Exhibit 12.1 to the Company's Annual Report on Form 10-K for the year ended December 31, 2002 and incorporated by reference herein) |
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23.01 |
Independent Accountants' Consent with respect to the Company. |
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23.04 |
Consent of William T. Torgerson (included in Exhibit 5.01). |
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23.05 |
Consent of Covington & Burling. |
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24.01 |
Power of Attorney. |
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25.01 |
Form T-1 Statement of Eligibility of The Bank of New York to act as Trustee under the Indenture. |
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*To be filed as an exhibit to a subsequent Current Report on Form 8-K. |
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ITEM 17. UNDERTAKINGS. |
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1. |
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
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(i) |
To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
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(ii) |
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; |
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(iii) |
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
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provided, however , that paragraphs (1)(i) and (1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement; |
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2. |
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and |
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3. |
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
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The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 15 above, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such officer, director or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
SIGNATURES |
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Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Washington, District of Columbia, on the 7th day of April, 2003. |
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PEPCO HOLDINGS, INC. /s/ JOHN M. DERRICK, JR. By: John M. Derrick, Jr. Chairman and Chief Executive Officer |
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Pursuant to the requirements of Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated. |
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Signature |
Title |
Date |
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/s/ JOHN M. DERRICK, JR. |
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ANDREW W. WILLIAMS* Andrew W. Williams |
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JAMES P. LAVIN* James P. Lavin |
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EDMUND B. CRONIN, JR.* Edmund B. Cronin, Jr. |
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Terence C. Golden |
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GEORGE F. MACCORMACK* George F. MacCormack |
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RICHARD B. MCGLYNN* |
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JUDITH A. MCHALE* Judith A. McHale |
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FLORETTA D. MCKENZIE* Floretta D. McKenzie |
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LAWRENCE C. NUSSDORF* Lawrence C. Nussdorf |
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PETER F. O'MALLEY* Peter F. O'Malley |
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PAULINE A. SCHNEIDER* Pauline A. Schneider |
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DENNIS R. WRAASE* Dennis R. Wraase |
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Ellen Sheriff Rogers Attorney-in-Fact |
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